[Federal Register Volume 77, Number 24 (Monday, February 6, 2012)]
[Notices]
[Pages 5862-5864]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-2588]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66282; File No. SR-NASDAQ-2012-016]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify Fees Assessed Under Rule 7015(c) for Subscription to Computer to
Computer Interface Stations
January 31, 2012.
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 January 23, 2012, 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, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
NASDAQ is proposing to modify the fees assessed under Rule 7015(c)
for subscription to Computer to Computer Interface Stations
(``Stations''). NASDAQ will implement the proposed change on February
1, 2012.
The text of the proposed rule change is below. Proposed new
language is underscored; proposed deletions are in brackets.
7015. Access Services
The following charges are assessed by Nasdaq for connectivity to
systems operated by NASDAQ, including the Nasdaq Market Center, the
FINRA/NASDAQ Trade Reporting Facility, and FINRA's OTCBB Service. The
following fees are not applicable to the NASDAQ Options Market LLC. For
related options fees for Access Services refer to Rule 7053.
(a)-(b) No change.
(c) Computer to Computer Interface (CTCI) Stations
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Fee component Fee
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[1st] Per Station Fee........ [$200]$600/Station/month.
[
Each Additional Station...... $600/Station/month].
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The bandwidth-based fees in the table below apply to CTCI
subscribers that have not transitioned off of Nasdaq-supported
circuits.
Bandwidth
------------------------------------------------------------------------
Fee component Fee
------------------------------------------------------------------------
Single 56kb line with single $900/month.
hub and router (for remote
disaster recovery sites
only).
Option 1:
Dual 56kb lines (one for $1,000/month.
redundancy) and single
hub and router.
Option 2:
Dual 56kb lines (one for $1,200/month.
redundancy), dual hubs
(one for redundancy),
and dual router (one for
redundancy).
Option 3:
Dual Tl lines (one for $2,500/month.
redundancy), dual hubs
(one for redundancy),
and dual routers (one
for redundancy).
Includes base bandwidth
of 128kb.
[[Page 5863]]
Bandwidth Enhancement Fee
(for Tl subscribers only):
Per 64kb increase above $200/month.
128kb Tl base.
Option 1, 2, or 3 with Fee for Option 1, 2, or 3 (including any
Message Queue software Bandwidth Enhancement Fee) plus 20%.
enhancement.
Installation Fee............. $2,000 per site for dual hubs and
routers.
$1,000 per site for single hub and
router.
Relocation Fee (for the $1,700 per relocation.
movement of TCF/IP-capable
lines within a single
location).
------------------------------------------------------------------------
(d)-(h) No change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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
NASDAQ is proposing to eliminate from Rule 7015(c) the $200 per
station/per month fee assessed for the first Station subscribed and
assess a uniform fee for all Stations of $600 per Station, per month,
which is the current fee assessed for each Station subscribed in excess
of one. Stations are logical channels used to manage the flow of data
to and from a member firm user. A Station allows a subscribing member
firm to send orders to NASDAQ or to report trades, using the member
firm's computer system and not a NASDAQ Workstation. Stations are
synonymous with the logical access ports used for FIX and QIX as they
have the same characteristics, including a one-to-one relationship
between the member firm and Station and throughput limits.\3\ Unlike
FIX and QIX ports, which are limited to a single service, Stations
allow member firms to access multiple services. For example, if a
member firm wished to access ACT, ACES and TRACE using FIX it would
have to order three separate ports, totaling $1,500 per month, whereas
the member firm may connect to all three facilities through a single
Station for a proposed fee of $600 per month.
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\3\ Rules 7015(a) and (b).
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Use of this service is voluntary and member firms have the option
of subscribing to other protocols that offer similar connectivity.
NASDAQ notes that the Station fees have not increased since March 2006,
when the current fee structure was adopted.\4\ NASDAQ developed and
implemented enhancements to CTCI since March 2006, such as updating
protocol formatting based on changing industry requirements and adding
new servers to support the updated product. NASDAQ also added the
ability to receive DROP copies over CTCI, which allows subscribing
member firms to send in order information and receive back their DROP
copies over a single connection.\5\ As a consequence of adding
enhancements, the value of the service has incrementally increased over
time and NASDAQ believes that it is appropriate to now raise the fee
assessed for CTCI to better align it with the increased value of the
service and rising costs associated with technology and connectivity.
Accordingly, NASDAQ proposes to eliminate the discounted fee assessed
for the first Station subscribed and assess a uniform fee of $600 for
each Station subscribed. NASDAQ anticipates that the proposed fees may
provide NASDAQ with a profit, in addition to covering costs discussed
above.
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\4\ Securities Exchange Act Release No. 53536 (March 21, 2006),
71 FR 15784 (March 29, 2006) (SR-NASD-2006-026).
\5\ Prior to this enhancement, member firms would have to order
a separate port dedicated to the receipt of their DROP copies.
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2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and Section
6(b)(4) of the Act,\7\ in particular, because 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 that
NASDAQ operates or controls, and it does not unfairly discriminate
between customers, issuers, brokers or dealers. NASDAQ believes that
the proposal constitutes an equitable allocation of fees because all
similarly-situated member firms would be charged the same amount. In
addition, access to NASDAQ will continue to be offered on fair and non-
discriminatory terms.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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NASDAQ believes that the proposal is reasonable because the fee
increase will realign the cost of administering and enhancing the
service with the revenue generated by the fee. As noted above, NASDAQ
has developed and implemented enhancements to CTCI since last
increasing fees in March 2006. As a consequence of adding enhancements,
the value of the service has incrementally increased over time and
NASDAQ believes that it is appropriate to now raise the fee assessed
for the initial Station to better align the fee with the increased
value of the service. NASDAQ anticipates that the proposed fee will
cover the costs associated with 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. As discussed, the proposed fee increase applies to only
the first Station subscribed, aligning that fee with the fee
historically applied to all Stations subscribed in excess of one.
NASDAQ notes that the proposed single Station fee is structured
similarly to the FIX port fee that, although offered at $100 per port,
per month less than the proposed Station fee, does not provide the
flexibility in connectivity that Stations provide.\8\
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\8\ Rule 7015(b).
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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
result in any burden on competition that is not
[[Page 5864]]
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 \9\ and subparagraph (f)(2) of Rule 19b-4
thereunder.\10\ 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.
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\9\ 15 U.S.C. 78s(b)(3)(a)(ii). [sic]
\10\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2012-016 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-2012-016. This
file number should be included on the subject line if email is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements 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 on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for inspection and copying at the
principal offices of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2012-016, and should be submitted on or before
February 27, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-2588 Filed 2-3-12; 8:45 am]
BILLING CODE 8011-01-P