Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify NASDAQ Rule 7049 Fees, 74150-74152 [2014-29240]
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74150
Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices
action is: (1) Necessary or appropriate in
the public interest; (2) for the protection
of investors; or (3) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
EDGX–2014–33 on the subject line.
emcdonald on DSK67QTVN1PROD with NOTICES
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
No. SR–EDGX–2014–33. 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
post all comments on the Commission’s
Internet Web site (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 Web site 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
10:00 a.m. and 3:00 p.m. Copies of such
filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–EDGX–
02:54 Dec 13, 2014
Jkt 235001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29243 Filed 12–12–14; 8:45 am]
BILLING CODE 8011–01–P
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
VerDate Sep<11>2014
2014–33 and should be submitted on or
before January 5, 2015.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73789; File No. SR–
NASDAQ–2014–120]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify
NASDAQ Rule 7049 Fees
December 8, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
3, 2014, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change as described in
Items I, II and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
NASDAQ is proposing to modify fees
assessed under NASDAQ Rule 7049 for
the NASDAQ InterACT surveillance
tool. While the changes proposed herein
are effective upon filing, the Exchange
has designated that the amendments be
operative on January 2, 2015.
The text of the proposed rule change
is available at nasdaq.cchwallstreet.com
at NASDAQ’s principal office, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASDAQ included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of those
25 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ is proposing to amend Rule
7049 to increase the fee and related fee
cap for subscription to the NASDAQ
InterACT service. InterACT is a realtime compliance tool accessed through
an existing Nasdaq Workstation or
Weblink ACT 3.0 user account, which
assists a member firm with supervision
of its trade activity reported to the
FINRA/NASDAQ Trade Reporting
Facility, and with its supervision of
trade throughs to help in complying
with Rule 611 of Regulation NMS.3 The
Exchange currently assesses a fee of
$300 per month, per user, for the first
three users, and $100 per month, per
user, for each additional user, with a
maximum fee of $1,500 per month, per
member firm. The Exchange began
offering the service in 2009 4 and has not
increased fees since its adoption,
notwithstanding that the Exchange’s
costs in offering and supporting the
service have increased. Accordingly,
NASDAQ is proposing to increase the
fee assessed for the service to $400 per
month, per user, with an increased fee
cap of $2,400 per month, per member
firm. The Exchange is also proposing to
eliminate the reduced fee rate of $100
per user, per month assessed for the
fourth through ninth subscriptions.5
The Exchange notes that offering the
discounted fee for the fourth through
ninth user subscriptions was designed
to encourage member firms to purchase
more subscriptions, thus ensuring broad
use of the service and, ultimately,
NASDAQ’s ability to offer the service
long-term. NASDAQ believes that the
reduced fee has had the desired effect
and, accordingly, is assessing the same
fee for all subscriptions through the
sixth, at which point member firms will
have reached the new fee cap. Lastly,
upon launch of InterACT in May 2009,
NASDAQ offered the service at no cost
for sixty days. Accordingly, NASDAQ is
3 17
CFR 242.611.
Exchange Act Release No. 59786
(April 17, 2009), 74 FR 18769 (April 24, 2009) (SR–
NASDAQ–2009–033).
5 Subscriptions beyond the ninth are provided at
no cost because the subscribing member firm has
met the $1,500 monthly fee cap.
4 Securities
E:\FR\FM\15DEN1.SGM
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Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices
emcdonald on DSK67QTVN1PROD with NOTICES
proposing to delete text from the rule
that concerns the expired free period.
2. Statutory Basis
NASDAQ believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,6 in
general, and with Sections 6(b)(4) and
6(b)(5) of the Act,7 in particular, in that
it provides for the equitable allocation
of reasonable dues, fees and other
charges among members and issuers and
other persons using any facility or
system which NASDAQ operates or
controls, and is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
This proposal is reasonable, equitable
and not unfairly discriminatory for the
reasons noted below.
NASDAQ believes that the proposed
increases to the fee and fee cap are
reasonable because they will allow
NASDAQ to realign the fee assessed for
the service with the costs it incurs in
offering it, while also ensuring that the
service continues to provide NASDAQ
with a profit. Eliminating the reduced
fee for the fourth through ninth
subscriptions is reasonable because
NASDAQ believes that it has served its
purpose by attracting an adequate
number of subscribers to the service to
ensure its viability. As a consequence,
NASDAQ believes that such incentive
pricing is no longer needed.
NASDAQ believes that the increased
fees and elimination of incentive pricing
is an equitable allocation because
NASDAQ is assessing the fee increase
uniformly among subscribers up to the
fee cap, which is also increased.
NASDAQ notes that it incurs the same
costs in offering a subscription,
regardless of the number of member
subscriptions. As such, increasing the
fee and applying it uniformly to all
subscriptions without any distinction
based on the number of subscriptions a
member firm has, up to the increased
fee cap, better aligns the fees paid with
the costs incurred by NASDAQ in
offering the service.
The Exchange believes that the
proposed changes are not unfairly
discriminatory because they now apply
a uniform fee per subscription, thus
eliminating a distinction made in the fee
assessed based on the number of
subscriptions held. The Exchange notes
that some member firms may incur a
disproportionate increase in fees as
compared to others under the proposed
change as a result of the elimination of
the incentive pricing provided for the
fourth through ninth subscriptions and
6 15
7 15
U.S.C. 78f.
U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
02:54 Dec 13, 2014
increase in the fee cap. Under the
proposed change, a member firm that
has four to six subscriptions will
experience a greater per subscription fee
increase than a member firm with three
or fewer subscriptions, whereas
subscriptions in excess of six under the
proposed change exceed the new fee cap
and are therefore offered at no cost. The
Exchange does not believe that the
changes are unfairly discriminatory
because they eliminate a distinction in
the fee assessed based on NASDAQ’s
desire to ensure wide acceptance of the
service, and better align the fee assessed
for a subscription with the costs that
NASDAQ incurs in providing it.
NASDAQ notes that it is retaining the
fee cap, albeit at a higher level, which
will ensure that no member firm pays
more than $2,400 per month.
Lastly, the proposed elimination of
the rule text concerning the expired free
period is designed to clarify the rule text
and avoid any potential confusion
among market participants that may
arise if the language were to remain.
Accordingly, NASDAQ does not believe
that the proposed changes will impose
any unnecessary burden on
competition.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ does not believe that the
proposed rule changes will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.8
NASDAQ notes that it operates in a
highly competitive market in which
market participants can readily favor
competing venues if they deem fee
levels at a particular venue to be
excessive. In such an environment,
NASDAQ must carefully balance the
fees it assesses with the costs incurred
to remain competitive with other
exchanges. To the extent NASDAQ’s
fees are too high or another exchange’s
products and services provide greater
value, NASDAQ will likely lose
subscriber revenue. As such, NASDAQ
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited. In this instance, NASDAQ is
proposing to increase the fees for a
service for the first time since it was
offered in 2009 to realign the fee
assessed for the subscription to the
service with the costs it incurs in
offering it, and to ensure that the service
provides NASDAQ with a profit.
Moreover, the Exchange does not
believe that the fee increase imposes an
unnecessary burden on competition
because the service is optional and
member firms may develop their own
alternatives to the service or purchase
similar functionality from third parties.
IV. Solicitation of Comments
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:
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing change has become
effective pursuant to Section 19(b)(3)(A)
of the Act,9 and paragraph (f) 10 of Rule
19b-4, thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change 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.
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2014–120 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2014–120. 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
post all comments on the Commission’s
Internet Web site (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
9 15
8 15
Jkt 235001
74151
PO 00000
U.S.C. 78f(b)(8).
Frm 00089
Fmt 4703
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
10 17
Sfmt 4703
E:\FR\FM\15DEN1.SGM
15DEN1
74152
Federal Register / Vol. 79, No. 240 / Monday, December 15, 2014 / Notices
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 Web site 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
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2014–120, and should be
submitted on or before January 5, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29240 Filed 12–12–14; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–73794; File No. SR–
NYSEMKT–2014–98]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending the NYSE
Amex Options Fee Schedule To Amend
the Application of Routing Surcharge
Fees
emcdonald on DSK67QTVN1PROD with NOTICES
December 9, 2014.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on
November 26, 2014, NYSE MKT LLC
(the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
CFR 200.30–3(a)(12).
1 15 U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
VerDate Sep<11>2014
04:14 Dec 13, 2014
Jkt 235001
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
11 17
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend the
NYSE Amex Options Fee Schedule
(‘‘Fee Schedule’’) to amend the
application of Routing Surcharge fees.
The Exchange proposes to implement
the change on December 1, 2014. The
text of the proposed rule change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
1. Purpose
The Exchange proposes to amend the
Fee Schedule as it relates to the
application of Routing Surcharge fees.
The purpose of the proposed change is
to account for recent changes
introduced on other exchanges that
impact the fees charged when routing
orders.
The Exchange currently charges ATP
Holders a Routing Surcharge when it
routes orders to other exchanges for
execution. The Routing Surcharge is
comprised of an $0.11 per contract fee,
plus the applicable charges assessed by
the away market for execution of the
order (which the Exchange is able to
discern from the away market fee
schedule). If the executing exchange
does not charge a transaction fee for the
execution of a Customer order, the
Routing Surcharge is waived.
Recently, the BOX Options Exchange
LLC (‘‘BOX’’) adopted per contract
pricing that varies based upon the
counter party to the trade. This pricing
change makes it impossible to know in
advance of the execution what the
charges will be for an order routed to
BOX. For example, a Professional
Customer order routed to BOX in a nonPenny option would be charged $0.35
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
per contract if it traded against another
Professional Customer or Broker/Dealer,
but would be charged $0.94 per contract
if it traded against a Customer.4
In order to provide ATP Holders with
certainty regarding the routing fees for
which they may be liable, the Exchange
is proposing to amend the Fee Schedule
as it relates to the application of Routing
Surcharge fees, specifically endnote 7.
The proposed amendment would
specify that if the actual transaction fees
assessed by the away exchange(s)
cannot be determined prior to the
execution, the Exchange would charge
the $0.11 per contract fee plus the
highest per contract charge assessed by
the away exchange(s) for the relevant
option class and type of market
participant (e.g., Customer, Firm,
Broker/Dealer, Professional Customer or
Market Maker).
The Exchange proposes to make a
non-substantive changes [sic] to the Fee
Schedule to replace the term ‘‘all actual
charges’’ with the term ‘‘any transaction
fees’’ as the Exchange believes that the
term transaction fees better represents
the applicable charges on away
exchanges, and is consistent with
existing rule text on the NYSE Arca, Inc.
Options (‘‘NYSE Arca’’) Fee Schedule.
The Exchange notes that ATP Holders
can avoid having their orders routed to
away markets by utilizing specific, nonroutable order types if they so choose.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Securities Exchange
Act of 1934 (the ‘‘Act’’),5 in general, and
furthers the objectives of Section 6(b)(4)
of the Act,6 in particular, because it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members, issuers and other
persons using its facilities and does not
unfairly discriminate between
customers, issuers, brokers or dealers.
The Exchange believes that the
proposed fee change is reasonable and
equitable because charging market
participants a set per contract rate in
those instances when an order is routed
to an away exchange provides market
participants with certainty, which will
enable them to make informed decisions
regarding whether to continue to
designate such orders as eligible for
routing to away exchange. The
Exchange further believes that the
proposed fee change to charge the
4 See BOX Fee Schedule, Section 1 (as of
November 2014), available here, https://
boxexchange.com/assets/BOX_Fee_Schedule.pdf.
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4).
E:\FR\FM\15DEN1.SGM
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]]>Agencies
[Federal Register Volume 79, Number 240 (Monday, December 15, 2014)]
[Notices]
[Pages 74150-74152]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29240]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73789; File No. SR-NASDAQ-2014-120]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify NASDAQ Rule 7049 Fees
December 8, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 3, 2014, The NASDAQ Stock Market LLC (``NASDAQ'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II and
III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
NASDAQ is proposing to modify fees assessed under NASDAQ Rule 7049
for the NASDAQ InterACT surveillance tool. While the changes proposed
herein are effective upon filing, the Exchange has designated that the
amendments be operative on January 2, 2015.
The text of the proposed rule change is available at
nasdaq.cchwallstreet.com at NASDAQ's principal office, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASDAQ included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ is proposing to amend Rule 7049 to increase the fee and
related fee cap for subscription to the NASDAQ InterACT service.
InterACT is a real-time compliance tool accessed through an existing
Nasdaq Workstation or Weblink ACT 3.0 user account, which assists a
member firm with supervision of its trade activity reported to the
FINRA/NASDAQ Trade Reporting Facility, and with its supervision of
trade throughs to help in complying with Rule 611 of Regulation NMS.\3\
The Exchange currently assesses a fee of $300 per month, per user, for
the first three users, and $100 per month, per user, for each
additional user, with a maximum fee of $1,500 per month, per member
firm. The Exchange began offering the service in 2009 \4\ and has not
increased fees since its adoption, notwithstanding that the Exchange's
costs in offering and supporting the service have increased.
Accordingly, NASDAQ is proposing to increase the fee assessed for the
service to $400 per month, per user, with an increased fee cap of
$2,400 per month, per member firm. The Exchange is also proposing to
eliminate the reduced fee rate of $100 per user, per month assessed for
the fourth through ninth subscriptions.\5\ The Exchange notes that
offering the discounted fee for the fourth through ninth user
subscriptions was designed to encourage member firms to purchase more
subscriptions, thus ensuring broad use of the service and, ultimately,
NASDAQ's ability to offer the service long-term. NASDAQ believes that
the reduced fee has had the desired effect and, accordingly, is
assessing the same fee for all subscriptions through the sixth, at
which point member firms will have reached the new fee cap. Lastly,
upon launch of InterACT in May 2009, NASDAQ offered the service at no
cost for sixty days. Accordingly, NASDAQ is
[[Page 74151]]
proposing to delete text from the rule that concerns the expired free
period.
---------------------------------------------------------------------------
\3\ 17 CFR 242.611.
\4\ Securities Exchange Act Release No. 59786 (April 17, 2009),
74 FR 18769 (April 24, 2009) (SR-NASDAQ-2009-033).
\5\ Subscriptions beyond the ninth are provided at no cost
because the subscribing member firm has met the $1,500 monthly fee
cap.
---------------------------------------------------------------------------
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\7\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which NASDAQ operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. This proposal is reasonable, equitable and not
unfairly discriminatory for the reasons noted below.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
NASDAQ believes that the proposed increases to the fee and fee cap
are reasonable because they will allow NASDAQ to realign the fee
assessed for the service with the costs it incurs in offering it, while
also ensuring that the service continues to provide NASDAQ with a
profit. Eliminating the reduced fee for the fourth through ninth
subscriptions is reasonable because NASDAQ believes that it has served
its purpose by attracting an adequate number of subscribers to the
service to ensure its viability. As a consequence, NASDAQ believes that
such incentive pricing is no longer needed.
NASDAQ believes that the increased fees and elimination of
incentive pricing is an equitable allocation because NASDAQ is
assessing the fee increase uniformly among subscribers up to the fee
cap, which is also increased. NASDAQ notes that it incurs the same
costs in offering a subscription, regardless of the number of member
subscriptions. As such, increasing the fee and applying it uniformly to
all subscriptions without any distinction based on the number of
subscriptions a member firm has, up to the increased fee cap, better
aligns the fees paid with the costs incurred by NASDAQ in offering the
service.
The Exchange believes that the proposed changes are not unfairly
discriminatory because they now apply a uniform fee per subscription,
thus eliminating a distinction made in the fee assessed based on the
number of subscriptions held. The Exchange notes that some member firms
may incur a disproportionate increase in fees as compared to others
under the proposed change as a result of the elimination of the
incentive pricing provided for the fourth through ninth subscriptions
and increase in the fee cap. Under the proposed change, a member firm
that has four to six subscriptions will experience a greater per
subscription fee increase than a member firm with three or fewer
subscriptions, whereas subscriptions in excess of six under the
proposed change exceed the new fee cap and are therefore offered at no
cost. The Exchange does not believe that the changes are unfairly
discriminatory because they eliminate a distinction in the fee assessed
based on NASDAQ's desire to ensure wide acceptance of the service, and
better align the fee assessed for a subscription with the costs that
NASDAQ incurs in providing it. NASDAQ notes that it is retaining the
fee cap, albeit at a higher level, which will ensure that no member
firm pays more than $2,400 per month.
Lastly, the proposed elimination of the rule text concerning the
expired free period is designed to clarify the rule text and avoid any
potential confusion among market participants that may arise if the
language were to remain.
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule changes will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.\8\ NASDAQ notes
that it operates in a highly competitive market in which market
participants can readily favor competing venues if they deem fee levels
at a particular venue to be excessive. In such an environment, NASDAQ
must carefully balance the fees it assesses with the costs incurred to
remain competitive with other exchanges. To the extent NASDAQ's fees
are too high or another exchange's products and services provide
greater value, NASDAQ will likely lose subscriber revenue. As such,
NASDAQ believes that the degree to which fee changes in this market may
impose any burden on competition is extremely limited. In this
instance, NASDAQ is proposing to increase the fees for a service for
the first time since it was offered in 2009 to realign the fee assessed
for the subscription to the service with the costs it incurs in
offering it, and to ensure that the service provides NASDAQ with a
profit. Moreover, the Exchange does not believe that the fee increase
imposes an unnecessary burden on competition because the service is
optional and member firms may develop their own alternatives to the
service or purchase similar functionality from third parties.
Accordingly, NASDAQ does not believe that the proposed changes will
impose any unnecessary burden on competition.
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\8\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing change has become effective pursuant to Section
19(b)(3)(A) of the Act,\9\ and paragraph (f) \10\ of Rule 19b-4,
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change 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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
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 rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2014-120 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-120. 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 post all comments on
the Commission's Internet Web site (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
[[Page 74152]]
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 Web site 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
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NASDAQ-2014-
120, and should be submitted on or before January 5, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29240 Filed 12-12-14; 8:45 am]
BILLING CODE 8011-01-P
