Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change to Modify Nasdaq Data Feeds, 42428-42432 [E6-11925]

Download as PDF 42428 Federal Register / Vol. 71, No. 143 / Wednesday, July 26, 2006 / Notices conduct appropriate surveillance of trading activity on the DRF and has in place relevant surveillance procedures.5 All classes of securities traded on the DRF would be subject to the Exchange’s Hybrid System rules relating to the electronic component of Hybrid trading and any applicable non-trading rules. To the extent system capacity limits the number of members that can quote on the DRF, proposed Exchange Rule 6.18 provides a priority system to select member participants. Connectivity procedures are available to all CBOE members. The Exchange represents that there is already sufficient member connectivity to ensure that the DRF, if activated, could operate in a useful manner.6 The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.7 Specifically, the Commission finds that the proposal is consistent with Section 6(b)(1) of the Act,8 which requires that an exchange is organized and has the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its members and persons associated with its members, with the provisions of the Act, the rules and regulations thereunder, and the rules of the exchange. Specifically, the Commission finds that proposed Exchange Rule 6.18 provides a business continuity plan that is reasonably designed to allow the Exchange to continue its trading operations in the event a disaster or other unusual circumstance renders the CBOE trading floor inoperable. Furthermore, the Commission believes the proposed rule change is reasonably designed to enhance the resilience of the U.S. financial markets generally. In addition, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,9 which requires, among other things, that the rules of a national securities exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. Specifically, the Commission finds the proposed rule change is reasonably designed to provide market participants with the necessary disclosure to understand the Exchange’s operational capabilities and plans in the event of a disaster. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,10 that the proposed rule change (SR–CBOE–2006– 01), as amended, is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–11926 Filed 7–25–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54179; File No. SR– NASDAQ–2006–013] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change to Modify Nasdaq Data Feeds July 20, 2006. 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 June 21, 2006, The NASDAQ Stock Market LLC (‘‘Nasdaq’’), filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by Nasdaq. 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 Substance of the Proposed Rule Change Nasdaq is proposing to incorporate data from Nasdaq’s INET facility into Nasdaq TotalView data entitlements and to establish fees for the use and distribution of those data entitlements. Nasdaq proposes to: (1) Incorporate the INET ITCH Feed into the TotalView entitlement, rename the feed TotalView ITCH, and charge TotalView user fees to TotalView ITCH Feed recipients; (2) add the full depth of Nasdaq Market Participant quoting of New York Stock Exchange-(‘‘NYSE’’) and American Stock Exchange-(‘‘Amex’’) listed stocks into the TotalView entitlement; (3) establish a modified distributor fee for the TotalView entitlement, renamed the ‘‘Depth Feed’’; (4) establish a modified user fee schedule for TotalView data; (5) allow for the unlimited, free distribution of Nasdaq’s aggregate best bid and offer quotation for Nasdaq’s quoting in NYSEand Amex-listed stocks; and (6) charge fees for the receipt and distribution of individual Nasdaq Market Participants’ best bid and offer in NYSE- and Amexlisted stocks. If approved, Nasdaq states that it would make this proposal effective at the beginning of the first full month following the integration of Nasdaq’s trading systems into a single platform.3 Below is the text of the proposed rule change. Proposed new language is italicized and proposed deletions are in [brackets]. * * * * * 7019. Market Data Distributor Fees (a) No change. (b) The charge to be paid by Distributors of the following Nasdaq Market Center real time data feeds shall be: Monthly direct access fee Issue Specific Data ................................ Monthly internal distributor fee Monthly external distributor fee ............................ ................................................................ $1000 for distribution to 50 or fewer subscribers; $2,500 for distribution to more than 50 and less than or equal to 100 subscribers; $4,500 for distribution to greater than 100. $500 for distribution to 10 or fewer subscribers; Dynamic Intraday ................................... $2,500 $1,000 for distribution to greater than 10 subscribers. sroberts on PROD1PC70 with NOTICES Depth Feed: 5 See Notice at 3. 8 15 U.S.C. 78f(b)(1). U.S.C. 78f(b)(5). 10 15 U.S.C. 78s(b)(2). 11 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 6 Id. 9 15 7 In approving this proposed rule change the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). VerDate Aug<31>2005 17:16 Jul 25, 2006 Jkt 208001 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 2 17 CFR 240.19b–4. Securities Exchange Act Release No. 53583 (March 31, 2006), 71 FR 19573 (April 14, 2006) (SR–NASDAQ–2006–001). 3 See E:\FR\FM\26JYN1.SGM 26JYN1 Federal Register / Vol. 71, No. 143 / Wednesday, July 26, 2006 / Notices Monthly direct access fee [TotalView]. [OpenView]. Daily ................................................ MFQS .............................................. Market Summary Statistics: Intraday ........................................... Real Time Index. sroberts on PROD1PC70 with NOTICES (a) TotalView Entitlement The TotalView entitlement allows a subscriber to see all individual Nasdaq Market Center participant orders and quotes displayed in the system as well as the aggregate size of such orders and quotes at each price level in the execution functionality of the Nasdaq Market Center, which currently includes Nasdaq, NYSE- and Amex-listed securities. In the case of Nasdaq listed securities, this entitlement automatically includes[ing] the NQDS feed [and the Brut System Book Feed]. (1)(A) Except as provided in (a)(1)(B) and (C), for the TotalView entitlement there shall be a $75 [70] monthly charge for each controlled device. (B) Except as provided in (a)(1)(C), a non-professional subscriber, as defined in Rule 7011(b), shall pay $14 per month for each controlled device. (C) As an alternative to (a)(1)(A) and (B), a broker-dealer distributor may purchase an enterprise license at a rate of $25,000 for non-professional subscribers or $100,000 per month for both professional and non-professional subscribers. The enterprise license entitles a distributor to provide TotalView to an unlimited number of internal users, whether such users receive the data directly or through third-party vendors, and external users with whom the firm has a brokerage relationship. The enterprise license shall not apply to relevant Level 1 and NQDS fees. (2) 30-Day Free-Trial Offer. Nasdaq shall offer all new individual subscribers and potential new individual subscribers a 30-day waiver of the user fees for TotalView. This waiver shall not include the incremental fees assessed for the NQDS-only service [, which are $30 for professional users and $9 for non-professional users per month]. This fee waiver period shall be applied on a rolling basis, determined by the date on which a new individual subscriber or potential individual Jkt 208001 $0 ........................................................... $500. $500 7023. Nasdaq TotalView 17:16 Jul 25, 2006 Monthly external distributor fee $500 A distributor shall pay the higher of either the internal distributor fee or the external distributor fee but not both. (c)–(d) No change. VerDate Aug<31>2005 Monthly internal distributor fee $50 ......................................................... $1,500. subscriber is first entitled by a distributor to receive access to TotalView. A distributor may only provide this waiver to a specific individual subscriber once. For the period of the offer, only the TotalView portion of the TotalView monthly fee [of $40 per professional user and $5 per non-professional user per month] shall be waived. (b) No change. (c) OpenView (1) The OpenView entitlement package consists of [all] the best bid and offer quotation from each individual Nasdaq Market Center participant quoting [quotes and orders] in nonNasdaq exchange-listed securities in the system. There shall be a charge of $6 per month per controlled device for Open View. (2) The OpenView Top-of-File (‘‘OpenView TOF’’) entitlement package consists of the Nasdaq aggregate best bid and offer quotation for non-Nasdaq exchange-listed securities in the system. There shall be no fee for the distribution of the Open View TOF. (d) No change. * * * * * 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 these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On December 7, 2005, Nasdaq acquired INET ATS, Inc., a registered broker-dealer and member of the NASD, and operator of the INET ATS (‘‘INET’’). Once purchased by Nasdaq, INET PO 00000 42429 Frm 00084 Fmt 4703 Sfmt 4703 became a facility of a national securities association. On November 1, 2005, Nasdaq submitted a proposed rule change to establish rules governing the operation of this facility.4 This proposed rule change was approved by the Commission on December 7, 2005.5 On January 13, 2006, the Commission issued an order conditionally approving Nasdaq’s registration as a national securities exchange.6 In its proposed rules governing the operation of the INET facility, Nasdaq stated its intention of ultimately integrating the INET facility with Nasdaq into a single technology platform that would further enhance execution quality for system users.7 Nasdaq states that, as part of that process, it must, among other things, have INET distribute its full depth of its order book via its premium data entitlements, e.g., TotalView.8 Nasdaq states that this step would be completed when Nasdaq completes the integration of its INET, Brut, and Nasdaq Market Center trading facilities into a single integrated system—the ‘‘Single Book’’— as set forth in SR–NASDAQ–2006–001.9 Nasdaq states that Nasdaq TotalView is a comprehensive source of Nasdaq order and quote information, and provides the greatest level of transparency into the Nasdaq stock market. Nasdaq states that today, TotalView provides 23 times the liquidity displayed and nearly 5 times the orders disseminated by the Nasdaq Quotation Dissemination Service (‘‘NQDS’’). Nasdaq’s full depth in NYSE- and Amex-listed stocks (OpenView) also provides access to 40% more liquidity than the top-of-file quote quotes provided via the Consolidated Quotation System feed from the Securities Information Automation 4 Securities Exchange Act Release No. 52723 (November 2, 2005), 70 FR 67513 (November 7, 2005) (proposing SR–NASD–2005–128). 5 Securities Exchange Act Release No. 52902 (December 7, 2005), 70 FR 73810 (December 13, 2005) (approving SR–NASD–2005–128). 6 Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10–131). 7 See supra note 4 at 67522. 8 Id. 9 See supra note 3. E:\FR\FM\26JYN1.SGM 26JYN1 42430 Federal Register / Vol. 71, No. 143 / Wednesday, July 26, 2006 / Notices sroberts on PROD1PC70 with NOTICES Corporation. If approved, Nasdaq expects the proposed Nasdaq, Brut, and INET integrated data would represent triple the current level of liquidity. Integrating INET Data Into Nasdaq Entitlements Nasdaq states that a consequence of this integration is that market participants would be able to receive real-time information regarding the orders in INET’s order book via two distinct sources. Today, Nasdaq’s TotalView Feed provides information regarding all quotes and orders in the Nasdaq Market Center for Nasdaq-listed securities (including, but not limited to, INET orders). Upon the integration of the INET system, the Nasdaq TotalView entitlement would, if approved, for the first time include the equivalent quotation information for NYSE- and Amex-listed securities. Also today, INET separately disseminates the INET ITCH Feed, which contains information regarding orders entered into INET. Upon the integration to a single consolidated platform, the ITCH data feeds (1.0, 2.0, 2.0a, and 3.0) would be re-named ‘‘TotalView ITCH’’ and would contain the equivalent quotes and orders as those carried by TotalView, albeit in different formats. Thus, upon integration of Nasdaq’s trading systems, the TotalView Entitlement, would be available in two separate datafeed formats, and both would contain substantially more data than they do today. Because Nasdaq proposes to continue to distribute INET order information via both the traditional TotalView Feed as well as the TotalView ITCH Feed and because both would contain identical data, Nasdaq believes that it is appropriate for it to incorporate the TotalView ITCH Feed within the TotalView entitlement for fee purposes. The TotalView entitlement is intended to assess fees for the receipt of real-time information regarding depth of order book and related information, regardless of source. While Nasdaq believes it important to offer market participants the choice to receive INET order book information via either the existing TotalView Feed or the TotalView ITCH Feed, it further believes there is no justification to warrant differential fees based on the method of delivery because the two methods would provide recipients with the same data. Accordingly, Nasdaq proposes to incorporate the TotalView ITCH Feed into the TotalView entitlement effective upon the completion of the integration of the Single Book. Nasdaq states that, as of that time, any recipient of the TotalView ITCH Feeds would need to VerDate Aug<31>2005 17:16 Jul 25, 2006 Jkt 208001 complete relevant market data agreements, begin submission of monthly usage reporting, and pay associated fees. Current recipients of the TotalView ITCH pay no fees and would be required to pay the TotalView entitlement fee for the first time. Under this proposal, incremental fees would be assessed only where a distributor distributes the TotalView ITCH Feeds in an application or context that does not already distribute TotalView Entitlements to provide Nasdaq Market Center order book information. Nasdaq notes that, of the approximately 145 firms currently receiving the INET ITCH Feeds, many are already TotalView or OpenView distributors, and thus, for those firms, this rule change would impose no incremental expense unless their usage is expanded. Consolidating Total View and OpenView Distribution and User Fees Nasdaq offers various data products that firms may purchase and redistribute either within their own organizations or to outside parties. Nasdaq assesses ‘‘distributor fees’’ that are designed to encourage broad distribution of the data, and allow Nasdaq to recover the relatively high fixed costs associated with supporting connectivity and contractual relationships with distributors. Currently, Nasdaq has the following approved distributor fees 10 in place for both TotalView and OpenView. • TotalView and OpenView Direct Access Fee: $2,500 per month each. • TotalView and OpenView Internal Distribution Fee: $1,000 per month each. • TotalView and OpenView External Distribution Fee: $2,500 per month each. Thus, for example, if a firm receives TotalView and OpenView directly from Nasdaq and distributes the data externally, the firm currently pays $10,000 per month in distributor fees ($2,500 for direct access to TotalView, $2,500 for direct access to OpenView, $2,500 to externally distribute TotalView, and $2,500 to externally distribute OpenView). To promote the continued distribution of full depth data as it becomes available with the full complement of INET order information, Nasdaq is proposing to combine the distribution of TotalView and OpenView data into a single entitlement for distribution purposes. Specifically, Nasdaq proposes to establish the ‘‘Depth 10 See Securities Exchange Act Release No. 51814 (June 9, 2005), 70 FR 35151 (June 16, 2005) (approving SR–NASD–2004–185). PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 Feed Distributor Fees,’’ a consolidated entitlement with a pricing structure comprised of three components: • Depth Feed Direct Access Fee: $2,500 per month for any organization that receives an intraday Nasdaq market center depth data product directly from Nasdaq. Nasdaq states that a distributor receiving this data indirectly via a retransmission vendor would not be liable for the Direct Access Fee. • Depth Feed Internal Distribution Fee: $500 per month for internal distributors with distribution of TotalView data to 10 or fewer subscribers; $1000 per month for internal distributors with distribution of TotalView data to greater than 10 subscribers. Nasdaq states that, as with the current Internal Distribution Fees, this fee would be applicable to any organization that receives an intraday Nasdaq market center depth data product (either directly from Nasdaq or through a retransmission vendor) and distributes the data solely within its own organization. • Depth Feed External Distribution Fee: $1,000 per month for external distributors distributing TotalView data to 50 or fewer subscribers; $2,500 per month for external distributors distributing TotalView data to more than 50 and less than or equal to 100 subscribers; and $4,500 per month for external distributors distributing TotalView data to more than 100 recipients. Nasdaq states that, as is the case today, this fee would be applicable to any organization that receives an intraday Nasdaq market center depth data product (either directly from Nasdaq or through a retransmission vendor) and distributes the data outside its own organization. Nasdaq states that, under the new schedule, a firm that receives a TotalView Feed and/or an INET ITCH Feed directly from Nasdaq and distributes the data externally, would pay a range of $3,500-$7,000 per month, depending upon the number of end users, a significant reduction from the currently approved fees. Nasdaq states that the only firms that would be assessed higher fees would be: (1) distributors of the TotalView ITCH Feed alone because it is currently free and is proposed to be fee liable; and (2) firms that currently distribute either TotalView or OpenView but not both, and distribute that data to more than 100 subscribers, would have a resulting increase of $2,000 per month. Nasdaq states that, for that incremental $2,000 per month, those firms, of which there are currently seventeen, would gain the ability to distribute both NYSE-/Amexlisted and Nasdaq-listed depth E:\FR\FM\26JYN1.SGM 26JYN1 Federal Register / Vol. 71, No. 143 / Wednesday, July 26, 2006 / Notices information to their subscribers where they had previously provided only one of them. Nasdaq states that an organization that receives the Nasdaq Market Center full depth data directly from Nasdaq would pay the Direct Access Fee plus the higher of either the Internal Distribution or External Distribution Fee (but not both). An organization that only receives the Nasdaq Market Center full depth data indirectly from a retransmission vendor would pay either the Internal Distribution or External Distribution fee (but not both). Nasdaq states that, as with past distributor fee structures, the External Distribution Fee is higher than the Internal Distribution Fee to reflect the fact that external distributors typically have broader distribution of the data than internal distributors. Nasdaq believes that lowering the fee for firms that subscribe to depth feeds would encourage more vendors to take the combination of both feeds. Additionally, Nasdaq believes that the new structure spreads the burden of Nasdaq data fees more equitably across the broader customer base of data distributors and consumers of Nasdaq market data. sroberts on PROD1PC70 with NOTICES Fee Increased To Recover Costs Of Providing Additional Data Nasdaq states that, upon integration of the Single Book, both of Nasdaq’s full depth feeds—TotalView and ITCH— would contain not only order and quotation information from Nasdaq market participant activity in Nasdaqlisted securities, but NYSE- and Amexlisted stocks as well. Upon the full Single Book integration, Nasdaq proposes to integrate the entitlement for full depth from Nasdaq market participants quoting in Nasdaq stocks with the full depth from Nasdaq market participants quoting in NYSE- and Amex-listed stocks, resulting in a single entitlement to be called TotalView. This single entitlement would cost $75 per user per month for professional users and $14 per user per month for nonprofessional users. Nasdaq states that, in the case of non-professionals, there is no fee increase on account of this change, simply an increase in functionality. In the case of professional users, the TotalView user fee increases by $5, though for those users who previously subscribed to the TotalView and OpenView entitlements separately, this amounts to a $1 per user per month discount. Nasdaq states that only those users that had one of the companion entitlements without the other would pay more under this proposal. VerDate Aug<31>2005 17:16 Jul 25, 2006 Jkt 208001 Distribution of Quotation Information for NYSE and Amex Securities To encourage more competition in the trading and quoting of NYSE- and Amex-listed stocks, as well as to encourage subscribership to Nasdaq’s full-depth products, Nasdaq is proposing Nasdaq Rule 7023(c)(2) to institute a fee waiver for firms wishing to distribute Nasdaq’s aggregate realtime best bid and offer quote for NYSEand Amex-listed stocks via the TotalView or TotalView ITCH versions of its feeds. Nasdaq states that, in support of its exchange registration transition, it is proposing to distribute the best bid and offer from each Nasdaq market participant quoting in NYSE- and Amex-listed stocks in real-time. As set forth in Nasdaq Rule 7023(c)(1), Nasdaq proposes a $6 per user per month price for this product. Nasdaq expects that most users currently receiving full depth from Nasdaq in NYSE- and Amexlisted stocks would continue to do so via the TotalView entitlement. However, for any subscriber currently receiving only this depth data for NYSE- and Amex-listed stocks (i.e., OpenView data), and not wishing to also receive the equivalent data for Nasdaq-listed stocks, this option would allow a user to continue paying at the same rate schedule for user-fees that they have in the past and the distributor fee schedule referenced earlier in this filing. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act 11 in general, and Section 6(b)(4) of the Act 12 in particular, in that the incorporation of the TotalView ITCH Feeds into the TotalView entitlement and creating a unified distributor fee provides for the equitable allocation of reasonable charges among the persons distributing and purchasing Nasdaq depth of order book information. Nasdaq states that the proposed pricing structure would enable it to equitably charge for INET depth of book information regardless of the manner in which it is received, continue to provide market participants with choice regarding receipt of this information, and ease the transition to a single technology platform. Nasdaq further believes that this rule change would encourage the broader redistribution of the Nasdaq depth of book information, thus improving transparency and thereby benefit the investing public. PO 00000 11 15 12 15 U.S.C. 78f. U.S.C. 78f(b)(4). Frm 00086 Fmt 4703 Sfmt 4703 42431 B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or (ii) as to which Nasdaq consents, the Commission will: (A) By order approve such proposed rule change; or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2006–013 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASDAQ–2006–013. This file number should be included on the subject line if e-mail 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 (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements E:\FR\FM\26JYN1.SGM 26JYN1 42432 Federal Register / Vol. 71, No. 143 / Wednesday, July 26, 2006 / Notices 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 inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of Nasdaq. 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–2006–013 and should be submitted on or before August 16, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.13 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6–11925 Filed 7–25–06; 8:45 am] BILLING CODE 8010–01–P fee, or other charge applicable only to a member imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. of these 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 aspects of such statements. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its fee schedule reflected in Exchange Rule 11.10(A) to provide for a quotation fee. The quotation fee would be based upon the number of changes to the price or size of an ETP Holder’s displayed bid or offer on the Exchange (‘‘quotation updates’’) and would apply only to the extent the ETP Holder’s average number of daily quotation updates is greater than 3 million. Below is the text of the proposed rule change, as amended. Proposed new language is in italics. 1. Purpose The Exchange’s fee schedule reflected in Exchange Rule 11.10(A) currently provides for fees payable by ETP Holders based upon, among other things, transactions executed on the Exchange, but does not provide for any fees based solely upon the number of changes to the price or size of an ETP Holder’s quotation updates. However, NSX states that quotation updates can affect both the Exchange’s systems resources and its regulatory functions. For example, a sufficiently high level of quotation updates could require that the Exchange expend additional resources on its systems technology in order to avoid capacity and performance degradation issues. NSX states that the levels of surveillance and investigation required in order for the Exchange to adequately discharge its self-regulatory obligations also increase with an increase in quotation updates. For these reasons, the Exchange believes that it is appropriate to charge a fee for high levels of quotation updates that consume a high amount of the Exchange’s systems capacity and require a higher amount of regulatory scrutiny. The proposed quotation fee would be based upon the number of quotations updates posted by an ETP Holder, but would apply only to the extent that an ETP Holder averages in excess of 3 million quotation updates per day. The Exchange is proposing to charge ETP Holders that provide quotation updates in excess of 3 million updates on an average daily basis a penny a quote for all quotation updates in excess of 3 million.5 The average daily quotation updates would be calculated on a monthly basis taking the total quotation updates for the month-end period (‘‘TQU’’) and dividing the TQU by the number of trading days the ETP Holder provides quotation updates. Three million would be subtracted from this average daily quotation to yield the amount of daily quotations in excess of 3 million quotes. The excess would be multiplied by a penny to yield the daily RULES OF NATIONAL STOCK EXCHANGE * * * * * * * CHAPTER XI SECURITIES AND EXCHANGE COMMISSION Trading Rules [Release No. 34–54180; File No. SR–NSX– 2006–09] Rule 11.10 National Securities Trading System Fees Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto to Amend Its Fee Schedule Contained in Exchange Rule 11.10(A) to Include a Quotation Fee A. Trading Fees (a)-(r) No change. (s) Quotation Fee. ETP Holders will be charged for quotation updates based upon the per quotation update rates as noted below. A ‘‘quotation update’’ means each change to the price or size of an ETP Holder’s displayed bid or offer on the Exchange. * sroberts on PROD1PC70 with NOTICES July 20, 2006. 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 July 3, 2006, the National Stock Exchange, Inc. (‘‘NSX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On July 19, 2006, NSX submitted Amendment No. 1 to the proposed rule change. On July 20, 2006, NSX submitted Amendment No. 2 to the proposed rule change. The Exchange has designated this proposal as one establishing or changing a due, * * Avg. daily quotation updates Charge per quotation update 0 to 3,000,000 ........... 3,000,001 and higher $0.00 $0.01 over 3,000,000 * * * * * 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 Exchange included statements concerning the purpose of and basis for the proposed rule change, as amended, and discussed any comments it received on the proposed rule change. The text 13 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Aug<31>2005 17:16 Jul 25, 2006 3 15 4 17 Jkt 208001 PO 00000 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). Frm 00087 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 5 Thus, for example, an ETP Holder that has an averaged daily quotation updates of 3,000,001 would be assessed a penny and not have to pay $30,000.01. E:\FR\FM\26JYN1.SGM 26JYN1

Agencies

[Federal Register Volume 71, Number 143 (Wednesday, July 26, 2006)]
[Notices]
[Pages 42428-42432]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11925]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54179; File No. SR-NASDAQ-2006-013]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change to Modify Nasdaq Data Feeds

 July 20, 2006.
    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 June 21, 2006, The NASDAQ Stock Market LLC (``Nasdaq''), filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III below, which Items 
have been prepared by Nasdaq. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq is proposing to incorporate data from Nasdaq's INET facility 
into Nasdaq TotalView data entitlements and to establish fees for the 
use and distribution of those data entitlements. Nasdaq proposes to: 
(1) Incorporate the INET ITCH Feed into the TotalView entitlement, 
rename the feed TotalView ITCH, and charge TotalView user fees to 
TotalView ITCH Feed recipients; (2) add the full depth of Nasdaq Market 
Participant quoting of New York Stock Exchange-(``NYSE'') and American 
Stock Exchange-(``Amex'') listed stocks into the TotalView entitlement; 
(3) establish a modified distributor fee for the TotalView entitlement, 
renamed the ``Depth Feed''; (4) establish a modified user fee schedule 
for TotalView data; (5) allow for the unlimited, free distribution of 
Nasdaq's aggregate best bid and offer quotation for Nasdaq's quoting in 
NYSE- and Amex-listed stocks; and (6) charge fees for the receipt and 
distribution of individual Nasdaq Market Participants' best bid and 
offer in NYSE- and Amex-listed stocks. If approved, Nasdaq states that 
it would make this proposal effective at the beginning of the first 
full month following the integration of Nasdaq's trading systems into a 
single platform.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 53583 (March 31, 
2006), 71 FR 19573 (April 14, 2006) (SR-NASDAQ-2006-001).
---------------------------------------------------------------------------

    Below is the text of the proposed rule change. Proposed new 
language is italicized and proposed deletions are in [brackets].
* * * * *

7019. Market Data Distributor Fees

    (a) No change.
    (b) The charge to be paid by Distributors of the following Nasdaq 
Market Center real time data feeds shall be:

----------------------------------------------------------------------------------------------------------------
                                          Monthly direct        Monthly internal            Monthly external
                                            access fee           distributor fee            distributor fee
----------------------------------------------------------------------------------------------------------------
Issue Specific Data....................  ................  ..........................  $1000 for distribution to
                                                                                        50 or fewer subscribers;
                                                           $500 for distribution to    $2,500 for distribution
                                                            10 or fewer subscribers;    to more than 50 and less
                                                                                        than or equal to 100
                                                                                        subscribers;
Dynamic Intraday.......................            $2,500  $1,000 for distribution to  $4,500 for distribution
                                                            greater than 10             to greater than 100.
                                                            subscribers.
Depth Feed:

[[Page 42429]]

 
    [TotalView]........................
    [OpenView].........................
    Daily..............................              $500  $0........................  $500.
    MFQS...............................
Market Summary Statistics:
    Intraday...........................              $500  $50.......................  $1,500.
Real Time Index........................
----------------------------------------------------------------------------------------------------------------

    A distributor shall pay the higher of either the internal 
distributor fee or the external distributor fee but not both.
    (c)-(d) No change.

7023. Nasdaq TotalView

    (a) TotalView Entitlement
    The TotalView entitlement allows a subscriber to see all individual 
Nasdaq Market Center participant orders and quotes displayed in the 
system as well as the aggregate size of such orders and quotes at each 
price level in the execution functionality of the Nasdaq Market Center, 
which currently includes Nasdaq, NYSE- and Amex-listed securities. In 
the case of Nasdaq listed securities, this entitlement automatically 
includes[ing] the NQDS feed [and the Brut System Book Feed].
    (1)(A) Except as provided in (a)(1)(B) and (C), for the TotalView 
entitlement there shall be a $75 [70] monthly charge for each 
controlled device.
    (B) Except as provided in (a)(1)(C), a non-professional subscriber, 
as defined in Rule 7011(b), shall pay $14 per month for each controlled 
device.
    (C) As an alternative to (a)(1)(A) and (B), a broker-dealer 
distributor may purchase an enterprise license at a rate of $25,000 for 
non-professional subscribers or $100,000 per month for both 
professional and non-professional subscribers. The enterprise license 
entitles a distributor to provide TotalView to an unlimited number of 
internal users, whether such users receive the data directly or through 
third-party vendors, and external users with whom the firm has a 
brokerage relationship. The enterprise license shall not apply to 
relevant Level 1 and NQDS fees.
    (2) 30-Day Free-Trial Offer. Nasdaq shall offer all new individual 
subscribers and potential new individual subscribers a 30-day waiver of 
the user fees for TotalView. This waiver shall not include the 
incremental fees assessed for the NQDS-only service [, which are $30 
for professional users and $9 for non-professional users per month]. 
This fee waiver period shall be applied on a rolling basis, determined 
by the date on which a new individual subscriber or potential 
individual subscriber is first entitled by a distributor to receive 
access to TotalView. A distributor may only provide this waiver to a 
specific individual subscriber once.
    For the period of the offer, only the TotalView portion of the 
TotalView monthly fee [of $40 per professional user and $5 per non-
professional user per month] shall be waived.
    (b) No change.
    (c) OpenView
    (1) The OpenView entitlement package consists of [all] the best bid 
and offer quotation from each individual Nasdaq Market Center 
participant quoting [quotes and orders] in non-Nasdaq exchange-listed 
securities in the system. There shall be a charge of $6 per month per 
controlled device for Open View.
    (2) The OpenView Top-of-File (``OpenView TOF'') entitlement package 
consists of the Nasdaq aggregate best bid and offer quotation for non-
Nasdaq exchange-listed securities in the system. There shall be no fee 
for the distribution of the Open View TOF.
    (d) No change.
* * * * *

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 these statements may be examined at the places specified in 
Item IV below. Nasdaq has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On December 7, 2005, Nasdaq acquired INET ATS, Inc., a registered 
broker-dealer and member of the NASD, and operator of the INET ATS 
(``INET''). Once purchased by Nasdaq, INET became a facility of a 
national securities association. On November 1, 2005, Nasdaq submitted 
a proposed rule change to establish rules governing the operation of 
this facility.\4\ This proposed rule change was approved by the 
Commission on December 7, 2005.\5\ On January 13, 2006, the Commission 
issued an order conditionally approving Nasdaq's registration as a 
national securities exchange.\6\
---------------------------------------------------------------------------

    \4\ Securities Exchange Act Release No. 52723 (November 2, 
2005), 70 FR 67513 (November 7, 2005) (proposing SR-NASD-2005-128).
    \5\ Securities Exchange Act Release No. 52902 (December 7, 
2005), 70 FR 73810 (December 13, 2005) (approving SR-NASD-2005-128).
    \6\ Securities Exchange Act Release No. 53128 (January 13, 
2006), 71 FR 3550 (January 23, 2006) (File No. 10-131).
---------------------------------------------------------------------------

    In its proposed rules governing the operation of the INET facility, 
Nasdaq stated its intention of ultimately integrating the INET facility 
with Nasdaq into a single technology platform that would further 
enhance execution quality for system users.\7\ Nasdaq states that, as 
part of that process, it must, among other things, have INET distribute 
its full depth of its order book via its premium data entitlements, 
e.g., TotalView.\8\ Nasdaq states that this step would be completed 
when Nasdaq completes the integration of its INET, Brut, and Nasdaq 
Market Center trading facilities into a single integrated system--the 
``Single Book''--as set forth in SR-NASDAQ-2006-001.\9\
---------------------------------------------------------------------------

    \7\ See supra note 4 at 67522.
    \8\ Id.
    \9\ See supra note 3.
---------------------------------------------------------------------------

    Nasdaq states that Nasdaq TotalView is a comprehensive source of 
Nasdaq order and quote information, and provides the greatest level of 
transparency into the Nasdaq stock market. Nasdaq states that today, 
TotalView provides 23 times the liquidity displayed and nearly 5 times 
the orders disseminated by the Nasdaq Quotation Dissemination Service 
(``NQDS''). Nasdaq's full depth in NYSE- and Amex-listed stocks 
(OpenView) also provides access to 40% more liquidity than the top-of-
file quote quotes provided via the Consolidated Quotation System feed 
from the Securities Information Automation

[[Page 42430]]

Corporation. If approved, Nasdaq expects the proposed Nasdaq, Brut, and 
INET integrated data would represent triple the current level of 
liquidity.
Integrating INET Data Into Nasdaq Entitlements
    Nasdaq states that a consequence of this integration is that market 
participants would be able to receive real-time information regarding 
the orders in INET's order book via two distinct sources. Today, 
Nasdaq's TotalView Feed provides information regarding all quotes and 
orders in the Nasdaq Market Center for Nasdaq-listed securities 
(including, but not limited to, INET orders). Upon the integration of 
the INET system, the Nasdaq TotalView entitlement would, if approved, 
for the first time include the equivalent quotation information for 
NYSE- and Amex-listed securities. Also today, INET separately 
disseminates the INET ITCH Feed, which contains information regarding 
orders entered into INET. Upon the integration to a single consolidated 
platform, the ITCH data feeds (1.0, 2.0, 2.0a, and 3.0) would be re-
named ``TotalView ITCH'' and would contain the equivalent quotes and 
orders as those carried by TotalView, albeit in different formats. 
Thus, upon integration of Nasdaq's trading systems, the TotalView 
Entitlement, would be available in two separate datafeed formats, and 
both would contain substantially more data than they do today.
    Because Nasdaq proposes to continue to distribute INET order 
information via both the traditional TotalView Feed as well as the 
TotalView ITCH Feed and because both would contain identical data, 
Nasdaq believes that it is appropriate for it to incorporate the 
TotalView ITCH Feed within the TotalView entitlement for fee purposes. 
The TotalView entitlement is intended to assess fees for the receipt of 
real-time information regarding depth of order book and related 
information, regardless of source. While Nasdaq believes it important 
to offer market participants the choice to receive INET order book 
information via either the existing TotalView Feed or the TotalView 
ITCH Feed, it further believes there is no justification to warrant 
differential fees based on the method of delivery because the two 
methods would provide recipients with the same data.
    Accordingly, Nasdaq proposes to incorporate the TotalView ITCH Feed 
into the TotalView entitlement effective upon the completion of the 
integration of the Single Book. Nasdaq states that, as of that time, 
any recipient of the TotalView ITCH Feeds would need to complete 
relevant market data agreements, begin submission of monthly usage 
reporting, and pay associated fees. Current recipients of the TotalView 
ITCH pay no fees and would be required to pay the TotalView entitlement 
fee for the first time. Under this proposal, incremental fees would be 
assessed only where a distributor distributes the TotalView ITCH Feeds 
in an application or context that does not already distribute TotalView 
Entitlements to provide Nasdaq Market Center order book information. 
Nasdaq notes that, of the approximately 145 firms currently receiving 
the INET ITCH Feeds, many are already TotalView or OpenView 
distributors, and thus, for those firms, this rule change would impose 
no incremental expense unless their usage is expanded.
Consolidating Total View and OpenView Distribution and User Fees
    Nasdaq offers various data products that firms may purchase and 
redistribute either within their own organizations or to outside 
parties. Nasdaq assesses ``distributor fees'' that are designed to 
encourage broad distribution of the data, and allow Nasdaq to recover 
the relatively high fixed costs associated with supporting connectivity 
and contractual relationships with distributors. Currently, Nasdaq has 
the following approved distributor fees \10\ in place for both 
TotalView and OpenView.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 51814 (June 9, 
2005), 70 FR 35151 (June 16, 2005) (approving SR-NASD-2004-185).
---------------------------------------------------------------------------

     TotalView and OpenView Direct Access Fee: $2,500 per month 
each.
     TotalView and OpenView Internal Distribution Fee: $1,000 
per month each.
     TotalView and OpenView External Distribution Fee: $2,500 
per month each.
    Thus, for example, if a firm receives TotalView and OpenView 
directly from Nasdaq and distributes the data externally, the firm 
currently pays $10,000 per month in distributor fees ($2,500 for direct 
access to TotalView, $2,500 for direct access to OpenView, $2,500 to 
externally distribute TotalView, and $2,500 to externally distribute 
OpenView).
    To promote the continued distribution of full depth data as it 
becomes available with the full complement of INET order information, 
Nasdaq is proposing to combine the distribution of TotalView and 
OpenView data into a single entitlement for distribution purposes. 
Specifically, Nasdaq proposes to establish the ``Depth Feed Distributor 
Fees,'' a consolidated entitlement with a pricing structure comprised 
of three components:
     Depth Feed Direct Access Fee: $2,500 per month for any 
organization that receives an intraday Nasdaq market center depth data 
product directly from Nasdaq. Nasdaq states that a distributor 
receiving this data indirectly via a re-transmission vendor would not 
be liable for the Direct Access Fee.
     Depth Feed Internal Distribution Fee: $500 per month for 
internal distributors with distribution of TotalView data to 10 or 
fewer subscribers; $1000 per month for internal distributors with 
distribution of TotalView data to greater than 10 subscribers. Nasdaq 
states that, as with the current Internal Distribution Fees, this fee 
would be applicable to any organization that receives an intraday 
Nasdaq market center depth data product (either directly from Nasdaq or 
through a retransmission vendor) and distributes the data solely within 
its own organization.
     Depth Feed External Distribution Fee: $1,000 per month for 
external distributors distributing TotalView data to 50 or fewer 
subscribers; $2,500 per month for external distributors distributing 
TotalView data to more than 50 and less than or equal to 100 
subscribers; and $4,500 per month for external distributors 
distributing TotalView data to more than 100 recipients. Nasdaq states 
that, as is the case today, this fee would be applicable to any 
organization that receives an intraday Nasdaq market center depth data 
product (either directly from Nasdaq or through a retransmission 
vendor) and distributes the data outside its own organization.
    Nasdaq states that, under the new schedule, a firm that receives a 
TotalView Feed and/or an INET ITCH Feed directly from Nasdaq and 
distributes the data externally, would pay a range of $3,500-$7,000 per 
month, depending upon the number of end users, a significant reduction 
from the currently approved fees. Nasdaq states that the only firms 
that would be assessed higher fees would be: (1) distributors of the 
TotalView ITCH Feed alone because it is currently free and is proposed 
to be fee liable; and (2) firms that currently distribute either 
TotalView or OpenView but not both, and distribute that data to more 
than 100 subscribers, would have a resulting increase of $2,000 per 
month. Nasdaq states that, for that incremental $2,000 per month, those 
firms, of which there are currently seventeen, would gain the ability 
to distribute both NYSE-/Amex-listed and Nasdaq-listed depth

[[Page 42431]]

information to their subscribers where they had previously provided 
only one of them.
    Nasdaq states that an organization that receives the Nasdaq Market 
Center full depth data directly from Nasdaq would pay the Direct Access 
Fee plus the higher of either the Internal Distribution or External 
Distribution Fee (but not both). An organization that only receives the 
Nasdaq Market Center full depth data indirectly from a retransmission 
vendor would pay either the Internal Distribution or External 
Distribution fee (but not both). Nasdaq states that, as with past 
distributor fee structures, the External Distribution Fee is higher 
than the Internal Distribution Fee to reflect the fact that external 
distributors typically have broader distribution of the data than 
internal distributors.
    Nasdaq believes that lowering the fee for firms that subscribe to 
depth feeds would encourage more vendors to take the combination of 
both feeds. Additionally, Nasdaq believes that the new structure 
spreads the burden of Nasdaq data fees more equitably across the 
broader customer base of data distributors and consumers of Nasdaq 
market data.
Fee Increased To Recover Costs Of Providing Additional Data
    Nasdaq states that, upon integration of the Single Book, both of 
Nasdaq's full depth feeds--TotalView and ITCH--would contain not only 
order and quotation information from Nasdaq market participant activity 
in Nasdaq-listed securities, but NYSE- and Amex-listed stocks as well. 
Upon the full Single Book integration, Nasdaq proposes to integrate the 
entitlement for full depth from Nasdaq market participants quoting in 
Nasdaq stocks with the full depth from Nasdaq market participants 
quoting in NYSE- and Amex-listed stocks, resulting in a single 
entitlement to be called TotalView. This single entitlement would cost 
$75 per user per month for professional users and $14 per user per 
month for non-professional users. Nasdaq states that, in the case of 
non-professionals, there is no fee increase on account of this change, 
simply an increase in functionality. In the case of professional users, 
the TotalView user fee increases by $5, though for those users who 
previously subscribed to the TotalView and OpenView entitlements 
separately, this amounts to a $1 per user per month discount. Nasdaq 
states that only those users that had one of the companion entitlements 
without the other would pay more under this proposal.
Distribution of Quotation Information for NYSE and Amex Securities
    To encourage more competition in the trading and quoting of NYSE- 
and Amex-listed stocks, as well as to encourage subscribership to 
Nasdaq's full-depth products, Nasdaq is proposing Nasdaq Rule 
7023(c)(2) to institute a fee waiver for firms wishing to distribute 
Nasdaq's aggregate real-time best bid and offer quote for NYSE- and 
Amex-listed stocks via the TotalView or TotalView ITCH versions of its 
feeds.
    Nasdaq states that, in support of its exchange registration 
transition, it is proposing to distribute the best bid and offer from 
each Nasdaq market participant quoting in NYSE- and Amex-listed stocks 
in real-time. As set forth in Nasdaq Rule 7023(c)(1), Nasdaq proposes a 
$6 per user per month price for this product. Nasdaq expects that most 
users currently receiving full depth from Nasdaq in NYSE- and Amex-
listed stocks would continue to do so via the TotalView entitlement. 
However, for any subscriber currently receiving only this depth data 
for NYSE- and Amex-listed stocks (i.e., OpenView data), and not wishing 
to also receive the equivalent data for Nasdaq-listed stocks, this 
option would allow a user to continue paying at the same rate schedule 
for user-fees that they have in the past and the distributor fee 
schedule referenced earlier in this filing.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act \11\ in general, and Section 
6(b)(4) of the Act \12\ in particular, in that the incorporation of the 
TotalView ITCH Feeds into the TotalView entitlement and creating a 
unified distributor fee provides for the equitable allocation of 
reasonable charges among the persons distributing and purchasing Nasdaq 
depth of order book information. Nasdaq states that the proposed 
pricing structure would enable it to equitably charge for INET depth of 
book information regardless of the manner in which it is received, 
continue to provide market participants with choice regarding receipt 
of this information, and ease the transition to a single technology 
platform. Nasdaq further believes that this rule change would encourage 
the broader redistribution of the Nasdaq depth of book information, 
thus improving transparency and thereby benefit the investing public.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change would result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding, or (ii) as to 
which Nasdaq consents, the Commission will:
    (A) By order approve such proposed rule change; or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2006-013 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2006-013. This 
file number should be included on the subject line if e-mail 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 (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements

[[Page 42432]]

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 inspection and copying in the 
Commission's Public Reference Room. Copies of such filing also will be 
available for inspection and copying at the principal office of Nasdaq. 
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-2006-
013 and should be submitted on or before August 16, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-11925 Filed 7-25-06; 8:45 am]
BILLING CODE 8010-01-P