Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule To Amend Fees Assessed for Use of NASDAQ Pre-Trade Risk Management, 48193-48195 [2011-20008]
Download as PDF
<![CDATA[
48193
Federal Register / Vol. 76, No. 152 / Monday, August 8, 2011 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
NSCC has not solicited or received
written comments relating to the
proposed rule change. NSCC will notify
the Commission of any written
comments it receives.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective upon filing pursuant to Section
19(b)(3)(A)(ii) of the Act 11 and Rule
19b–4(f)(2) 12 thereunder because the
proposed rule change establishes or
changes a due, fee, or other charge
applicable only to a member. 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.
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 e-mail to rulecomments@sec.gov. Please include File
No. SR–NSCC–2011–06 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File No.
SR–NSCC–2011–06. 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 (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
a.m. and 3 p.m. Copies of such filings
also will be available for inspection and
copying at NSCC’s principal office and
NSCC’s Web site at https://
www.dtcc.com/downloads/legal/
rule_filings/2011/nscc/2011–06.pdf. 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–NSCC–2011–06 and should be
submitted on or before August 29, 2011.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.13
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–19980 Filed 8–5–11; 8:45 am]
BILLING CODE 8011–01–P
Port tiers
mstockstill on DSK4VPTVN1PROD with NOTICES
Tier
Tier
Tier
Tier
1
2
3
4
(c) Users of PRM services specified
below will be assessed the following
charges in addition to the applicable
PRM-enabled port charges:
12 Supra
note 2.
note 3.
VerDate Mar<15>2010
18:57 Aug 05, 2011
[Release No. 34–65020; File No. SR–
NASDAQ–2011–099]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule To Amend Fees
Assessed for Use of NASDAQ PreTrade Risk Management
August 3, 2011.
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 25,
2011, The NASDAQ Stock Market LLC
(the ‘‘Exchange’’ or ‘‘NASDAQ’’) 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 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 amend fees
assessed for use of NASDAQ Pre-trade
Risk Management (‘‘PRM’’) and to make
a minor technical correction. NASDAQ
will implement the amended fees
effective August 1, 2011.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
7016. Nasdaq Risk Management
(a) No change.
(b) Users of NASDAQ Pre-trade Risk
Management (‘‘PRM’’) will be assessed
[a charge of $100 per month per PRMenabled port.] a monthly fee based on
the following table, and such fees will
not exceed $25,000 per member firm,
per month:
Number of PRM-enabled ports
................................................................................
................................................................................
................................................................................
................................................................................
11 Supra
SECURITIES AND EXCHANGE
COMMISSION
50 or more .......................................................................
20 to 49 ...........................................................................
5 to 19 .............................................................................
1 to 4 ...............................................................................
PRM Modules—[$500 per month per
PRM Module] No charge
Aggregate Total Checks—[$0.025 per
each eligible side, capped at $2,000 per
month per PRM Module] No charge
13 17
1 15
Jkt 223001
PO 00000
Monthly fee
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
Frm 00077
Fmt 4703
Sfmt 4703
$400 per port, per month.
500 per port, per month.
550 per port, per month.
600 per port, per month.
PRM Workstation Add-ons to an $100
per each PRM Workstation Add-on per
month [existing NASDAQ Workstation
or beginning July 2006 (no charge for
2 17
E:\FR\FM\08AUN1.SGM
CFR 240.19b–4.
08AUN1
48194
Federal Register / Vol. 76, No. 152 / Monday, August 8, 2011 / Notices
any PRM WeblinkACT 2.0 Workstation
Add-ons in April, May and June 2008]
*
*
*
*
*
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ is proposing to amend the
fees assessed users of NASDAQ PreTrade Risk Management. PRM provides
member firms with the ability to set a
wide range of parameters for orders to
facilitate pre-trade protection by
creating a PRM module defined to
represent checks desired. Using PRM,
firms can increase controls on their
trading activity and the trading activity
of their clients and customers at the
order level, including the opportunity to
prevent potentially erroneous
transactions. PRM validates orders
entered on PRM-enabled ports prior to
allowing those orders into its matching
engine and, using parameters set by the
subscriber, determines if the order
should be sent for fulfillment. If PRM
rejects an order, it alerts the member
firm and provides it with clearlydefined reasons for the rejection.3 These
alerts are sent on Execution and Order/
Message DROP copy lines/reports.
PRM users may choose to set PRM
Order Checks, Aggregate Total Checks
within a PRM Module, and subscribe to
PRM Workstation Add-ons to [sic] an
existing NASDAQ Workstation or
WeblinkACT 2.0. PRM manages risk by
checking each order, before it is
accepted into the system, against certain
parameters pre-specified by the user
within a module, such as maximum
order size or value, order type
3 For example, PRM provides a ‘‘Fat Finger
Check,’’ which allows a user to compare price
instructions on incoming orders against the current
displayed size and price in the market. If the order
is not in line with the displayed price and size, the
order will be rejected before it can execute. Users
can set order limits at several levels to ensure that
clearly erroneous orders never execute.
VerDate Mar<15>2010
18:57 Aug 05, 2011
Jkt 223001
restrictions, market session restrictions
(pre/post market), security restrictions,
including per-security limits, restricted
stock list, and certain other criteria.
These checks are in addition to the Fat
Finger Check, which is available for all
orders submitted through a RASH/FIX
PRM-enabled port.4 In order for a
member firm to subscribe, at least one
PRM Module per market participant ID
(‘‘MPID’’) is required, but a user may
have multiple PRM Module
subscriptions per MPID, depending on
the type and number of ports designated
as PRM ports.5 A PRM Module is
created to validate individual orders
against pre-specified parameters.
Aggregate Total Checks allow users to
limit overall daily trading activity based
on Buy, Sell, and/or Net trading limits.
These daily trading activity limits may
be established at an aggregate limit and/
or security specific limit per PRM
Module. Member firms may subscribe to
the PRM Workstation Add-on to [sic] an
existing NASDAQ Workstation or
WeblinkACT 2.0 for a fee.
NASDAQ is proposing to change the
means by which PRM fees are assessed
under Rules 7016(b) and (c). Currently,
under Rule 7016(b) subscribers pay a
nominal fee of $100 per PRM-enabled
port, and $500 per month, per PRM
Module. Subscribers must subscribe to
at least one PRM Module, but often
subscribe to more than one PRM
Module so that firm may monitor
separate order flow sent through a single
PRM-enabled port. In addition, a
separate fee for Aggregate Total Checks
is assessed at a rate of $.025 per each
eligible side and is limited to a total of
$2,000 per module, per month. As such,
combined fees for a single PRM-enabled
port often exceed the minimum fee of
$600 per month.
In lieu of assessing module-based and
order-based fees under Rule 7016(c),
NASDAQ is proposing to eliminate the
fee for these two services and increase
the per-port fee assessed under Rule
7016(b). The new monthly port-based
fee is tiered, decreasing as the number
of PRM-enabled ports subscribed
increase and the next tier is reached.
NASDAQ is also proposing to limit the
fees assessed a member firm under the
new tiered fee structure to a total of
$25,000 per month. Although NASDAQ
is proposing to eliminate the fees
assessed for PRM Modules and
4 Id.
5 A member using FIX or Rash ports can configure
its PRM Module to pre-trade-manage a subscriber’s
order flow for a specified MPID and PRM-enabled
port, or for an account within an MPID. A member
using OUCH ports can configure its PRM Module
to pre-trade-manage a subscriber’s order flow for a
specified port.
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
Aggregate Total Check, both services
will continue to be available to
subscribers with no change to the
service provided.
NASDAQ believes that assessing PRM
fees by port will simplify the billing
process and either result in no increase
in fees as assessed under the current
rules, or more likely result in a fee
decrease for the majority of current
subscribers. For example, a subscriber to
a single PRM-enabled port with a single
PRM Module subscription would incur
the same fee under both the proposed
PRM-enabled port fee and the current
fee regime—$600 per month. A
subscriber to five PRM-enabled ports
with five PRM Modules would be
assessed a fee of $3,000 per month
under the current rules, whereas the
same subscriber would only pay $2,750
per month under the proposed rules. A
subscriber with five PRM-enabled ports
and a total of ten PRM Modules would
pay $5,500 per month under the current
rules, yet only $2,750 per month under
the proposed fees. This analysis does
not account for the additional savings
that subscribers to Aggregate Total
Checks will realize under the proposed
new fees.
Last, NASDAQ is deleting language
concerning a fee holiday from PRM
Workstation Add-ons fees from the table
under Rule 7016(c), since it concerns a
limited timeframe that has since
expired.
2. Statutory Basis
NASDAQ believes that the proposed
rule change is consistent with Section
6(b)(4) of the Act 6 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 the
NASDAQ operates or controls, and it
does not unfairly discriminate between
customers, issuers, brokers or dealers.
The amended fee schedule applies to all
subscribers equally based on the
number of ports subscribed. The
proposed amended fees provide a more
efficient means of billing, thus reducing
administrative costs. The proposed
changes may also provide incentive for
member firms to subscribe to the service
and utilize additional PRM features (i.e.,
Total Aggregate Checks) given the
elimination of transaction-based fee for
Total Aggregate Checks, the elimination
of the monthly PRM Module fee, and
the tiered PRM fee structure with a
$25,000 monthly fee cap, per member
firm. The proposed amended fees will
continue to cover the costs associated
with separately offering the service,
6 15
E:\FR\FM\08AUN1.SGM
U.S.C. 78f(b)(4).
08AUN1
Federal Register / Vol. 76, No. 152 / Monday, August 8, 2011 / Notices
responding to customer requests,
configuring NASDAQ’s systems,
programming to user specifications, and
administering the service, among other
things, and may provide NASDAQ with
a profit to the extent costs are covered.
NASDAQ also believes that the
proposed rule change is consistent with
the provisions of Section 6(b)(5) of the
Act 7 because it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. PRM is designed to assist
member firms in avoiding entry of
erroneous orders by screening out those
that exceed pre-determined limits,
which otherwise may harm both the
member firm and the quality of the
markets. As such, PRM is an important
compliance tool that members may use
to help maintain the regulatory integrity
of the markets. NASDAQ believes that
the amendments to the fees assessed for
PRM and its services may encourage
more member firms to subscribe to this
useful compliance tool.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
mstockstill on DSK4VPTVN1PROD with NOTICES
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 rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 8 and
subparagraph (f)(2) of Rule 19b-4
thereunder.9 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. If the
Commission takes such action, the
7 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(a)(ii).
9 17 CFR 240.19b–4(f)(2).
8 15
VerDate Mar<15>2010
18:57 Aug 05, 2011
Jkt 223001
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or 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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2011–099 on the
subject line.
48195
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–20008 Filed 8–5–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65010; File No. SR–Phlx–
2011–100]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
OMX PHLX LLC Relating to Member
and Member Organization Participation
August 2, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
• Send paper comments in triplicate
notice is hereby given that on July 26,
to Elizabeth M. Murphy, Secretary,
2011, NASDAQ OMX PHLX LLC
Securities and Exchange Commission,
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
100 F Street, NE., Washington, DC
Securities and Exchange Commission
20549–1090.
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
All submissions should refer to File
and III, below, which Items have been
Number SR–NASDAQ–2011–099. This
prepared by the Exchange. The
file number should be included on the
subject line if e-mail is used. To help the Commission is publishing this notice to
solicit comments on the proposed rule
Commission process and review your
change from interested persons.
comments more efficiently, please use
only one method. The Commission will I. Self-Regulatory Organization’s
post all comments on the Commission’s Statement of the Terms of Substance of
Internet Web site (https://www.sec.gov/
the Proposed Rule Change
rules/sro.shtml). Copies of the
The Exchange proposes to apply
submission, all subsequent
Exchange Rule 3211 entitled ‘‘PSX
amendments, all written statements
Participant Registration’’ to members
with respect to the proposed rule
and member organizations conducting
change that are filed with the
an options business.
Commission, and all written
The text of the proposed rule change
communications relating to the
is available on the Exchange’s Web site
proposed rule change between the
Commission and any person, other than at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings, at the
those that may be withheld from the
principal office of the Exchange, and at
public in accordance with the
the Commission’s Public Reference
provisions of 5 U.S.C. 552, will be
Room.
available for Web site viewing and
printing in the Commission’s Public
II. Self-Regulatory Organization’s
Reference Room, 100 F Street, NE.,
Statement of the Purpose of, and
Washington, DC 20549, on official
Statutory Basis for, the Proposed Rule
business days between the hours of 10
Change
a.m. and 3 p.m. Copies of the filing also
In its filing with the Commission, the
will be available for inspection and
Exchange included statements
copying at the principal office of the
concerning the purpose of and basis for
Exchange. All comments received will
the proposed rule change and discussed
be posted without change; the
any comments it received on the
Commission does not edit personal
proposed rule change. The text of these
identifying information from
statements may be examined at the
submissions. You should submit only
places specified in Item IV below. The
information that you wish to make
Exchange has prepared summaries, set
available publicly. All submissions
should refer to File Number SR–
10 17 CFR 200.30–3(a)(12).
NASDAQ–2011–099 and should be
1 15 U.S.C. 78s(b)(1).
submitted on or before August 29, 2011.
2 17 CFR 240.19b–4.
Paper Comments
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
E:\FR\FM\08AUN1.SGM
08AUN1
]]>Agencies
[Federal Register Volume 76, Number 152 (Monday, August 8, 2011)]
[Notices]
[Pages 48193-48195]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20008]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65020; File No. SR-NASDAQ-2011-099]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule To Amend
Fees Assessed for Use of NASDAQ Pre-Trade Risk Management
August 3, 2011.
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 25, 2011, The NASDAQ Stock Market LLC (the ``Exchange''
or ``NASDAQ'') 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 NASDAQ. 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 Substance
of the Proposed Rule Change
NASDAQ is proposing to amend fees assessed for use of NASDAQ Pre-
trade Risk Management (``PRM'') and to make a minor technical
correction. NASDAQ will implement the amended fees effective August 1,
2011.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.
7016. Nasdaq Risk Management
(a) No change.
(b) Users of NASDAQ Pre-trade Risk Management (``PRM'') will be
assessed [a charge of $100 per month per PRM-enabled port.] a monthly
fee based on the following table, and such fees will not exceed $25,000
per member firm, per month:
----------------------------------------------------------------------------------------------------------------
Number of PRM-enabled
Port tiers ports Monthly fee
----------------------------------------------------------------------------------------------------------------
Tier 1................................. 50 or more................ $400 per port, per month.
Tier 2................................. 20 to 49.................. 500 per port, per month.
Tier 3................................. 5 to 19................... 550 per port, per month.
Tier 4................................. 1 to 4.................... 600 per port, per month.
----------------------------------------------------------------------------------------------------------------
(c) Users of PRM services specified below will be assessed the
following charges in addition to the applicable PRM-enabled port
charges:
PRM Modules--[$500 per month per PRM Module] No charge
Aggregate Total Checks--[$0.025 per each eligible side, capped at
$2,000 per month per PRM Module] No charge
PRM Workstation Add-ons to an $100 per each PRM Workstation Add-on
per month [existing NASDAQ Workstation or beginning July 2006 (no
charge for
[[Page 48194]]
any PRM WeblinkACT 2.0 Workstation Add-ons in April, May and June 2008]
* * * * *
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ is proposing to amend the fees assessed users of NASDAQ Pre-
Trade Risk Management. PRM provides member firms with the ability to
set a wide range of parameters for orders to facilitate pre-trade
protection by creating a PRM module defined to represent checks
desired. Using PRM, firms can increase controls on their trading
activity and the trading activity of their clients and customers at the
order level, including the opportunity to prevent potentially erroneous
transactions. PRM validates orders entered on PRM-enabled ports prior
to allowing those orders into its matching engine and, using parameters
set by the subscriber, determines if the order should be sent for
fulfillment. If PRM rejects an order, it alerts the member firm and
provides it with clearly-defined reasons for the rejection.\3\ These
alerts are sent on Execution and Order/Message DROP copy lines/reports.
---------------------------------------------------------------------------
\3\ For example, PRM provides a ``Fat Finger Check,'' which
allows a user to compare price instructions on incoming orders
against the current displayed size and price in the market. If the
order is not in line with the displayed price and size, the order
will be rejected before it can execute. Users can set order limits
at several levels to ensure that clearly erroneous orders never
execute.
---------------------------------------------------------------------------
PRM users may choose to set PRM Order Checks, Aggregate Total
Checks within a PRM Module, and subscribe to PRM Workstation Add-ons to
[sic] an existing NASDAQ Workstation or WeblinkACT 2.0. PRM manages
risk by checking each order, before it is accepted into the system,
against certain parameters pre-specified by the user within a module,
such as maximum order size or value, order type restrictions, market
session restrictions (pre/post market), security restrictions,
including per-security limits, restricted stock list, and certain other
criteria. These checks are in addition to the Fat Finger Check, which
is available for all orders submitted through a RASH/FIX PRM-enabled
port.\4\ In order for a member firm to subscribe, at least one PRM
Module per market participant ID (``MPID'') is required, but a user may
have multiple PRM Module subscriptions per MPID, depending on the type
and number of ports designated as PRM ports.\5\ A PRM Module is created
to validate individual orders against pre-specified parameters.
Aggregate Total Checks allow users to limit overall daily trading
activity based on Buy, Sell, and/or Net trading limits. These daily
trading activity limits may be established at an aggregate limit and/or
security specific limit per PRM Module. Member firms may subscribe to
the PRM Workstation Add-on to [sic] an existing NASDAQ Workstation or
WeblinkACT 2.0 for a fee.
---------------------------------------------------------------------------
\4\ Id.
\5\ A member using FIX or Rash ports can configure its PRM
Module to pre-trade-manage a subscriber's order flow for a specified
MPID and PRM-enabled port, or for an account within an MPID. A
member using OUCH ports can configure its PRM Module to pre-trade-
manage a subscriber's order flow for a specified port.
---------------------------------------------------------------------------
NASDAQ is proposing to change the means by which PRM fees are
assessed under Rules 7016(b) and (c). Currently, under Rule 7016(b)
subscribers pay a nominal fee of $100 per PRM-enabled port, and $500
per month, per PRM Module. Subscribers must subscribe to at least one
PRM Module, but often subscribe to more than one PRM Module so that
firm may monitor separate order flow sent through a single PRM-enabled
port. In addition, a separate fee for Aggregate Total Checks is
assessed at a rate of $.025 per each eligible side and is limited to a
total of $2,000 per module, per month. As such, combined fees for a
single PRM-enabled port often exceed the minimum fee of $600 per month.
In lieu of assessing module-based and order-based fees under Rule
7016(c), NASDAQ is proposing to eliminate the fee for these two
services and increase the per-port fee assessed under Rule 7016(b). The
new monthly port-based fee is tiered, decreasing as the number of PRM-
enabled ports subscribed increase and the next tier is reached. NASDAQ
is also proposing to limit the fees assessed a member firm under the
new tiered fee structure to a total of $25,000 per month. Although
NASDAQ is proposing to eliminate the fees assessed for PRM Modules and
Aggregate Total Check, both services will continue to be available to
subscribers with no change to the service provided.
NASDAQ believes that assessing PRM fees by port will simplify the
billing process and either result in no increase in fees as assessed
under the current rules, or more likely result in a fee decrease for
the majority of current subscribers. For example, a subscriber to a
single PRM-enabled port with a single PRM Module subscription would
incur the same fee under both the proposed PRM-enabled port fee and the
current fee regime--$600 per month. A subscriber to five PRM-enabled
ports with five PRM Modules would be assessed a fee of $3,000 per month
under the current rules, whereas the same subscriber would only pay
$2,750 per month under the proposed rules. A subscriber with five PRM-
enabled ports and a total of ten PRM Modules would pay $5,500 per month
under the current rules, yet only $2,750 per month under the proposed
fees. This analysis does not account for the additional savings that
subscribers to Aggregate Total Checks will realize under the proposed
new fees.
Last, NASDAQ is deleting language concerning a fee holiday from PRM
Workstation Add-ons fees from the table under Rule 7016(c), since it
concerns a limited timeframe that has since expired.
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
Section 6(b)(4) of the Act \6\ 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 the NASDAQ
operates or controls, and it does not unfairly discriminate between
customers, issuers, brokers or dealers. The amended fee schedule
applies to all subscribers equally based on the number of ports
subscribed. The proposed amended fees provide a more efficient means of
billing, thus reducing administrative costs. The proposed changes may
also provide incentive for member firms to subscribe to the service and
utilize additional PRM features (i.e., Total Aggregate Checks) given
the elimination of transaction-based fee for Total Aggregate Checks,
the elimination of the monthly PRM Module fee, and the tiered PRM fee
structure with a $25,000 monthly fee cap, per member firm. The proposed
amended fees will continue to cover the costs associated with
separately offering the service,
[[Page 48195]]
responding to customer requests, configuring NASDAQ's systems,
programming to user specifications, and administering the service,
among other things, and may provide NASDAQ with a profit to the extent
costs are covered.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
NASDAQ also believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act \7\ because it is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system. PRM is designed to
assist member firms in avoiding entry of erroneous orders by screening
out those that exceed pre-determined limits, which otherwise may harm
both the member firm and the quality of the markets. As such, PRM is an
important compliance tool that members may use to help maintain the
regulatory integrity of the markets. NASDAQ believes that the
amendments to the fees assessed for PRM and its services may encourage
more member firms to subscribe to this useful compliance tool.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
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 rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\9\ 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(a)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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 e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2011-099 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2011-099. 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 (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 a.m. and 3 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. 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-2011-099 and should be submitted on or before August 29, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20008 Filed 8-5-11; 8:45 am]
BILLING CODE 8011-01-P
