[Federal Register Volume 89, Number 103 (Tuesday, May 28, 2024)]
[Notices]
[Pages 46243-46250]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11581]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100188; File No. SR-NASDAQ-2024-016]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Suspension of and Order Instituting Proceedings To Determine Whether To 
Approve or Disapprove Proposed Rule Change To Increase Fees for Certain 
Market Data and Connectivity Products and To Maintain the Current Fees 
for Such Products if Members Meet a Minimum Average Daily Displayed 
Volume Threshold

May 21, 2024.

I. Introduction

    On March 22, 2024, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change (File Number SR-NASDAQ-2024-016) 
to increase fees for certain market data and connectivity products and 
to maintain the current fees for such products if members meet a 
minimum average daily displayed volume threshold (``Proposal''). The 
proposed rule change was immediately effective upon filing with the 
Commission pursuant to Section 19(b)(3)(A) of the Act.\3\ The proposed 
rule change was published for comment in the Federal Register on April 
1, 2024.\4\ The Commission has received one comment letter on the 
proposed rule change.\5\ Pursuant to Section 19(b)(3)(C) of the Act,\6\ 
the Commission is hereby: (1) temporarily suspending the proposed rule 
change; and (2) instituting proceedings to determine whether to approve 
or disapprove the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A). A proposed rule change may take 
effect upon filing with the Commission if it is designated by the 
exchange as ``establishing or changing a due, fee, or other charge 
imposed by the self-regulatory organization on any person, whether 
or not the person is a member of the self-regulatory organization.'' 
15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ See Securities Exchange Act Release No. 99879 (April 5, 
2024), 89 FR 24070 (``Notice'').
    \5\ See Letter from Tyler Gellasch, President and CEO, Healthy 
Markets Association, to Vanessa Countryman, Secretary, Commission, 
dated April 24, 2024 (``HMA Letter''). Comments received on the 
Proposal are available at https://www.sec.gov/comments/sr-nasdaq-2024-016/srnasdaq2024016.htm.
    \6\ 15 U.S.C. 78s(b)(3)(C).
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II. Background and Description of the Proposed Rule Change

    The Exchange states that the purpose of the proposed rule change is 
to reward firms that meet a minimum average daily displayed volume with 
lower fees for Non-Display Usage and the Exchange's 40Gb and 10Gb Ultra 
high-speed connection to the Exchange.\7\ The Exchange explains that 
Non-Display fees are currently assessed on a per-subscriber \8\ or per-
firm basis.\9\ Monthly fees are $375 per Subscriber for 1-39 
subscribers; $15,000 per firm for 40-99 subscribers; $30,000 per firm 
for 100-249 subscribers; and $75,000 per firm for 250 or more 
subscribers.\10\ Under the proposed rule change, a member firm that 
meets the minimum ADV threshold discussed below would continue to pay 
those fees.\11\ The Exchange further states that firms that do not meet 
the minimum ADV threshold, however, as well as non-member firms, would 
pay the new monthly fees of $500 per subscriber for 1-39 subscribers; 
$20,000 per firm for 40-99 subscribers; $40,000 per firm for 100-249 
subscribers; and $100,000 per firm for 250 or more subscribers.\12\
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    \7\ This proposed rule change was initially filed on March 6, 
2024, as SR-Nasdaq-2024-011. On March 20, 2024, that filing was 
withdrawn and replaced with SR-Nasdaq-2024-015. On March 22, 2024, 
SR-Nasdaq-2024-015 was withdrawn and replaced with the instant 
filing due to a technical error. See Notice, 89 FR at 24070.
    \8\ ``Subscriber'' is defined as a device or computer terminal 
or an automated service which is entitled to receive information. 
See Notice, 89 FR at 24070.
    \9\ See Notice, 89 FR at 24070.
    \10\ See id.
    \11\ See id.
    \12\ See id. (stating that Non-Display Usage is any method of 
accessing Nasdaq U.S. information that involves access or use by a 
machine or automated device without access or use of a display by a 
natural person and that examples of Non-Display Usage include, but 
are not limited to: Automated trading; Automated order/quote 
generation and/or order/quote pegging; Price referencing for use in 
algorithmic trading; Price referencing for use in smart order 
routing; Program trading and high frequency trading; Order 
verification; Automated surveillance programs; Risk management; 
Automatic order cancellation, or automatic error discovery; Clearing 
and settlement activities; Account maintenance (e.g., controlling 
margin for a customer account); and ``Hot'' disaster recovery). The 
Exchange also states that, although either top-of-book or depth-of-
book data can be used for Non-Display Usage, the Proposal modifies 
fees for depth-of-book data only. See Notice, 89 FR at 24070 (citing 
Equity 7, Section 123 (Nasdaq Depth-of-Book data)).

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[[Page 46244]]

    Nasdaq states that it offers customers the opportunity to co-locate 
their servers and equipment within the Nasdaq Data Center,\13\ allowing 
participants an opportunity to reduce latency and network 
complexity.\14\ Nasdaq offers a variety of connectivity options to fit 
a firm's specific networking needs, including the high-speed 40Gb and 
10Gb Ultra networks.\15\ The Exchange further states that all of its 
colocation and connectivity options offer customers access to any or 
all Nasdaq exchanges through a single connection.\16\
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    \13\ See Notice, 89 FR at 24070 (citing Nasdaq Co-Location 
(CoLo) Services, available at https://www.nasdaqtrader.com/trader.aspx?id=colo; Stock Exchange Data Center & Trading, available 
at https://www.nasdaq.com/solutions/nasdaq-co-location).
    \14\ See Notice, 89 FR at 24070.
    \15\ See id.
    \16\ See id. (citing Securities Exchange Act Release No. 84571 
(November 9, 2018), 83 FR 57758 (November 16, 2018) (SR-Nasdaq-2018-
086)). Nasdaq also states, as an example, that a firm that is a 
member of all six Nasdaq exchanges that purchases services in the 
Nasdaq Data Center such as a 40G fiber connection, cabinet space, 
cooling fans, and patch cables only purchases these products or 
services once to use them for all six Nasdaq exchanges. See Notice, 
89 FR at 24070.
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    Nasdaq currently charges members an ongoing monthly fee of $21,100 
for the 40Gb fiber connection and $15,825 for the 10Gb Ultra connection 
to the Nasdaq exchanges.\17\ Under the proposed rule change, a firm 
that meets the minimum ADV threshold would continue to pay those 
fees.\18\ Member firms that do not meet the minimum ADV threshold 
discussed below, as well as non-member firms, would pay the new monthly 
fee of $23,700 for the 40Gb fiber connection and $17,800 for the 10Gb 
Ultra connection.\19\
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    \17\ See Notice, 89 FR at 24070.
    \18\ See id.
    \19\ See id.
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    The Proposal introduces the new term ``Minimum ADV,'' which will 
mean the introduction by a member of at least one million shares of 
added executed displayed liquidity on average per trading day in all 
securities through one or more of the member's market participant 
identifiers (``MPIDs'') on the Nasdaq Market Center.\20\ Average daily 
volume is calculated as the total volume of shares executed for all 
added displayed orders in all securities during the trading month 
divided by the number of trading days in that month, averaged over the 
six-month period preceding the billing month, or the date the firm 
became a member, whichever is shorter. New members will be deemed to 
meet the Minimum ADV for the first month of operation.\21\ Minimum ADV 
excludes sponsored access by a member on behalf of a third party.\22\ 
Nasdaq states that the Minimum ADV threshold was designed to be 
accessible to all members to promote wide engagement with the 
Exchange.\23\
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    \20\ See id.
    \21\ See id. at 24070-1.
    \22\ See id. at 24071.
    \23\ See id.
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    Nasdaq states that it does not expect any member to be 
disadvantaged by the Proposal. Nasdaq is a maker-taker platform and 
offers rebates to members that offer displayed liquidity.\24\ With 
these rebates, Nasdaq states that no member should have any difficulty 
posting and executing sufficient displayed liquidity to meet the ADV 
threshold.\25\ Nasdaq further states that the threshold is set at a 
level that Nasdaq believes any member--even smaller members--should be 
able to meet without significant effort.\26\ Nasdaq states that, 
because the threshold applies to displayed liquidity only, the Proposal 
should not impact the Best Execution obligations of any member.\27\ 
Nasdaq believes that, if all members were to meet this threshold, the 
Proposal would add an incremental 60-80 million shares to Nasdaq's 
accessible liquidity.\28\ Nasdaq states that non-members that do not 
post displayed liquidity to the market would pay the higher fees 
because the non-members do not directly contribute order flow to the 
Exchange, but nevertheless benefit from that order flow through tighter 
spreads, better prices, and the other advantages of a more liquid 
platform.\29\
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    \24\ See id.
    \25\ See id.
    \26\ See id.
    \27\ See id.
    \28\ See id.
    \29\ See id.
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III. Suspension of the Proposed Rule Change

    Pursuant to Section 19(b)(3)(C) of the Act,\30\ at any time within 
60 days of the date of filing of an immediately effective proposed rule 
change pursuant to Section 19(b)(1) of the Act,\31\ the Commission 
summarily may temporarily suspend the change in the rules of a self-
regulatory organization (``SRO'') if it appears to the Commission that 
such action is necessary or appropriate in the public interest, for the 
protection of investors, or otherwise in furtherance of the purposes of 
the Act. The Commission believes a temporary suspension of the proposed 
rule change is necessary and appropriate to allow for additional 
analysis of the proposed rule change's consistency with the Act and the 
rules thereunder.
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    \30\ 15 U.S.C. 78s(b)(3)(C).
    \31\ 15 U.S.C. 78s(b)(1).
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A. Exchange Statements In Support of the Proposal

    In support of the Proposal, the Exchange states that exchanges, 
like all trading venues, compete as platforms.\32\ All elements of the 
platform--trade executions, market data, connectivity, membership, and 
listings--operate in concert.\33\ Trade executions increase the value 
of market data; market data functions as an advertisement for on-
exchange trading; listings increase the value of trade executions and 
market data; and greater liquidity on the exchange enhances the value 
of ports and colocation services.\34\ The Exchange states that the 
Proposal is designed to promote competition by providing an incentive 
for members to provide liquidity (therefore attracting investors and 
increasing the overall value of the platform) through charging lower 
fees for other platform services (i.e., market data and 
connectivity).\35\ The Exchange states that this will lead to more 
displayed liquidity on the Exchange, enhancing and enriching the market 
data distributed to the industry, which then increases the amount of 
interest in the platform.\36\ The Exchange states that this will also 
enable it to offer investors a more robust, lower cost-trading 
experience through tighter spreads and more efficient trading, placing 
it in a better competitive position relative to other exchanges and 
trading venues.\37\
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    \32\ See Notice, 89 FR at 24071.
    \33\ See id.
    \34\ See id. The Exchange also states that it attached to the 
filing with the Commission a data-based analysis demonstrating how 
platform competition works entitled ``How Exchanges Compete: An 
Economic Analysis of Platform Competition'' as Exhibit 3, explaining 
that exchanges are multi-sided platforms, whose value is dependent 
on attracting users to multiple sides of the platform. See id. The 
Exchange states that issuers need investors, and every trade 
requires two sides to trade, and to make its platform attractive to 
multiple constituencies, an exchange must consider inter-side 
externalities, meaning demand for one set of platform services 
depends on the demand for other services. See id.
    \35\ See Notice, 89 FR at 24071.
    \36\ See id.
    \37\ See id. The Exchange further states that, to the degree 
that the additional liquidity is moved from off-exchange venues to 
on-exchange platforms, overall market transparency will improve as 
well. See id.

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[[Page 46245]]

1. The Exchange Believes that Fees Produced in a Competitive 
Environment are an Equitable Allocation of Reasonable Dues, Fees, and 
Other Charges
    The Exchange states that reliance on competitive solutions is 
fundamental to the Act.\38\ The Exchange further states that 
significant competitive forces constrain fees, fee levels meet the 
Act's standard for the ``equitable allocation of reasonable dues, fees, 
and other charges among members and issuers and other persons using its 
facilities,'' \39\ unless there is a substantial countervailing basis 
to find that a fee does not meet some other requirement of the Act.\40\ 
The Exchange states that evidence of platform competition demonstrates 
that each exchange product is sold in a competitive environment, and 
its fees will be an equitable allocation of reasonable dues, fees, and 
other charges, provided that nothing about the product or its fee 
structure impairs competition.\41\
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    \38\ See Notice, 89 FR at 24071.
    \39\ See 15 U.S.C. 78f(b)(4).
    \40\ See Notice, 89 FR at 24071 (citing U.S. Securities and 
Exchange Commission, ``Staff Guidance on SRO Rule filings Relating 
to Fees'' (May 21, 2019), available at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees (``Fee Guidance'') (``If significant 
competitive forces constrain the fee at issue, fee levels will be 
presumed to be fair and reasonable, and the inquiry is whether there 
is a substantial countervailing basis to find that the fee terms 
nevertheless fail to meet an applicable requirement of the Exchange 
Act (e.g., that fees are equitably allocated, not unfairly 
discriminatory, and not an undue burden on competition).'')).
    \41\ The Exchange states that nothing in the Act requires proof 
of product-by-product competition. See Notice, 89 FR at 24071.
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    The Exchange states that Congress directed the Commission to ``rely 
on `competition, whenever possible, in meeting its regulatory 
responsibilities for overseeing the SROs and the national market 
system,' '' \42\ and, following this mandate, that the Commission and 
the courts have repeatedly expressed their preference for competition 
over regulatory intervention to determine prices, products, and 
services in the securities markets.\43\
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    \42\ See Notice, 89 FR at 24071 (citing NetCoalition v. SEC, 715 
F.3d 342, 534-35 (D.C. Cir. 2013); H.R. Rep. No. 94-229 at 92 (1975) 
(``[I]t is the intent of the conferees that the national market 
system evolve through the interplay of competitive forces as 
unnecessary regulatory restrictions are removed.'')).
    \43\ See Notice, 89 FR at 24071.
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    The Exchange states that, in Regulation NMS, the Commission 
highlighted the importance of market forces in determining prices and 
SRO revenues and recognized that regulation of the national market 
system ``has been remarkably successful in promoting market competition 
in its broader forms that are most important to investors and listed 
companies.'' \44\ The Exchange further states that, as a result, the 
Commission has long relied on competitive forces to determine whether a 
fee proposal is equitable, fair, reasonable, and not unreasonably or 
unfairly discriminatory.\45\ The Exchanges states that, in 2008, the 
Commission explained that ``[i]f competitive forces are operative, the 
self-interest of the exchanges themselves will work powerfully to 
constrain unreasonable or unfair behavior'' \46\ and in 2019, that the 
Commission Staff reaffirmed that ``[i]f significant competitive forces 
constrain the fee at issue, fee levels will be presumed to be fair and 
reasonable . . . .'' \47\ The Exchange explains that, accordingly, 
``the existence of significant competition provides a substantial basis 
for finding that the terms of an exchange's fee proposal are equitable, 
fair, reasonable, and not unreasonably or unfairly discriminatory.'' 
\48\ The Exchange states that, consistent with the Commission's 
longstanding focus on competition, Commission Staff have indicated that 
they would only look at factors outside of the competitive market if a 
``proposal lacks persuasive evidence that the proposed fee is 
constrained by significant competitive forces.'' \49\
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    \44\ See Notice, 89 FR at 24071 (citing Securities Exchange Act 
Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 
(``Regulation NMS Adopting Release'')).
    \45\ See Notice, 89 FR at 24071.
    \46\ See Notice, 89 FR at 24071 (citing Securities Exchange Act 
Release No. 59039 (December 2, 2008), 73 FR 74770 (December 9, 2008) 
(SR-NYSEArca-2006-21)).
    \47\ See Notice, 89 FR at 24071 (citing Fee Guidance).
    \48\ See id.
    \49\ See id. The Exchange states that, in the Fee Guidance, the 
Staff indicated that ``[w]hen reviewing rule filing proposals . . . 
[it] is mindful of recent opinions by the D.C. Circuit,'' including 
Susquehanna International Group, LLP v. SEC, 866 F.3d 442 (D.C. Cir. 
2017). See Notice, 89 FR at 24072. However, the Exchange believes 
that the D.C. Circuit's decision in Susquehanna is irrelevant to the 
Commission's review of immediately effective SRO fee filings. See 
id. The Exchange states that Susquehanna involved the Commission's 
approval of a rule proposed under Section 19(b)(2) of the Act, not 
its evaluation of whether to temporarily suspend an SRO's 
immediately effective fee filing under Section 19(b)(3). See id. The 
Exchange believes that a comparison of Sections 19(b)(2) and 
19(b)(3) of the Act makes clear that the Commission is not required 
to undertake the same independent review, and make the same findings 
and determinations, for Section 19(b)(3) filings that it must for 
Section 19(b)(2) filings and, Section 19(b)(2) requires the 
Commission to ``find[ ] that [a] proposed rule change is consistent 
with the'' Act before approving the rule. 15 U.S.C. 78s(b)(2)(C)(i). 
The Exchange states that Section 19(b)(3), by contrast, imbues the 
Commission with discretion, stating that it ``may temporarily 
suspend'' an immediately effective rule filing where ``it appears to 
the Commission that such action is necessary or appropriate.'' See 
id. The Exchange further states that, as the Supreme Court has 
explained, statutes stating that an agency ``may''--but need not--
take certain action are ``written in the language of permission and 
discretion.'' See id. (citing S. Ry. Co. v. Seaboard Allied Milling, 
442 U.S. 444, 455 (1979); see also Crooker v. SEC, 161 F.2d 944, 949 
(1st Cir. 1947) (per curiam)). The Exchange believes that the 
``contrast'' between Sections 19(b)(2) and 19(b)(3), the Commission 
itself has explained, ``reflects the fundamental difference in the 
way Congress intended for different types of rules to be treated'' 
and (``[W]hile the Commission's authority to suspend a fee under 
Subsection (3)(C) is permissive, its duties under Subsection (2) are 
stated in mandatory terms. See Notice, 89 FR at 24072 (citing Brief 
of Respondent SEC, NetCoalition v. SEC, 715 F.3d 342-43 (D.C. Cir. 
2013) (Nos. 10-1421 et al.).''). Thus, the Exchange argues that 
neither Susquehanna, nor Section 19(b)(3) of the Act, requires the 
Commission to make independent findings that an immediately 
effective SRO fee filing such as this one is consistent with the Act 
and, the Exchange argues that to the degree that the Susquehanna 
decision is applicable to any Commission action, however, the court 
held that the Commission is required to ``itself find or determine'' 
that a proposal meets statutory requirements, explaining that the 
Commission is ``obligated to make an independent review'' of an 
SRO's proposal, and not rely solely on the work of the SRO. See 
Notice, 89 FR at 24072 (citing 866 F.3d at 446).
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2. The Exchange Believes That Nothing in the Act Requires an 
Examination of Fees in Isolation
    The Exchange states that the Act mandates the ``equitable 
allocation of reasonable dues, fees, and other charges among members 
and issuers and other persons using its facilities,'' \50\ further 
stating that this provision refers generally to ``reasonable dues, 
fees, and other charges'' as a whole, not individual fees, and that 
nothing in the Act requires the individual examination of specific 
product fees in isolation.\51\ The Exchange states that evidence of 
platform competition is sufficient to show that the product operates in 
a competitive environment, provided that a proposed rule change does 
not in and of itself undermine competition.\52\ The Exchange finally 
states that a determination of whether a proposal permits unfair 
discrimination between customers, issuers, brokers, or dealers remains 
a separate product-specific inquiry.\53\
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    \50\ See 15 U.S.C. 78f(b)(4).
    \51\ See Notice, 89 FR at 24072.
    \52\ See id.
    \53\ See id.
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3. The Exchange Believes That the Commission Has Recognized That 
Exchanges Are Subject to Significant Competitive Forces in the Market 
for Order Flow
    The Exchange states that the fact that the market for order flow is 
competitive has long been recognized by the courts--citing 
specifically, the

[[Page 46246]]

NetCoalition v. Securities and Exchange Commission statement, ``[n]o 
one disputes that competition for order flow is `fierce.' . . . As the 
SEC explained, `[i]n the U.S. national market system, buyers and 
sellers of securities, and the broker-dealers that act as their order-
routing agents, have a wide range of choices of where to route orders 
for execution'; [and] `no exchange can afford to take its market share 
percentages for granted' because `no exchange possesses a monopoly, 
regulatory or otherwise, in the execution of order flow from broker 
dealers.' '' \54\
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    \54\ See NetCoalition, 615 F.3d at 539 (D.C. Cir. 2010) (quoting 
Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 
74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-21)). See also 
Notice, 89 FR at 24072.
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4. The Exchange Believes That All Exchange Products Are Subject to 
Competition--Not Just Those Directly Related to Order Flow
    The Exchange states that competition is not limited to order flow 
and that data shows that the combination of explicit all-in costs to 
trade and other implicit costs has largely equalized the cost to trade 
across venues.\55\ The Exchange states that this is a function of the 
fact that, if the all-in cost to the user of interacting with an 
exchange exceeds market price, customers can and do shift their 
purchases and trading activity to other exchanges, and therefore the 
exchange must adjust one or more of its fees to attract customers.\56\
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    \55\ The Exchange states that competition across platforms 
constrains platform fees and results in ``all-in'' costs becoming 
equal across platforms, but that the Staff Guidance on SRO Rule 
Filings Relating to Fees states that platform competition requires 
that the ``overall return of the platform, rather than the return of 
any particular fees charged to a type of customer, . . . be used to 
assess the competitiveness of the platform's market,'' and that 
``[a]n SRO that wishes to rely on total platform theory must provide 
evidence demonstrating that competitive forces are sufficient to 
constrain the SRO's aggregate return across the platform.'' See 
Notice, 89 FR at 24072 (citing Fee Guidance Exchange's emphasis). 
The Exchange states that it does not know, and cannot determine, 
whether returns (as opposed to fees) are equalized across platforms, 
because we do not have detailed cost information from other 
exchanges. See id. The Exchange believes that an analysis of 
returns, however, is unnecessary to show that competition constrains 
fees given that, platform competition can be demonstrated solely by 
examining costs to users. See id.
    \56\ See Notice, 89 FR at 24072.
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    The Exchange states that this conclusion is particularly striking 
given that different exchanges engage in a variety of business models 
and offer an array of pricing options to appeal to different customer 
types; specifically, that the largest exchanges operate maker-taker 
platforms, offering rebates to attract trading liquidity, which allows 
them to maintain actionable quotes with high liquidity and offer high-
quality market data.\57\ The Exchange further states that the negative 
price charged to liquidity providers through rebates is part of the 
platform because it serves to create features attractive to other 
participants, including oftentimes tight spreads, actionable and lit 
quotes, and more valuable market data.\58\
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    \57\ See id.
    \58\ See id.
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    The Exchange states that inverted venues, in contrast, have the 
opposite price structure--liquidity providers pay to add liquidity, 
while liquidity takers earn a rebate--these platforms offer less 
liquidity, but better queue priority, faster fills, and lower effective 
spreads for investors.\59\ The Exchange states that there are a wide 
range of other pricing models and product offerings among the dozens of 
lit and unlit trading venues that compete in the marketplace in 
addition to these examples.\60\ The Exchange further states that 
different strategies among exchanges also manifest in the pricing of 
other services, such as market data and connectivity.\61\ The Exchange 
states that some exchanges charge for such services, while others 
charge little or nothing (typically because the exchange is new or has 
little liquidity), just as some exchanges charge a fee per trade, while 
others pay rebates.\62\
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    \59\ See id.
    \60\ See id.
    \61\ See id.
    \62\ See id.
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    In assessing competition for exchange services, the Exchange 
explains that ``we must consider not only explicit costs, such as fees 
for trading, market data, and connectivity, but also the implicit costs 
of trading on an exchange[ ]''; and that ``[t]he realized spread, or 
markout, captures the implicit cost to trade on a platform.'' \63\ The 
Exchange further states that considering both the explicit costs 
charged by exchanges for their various joint products and the implicit 
costs incurred by traders to trade on various exchanges, the data show 
that all-in trading costs across exchanges are largely equalized, 
regardless of different trading strategies offered by each platform for 
each individual service.\64\
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    \63\ The Exchange states that the concept of markout was created 
by market makers trying to capture the spread while providing a two-
sided (bid and offer) market. See Notice, 89 FR at 24072. The 
Exchange states that, for market makers, being filled on the bid or 
the offer can cause a loss if the fill changes market prices. See 
id. (stating as an example, a fill on a market maker's bid just as 
the stock price falls results in a ``virtual loss,'' because the 
market maker has a long position with a new bid lower than the 
fill). The Exchange states that negative markouts can be beneficial. 
See Notice, 89 FR at 24072 (stating as an example, if an 
institutional investor is working a large buy order, negative 
markouts represent fills as the market falls, allowing later orders 
to be placed sooner, and likely at a better price, reducing the 
opportunity costs as well as explicit cost of building the 
position). The Exchange further states that data suggests that 
market participants employ sophisticated analytic tools to weigh the 
cost of immediate liquidity and lower opportunity costs against 
better spread capture (lower markouts) and explicit trading costs. 
See Notice, 89 FR at 24073. The Exchange states that, as discussed 
in greater detail in its Exhibit 3, the venues with the highest 
explicit costs--typically inverted and fee-fee venues--have the 
lowest implicit costs from markouts and vice versa. See id. The 
Exchange also states that higher positive markouts mean more spread 
capture, but those venues also tend to have the highest explicit 
costs, and provide the least liquidity, and positive externalities, 
to the market. See id.
    \64\ See Notice, 89 FR at 24073.
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    The Exchange states that platform competition has resulted in a 
competitive environment in the market for exchange services, in which 
trading platforms are constrained by other platforms' offerings, taking 
into consideration the all-in cost of interacting with the 
platform.\65\ The Exchange further states that this constraint is a 
natural consequence of competition and demonstrates that no exchange 
platform can charge excessive fees and expect to remain competitive, 
thereby constraining fees on all products sold as part of the 
platform.\66\ The Exchange finally states that the existence of 
platform-level competition also explains why some consumers route 
orders to the exchange with the highest explicit trading costs even 
though other exchanges offer free or a net rebate for trading.\67\
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    \65\ See id.
    \66\ See id.
    \67\ The Exchange states that empirical evidence also shows that 
market data is more valuable from exchanges with more liquidity. 
According to the Exchange, many customers decide not to take data 
from smaller markets, even though they are free or much lower cost 
than larger markets. See Notice, 89 FR at 24073.
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5. The Exchange Believes That Exchanges Compete at Both the Platform 
and Product Level
    The Exchange states that its customers are differentiated in the 
value they place on the different products offered by exchanges and in 
their willingness to pay for those products.\68\ The Exchange believes 
that this occurs both on a firm-wide and a transaction basis; for 
example, individual customers ``multi-home'' on various platforms, and 
are thus able to route different trades to different platforms to take 
advantage of favorable economics offered on a trade-to-trade basis.\69\
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    \68\ See Notice, 89 FR at 24073.
    \69\ See id.

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[[Page 46247]]

    The Exchange believes that exchanges compete by offering 
differentiated packages of pricing and products to attract different 
categories of customer, and that, as in any competitive market, 
consumers will ``vote with their feet,'' incentivizing platforms to 
supply an array of pricing and product offerings that suit diverse 
consumer needs far more effectively than a uniform, one-size-fits-some 
rigid product offering.\70\ The Exchange further states that if an 
exchange's pricing for a particular product gets out of line, such that 
its total return is boosted above competitive levels, market forces 
will discipline that approach because competing exchanges will quickly 
attract customer volume through more attractive all-in trading 
costs.\71\ In addition, the Exchange states that if a particular 
package of pricing and products is not attractive to a sufficient 
volume of customers in a particular category, those customers may elect 
not to purchase the service and that this is why exchanges compete at a 
product level, as well as based on all-in trading costs.\72\
---------------------------------------------------------------------------

    \70\ See id.
    \71\ See id.
    \72\ See id.
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6. The Exchange Believes That Exchanges Compete With Off-Exchange 
Trading Platforms in Addition to Other Exchanges
    The Exchange states that, as the SEC recently noted in its market 
infrastructure proposal,\73\ the number of transactions completed on 
non-exchange venues has been growing, and allowing exchanges to compete 
as platforms will help exchanges compete against non-exchange venues, 
and, to the degree order flow is shifted from non-exchange to exchange 
venues, overall market transparency will improve.\74\ The Exchange 
states that exchanges have a unique role to play in market transparency 
because they publish an array of pre- and post-trade data that non-
exchange venues, almost entirely, do not. The Exchange further states 
that greater transparency benefits non-exchange venues by enabling them 
to provide more accurate pricing to their customers, and by helping 
such venues set their own prices, benchmark, analyze the total cost of 
ownership, and assess their own trading strategies.
---------------------------------------------------------------------------

    \73\ See id. (citing Regulation NMS: Minimum Pricing Increments, 
Access Fees, and Transparency of Better Price Orders, Securities 
Exchange Act Release No. 96494 (File No. S7-30-22)).
    \74\ See Notice, 89 FR at 24073 (stating that non-exchange 
venues rely on market data distributed by exchanges to set prices 
and greater transparency allows both exchange and non-exchange 
venues to operate more effectively and efficiently).
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    The Exchange states that allowing exchanges to compete effectively 
as platforms has other positive network effects: larger trading 
platforms offer lower average trading costs; and as trading platforms 
attract more liquidity, bid-ask spreads tighten, search costs fall (by 
limiting the number of venues that a customer needs to check to assess 
the market), and connection costs decrease, as customers have no need 
to connect to all venues.\75\ The Exchanges argues that the whole is 
therefore greater (in the sense that it is more efficient) than the sum 
of the parts.\76\
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    \75\ In addition, the Exchange states that its experience shows 
that fewer customers connect with smaller trading venues than with 
larger venues. See Notice, 89 FR at 24073.
    \76\ See Notice, 89 FR at 24073.
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    The Exchange states that this is not to say that smaller 
established trading platforms do not have a role to play as they 
provide specialized services that cater to individual customer needs, 
but that these specialized services help the smaller exchanges grow by 
driving liquidity to their platforms, and, if they are successful, 
achieve the economies of scale that benefit the larger enterprises.\77\ 
The Exchange states that, because the total costs of interacting with 
an exchange are roughly equal, smaller exchanges offset higher trading 
costs with lower connectivity, market data, or other fees.\78\ The 
Exchange states that, while the mix of fees will change as exchanges 
grow, the all-in cost of interacting with the exchange remains roughly 
the same.\79\ The Exchange finally states that acknowledging that 
exchanges compete as platforms and approving fees expeditiously on that 
basis will improve the ability of exchanges to compete against non-
exchange venues, and, to the degree order flow is shifted to exchanges, 
both transparency and efficiency will improve.\80\
---------------------------------------------------------------------------

    \77\ See id.
    \78\ See id.
    \79\ See id.
    \80\ See id.
---------------------------------------------------------------------------

7. The Exchange States That the Proposed Fees Are Equitable and 
Reasonable Because They Will Be Subject to Competition
    The Exchange states that intent of the Proposal offering member 
firms an incentive to display liquidity through lower non-display and 
connectivity fees is to generate a ``virtuous cycle,'' in which the 
proposed fee structure will attract more liquidity to the Exchange, 
making it a more attractive trading venue, and thereby attracting more 
liquidity.\81\ The Exchange states that incentive programs have been 
widely adopted by exchanges, and are reasonable, equitable, and non-
discriminatory because they are open on an equal basis to similarly 
situated members and provide additional benefits or discounts that are 
reasonably related to the value to an exchange's market quality and 
activity.\82\ The Exchange also states that the Proposal will 
contribute to market quality because it will help bring new order flow 
to the Exchange and greater displayed liquidity on the Exchange offers 
investors deeper, more liquid markets and execution opportunities.\83\ 
The Exchange states that increased order flow benefits investors by 
deepening the Exchange's liquidity pool, potentially providing greater 
execution incentives and opportunities, offering additional flexibility 
for all investors to enjoy cost savings, supporting the quality of 
price discovery, promoting market transparency, and lowering spreads 
between bids and offers and thereby lowering investor costs.\84\ The 
Exchange states that, to the degree that liquidity is attracted from 
dark venues, that liquidity also increases transparency for the market 
overall, providing investors with more information about market 
trends.\85\ The Exchange finally states that the Proposal will help 
members that meet the Minimum ADV threshold maintain lower costs and 
will benefit them through the many positive externalities associated 
with a more liquid exchange.\86\
---------------------------------------------------------------------------

    \81\ See id.
    \82\ See id. (citing as examples Securities Exchange Act Release 
No. 92493 (July 26, 2021), 86 FR 41129 (July 30, 2021) (SR-CboeEDGX-
2021-034) (proposal to provide discount to new members that meet 
certain volume thresholds, noting that ``relative volume-based 
incentives and discounts have been widely adopted by exchanges . . . 
and are reasonable, equitable and non-discriminatory because they 
are open on an equal basis to similarly situated members and provide 
additional benefits or discounts that are reasonably related to (i) 
the value to an exchange's market quality and (ii) associated higher 
levels of market activity . . . .'') and Securities Exchange Act 
Release No. 53790 (May 11, 2006), 71 FR 28738 (May 17, 2006) (SR-
Phlx-2006-04) (``The Commission recognizes that volume-based 
discounts of fees are not uncommon, and where the discount can be 
applied objectively, it is consistent with Rule 603. For the same 
reasons noted above, the Commission believes that the fee structure 
meets the standard in section 6(b)(4) of the Act in that the 
proposed rule change provides for the equitable allocation of 
reasonable dues, fees, and other charges among the Exchange's 
members and issuers and other persons using its facilities.'')).
    \83\ See Notice, 89 FR at 24074.
    \84\ See id.
    \85\ See id.
    \86\ See id.
---------------------------------------------------------------------------

    The Exchange states that the competition among exchanges as trading

[[Page 46248]]

platforms, as well as the competition between exchanges and alternative 
trading venues, constrain exchanges from charging excessive fees for 
any exchange products, including trading, listings, ports, and market 
data.\87\ The Exchange also states that the fees that arise from the 
competition among trading platforms may be too low because they fail to 
reflect the benefits to the market as a whole of exchange products and 
services, allowing other venues to free-ride on these investments by 
the exchange platforms, increasing fragmentation and search costs.\88\ 
The Exchange believes that, as long as total returns are constrained by 
competitive forces there is no regulatory basis to be concerned with 
pricing of particular elements offered on a platform and that 
regulatory constraints in this environment are likely to reduce 
consumer welfare by constraining certain exchanges from offering 
packages of pricing and products that would be attractive to certain 
sets of consumers, thus impeding competition with venues that are not 
subject to the same regulatory limitations and reducing the benefits of 
competition to customers.\89\
---------------------------------------------------------------------------

    \87\ See id.
    \88\ See id.
    \89\ See id.
---------------------------------------------------------------------------

8. The Exchange Believes That the Proposal Is Not Unfairly 
Discriminatory
    The Exchange states that the Proposal is not unfairly 
discriminatory and that Non-Display Usage and the Exchange's 40Gb and 
10Gb Ultra high-speed connections will be offered to all members and 
non-members on like terms.\90\ The Exchanges states that it is also not 
unfair to charge more to firms that do not directly contribute order 
flow to the Exchange, but nevertheless benefit from that order flow 
through tighter spreads, better prices, and the other advantages of a 
more liquid platform.\91\ The Exchange also states that, specifically, 
the Proposal is not unfairly discriminatory with respect to either 
members or non-members.\92\ The Exchange states that, with respect to 
members, all members that meet the ADV threshold will be charged lower 
fees; and with respect to smaller members, Nasdaq offers rebates to 
members that offer displayed liquidity.\93\ The Exchange states that, 
with these rebates, any member--even smaller members--should have the 
ability to post sufficient displayed liquidity to meet the ADV 
threshold.\94\
---------------------------------------------------------------------------

    \90\ See Notice, 89 FR at 24074.
    \91\ See id.
    \92\ See id.
    \93\ See id.
    \94\ See id.
---------------------------------------------------------------------------

    The Exchange states that the Proposal is not unfairly 
discriminatory with respect to non-member broker-dealers, which include 
brokers routing trades through members and off-exchange trading 
platforms that use exchange data to execute trades, because they have 
the option of becoming members to obtain lower fees under the Proposal, 
and because they realize the benefits of higher liquidity--including 
tighter spreads and better prices--and it is not unfair discrimination 
to charge a higher fee for that benefit.\95\ The Exchange further 
states that the Proposal is not unfairly discriminatory with respect to 
non-member firms that are not broker-dealers, such as market data 
vendors and index providers, because they also benefit from the value 
that the additional liquidity generated by this Proposal will provide 
to the trading platform.\96\ The Exchange states that, incentivizing 
higher levels of liquidity enhances and enriches the market data 
distributed to the industry, and increases the overall value of 
platform and that is not unfair for such parties to pay a higher fee to 
reflect the greater value of the platform.\97\ The Exchange states that 
discounts for specific categories of market participants are well-
established; examples include non-professional fees, broker-dealer 
enterprise licenses, and a media enterprise license.\98\
---------------------------------------------------------------------------

    \95\ See id.
    \96\ See id.
    \97\ See id.
    \98\ See also id. (citing as an example The Nasdaq Stock Market, 
Price List--U.S. Equities, available at http://www.nasdaqtrader.com/Trader.aspx?id=DPUSData (providing discounts for Non-Professional 
subscribers for Nasdaq TotalView and other market data products, 
enterprise licenses for broker-dealers for multiple market data 
products, and a digital media enterprise license for Nasdaq Basic)).
---------------------------------------------------------------------------

B. Suspension

    To date, the Commission has received one comment letter on the 
proposed rule change, and the letter opposes the proposed rule 
change.\99\ The commenter states, among other concerns, that the 
Exchange mischaracterizes the Proposal as a discount instead of a fee 
increase on some participants, and does not include sufficient or 
meaningful data or justification to support the fee increase or the 
tying of costs from one product (market data) to another product 
(transactions).\100\ The commenter also states that the Proposal is 
discriminatory, an undue burden on competition, and inconsistent with a 
past Commission order disapproving a Nasdaq proposed rule change.\101\
---------------------------------------------------------------------------

    \99\ See HMA Letter, supra n. 5.
    \100\ See id. at 4-5.
    \101\ See id. at 5-8 (citing Securities Exchange Act Release No. 
65362 (September 20, 2011), 76 FR 59466 (September 26. 2011) (SR-
Nasdaq-2011-010) (Order Disapproving a Proposed Rule Change to Link 
Market Data Fees and Transaction Execution Fees)).
---------------------------------------------------------------------------

    When exchanges file their proposed rule changes with the 
Commission, including fee filings like the Exchange's present Proposal, 
they are required to provide a statement supporting the proposal's 
basis under the Act and the rules and regulations thereunder applicable 
to the exchange.\102\ The instructions to Form 19b-4, on which 
exchanges file their proposed rule changes, specify that such statement 
``should be sufficiently detailed and specific to support a finding 
that the proposed rule change is consistent with [those] 
requirements.'' \103\
---------------------------------------------------------------------------

    \102\ See 17 CFR 240.19b-4 (Item 3 entitled ``Self-Regulatory 
Organization's Statement of the Purpose of, and Statutory Basis for, 
the Proposed Rule Change'').
    \103\ See id.
---------------------------------------------------------------------------

    Section 6 of the Act, including Sections 6(b)(4), (5), and (8), 
require the rules of an exchange to: (1) provide for the equitable 
allocation of reasonable fees among members, issuers, and other persons 
using the exchange's facilities; \104\ (2) perfect the mechanism of a 
free and open market and a national market system, protect investors 
and the public interest, and not be designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers; \105\ 
and (3) not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act.\106\
---------------------------------------------------------------------------

    \104\ 15 U.S.C. 78f(b)(4).
    \105\ 15 U.S.C. 78f(b)(5).
    \106\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    In temporarily suspending the Exchange's proposed rule change, the 
Commission intends to further consider whether the Proposal to increase 
market data and connectivity fees for participants who do not maintain 
the minimum average daily displayed volume threshold is consistent with 
the statutory requirements applicable to a national securities exchange 
under the Act. In particular, the Commission will consider whether the 
proposed rule change satisfies the standards under the Act and the 
rules thereunder requiring, among other things, that an exchange's 
rules provide for the equitable allocation of reasonable fees among 
members, issuers, and other persons using its facilities; not permit 
unfair discrimination between customers, issuers, brokers or dealers; 
and do not impose any burden on competition not

[[Page 46249]]

necessary or appropriate in furtherance of the purposes of the 
Act.\107\
---------------------------------------------------------------------------

    \107\ See 15 U.S.C. 78f(b)(4), (5), and (8), respectively.
---------------------------------------------------------------------------

    Therefore, the Commission finds that it is appropriate in the 
public interest, for the protection of investors, and otherwise in 
furtherance of the purposes of the Act, to temporarily suspend the 
proposed rule change.\108\
---------------------------------------------------------------------------

    \108\ For purposes of temporarily suspending the proposed rule 
change, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

IV. Proceedings To Determine Whether To Approve or Disapprove the 
Proposed Rule Change

    In addition to temporarily suspending the Proposal, the Commission 
also hereby institutes proceedings pursuant to Sections 19(b)(3)(C) 
\109\ and 19(b)(2)(B) of the Act \110\ to determine whether the 
Exchange's proposed rule change should be approved or disapproved. 
Institution of proceedings does not indicate that the Commission has 
reached any conclusions with respect to any of the issues involved. 
Rather, the Commission seeks and encourages interested persons to 
provide additional comment on the proposed rule change to inform the 
Commission's analysis of whether to approve or disapprove the proposed 
rule change.
---------------------------------------------------------------------------

    \109\ 15 U.S.C. 78s(b)(3)(C). Once the Commission temporarily 
suspends a proposed rule change, Section 19(b)(3)(C) of the Act 
requires that the Commission institute proceedings under Section 
19(b)(2)(B) to determine whether a proposed rule change should be 
approved or disapproved.
    \110\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\111\ the Commission is 
providing notice of the grounds for possible disapproval under 
consideration:
---------------------------------------------------------------------------

    \111\ Id. Section 19(b)(2)(B) of the Act also provides that 
proceedings to determine whether to disapprove a proposed rule 
change must be concluded within 180 days of the date of publication 
of notice of the filing of the proposed rule change. See id. The 
time for conclusion of the proceedings may be extended for up to 60 
days if the Commission finds good cause for such extension and 
publishes its reasons for so finding, or if the exchange consents to 
the longer period. See id.
---------------------------------------------------------------------------

     Whether the Exchange has demonstrated how the proposed 
fees are consistent with Section 6(b)(4) of the Act, which requires 
that the rules of a national securities exchange ``provide for the 
equitable allocation of reasonable dues, fees, and other charges among 
its members and issuers and other persons using its facilities''; \112\
---------------------------------------------------------------------------

    \112\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

     Whether the Exchange has demonstrated how the proposed 
fees are consistent with Section 6(b)(5) of the Act, which requires, 
among other things, that the rules of a national securities exchange 
not be ``designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers''; \113\ and
---------------------------------------------------------------------------

    \113\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

     Whether the Exchange has demonstrated how the proposed 
fees are consistent with Section 6(b)(8) of the Act, which requires 
that the rules of a national securities exchange ``not impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of [the Act].'' \114\
---------------------------------------------------------------------------

    \114\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    As discussed in Section III above, the Exchange made various 
arguments in support of the Proposal. There are questions as to whether 
the Exchange has provided sufficient information to demonstrate that 
the proposed fees are consistent with the Act and the rules thereunder. 
The Commission will specifically consider, among other things, whether 
the Exchange has provided sufficient information to demonstrate that 
the Exchange is subject to significant competitive forces when setting 
the proposed market data and connectivity fees in order to justify that 
those fees are fair and reasonable. The Commission will also consider 
whether the Exchange has provided sufficient information to demonstrate 
that tying the proposed market data and connectivity fees to a minimum 
average daily display volume threshold is not an undue burden on 
competition or is not unfairly discriminatory.
    Under the Commission's Rules of Practice, the ``burden to 
demonstrate that a proposed rule change is consistent with the [Act] 
and the rules and regulations issued thereunder . . . is on the [SRO] 
that proposed the rule change.'' \115\ The description of a proposed 
rule change, its purpose and operation, its effect, and a legal 
analysis of its consistency with applicable requirements must all be 
sufficiently detailed and specific to support an affirmative Commission 
finding,\116\ and any failure of an SRO to provide this information may 
result in the Commission not having a sufficient basis to make an 
affirmative finding that a proposed rule change is consistent with the 
Act and the applicable rules and regulations.\117\
---------------------------------------------------------------------------

    \115\ 17 CFR 201.700(b)(3).
    \116\ See id.
    \117\ See id.
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional 
consideration and comment on the issues raised herein, including as to 
whether the proposed fees are consistent with the Act, and 
specifically, with its requirements that exchange fees be reasonable 
and equitably allocated, not be unfairly discriminatory, and not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.\118\
---------------------------------------------------------------------------

    \118\ See 15 U.S.C. 78f(b)(4), (5), and (8).
---------------------------------------------------------------------------

V. Commission's Solicitation of Comments

    The Commission requests written views, data, and arguments with 
respect to the concerns identified above as well as any other relevant 
concerns. Such comments should be submitted by June 18, 2024. Rebuttal 
comments should be submitted by July 2, 2024. Although there do not 
appear to be any issues relevant to approval or disapproval that would 
be facilitated by an oral presentation of views, data, and arguments, 
the Commission will consider, pursuant to Rule 19b-4, any request for 
an opportunity to make an oral presentation.\119\
---------------------------------------------------------------------------

    \119\ 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants 
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is 
appropriate for consideration of a particular proposal by an SRO. 
See Securities Acts Amendments of 1975, Report of the Senate 
Committee on Banking, Housing and Urban Affairs to Accompany S. 249, 
S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975).
---------------------------------------------------------------------------

    The Commission asks that commenters address the sufficiency and 
merit of the Exchange's statements in support of the Proposal, in 
addition to any other comments they may wish to submit about the 
proposed rule change.
    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NASDAQ-2024-016 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-NASDAQ-2024-016. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will

[[Page 46250]]

post all comments on the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent 
amendments, all written statements with respect to the proposed rule 
change that are filed with the Commission, and all written 
communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-NASDAQ-2024-016 and should be submitted on or before June 18, 2024. 
Rebuttal comments should be submitted by July 2, 2024.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(3)(C) of the 
Act,\120\ that File No. SR-NASDAQ-2024-016, be and hereby is, 
temporarily suspended. In addition, the Commission is instituting 
proceedings to determine whether the proposed rule change should be 
approved or disapproved.
---------------------------------------------------------------------------

    \120\ 15 U.S.C. 78s(b)(3)(C).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\121\
---------------------------------------------------------------------------

    \121\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-11581 Filed 5-24-24; 8:45 am]
BILLING CODE 8011-01-P