Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Allow Broker-Dealers That Purchase the Nasdaq Basic Enterprise License at Equity 7, Section 147(b)(5) to Distribute Nasdaq Last Sale (“NLS”) to the General Investing Public, 26985-26990 [2021-10388]
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the Exchange consents, the Commission
will:
A. By order approve or disapprove
such proposed rule change, or
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CboeBZX–2021–036 on the subject line.
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Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeBZX–2021–036. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
16:40 May 17, 2021
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–10389 Filed 5–17–21; 8:45 am]
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:
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inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–CboeBZX–2021–036 and
should be submitted on or before June
8, 2021.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91874; File No. SR–
NASDAQ–2021–036]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Allow
Broker-Dealers That Purchase the
Nasdaq Basic Enterprise License at
Equity 7, Section 147(b)(5) to Distribute
Nasdaq Last Sale (‘‘NLS’’) to the
General Investing Public
May 12, 2021.
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 April 30,
2021, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to allow
broker-dealers that purchase the Nasdaq
Basic enterprise license at Equity 7,
Section 147(b)(5) to distribute Nasdaq
Last Sale (‘‘NLS’’) to the general
investing public under the same terms
and conditions currently permitted
under the NLS enterprise license at
Equity 7, Section 139(b)(4). The current
25 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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26985
Nasdaq Basic enterprise license at
Section 147(b)(5) allows distribution of
NLS to natural persons in a brokerage
relationship with the broker-dealer,
while the current NLS enterprise license
at Section 139(b)(4) allows distribution
to the general investing public for
Display Usage, and requires the
Distributor to have a reasonable basis to
conclude that all Users of such
information are either Non-Professionals
or Professionals whom the Distributor
has no reason to believe are using NLS
in their professional capacity. The
proposal is to allow broker-dealers that
purchase the Nasdaq Basic enterprise
license at Section 147(b)(5) to distribute
NLS to the general investing public for
Display Usage under the same
conditions as set forth at Section
139(b)(4).
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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. The
Exchange 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
The Exchange proposes to allow
broker-dealers that purchase the Nasdaq
Basic enterprise license at Equity 7,
Section 147(b)(5) to distribute NLS to
the general investing public under the
same terms and conditions currently
permitted under the NLS enterprise
license at Equity 7, Section 139(b)(4).
The current Nasdaq Basic enterprise
license at Section 147(b)(5) limits
distribution of NLS to natural persons in
a brokerage relationship with the
broker-dealer, while the current NLS
enterprise license at Section 139(b)(4)
allows distribution to the general
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
investing public for Display Usage,3 and
requires the Distributor 4 to have a
reasonable basis to conclude that all
Users of such information are either
Non-Professionals 5 or Professionals 6
whom the Distributor has no reason to
believe are using NLS in their
professional capacity. The proposal is to
allow broker-dealers that purchase the
Nasdaq Basic enterprise license at
Section 147(b)(5) to distribute NLS to
the general investing public for Display
Usage under the same conditions set
forth at Section 139(b)(4).7
No exchange fees will change as a
result of the Proposal.
Current Enterprise Licenses for Nasdaq
Basic and NLS
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Nasdaq Basic
Nasdaq Basic is a real-time market
data product that offers best bid and
offer and last sale information for all
U.S. exchange-listed securities based on
liquidity within the Nasdaq market
center and trades reported to the
3 ‘‘Display Usage’’ means ‘‘any method of
accessing Exchange Information that involves the
display of such data on a screen or other
mechanism designed for access or use by a natural
person or persons.’’ Equity 7, Section 139(f)(2).
4 A ‘‘Distributor’’ is ‘‘an entity, as identified in the
Nasdaq Global Data Agreement (or any successor
agreement), that executes such an Agreement and
has access to Exchange Information, together with
its affiliates having such access.’’ Equity 7, Section
139(f)(3).
5 A ‘‘Non-Professional Subscriber’’ is ‘‘a natural
person who is not: (A) Registered or qualified in
any capacity with the Securities and Exchange
Commission, the Commodity Futures Trading
Commission, any state securities agency, any
securities exchange or association, or any
commodities or futures contract market or
association; (B) engaged as an ‘‘investment adviser’’
as that term is defined in Section 202(a)(11) of the
Investment Advisers Act of 1940 (whether or not
registered or qualified under that Act); or (C)
employed by a bank or other organization exempt
from registration under federal or state securities
laws to perform functions that would require
registration or qualification if such functions were
performed for an organization not so exempt.’’
Equity 7, Section 139(f)(6).
6 A ‘‘Professional Subscriber’’ is ‘‘any natural
person, proprietorship, corporation, partnership, or
other entity whatever other than a NonProfessional.’’ Equity 7, Section 139(f)(7).
7 The Exchange also proposes to introduce three
conforming changes. First, Nasdaq proposes
language to clarify that the approval requirements
for electronic systems discussed in Section 147
apply to the distribution of Nasdaq Basic, not to the
distribution of NLS. Distribution of NLS will be
approved according to the standards set forth in
Section 139, and will be subject to all of the
provisions, excluding the payment of fees, set forth
in Section 139(b)(4). Second, the Exchange
proposes to replace an incorrect citation to Equity
7, Section 147(d)(3) with the correct citation to
Equity 7, Section 147(d)(4). Third, the Exchange
proposes to remove a reference to Section 139(c) to
clarify that the enterprise license under Section
147(b)(5) covers the fees for distribution to the
general investing public listed in Equity 7, Section
139(b), but not the fees for specialized use cases set
forth in Equity 7, Section 139(c).
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FINRA/Nasdaq Trade Reporting Facility
(‘‘TRF’’). It is a subset of the ‘‘core’’
quotation and last sale data provided by
securities information processors
(‘‘SIPs’’), which distribute consolidated
data pursuant to the CTA/CQ Plan and
the UTP Plan.
Nasdaq Basic is separated into three
components, which may be purchased
individually or in combination: (i)
Nasdaq Basic for Nasdaq, which
contains the best bid and offer on the
Nasdaq market center and last sale
transaction reports for Nasdaq and the
FINRA/Nasdaq TRF for Nasdaq-listed
stocks; (ii) Nasdaq Basic for NYSE,
which covers NYSE-listed stocks, and
(iii) Nasdaq Basic for NYSE American,
which provides data on stocks listed on
NYSE American and other listing
venues that disseminate quotes and
trade reports on Tape B. The specific
data elements available through Nasdaq
Basic are: (i) Nasdaq Basic Quotes
(‘‘QBBO’’), the best bid and offer and
associated size available in the Nasdaq
Market Center, as well as last sale
transaction reports; (ii) Nasdaq opening
and closing prices, as well as IPO and
trading halt cross prices; and (iii)
general exchange information, including
systems status reports, trading halt
information, and a stock directory.
Nasdaq offers an enterprise license for
Nasdaq Basic that allows a broker-dealer
to distribute Nasdaq Basic, or Derived
Data therefrom, through any electronic
system approved by Nasdaq, to an
unlimited number of Professional and
Non-Professional Subscribers who are
natural persons and with whom the
broker-dealer has a brokerage
relationship.8 The monthly fee for that
license is $100,000.9 That license also
provides the right to distribute NLS to
an unlimited number of Professional
and Non-Professional Subscribers who
are natural persons and with whom the
broker-dealer has a brokerage
relationship without paying the fees set
forth in Equity 7, Section 139(b) or (c).10
Nasdaq Last Sale
NLS provides real-time last sale
information for executions occurring
8 See
Equity 7 Section 147(b)(5).
id.
10 The Nasdaq Basic enterprise license also
includes a number of other provisions and
restrictions not at issue here, including but not
limited to: (i) A limitation that the use of the data
by a Professional Subscriber shall be limited to the
brokerage relationship, except that Nasdaq Basic
data may be made available for up to 4,500 internal
Subscribers without incurring additional fees; (ii) a
requirement for a separate enterprise license for
each discrete electronic system; (iii) a requirement
that the broker-dealer pay distributor fees under
paragraph (c)(1); and (iv) a requirement that the
broker-dealer report the number of Subscribers
receiving Nasdaq Basic under this license.
9 See
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within the Nasdaq market center and
trades reported to the jointly-operated
FINRA/Nasdaq TRF.11 The NLS data
feed, which provides price, volume and
time of execution data for last sale
transactions, includes transaction
information for Nasdaq-listed stocks
(‘‘NLS for Nasdaq’’) and for stocks listed
on NYSE, NYSE American, and other
Tape B listing venues (‘‘NLS for NYSE/
NYSE American’’).12 It is, like Nasdaq
Basic, a non-core product that provides
a subset of the core data provided by the
SIPs under the CTA and UTP plans.13
The Exchange offers an enterprise
license for NLS under Section 139(b)(4),
which allows any Distributor that is
disseminating NLS to the general
investing public, and which would
otherwise pay the Per User, Per Query,
or Per Device fees set forth in Equity 7,
Sections 139(b)(1) through (3), to
purchase a monthly enterprise license
for $41,500. To be eligible for the
license, NLS must be distributed on a
platform(s) controlled by the Distributor
and pre-approved by the Exchange as
providing the Distributor with a
reasonable basis to conclude that all
Users of such Information 14 are either
Non-Professionals or Professionals
whom the Distributor has no reason to
believe are using Nasdaq Last Sale in
their professional capacity.
Proposed Change
The Exchange proposes to allow
broker-dealers that purchase the Nasdaq
Basic enterprise license at Equity 7,
Section 147(b)(5) to distribute NLS to
the general investing public under the
same terms and conditions currently
permitted under the NLS enterprise
license at Equity 7, Section 139(b)(4).
Currently, broker-dealers that purchase
11 See Securities Exchange Act Release No. 55255
(February 8, 2007), 72 FR 7100 (February 14, 2007)
(SR–NASDAQ–2006–060) (proposing to establish
Nasdaq Last Sale data feeds); see also Securities
Exchange Act Release No. 57965 (June 16, 2008), 73
FR 35178 (June 20, 2008) (SR–NASDAQ–2006–060)
(approving SR–NASDAQ–2006–060, as amended by
Amendment Nos. 1 and 2, to implement NLS on a
pilot basis).
12 See Securities Exchange Act Release No. 57965
(June 16, 2008), 73 FR 35178 (June 20, 2008) (SR–
NASDAQ–2006–060).
13 See Securities Exchange Act Release No. 34–
82723 (February 15, 2018), 83 FR 7812 (February
22, 2018) (SR–NASDAQ–2018–010).
14 ‘‘Information’’ means ‘‘any data or information
that has been collected, validated, processed and/
or recorded by the Exchange and made available for
transmission relating to: (i) Eligible securities or
other financial instruments, markets, products,
vehicles, indicators or devices; (ii) activities of the
Exchange; or (iii) other information or data from the
Exchange. Information includes, but is not limited
to, any element of information used or processed in
such a way that Exchange Information or a
substitute for such Information can be identified,
recalculated or re-engineered from the processed
information.’’ See Equity 7, Section 139(f)(5).
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the Nasdaq Basic enterprise license are
allowed to distribute NLS to ‘‘an
unlimited number of Professional and
Non-Professional Subscribers who are
natural persons and with whom the
broker-dealer has a brokerage
relationship,’’ 15 while Distributors that
purchase the NLS enterprise license
may distribute NLS to any member of
the general investing public for Display
Usage, provided that the Distributor has
a ‘‘reasonable basis to conclude that all
Users of such Information are either
Non-Professionals or Professionals
whom the Distributor has no reason to
believe are using Nasdaq Last Sale in
their professional capacity.’’ 16 Nasdaq
proposes to allow purchasers of Nasdaq
Basic to distribute NLS to the general
investing public for Display Usage
under the same terms and conditions as
the NLS enterprise license.
The Proposal will offer purchasers of
the Nasdaq Basic enterprise license at
Equity 7, Section 147(b)(5) the full use
of the NLS enterprise license at Equity
7, Section 139(b)(4) at no extra charge.
The same terms and conditions
applicable to the NLS enterprise license
will continue to apply to the
distribution of NLS to the general
investing public under the Nasdaq Basic
enterprise license. These common
conditions include: (i) A limitation that
distribution of NLS will be limited to
Display Usage; 17 (ii) a separate approval
for each platform that will distribute
NLS will be required; 18 and (iii) a
15 Equity
7, Section 147(b)(5).
7, Section 139(b)(4).
17 See id. (‘‘For any customer that would
otherwise eligible for the Per User, Per Query, or
Per Device fees set forth in subsections (1) through
(3) above, excluding any requirement to count or
track usage, a Distributor may purchase a monthly
enterprise license for $41,500 to distribute Nasdaq
Last Sale data to the General Investing Public for
Display Usage to an unlimited number of Users or
Devices, including, but not limited to, television
distribution. . . .) (emphasis added).
18 See id. (‘‘To be eligible for the enterprise
license, Nasdaq Last Sale must be distributed on
platform(s) controlled by the Distributor and preapproved by the Exchange as providing the
Distributor with a reasonable basis to conclude that
all Users of such Information are either NonProfessionals or Professionals whom the Distributor
has no reason to believe are using Nasdaq Last Sale
in their professional capacity.’’). This is a different
platform approval requirement from that required to
distribute Nasdaq Basic under Section 147(b)(5).
The approval for a Nasdaq Basic platform under
Section 147(b)(5) is used to confirm that the
platform distributes information within the
brokerage relationship, and meets all other
requirements set forth within that license. The
approval for the NLS platform under Section
139(b)(4) is used to confirm that the Distributor has
a reasonable basis to conclude that all Users of such
Information are either Non-Professionals or
Professionals whom the Distributor has no reason
to believe are using Nasdaq Last Sale in their
professional capacity. This modification places the
same platform approval requirement on purchasers
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16 Equity
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16:40 May 17, 2021
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requirement that distribution be limited
to the general investing public.19 The
Exchange also proposes to delete a
reference Equity 7, Section 139(c) to
make it clear that distributors that
utilize NLS for one of the specialized
use cases set forth at Equity 7, Section
139(c) will be required to pay the fees
applicable to such use cases, whether or
not they purchased the Nasdaq Basic or
NLS enterprise licenses. All of these
restrictions currently apply to
purchasers of the NLS enterprise
license.20 The Proposal will continue to
allow the distribution of Nasdaq Basic,
including the last sale information that
is a component of Nasdaq Basic, under
the terms and conditions set forth in
Equity 7, Section 147(b)(5) without
change.
The Proposal will allow broader
distribution of NLS to the general
investing public and will lower our
customers’ administrative costs, as they
would not be required to restrict
distribution to individuals with
brokerage accounts.
Discussion
Background
Limitations on the distribution of NLS
under the Nasdaq Basic enterprise
license have changed over time. The
enterprise license was initially proposed
in 2011. At that time, distribution was
limited to Non-Professional Subscribers
in a brokerage relationship, and NLS
was not included.21 Distribution of NLS
was added in 2017,22 and, in 2018,
distribution of NLS was limited to
Professional and Non-Professional
of the Nasdaq Basic enterprise license that choose
to distribute NLS outside of the brokerage
relationship as customers that choose to solely
purchase the NLS enterprise license.
19 Distribution of NLS under any specialized use
case would occur under the applicable fee set forth
in Equity 7, Section 139(c). Compare Equity 7,
Section 139(b) (identifying fees for distribution to
the General Investing Public) with Equity 7, Section
139(c) (identifying fees for specialized usage of
NLS).
20 Current purchasers of the Nasdaq Basic
enterprise license will not be circumscribed in their
ability to distribute last sale data within the
parameters of that license. As explained above,
Nasdaq Basic contains both best bid and offer
information and last sale transaction reports.
Customers that purchase Nasdaq Basic will
continue to be able to distribute last sale data
within the brokerage relationship as part of the
Nasdaq Basic enterprise license without change.
The proposal will simply add a new option for
Nasdaq Basic customers: to distribute NLS data
outside of the brokerage relationship, under the
same terms and conditions that apply to purchasers
of the NLS enterprise license.
21 See Securities Exchange Act Release No. 65526
(October 11, 2011), 76 FR 64137 (October 17, 2011)
(SR–Nasdaq–2011–130).
22 See Securities Exchange Act Release No. 81697
(September 25, 2017), 82 FR 45639 (September 29,
2017) (SR–Nasdaq–2017–095).
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26987
Subscribers who are natural persons in
a brokerage relationship with the
broker-dealer, the same limitation as the
distribution of Nasdaq Basic.23
In 2019, Nasdaq introduced the
enterprise license fee for NLS at Section
139(b)(4).24 The purpose of the
enterprise license was to lower the cost
of distributing last sale data and expand
its availability to the general investing
public by eliminating certain counting
requirements for NLS usage, and
expanding the available mechanisms for
the delivery of NLS data. Nasdaq noted
in that filing that NLS had been
designed to enable market-data
distributors ‘‘to provide free access to [ ]
data to millions of individual investors
via the internet and television’’ and was
expected to ‘‘increase[ ] the availability
of N[asdaq] proprietary market data to
individual investors.’’ 25
The 2019 filing for the NLS enterprise
license included the requirement that
the Distributor have a reasonable basis
to conclude that all Users of such
Information 26 are either NonProfessionals or Professionals whom the
Distributor has no reason to believe are
using NLS in their professional
capacity—the same test applied to the
Per User model of NLS distribution.27
The Exchange explained that a
Distributor has ‘‘no reason to believe’’
that NLS is being used in a professional
capacity when, for example, the data is
made available to the general investing
public in a format that would be
‘‘unlikely to be of significant use to
Professionals acting in a professional
capacity,’’ as in the Per Query model,28
or when the Information is ‘‘made freely
available to internet users,’’ as in the Per
Device model.29 Any Distributor that
would be eligible to disseminate NLS
under the Per User, Per Query, or Per
Device models would be able to meet
that test because it is inherent (or
explicit) within the eligibility criteria
23 See Securities Exchange Act Release No. 82723
(February 15, 2018), 83 FR 7812 (February 22, 2018)
(SR–NASDAQ–2018–010).
24 See Securities Exchange Act Release No. 85504
(April 3, 2019), 84 FR 14183 (April 9, 2019) (SR–
NASDAQ–2019–024).
25 See id.; see also Securities Exchange Act
Release No. 57965 (June 16, 2008), 73 FR 35178
(June 20, 2008) (SR–NASDAQ–2006–060) (notice of
filing of Amendment No. 2 and Order granting
accelerated approval to proposed rule change, ad
modified by Amendment Nos. 1 and 2, to establish
Nasdaq last sale data feeds).
26 See supra, note 14.
27 See Section 139(b)(1).
28 See Securities Exchange Act Release No. 85504
(April 3, 2019), 84 FR 14183 (April 9, 2019) (SR–
NASDAQ–2019–024); see also Securities Exchange
Act Release No. 34–82723 (February 15, 2018), 83
FR 7812 (February 22, 2018) (SR–NASDAQ–2018–
010).
29 See id.
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
for each model.30 One of the chief
benefits of the enterprise license was
that it was designed to allow
Distributors to disseminate NLS data to
the general investing public in a manner
not easily tracked using the Per User,
Per Query, or Per Device models.31
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Basis for Proposal
At least two potential customers of
the Nasdaq Basic enterprise license have
requested permission to distribute NLS
to the general investing public for
Display Usage without requiring a
brokerage relationship. Upon
consideration of those customer
requests, Nasdaq has determined that
complying with them is in the best
interest of our customers. First, the
proposed change will allow broader
distribution of NLS to the general
investing public. Second, the Proposal
will lower our customers’
administrative costs as they would not
be required to restrict distribution to
individuals with brokerage accounts.32
There is little risk that the new
standard will result in widespread
distribution of NLS, which was
designed for the general investing
public, to professionals acting in their
professional capacity. Although the new
standard may occasionally result in
incidental Professional use, such use is
reasonable because NLS contains less
30 The ‘‘no reason to believe’’ test is explicitly
part of the criteria for the Per User model. See
Section 139(b)(1). It is inherent in the Per Query
model because, as noted above and in the filing
instituting that fee, this model ‘‘is unlikely to be of
significant use to Professionals acting in a
professional capacity . . .’’ See Securities Exchange
Act Release No. 34–82723 (February 15, 2018), 83
FR 7812 (February 22, 2018) (SR–NASDAQ–2018–
010). It is also inherent in the Per Device model
because that model is designed to make information
‘‘freely available to internet users,’’ and therefore is
unlikely to be of significant use to Professionals
acting in a professional capacity. See id.
31 An example of the type of distribution model
intended to benefit from the proposed license is a
spreadsheet program that allows the User to refresh
a stock price using an in-program command
without copying data. Such usage is analogous to
the Per Query model, which supplies only as much
data as the User requests on an ad hoc basis, but
is less susceptible to counting because the request
is done using a command embedded within another
program.
32 See Securities Exchange Act Release No. 82723
(February 15, 2018), 83 FR 7812 (February 22, 2018)
(SR–NASDAQ–2018–010) (quoting SR–NASDAQ–
2006–060 (Amendment No. 2, June 10, 2008), at 3.)
(explaining that NLS was designed to enable
market-data ‘‘distributors to provide free access to
the data to millions of individual investors via the
internet and television’’ and was expected to
‘‘increase the availability of NASDAQ proprietary
market data to individual investors.’’); see also
Securities Exchange Act Release No. 57965 (June
16, 2008), 73 FR 35178 (June 20, 2008) (SR–
NASDAQ–2006–060) (notice of filing of
Amendment No. 2 and Order granting accelerated
approval to proposed rule change, ad modified by
Amendment Nos. 1 and 2, to establish Nasdaq last
sale data feeds).
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16:40 May 17, 2021
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information and does not provide pretrade transparency, and is therefore
likely to be less useful to a Professional
than Nasdaq Basic or other products
that provide greater pre-trade
information.
The proposed change is not targeted
at, or expected to be limited in its
applicability to, any particular segment
of market participants, and no segment
of retail investors, the general investing
public, or any other market participant
is expected to benefit more than any
other.33
The Exchange expects the Nasdaq
Basic enterprise license to continue to
be attractive to potential customers, but
does not expect a large number of
additional sales in response to this
change. Nevertheless, based on
conversations with potential customers
and our overall familiarity with the
market, as many as three additional
broker-dealers may purchase the Nasdaq
Basic enterprise license as a result of the
proposed change.34
The Proposal will not alter any
Exchange fees.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,35 in general, and furthers the
objectives of Section 6(b)(5) of the Act,36
in particular, in that it is 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, and is
not designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange has already shown the
Nasdaq Basic enterprise license at
Section 147(b)(5),37 and the NLS
33 Although
this is not a fee filing, the Exchange
is addressing this question to provide as complete
as possible an evaluation of the proposed change.
See Division of Trading and Markets, U.S.
Securities and Exchange Commission, ‘‘Staff
Guidance on SRO Filings Related to Fees’’ (May 21,
2019) (‘‘Staff Guidance’’), available at https://
www.sec.gov/tm/staff-guidance-sro-rule-filings-fees
(indicating that the discussion of purpose should
indicate ‘‘whether the relevant product or service,
including the corresponding proposed fee or fee
change, is targeted at—or expected to be limited in
its applicability to—a specific segment(s) of market
participants (and if so, the related details))’’.
34 See id. (requesting that the discussion of
purpose address ‘‘the projected number of
purchasers (including members, as well as nonmembers) of any new or modified product or
service and the expected number of purchasers
likely to be subject to a new fee or pricing tier,
including members and non-members . . .’’).
35 15 U.S.C. 78f(b).
36 15 U.S.C. 78f(b)(5).
37 See Securities Exchange Act Release No. 81697
(September 25, 2017), 82 FR 45639 (September 29,
2017) (SR–Nasdaq–2017–095).
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
enterprise license at Section 139(b)(4) 38
to be consistent with Section 6(b) of the
Act. This analysis therefore focuses on
the change to the Nasdaq Basic
enterprise license at Section 147(b)(5).
As explained above, the Proposal will
expand the coverage of the Nasdaq Basic
enterprise license at Equity 7, Section
147(b)(5) to include the full use of the
NLS enterprise license at Equity 7,
Section 139(b)(4) at no extra charge. The
same terms and conditions applicable to
the NLS enterprise license will continue
to apply to the distribution of NLS to
the general investing public under the
Nasdaq Basic enterprise license. These
common conditions include: (i) A
requirement that distribution of NLS be
limited to Display Usage; 39 (ii) a
separate approval of each platform that
will distribute NLS will be required; 40
and (iii) a restriction that distribution be
limited to the general investing public.41
Distributors that utilize NLS for one of
the specialized use cases set forth at
Equity 7, Section 139(c) will be required
to pay the fees applicable to such use
cases, whether or not they purchased
the Nasdaq Basic or NLS enterprise
licenses. All of conditions that currently
apply to purchasers of the NLS
enterprise license will apply to
distribution of NLS for Display Usage to
the general investing public under the
Nasdaq Basic enterprise license.42
Both Nasdaq Basic and NLS compete
with the top-of-book proprietary data
products offered by other exchanges,
including the NYSE BQT feed, which
disseminates top-of-book information
from the NYSE, NYSE American, NYSE
Arca, NYSE National, and NYSE
Chicago exchanges,43 and the Cboe One
Summary Feed, which disseminates
data from the BZX Exchange, BYX
38 See Securities Exchange Act Release No. 85504
(April 3, 2019), 84 FR 14183 (April 9, 2019) (SR–
NASDAQ–2019–024).
39 See supra, note 17.
40 See supra, note 18.
41 See supra, note 19.
42 See supra, note 20. Current purchasers of the
Nasdaq Basic enterprise license will not be
circumscribed in their ability to distribute last sale
data within the parameters of that license. As
explained above, Nasdaq Basic contains both best
bid and offer information and last sale transaction
reports. Customers that purchase Nasdaq Basic will
continue to be able to distribute last sale data
within the brokerage relationship as part of the
Nasdaq Basic enterprise license without change.
The proposal will simply add a new option for
Nasdaq Basic customers: To distribute NLS data
outside of the brokerage relationship, under the
same terms and conditions that apply to purchasers
of the NLS enterprise license.
43 See Securities Exchange Act Release No. 87803
(December 19, 2019), 84 FR 71505 (December 27,
2019) (SR–NYSE–2019–70) (explaining that the
NYSE BQT market data product competes ‘‘head to
head with the Nasdaq Basic and Cboe One
Feed market data products.’’).
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
Exchange, EDGX Exchange and EDGA
Exchange.44 The proposed change will
enhance competition by allowing
broader distribution of NLS in the
context of the Nasdaq Basic license, and
lowering the cost of compliance for
Nasdaq’s customers by removing the
need to restrict distribution to
individuals with brokerage accounts.
Competition with other exchanges in
the sale of top-of-book products, and the
likelihood that the Proposal will
enhance investor understanding of
securities markets and promote
consumer choice by expanding the
availability of NLS to the general
investing public, provide a substantial
basis for finding that the Proposal
promotes just and equitable principles
of trade, removes impediments to and
perfects the mechanism of a free and
open market and a national market
system, and protects investors and the
public interest.
The Proposal is not unfairly
discriminatory. As noted previously,
both the Nasdaq Basic 45 and NLS 46
enterprise licenses were shown to be
non-discriminatory and otherwise
consistent with the Act. The only
change here is to allow broader
distribution of NLS under the Nasdaq
Basic enterprise license at Section
147(b)(5). As explained above, the
proposed change is not targeted at, or
expected to be limited in its
applicability to, any particular segment
of market participants, and no segment
of retail investors, the general investing
public, or any other market participant
is expected to benefit more than any
other. The proposal will apply to any
broker-dealer that purchases the Nasdaq
Basic enterprise license without
differentiation of any kind, and is
therefore not unfairly discriminatory.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
jbell on DSKJLSW7X2PROD with NOTICES
Intermarket Competition
Applying the same standard for the
distribution of NLS to both the Nasdaq
44 See https://markets.cboe.com/us/equities/
market_data_services/#:∼:text=
Cboe%20Top%20is%20a%20real,time%20on%20a
%20Cboe%20book.&text=It%20is%20a
%20real%2Dtime,time
%20on%20a%20Cboe%20book.
45 See Securities Exchange Act Release No. 81697
(September 25, 2017), 82 FR 45639 (September 29,
2017) (SR–Nasdaq–2017–095).
46 See Securities Exchange Act Release No. 85504
(April 3, 2019), 84 FR 14183 (April 9, 2019) (SR–
NASDAQ–2019–024).
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16:40 May 17, 2021
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Basic and NLS enterprise licenses at
Sections 147(b)(5), and 139(b)(4),
respectively, will place no burden on
intermarket competition (the
competition among SROs). Both Nasdaq
Basic and NLS already compete directly
against the NYSE BQT feed and the
Cboe One Summary Feed. As noted
above, the proposed change will
enhance competition by allowing
broader distribution of NLS, and
lowering the cost of compliance for
Nasdaq’s customers by removing the
need to restrict distribution to
individuals with brokerage accounts.
Nasdaq believes that the proposed
change will enhance the value of the
Nasdaq Basic enterprise license,
promote customer choice, and therefore
boost competition among exchanges.
Intramarket Competition
The Proposal will not cause any
unnecessary or inappropriate burden on
intramarket competition (competition
among exchange customers). The
Proposal is not targeted at, or expected
to be limited in its applicability to, any
particular segment of broker-dealers,
and no market participant or any
segment of the general investing public
is expected to benefit more than any
other. As such, the Proposal does not
place any category of market participant
at a relative disadvantage compared to
any other category, and therefore will
not impose any burden on competition
not necessary or appropriate in
furtherance of the Act. Moreover,
current purchasers of the Nasdaq Basic
enterprise license will not be
circumscribed in their ability to
distribute last sale data within the
parameters of that license. As explained
above, Nasdaq Basic contains both best
bid and offer information and last sale
transaction reports. Customers that
purchase Nasdaq Basic will continue to
be able to distribute last sale data within
the brokerage relationship as part of the
Nasdaq Basic enterprise license without
change. The proposal will simply add a
new option for Nasdaq Basic customers:
To distribute NLS data outside of the
brokerage relationship, under the same
terms and conditions that apply to
purchasers of the NLS enterprise
license. Given that this is an expansion
of an existing license that does not
curtail that license in any way, there is
no burden on intramarket competition.
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.
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26989
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 47 and Rule 19b–
4(f)(6) thereunder.48
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
change 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 email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2021–036 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2021–036. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
47 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
48 17
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Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NASDAQ–2021–036 and
should be submitted on or before June
8, 2021.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.49
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–10388 Filed 5–17–21; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Continue Offering
Certain Connectivity Services That
Have Been Suspended by the
Securities and Exchange Commission
jbell on DSKJLSW7X2PROD with NOTICES
May 12, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 7,
2021, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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16:40 May 17, 2021
Jkt 253001
The Exchange proposes to continue
offering certain connectivity services
that have been suspended by the
Securities and Exchange Commission
(‘‘Commission’’) at no charge, for a
period of 14 days, in order to provide
affected Users time to acquire substitute
services before their connectivity is
terminated. The proposed rule change is
available on the Exchange’s website at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1. Purpose
[Release No. 34–91861; File No. SR–
NYSEArca–2021–38]
1 15
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
49 17
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
The Exchange proposes to continue
offering certain connectivity services
that have been suspended by the
Commission at no charge, for a period
of 14 days, in order to provide affected
Users 3 time to acquire substitute
3 For
purposes of the Exchange’s colocation
services, a ‘‘User’’ means any market participant
that requests to receive colocation services directly
from the Exchange. See Securities Exchange Act
Release No. 76010 (September 29, 2015), 80 FR
60197 (October 5, 2015) (SR–NYSEArca–2015–82).
As specified in the NYSE Arca Equities Fees and
Charges and the NYSE Arca Options Fees and
Charges (together, the ‘‘Fee Schedules’’), a User that
incurs colocation fees for a particular colocation
service pursuant thereto would not be subject to
colocation fees for the same colocation service
charged by the Exchange’s affiliates New York
Stock Exchange LLC, NYSE American LLC, NYSE
Chicago, Inc., and NYSE National, Inc. (together,
the ‘‘Affiliate SROs’’). See Securities Exchange Act
Release No. 70173 (August 13, 2013), 78 FR 50459
(August 19, 2013) (SR–NYSEArca–2013–80). Each
Affiliate SRO has submitted substantially the same
proposed rule change to propose the changes
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
services before their connectivity is
terminated.
As background, on March 10, 2021,
the Exchange filed with the Commission
a proposed rule change for immediate
effectiveness (the ‘‘Filing’’) that
amended the colocation services offered
by the Exchange to provide Users the
option to access to the systems and data
feeds of various additional third
parties.4 The proposed rule change
became operative on April 9, 2021.
Since then, five Users have contracted
to receive the services that were added
in the Filing.
On May 7, 2021, the Commission
suspended the Filing and instituted
proceedings to determine whether the
proposed rule change should be
approved or disapproved.5 Such action
suspended the Exchange’s ability to
offer access to Third Party Systems from
Long Term Stock Exchange, Members
Exchange, MIAX Emerald, MIAX
PEARL Equities, Morgan Stanley, and
TD Ameritrade, and to offer
connectivity to Third Party Data Feeds
from ICE Data Services—ICE TMC,
Members Exchange, MIAX Emerald, and
MIAX PEARL Equities (together, the
‘‘Suspended Services’’).
The Commission’s suspension of such
services is likely to cause disruption to
the current Users of such services, who
must now acquire substitutes for the
Suspended Services. As an
accommodation to such current Users,
the Exchange now proposes to provide
the Suspended Services to all Users, at
no charge, for a period of 14 days from
the date of filing (‘‘Transition Period’’),
to enable current Users to maintain their
connectivity while establishing alternate
connectivity.
Specifically, the Exchange proposes to
amend the Fee Schedules relating to
colocation to provide:
Connectivity To Suspended Third Party
Systems and Suspended Third Party
Data Feeds
Connectivity to the Third Party
Systems and Third Party Data Feeds
listed below (‘‘Suspended Services’’) is
available until May 24, 2021
(‘‘Transition Period’’). During the
Transition Period, the Exchange will not
charge any fees for the Suspended
Services. At the conclusion of the
described herein. See SR–NYSE–2021–31, SR–
NYSEAMER–2021–26, SR–NYSECHX–2021–10,
and SR–NYSENAT–2021–13.
4 See Securities Exchange Act Release No. 91388
(March 23, 2021), 86 FR 16433 (March 29, 2021)
(SR–NYSEArca–2021–15).
5 See Securities Exchange Act Release No. 91790
(May 7, 2021) (SR–NYSE–2021–15, SR–
NYSEAMER–2021–13, SR–NYSEArca–2021–15,
SR–NYSECHX–2021–04, SR–NYSENAT–2021–05).
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]]>Agencies
[Federal Register Volume 86, Number 94 (Tuesday, May 18, 2021)]
[Notices]
[Pages 26985-26990]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10388]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91874; File No. SR-NASDAQ-2021-036]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Allow Broker-Dealers That Purchase the Nasdaq Basic Enterprise License
at Equity 7, Section 147(b)(5) to Distribute Nasdaq Last Sale (``NLS'')
to the General Investing Public
May 12, 2021.
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 April 30, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to allow broker-dealers that purchase the
Nasdaq Basic enterprise license at Equity 7, Section 147(b)(5) to
distribute Nasdaq Last Sale (``NLS'') to the general investing public
under the same terms and conditions currently permitted under the NLS
enterprise license at Equity 7, Section 139(b)(4). The current Nasdaq
Basic enterprise license at Section 147(b)(5) allows distribution of
NLS to natural persons in a brokerage relationship with the broker-
dealer, while the current NLS enterprise license at Section 139(b)(4)
allows distribution to the general investing public for Display Usage,
and requires the Distributor to have a reasonable basis to conclude
that all Users of such information are either Non-Professionals or
Professionals whom the Distributor has no reason to believe are using
NLS in their professional capacity. The proposal is to allow broker-
dealers that purchase the Nasdaq Basic enterprise license at Section
147(b)(5) to distribute NLS to the general investing public for Display
Usage under the same conditions as set forth at Section 139(b)(4).
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange 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. The Exchange 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
The Exchange proposes to allow broker-dealers that purchase the
Nasdaq Basic enterprise license at Equity 7, Section 147(b)(5) to
distribute NLS to the general investing public under the same terms and
conditions currently permitted under the NLS enterprise license at
Equity 7, Section 139(b)(4). The current Nasdaq Basic enterprise
license at Section 147(b)(5) limits distribution of NLS to natural
persons in a brokerage relationship with the broker-dealer, while the
current NLS enterprise license at Section 139(b)(4) allows distribution
to the general
[[Page 26986]]
investing public for Display Usage,\3\ and requires the Distributor \4\
to have a reasonable basis to conclude that all Users of such
information are either Non-Professionals \5\ or Professionals \6\ whom
the Distributor has no reason to believe are using NLS in their
professional capacity. The proposal is to allow broker-dealers that
purchase the Nasdaq Basic enterprise license at Section 147(b)(5) to
distribute NLS to the general investing public for Display Usage under
the same conditions set forth at Section 139(b)(4).\7\
---------------------------------------------------------------------------
\3\ ``Display Usage'' means ``any method of accessing Exchange
Information that involves the display of such data on a screen or
other mechanism designed for access or use by a natural person or
persons.'' Equity 7, Section 139(f)(2).
\4\ A ``Distributor'' is ``an entity, as identified in the
Nasdaq Global Data Agreement (or any successor agreement), that
executes such an Agreement and has access to Exchange Information,
together with its affiliates having such access.'' Equity 7, Section
139(f)(3).
\5\ A ``Non-Professional Subscriber'' is ``a natural person who
is not: (A) Registered or qualified in any capacity with the
Securities and Exchange Commission, the Commodity Futures Trading
Commission, any state securities agency, any securities exchange or
association, or any commodities or futures contract market or
association; (B) engaged as an ``investment adviser'' as that term
is defined in Section 202(a)(11) of the Investment Advisers Act of
1940 (whether or not registered or qualified under that Act); or (C)
employed by a bank or other organization exempt from registration
under federal or state securities laws to perform functions that
would require registration or qualification if such functions were
performed for an organization not so exempt.'' Equity 7, Section
139(f)(6).
\6\ A ``Professional Subscriber'' is ``any natural person,
proprietorship, corporation, partnership, or other entity whatever
other than a Non-Professional.'' Equity 7, Section 139(f)(7).
\7\ The Exchange also proposes to introduce three conforming
changes. First, Nasdaq proposes language to clarify that the
approval requirements for electronic systems discussed in Section
147 apply to the distribution of Nasdaq Basic, not to the
distribution of NLS. Distribution of NLS will be approved according
to the standards set forth in Section 139, and will be subject to
all of the provisions, excluding the payment of fees, set forth in
Section 139(b)(4). Second, the Exchange proposes to replace an
incorrect citation to Equity 7, Section 147(d)(3) with the correct
citation to Equity 7, Section 147(d)(4). Third, the Exchange
proposes to remove a reference to Section 139(c) to clarify that the
enterprise license under Section 147(b)(5) covers the fees for
distribution to the general investing public listed in Equity 7,
Section 139(b), but not the fees for specialized use cases set forth
in Equity 7, Section 139(c).
---------------------------------------------------------------------------
No exchange fees will change as a result of the Proposal.
Current Enterprise Licenses for Nasdaq Basic and NLS
Nasdaq Basic
Nasdaq Basic is a real-time market data product that offers best
bid and offer and last sale information for all U.S. exchange-listed
securities based on liquidity within the Nasdaq market center and
trades reported to the FINRA/Nasdaq Trade Reporting Facility (``TRF'').
It is a subset of the ``core'' quotation and last sale data provided by
securities information processors (``SIPs''), which distribute
consolidated data pursuant to the CTA/CQ Plan and the UTP Plan.
Nasdaq Basic is separated into three components, which may be
purchased individually or in combination: (i) Nasdaq Basic for Nasdaq,
which contains the best bid and offer on the Nasdaq market center and
last sale transaction reports for Nasdaq and the FINRA/Nasdaq TRF for
Nasdaq-listed stocks; (ii) Nasdaq Basic for NYSE, which covers NYSE-
listed stocks, and (iii) Nasdaq Basic for NYSE American, which provides
data on stocks listed on NYSE American and other listing venues that
disseminate quotes and trade reports on Tape B. The specific data
elements available through Nasdaq Basic are: (i) Nasdaq Basic Quotes
(``QBBO''), the best bid and offer and associated size available in the
Nasdaq Market Center, as well as last sale transaction reports; (ii)
Nasdaq opening and closing prices, as well as IPO and trading halt
cross prices; and (iii) general exchange information, including systems
status reports, trading halt information, and a stock directory.
Nasdaq offers an enterprise license for Nasdaq Basic that allows a
broker-dealer to distribute Nasdaq Basic, or Derived Data therefrom,
through any electronic system approved by Nasdaq, to an unlimited
number of Professional and Non-Professional Subscribers who are natural
persons and with whom the broker-dealer has a brokerage
relationship.\8\ The monthly fee for that license is $100,000.\9\ That
license also provides the right to distribute NLS to an unlimited
number of Professional and Non-Professional Subscribers who are natural
persons and with whom the broker-dealer has a brokerage relationship
without paying the fees set forth in Equity 7, Section 139(b) or
(c).\10\
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\8\ See Equity 7 Section 147(b)(5).
\9\ See id.
\10\ The Nasdaq Basic enterprise license also includes a number
of other provisions and restrictions not at issue here, including
but not limited to: (i) A limitation that the use of the data by a
Professional Subscriber shall be limited to the brokerage
relationship, except that Nasdaq Basic data may be made available
for up to 4,500 internal Subscribers without incurring additional
fees; (ii) a requirement for a separate enterprise license for each
discrete electronic system; (iii) a requirement that the broker-
dealer pay distributor fees under paragraph (c)(1); and (iv) a
requirement that the broker-dealer report the number of Subscribers
receiving Nasdaq Basic under this license.
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Nasdaq Last Sale
NLS provides real-time last sale information for executions
occurring within the Nasdaq market center and trades reported to the
jointly-operated FINRA/Nasdaq TRF.\11\ The NLS data feed, which
provides price, volume and time of execution data for last sale
transactions, includes transaction information for Nasdaq-listed stocks
(``NLS for Nasdaq'') and for stocks listed on NYSE, NYSE American, and
other Tape B listing venues (``NLS for NYSE/NYSE American'').\12\ It
is, like Nasdaq Basic, a non-core product that provides a subset of the
core data provided by the SIPs under the CTA and UTP plans.\13\
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\11\ See Securities Exchange Act Release No. 55255 (February 8,
2007), 72 FR 7100 (February 14, 2007) (SR-NASDAQ-2006-060)
(proposing to establish Nasdaq Last Sale data feeds); see also
Securities Exchange Act Release No. 57965 (June 16, 2008), 73 FR
35178 (June 20, 2008) (SR-NASDAQ-2006-060) (approving SR-NASDAQ-
2006-060, as amended by Amendment Nos. 1 and 2, to implement NLS on
a pilot basis).
\12\ See Securities Exchange Act Release No. 57965 (June 16,
2008), 73 FR 35178 (June 20, 2008) (SR-NASDAQ-2006-060).
\13\ See Securities Exchange Act Release No. 34-82723 (February
15, 2018), 83 FR 7812 (February 22, 2018) (SR-NASDAQ-2018-010).
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The Exchange offers an enterprise license for NLS under Section
139(b)(4), which allows any Distributor that is disseminating NLS to
the general investing public, and which would otherwise pay the Per
User, Per Query, or Per Device fees set forth in Equity 7, Sections
139(b)(1) through (3), to purchase a monthly enterprise license for
$41,500. To be eligible for the license, NLS must be distributed on a
platform(s) controlled by the Distributor and pre-approved by the
Exchange as providing the Distributor with a reasonable basis to
conclude that all Users of such Information \14\ are either Non-
Professionals or Professionals whom the Distributor has no reason to
believe are using Nasdaq Last Sale in their professional capacity.
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\14\ ``Information'' means ``any data or information that has
been collected, validated, processed and/or recorded by the Exchange
and made available for transmission relating to: (i) Eligible
securities or other financial instruments, markets, products,
vehicles, indicators or devices; (ii) activities of the Exchange; or
(iii) other information or data from the Exchange. Information
includes, but is not limited to, any element of information used or
processed in such a way that Exchange Information or a substitute
for such Information can be identified, recalculated or re-
engineered from the processed information.'' See Equity 7, Section
139(f)(5).
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Proposed Change
The Exchange proposes to allow broker-dealers that purchase the
Nasdaq Basic enterprise license at Equity 7, Section 147(b)(5) to
distribute NLS to the general investing public under the same terms and
conditions currently permitted under the NLS enterprise license at
Equity 7, Section 139(b)(4). Currently, broker-dealers that purchase
[[Page 26987]]
the Nasdaq Basic enterprise license are allowed to distribute NLS to
``an unlimited number of Professional and Non-Professional Subscribers
who are natural persons and with whom the broker-dealer has a brokerage
relationship,'' \15\ while Distributors that purchase the NLS
enterprise license may distribute NLS to any member of the general
investing public for Display Usage, provided that the Distributor has a
``reasonable basis to conclude that all Users of such Information are
either Non-Professionals or Professionals whom the Distributor has no
reason to believe are using Nasdaq Last Sale in their professional
capacity.'' \16\ Nasdaq proposes to allow purchasers of Nasdaq Basic to
distribute NLS to the general investing public for Display Usage under
the same terms and conditions as the NLS enterprise license.
---------------------------------------------------------------------------
\15\ Equity 7, Section 147(b)(5).
\16\ Equity 7, Section 139(b)(4).
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The Proposal will offer purchasers of the Nasdaq Basic enterprise
license at Equity 7, Section 147(b)(5) the full use of the NLS
enterprise license at Equity 7, Section 139(b)(4) at no extra charge.
The same terms and conditions applicable to the NLS enterprise license
will continue to apply to the distribution of NLS to the general
investing public under the Nasdaq Basic enterprise license. These
common conditions include: (i) A limitation that distribution of NLS
will be limited to Display Usage; \17\ (ii) a separate approval for
each platform that will distribute NLS will be required; \18\ and (iii)
a requirement that distribution be limited to the general investing
public.\19\ The Exchange also proposes to delete a reference Equity 7,
Section 139(c) to make it clear that distributors that utilize NLS for
one of the specialized use cases set forth at Equity 7, Section 139(c)
will be required to pay the fees applicable to such use cases, whether
or not they purchased the Nasdaq Basic or NLS enterprise licenses. All
of these restrictions currently apply to purchasers of the NLS
enterprise license.\20\ The Proposal will continue to allow the
distribution of Nasdaq Basic, including the last sale information that
is a component of Nasdaq Basic, under the terms and conditions set
forth in Equity 7, Section 147(b)(5) without change.
---------------------------------------------------------------------------
\17\ See id. (``For any customer that would otherwise eligible
for the Per User, Per Query, or Per Device fees set forth in
subsections (1) through (3) above, excluding any requirement to
count or track usage, a Distributor may purchase a monthly
enterprise license for $41,500 to distribute Nasdaq Last Sale data
to the General Investing Public for Display Usage to an unlimited
number of Users or Devices, including, but not limited to,
television distribution. . . .) (emphasis added).
\18\ See id. (``To be eligible for the enterprise license,
Nasdaq Last Sale must be distributed on platform(s) controlled by
the Distributor and pre-approved by the Exchange as providing the
Distributor with a reasonable basis to conclude that all Users of
such Information are either Non-Professionals or Professionals whom
the Distributor has no reason to believe are using Nasdaq Last Sale
in their professional capacity.''). This is a different platform
approval requirement from that required to distribute Nasdaq Basic
under Section 147(b)(5). The approval for a Nasdaq Basic platform
under Section 147(b)(5) is used to confirm that the platform
distributes information within the brokerage relationship, and meets
all other requirements set forth within that license. The approval
for the NLS platform under Section 139(b)(4) is used to confirm that
the Distributor has a reasonable basis to conclude that all Users of
such Information are either Non-Professionals or Professionals whom
the Distributor has no reason to believe are using Nasdaq Last Sale
in their professional capacity. This modification places the same
platform approval requirement on purchasers of the Nasdaq Basic
enterprise license that choose to distribute NLS outside of the
brokerage relationship as customers that choose to solely purchase
the NLS enterprise license.
\19\ Distribution of NLS under any specialized use case would
occur under the applicable fee set forth in Equity 7, Section
139(c). Compare Equity 7, Section 139(b) (identifying fees for
distribution to the General Investing Public) with Equity 7, Section
139(c) (identifying fees for specialized usage of NLS).
\20\ Current purchasers of the Nasdaq Basic enterprise license
will not be circumscribed in their ability to distribute last sale
data within the parameters of that license. As explained above,
Nasdaq Basic contains both best bid and offer information and last
sale transaction reports. Customers that purchase Nasdaq Basic will
continue to be able to distribute last sale data within the
brokerage relationship as part of the Nasdaq Basic enterprise
license without change. The proposal will simply add a new option
for Nasdaq Basic customers: to distribute NLS data outside of the
brokerage relationship, under the same terms and conditions that
apply to purchasers of the NLS enterprise license.
---------------------------------------------------------------------------
The Proposal will allow broader distribution of NLS to the general
investing public and will lower our customers' administrative costs, as
they would not be required to restrict distribution to individuals with
brokerage accounts.
Discussion
Background
Limitations on the distribution of NLS under the Nasdaq Basic
enterprise license have changed over time. The enterprise license was
initially proposed in 2011. At that time, distribution was limited to
Non-Professional Subscribers in a brokerage relationship, and NLS was
not included.\21\ Distribution of NLS was added in 2017,\22\ and, in
2018, distribution of NLS was limited to Professional and Non-
Professional Subscribers who are natural persons in a brokerage
relationship with the broker-dealer, the same limitation as the
distribution of Nasdaq Basic.\23\
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\21\ See Securities Exchange Act Release No. 65526 (October 11,
2011), 76 FR 64137 (October 17, 2011) (SR-Nasdaq-2011-130).
\22\ See Securities Exchange Act Release No. 81697 (September
25, 2017), 82 FR 45639 (September 29, 2017) (SR-Nasdaq-2017-095).
\23\ See Securities Exchange Act Release No. 82723 (February 15,
2018), 83 FR 7812 (February 22, 2018) (SR-NASDAQ-2018-010).
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In 2019, Nasdaq introduced the enterprise license fee for NLS at
Section 139(b)(4).\24\ The purpose of the enterprise license was to
lower the cost of distributing last sale data and expand its
availability to the general investing public by eliminating certain
counting requirements for NLS usage, and expanding the available
mechanisms for the delivery of NLS data. Nasdaq noted in that filing
that NLS had been designed to enable market-data distributors ``to
provide free access to [ ] data to millions of individual investors via
the internet and television'' and was expected to ``increase[ ] the
availability of N[asdaq] proprietary market data to individual
investors.'' \25\
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\24\ See Securities Exchange Act Release No. 85504 (April 3,
2019), 84 FR 14183 (April 9, 2019) (SR-NASDAQ-2019-024).
\25\ See id.; see also Securities Exchange Act Release No. 57965
(June 16, 2008), 73 FR 35178 (June 20, 2008) (SR-NASDAQ-2006-060)
(notice of filing of Amendment No. 2 and Order granting accelerated
approval to proposed rule change, ad modified by Amendment Nos. 1
and 2, to establish Nasdaq last sale data feeds).
---------------------------------------------------------------------------
The 2019 filing for the NLS enterprise license included the
requirement that the Distributor have a reasonable basis to conclude
that all Users of such Information \26\ are either Non-Professionals or
Professionals whom the Distributor has no reason to believe are using
NLS in their professional capacity--the same test applied to the Per
User model of NLS distribution.\27\ The Exchange explained that a
Distributor has ``no reason to believe'' that NLS is being used in a
professional capacity when, for example, the data is made available to
the general investing public in a format that would be ``unlikely to be
of significant use to Professionals acting in a professional
capacity,'' as in the Per Query model,\28\ or when the Information is
``made freely available to internet users,'' as in the Per Device
model.\29\ Any Distributor that would be eligible to disseminate NLS
under the Per User, Per Query, or Per Device models would be able to
meet that test because it is inherent (or explicit) within the
eligibility criteria
[[Page 26988]]
for each model.\30\ One of the chief benefits of the enterprise license
was that it was designed to allow Distributors to disseminate NLS data
to the general investing public in a manner not easily tracked using
the Per User, Per Query, or Per Device models.\31\
---------------------------------------------------------------------------
\26\ See supra, note 14.
\27\ See Section 139(b)(1).
\28\ See Securities Exchange Act Release No. 85504 (April 3,
2019), 84 FR 14183 (April 9, 2019) (SR-NASDAQ-2019-024); see also
Securities Exchange Act Release No. 34-82723 (February 15, 2018), 83
FR 7812 (February 22, 2018) (SR-NASDAQ-2018-010).
\29\ See id.
\30\ The ``no reason to believe'' test is explicitly part of the
criteria for the Per User model. See Section 139(b)(1). It is
inherent in the Per Query model because, as noted above and in the
filing instituting that fee, this model ``is unlikely to be of
significant use to Professionals acting in a professional capacity .
. .'' See Securities Exchange Act Release No. 34-82723 (February 15,
2018), 83 FR 7812 (February 22, 2018) (SR-NASDAQ-2018-010). It is
also inherent in the Per Device model because that model is designed
to make information ``freely available to internet users,'' and
therefore is unlikely to be of significant use to Professionals
acting in a professional capacity. See id.
\31\ An example of the type of distribution model intended to
benefit from the proposed license is a spreadsheet program that
allows the User to refresh a stock price using an in-program command
without copying data. Such usage is analogous to the Per Query
model, which supplies only as much data as the User requests on an
ad hoc basis, but is less susceptible to counting because the
request is done using a command embedded within another program.
---------------------------------------------------------------------------
Basis for Proposal
At least two potential customers of the Nasdaq Basic enterprise
license have requested permission to distribute NLS to the general
investing public for Display Usage without requiring a brokerage
relationship. Upon consideration of those customer requests, Nasdaq has
determined that complying with them is in the best interest of our
customers. First, the proposed change will allow broader distribution
of NLS to the general investing public. Second, the Proposal will lower
our customers' administrative costs as they would not be required to
restrict distribution to individuals with brokerage accounts.\32\
---------------------------------------------------------------------------
\32\ See Securities Exchange Act Release No. 82723 (February 15,
2018), 83 FR 7812 (February 22, 2018) (SR-NASDAQ-2018-010) (quoting
SR-NASDAQ-2006-060 (Amendment No. 2, June 10, 2008), at 3.)
(explaining that NLS was designed to enable market-data
``distributors to provide free access to the data to millions of
individual investors via the internet and television'' and was
expected to ``increase the availability of NASDAQ proprietary market
data to individual investors.''); see also Securities Exchange Act
Release No. 57965 (June 16, 2008), 73 FR 35178 (June 20, 2008) (SR-
NASDAQ-2006-060) (notice of filing of Amendment No. 2 and Order
granting accelerated approval to proposed rule change, ad modified
by Amendment Nos. 1 and 2, to establish Nasdaq last sale data
feeds).
---------------------------------------------------------------------------
There is little risk that the new standard will result in
widespread distribution of NLS, which was designed for the general
investing public, to professionals acting in their professional
capacity. Although the new standard may occasionally result in
incidental Professional use, such use is reasonable because NLS
contains less information and does not provide pre-trade transparency,
and is therefore likely to be less useful to a Professional than Nasdaq
Basic or other products that provide greater pre-trade information.
The proposed change is not targeted at, or expected to be limited
in its applicability to, any particular segment of market participants,
and no segment of retail investors, the general investing public, or
any other market participant is expected to benefit more than any
other.\33\
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\33\ Although this is not a fee filing, the Exchange is
addressing this question to provide as complete as possible an
evaluation of the proposed change. See Division of Trading and
Markets, U.S. Securities and Exchange Commission, ``Staff Guidance
on SRO Filings Related to Fees'' (May 21, 2019) (``Staff
Guidance''), available at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees (indicating that the discussion of purpose should
indicate ``whether the relevant product or service, including the
corresponding proposed fee or fee change, is targeted at--or
expected to be limited in its applicability to--a specific
segment(s) of market participants (and if so, the related
details))''.
---------------------------------------------------------------------------
The Exchange expects the Nasdaq Basic enterprise license to
continue to be attractive to potential customers, but does not expect a
large number of additional sales in response to this change.
Nevertheless, based on conversations with potential customers and our
overall familiarity with the market, as many as three additional
broker-dealers may purchase the Nasdaq Basic enterprise license as a
result of the proposed change.\34\
---------------------------------------------------------------------------
\34\ See id. (requesting that the discussion of purpose address
``the projected number of purchasers (including members, as well as
non-members) of any new or modified product or service and the
expected number of purchasers likely to be subject to a new fee or
pricing tier, including members and non-members . . .'').
---------------------------------------------------------------------------
The Proposal will not alter any Exchange fees.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\35\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\36\ in particular, in that it is 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, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\35\ 15 U.S.C. 78f(b).
\36\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange has already shown the Nasdaq Basic enterprise license
at Section 147(b)(5),\37\ and the NLS enterprise license at Section
139(b)(4) \38\ to be consistent with Section 6(b) of the Act. This
analysis therefore focuses on the change to the Nasdaq Basic enterprise
license at Section 147(b)(5).
---------------------------------------------------------------------------
\37\ See Securities Exchange Act Release No. 81697 (September
25, 2017), 82 FR 45639 (September 29, 2017) (SR-Nasdaq-2017-095).
\38\ See Securities Exchange Act Release No. 85504 (April 3,
2019), 84 FR 14183 (April 9, 2019) (SR-NASDAQ-2019-024).
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As explained above, the Proposal will expand the coverage of the
Nasdaq Basic enterprise license at Equity 7, Section 147(b)(5) to
include the full use of the NLS enterprise license at Equity 7, Section
139(b)(4) at no extra charge. The same terms and conditions applicable
to the NLS enterprise license will continue to apply to the
distribution of NLS to the general investing public under the Nasdaq
Basic enterprise license. These common conditions include: (i) A
requirement that distribution of NLS be limited to Display Usage; \39\
(ii) a separate approval of each platform that will distribute NLS will
be required; \40\ and (iii) a restriction that distribution be limited
to the general investing public.\41\ Distributors that utilize NLS for
one of the specialized use cases set forth at Equity 7, Section 139(c)
will be required to pay the fees applicable to such use cases, whether
or not they purchased the Nasdaq Basic or NLS enterprise licenses. All
of conditions that currently apply to purchasers of the NLS enterprise
license will apply to distribution of NLS for Display Usage to the
general investing public under the Nasdaq Basic enterprise license.\42\
---------------------------------------------------------------------------
\39\ See supra, note 17.
\40\ See supra, note 18.
\41\ See supra, note 19.
\42\ See supra, note 20. Current purchasers of the Nasdaq Basic
enterprise license will not be circumscribed in their ability to
distribute last sale data within the parameters of that license. As
explained above, Nasdaq Basic contains both best bid and offer
information and last sale transaction reports. Customers that
purchase Nasdaq Basic will continue to be able to distribute last
sale data within the brokerage relationship as part of the Nasdaq
Basic enterprise license without change. The proposal will simply
add a new option for Nasdaq Basic customers: To distribute NLS data
outside of the brokerage relationship, under the same terms and
conditions that apply to purchasers of the NLS enterprise license.
---------------------------------------------------------------------------
Both Nasdaq Basic and NLS compete with the top-of-book proprietary
data products offered by other exchanges, including the NYSE BQT feed,
which disseminates top-of-book information from the NYSE, NYSE
American, NYSE Arca, NYSE National, and NYSE Chicago exchanges,\43\ and
the Cboe One Summary Feed, which disseminates data from the BZX
Exchange, BYX
[[Page 26989]]
Exchange, EDGX Exchange and EDGA Exchange.\44\ The proposed change will
enhance competition by allowing broader distribution of NLS in the
context of the Nasdaq Basic license, and lowering the cost of
compliance for Nasdaq's customers by removing the need to restrict
distribution to individuals with brokerage accounts. Competition with
other exchanges in the sale of top-of-book products, and the likelihood
that the Proposal will enhance investor understanding of securities
markets and promote consumer choice by expanding the availability of
NLS to the general investing public, provide a substantial basis for
finding that the Proposal promotes just and equitable principles of
trade, removes impediments to and perfects the mechanism of a free and
open market and a national market system, and protects investors and
the public interest.
---------------------------------------------------------------------------
\43\ See Securities Exchange Act Release No. 87803 (December 19,
2019), 84 FR 71505 (December 27, 2019) (SR-NYSE-2019-70) (explaining
that the NYSE BQT market data product competes ``head to head with
the Nasdaq Basic and Cboe One Feed market data products.'').
\44\ See https://markets.cboe.com/us/equities/
market_data_services/
#:~:text=Cboe%20Top%20is%20a%20real,time%20on%20a%20Cboe%20book.&text
=It%20is%20a%20real%2Dtime,time%20on%20a%20Cboe%20book.
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The Proposal is not unfairly discriminatory. As noted previously,
both the Nasdaq Basic \45\ and NLS \46\ enterprise licenses were shown
to be non-discriminatory and otherwise consistent with the Act. The
only change here is to allow broader distribution of NLS under the
Nasdaq Basic enterprise license at Section 147(b)(5). As explained
above, the proposed change is not targeted at, or expected to be
limited in its applicability to, any particular segment of market
participants, and no segment of retail investors, the general investing
public, or any other market participant is expected to benefit more
than any other. The proposal will apply to any broker-dealer that
purchases the Nasdaq Basic enterprise license without differentiation
of any kind, and is therefore not unfairly discriminatory.
---------------------------------------------------------------------------
\45\ See Securities Exchange Act Release No. 81697 (September
25, 2017), 82 FR 45639 (September 29, 2017) (SR-Nasdaq-2017-095).
\46\ See Securities Exchange Act Release No. 85504 (April 3,
2019), 84 FR 14183 (April 9, 2019) (SR-NASDAQ-2019-024).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Intermarket Competition
Applying the same standard for the distribution of NLS to both the
Nasdaq Basic and NLS enterprise licenses at Sections 147(b)(5), and
139(b)(4), respectively, will place no burden on intermarket
competition (the competition among SROs). Both Nasdaq Basic and NLS
already compete directly against the NYSE BQT feed and the Cboe One
Summary Feed. As noted above, the proposed change will enhance
competition by allowing broader distribution of NLS, and lowering the
cost of compliance for Nasdaq's customers by removing the need to
restrict distribution to individuals with brokerage accounts. Nasdaq
believes that the proposed change will enhance the value of the Nasdaq
Basic enterprise license, promote customer choice, and therefore boost
competition among exchanges.
Intramarket Competition
The Proposal will not cause any unnecessary or inappropriate burden
on intramarket competition (competition among exchange customers). The
Proposal is not targeted at, or expected to be limited in its
applicability to, any particular segment of broker-dealers, and no
market participant or any segment of the general investing public is
expected to benefit more than any other. As such, the Proposal does not
place any category of market participant at a relative disadvantage
compared to any other category, and therefore will not impose any
burden on competition not necessary or appropriate in furtherance of
the Act. Moreover, current purchasers of the Nasdaq Basic enterprise
license will not be circumscribed in their ability to distribute last
sale data within the parameters of that license. As explained above,
Nasdaq Basic contains both best bid and offer information and last sale
transaction reports. Customers that purchase Nasdaq Basic will continue
to be able to distribute last sale data within the brokerage
relationship as part of the Nasdaq Basic enterprise license without
change. The proposal will simply add a new option for Nasdaq Basic
customers: To distribute NLS data outside of the brokerage
relationship, under the same terms and conditions that apply to
purchasers of the NLS enterprise license. Given that this is an
expansion of an existing license that does not curtail that license in
any way, there is no burden on intramarket competition.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \47\ and Rule 19b-
4(f)(6) thereunder.\48\
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\47\ 15 U.S.C. 78s(b)(3)(A).
\48\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
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 change 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 email to [email protected]. Please include
File Number SR-NASDAQ-2021-036 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2021-036. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's
[[Page 26990]]
internet website (https://www.sec.gov/rules/sro.shtml). Copies of the
submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for website viewing and printing in the
Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2021-036 and should be submitted
on or before June 8, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\49\
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\49\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10388 Filed 5-17-21; 8:45 am]
BILLING CODE 8011-01-P
