[Federal Register Volume 77, Number 198 (Friday, October 12, 2012)]
[Notices]
[Pages 62283-62285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-25106]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67977; File No. SR-NASDAQ-2012-110]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Offer the ACT Reject Scan and Assess a Related Fee
October 4, 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 September 28, 2012, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I 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 the
Substance of the Proposed Rule Change
Nasdaq proposes to establish a new service, the ACT Reject Scan,
and assess a related fee. Nasdaq is proposing to implement the proposed
service on October 1, 2012 and implement the proposed fee on November
1, 2012. The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com, at Nasdaq's principal office, and at the
Commission's Public Reference Room.
[[Page 62284]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at the places specified in
Item III [sic] below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to establish a new add-on service to the Nasdaq
Workstation and Weblink ACT 2.0, and establish related fees. Nasdaq's
ACT Reject Scan service allows a member firm, at any point during the
trading day, to scan the trades it has submitted to the Automated
Confirmation Transaction Service (``ACT'') for all trades rejected by
ACT. Currently, a member firm must investigate any trade that has been
rejected by ACT and for which it has not received a control number.\3\
Some member firms have developed their own internal systems that record
the data transmitted to ACT in a searchable database, which can aid
them in assessing whether a trade was rejected by ACT. Member firms
without such systems must contact Nasdaq Subscriber Services to
determine the nature of the rejected trade. This manual process can be
time-consuming, at a point when a member firm has limited time to
report its trades. Nasdaq received feedback from member firms that a
reject scan feature would aid in editing and resubmitting rejected
trades, a process known as submitting a ``repaired'' trade. In
response, Nasdaq developed the ACT Reject Scan service, which automates
this process by providing to a subscribing member firm a list of all of
its rejected trades together with the trade report forms populated with
the original data entered. Subscribing member firms may then correct
the rejected trade report forms and resubmit the repaired trade
reports.
---------------------------------------------------------------------------
\3\ ACT provides a member firm a control number for all of its
trades that are accepted by ACT.
---------------------------------------------------------------------------
The ACT Reject Scan service can only be accessed using a Nasdaq
Workstation or Weblink ACT 2.0 user account. Member firms subscribing
to the ACT Reject Scan service are charged a monthly fee per user,
which provides access to the service for each Nasdaq Workstation and
Weblink ACT 2.0 user account selected for subscription to the ACT
Reject Scan service. Nasdaq proposes to offer the ACT Reject Scan
service to each subscriber for a subscription fee of $75 per user, per
month. Use of the ACT Reject Scan service is voluntary and the
subscription fee will be imposed on all purchasers equally based on the
number of users selected. The proposed fee will be applied to offset
the costs associated with establishing the service, responding to
customer requests, configuring Nasdaq's systems, programming to user
specifications, and administering the service, among other things. To
the extent that costs are covered by the proposed fee, the proposed fee
may also provide Nasdaq with a profit.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\4\ in general, and Section
6(b)(4) of the Act,\5\ 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. As noted, use of the
proposed ACT Reject Scan service is voluntary and the subscription fee
will be imposed on all purchasers equally based on the number of users.
The proposed fee will be allocated to cover the costs associated with
establishing the service, responding to customer requests, configuring
Nasdaq's systems, programming to user specifications, and administering
the service, among other things, and may provide Nasdaq with a profit
to the extent costs are covered.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange determined that the proposed fee is reasonable based
on member firm interest in ACT Reject Scan service, costs associated
with developing and supporting the service, and the value that ACT
Reject Scan service provides to subscribing member firms. The
information provided by ACT Reject Scan service relates to the
subscribing member firm's trade submission activity through ACT and the
member firm may aggregate and access this information by developing its
own system or by contacting Nasdaq Subscriber Services for such
information. As such, the Exchange believes that if a member firm
determines that the fee is not cost-efficient for its needs, it may
decline to subscribe to ACT Reject Scan service and access such
information from other sources.
The Exchange also believes the proposed rule change is consistent
with Section 6(b)(5) of the Act,\6\ which requires that the rules of an
exchange be designed to prevent fraudulent and manipulative acts and
practices, promote just and equitable principles of trade, foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, protect investors and the public interest. The
Exchange believes the proposed rule change is consistent with these
requirements because the proposed service provides subscribing members
with a useful surveillance tool with which they may access information
concerning the acceptance of their trade reports entered into ACT, and
quickly repair and resubmit their rejected reports. Accordingly, the
Exchange believes that the proposed service will further goals of the
Act by providing subscribing members with greater transparency with
respect to their trade reports and increasing efficiency with respect
to the re-submission of repaired reports.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 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
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
[[Page 62285]]
become effective pursuant to Section 19(b)(3)(A) \7\ of the Act and
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of the
filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that Nasdaq may
offer the ACT Reject Scan service beginning on October 1, 2012. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest as
it will provide members with the option to obtain greater transparency
with respect to their trade reports, as well as an enhanced ability to
repair rejected trades.\11\ In addition, the Commission notes that the
service is being offered at no charge for the month of October.
Therefore, the Commission hereby waives the 30-day operative delay and
designates the proposed rule change to be operative upon filing with
the Commission.
---------------------------------------------------------------------------
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2012-110 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-2012-110. 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 10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for inspection and copying at the
principal offices of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASDAQ-2012-110, and should be submitted on or before
November 2, 2012.
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-25106 Filed 10-11-12; 8:45 am]
BILLING CODE 8011-01-P