[Federal Register Volume 78, Number 93 (Tuesday, May 14, 2013)]
[Notices]
[Pages 28272-28273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11367]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69536; File No. SR-NASDAQ-2013-072]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change,
as Modified by Amendment No. 1 Thereto, To Amend Fees Assessed Under
Rule 7015(h)
May 8, 2013.
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 24, 2013 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, II and
III below, which Items have been prepared by the Exchange. On May 3,
2013, the Exchange submitted Amendment No. 1 to the proposed rule
change. The Commission is publishing this notice to solicit comments on
the proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ is proposing to amend the fees assessed under Rule 7015(h).
On May 3, 2013, NASDAQ filed Amendment No. 1 to add additional
clarifications to statutory basis discussion. NASDAQ implemented the
amended fees effective on May 1, 2013.
The text of the proposed rule change is below. Proposed new
language is italicized; 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 Chapter XV, Section 3
of the Options Rules.
(a)-(g) No change.
(h) VTE Terminal Fees
Each ID is subject to a minimum commission fee of
$250[125] per month unless it executes a minimum of 100,000 shares.
Each ID receiving market data is subject to pass-through
fees for use of these services. Pricing for these services is
determined by the exchanges and/or market center.
Each ID that is given web access is subject to a $250[125]
monthly fee.
* * * * *
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 IV 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 is proposing to increase the fees assessed members under
Rule 7015(h) for use of VTE terminals. A VTE terminal is a basic front-
end user interface used by NASDAQ members to connect to, and enter
orders in, The Nasdaq Market Center. Members using VTE terminals pay
the exchanges and market centers separately for data feeds and services
provided by NASDAQ, other exchanges or market centers through VTE. Such
fees are filed with the SEC and separately assessed by the exchanges
and market centers at the same rate irrespective of the method of
accessing the data feeds. These data feeds provide information that is
necessary for users to enter orders through VTE. The two fees assessed
under Rule 7015(h) relate to optional web access and commissions.
Rule 7015(h) currently assesses monthly a minimum commission fee of
$125 per ID for users executing orders totaling less than 100,000
shares per month, and a web access fee of $125 per ID. NASDAQ last
increased fees assessed under Rule 7015(h) in 2011 when it raised the
fee for access to the terminal via the web from $100 monthly to $125
monthly, and raised the minimum commission fee for users executing
orders totaling less than 100,000 shares per month from $100 monthly to
$125 monthly.\3\ In light of increasing costs, NASDAQ is proposing to
increase the fee for access to the terminal via the web from $125
monthly to $250 monthly, and increase the minimum commission fee for
users executing orders totaling less than 100,000 shares per month from
$125 monthly to $250 monthly.
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\3\ Securities Exchange Act Release No. 65014 (August 2, 2011),
76 FR 48189 (August 8, 2011) (SR-NASDAQ-2011-101).
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NASDAQ notes that web connectivity is one option available to
NASDAQ users for accessing the VTE terminal. Another option is access
through extranet connectivity, where a user contracts directly with a
third-party extranet provider and pays fees to that provider. With
respect to minimum commission fees, members that execute total orders
above the 100,000 share threshold will continue to not be assessed a
commission fee.
Based on NASDAQ's operation of the VTE since it was acquired from
INET, NASDAQ believes that the pricing changes are warranted in order
to
[[Page 28273]]
appropriately balance the demand for the product with increasing
platform, overhead and technology infrastructure costs.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \4\ in general, and with Section 6(b)(4) \5\ of the
Act, in particular. The Exchange believes it is consistent with Section
6(b)(4) of the Act 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 which the Exchange operates
or controls. All similarly situated members are subject to the same fee
structure, and access to this NASDAQ service is offered on fair and
non-discriminatory terms. NASDAQ has not increased the fees assessed
under Rule 7015(h) since 2011 despite incurring a substantial decrease
in subscribership, resulting in higher per-subscription costs as fixed
costs are spread among fewer users. Moreover, during this time NASDAQ
has also experienced increased costs associated with ongoing support of
the VTE platform, which include platform, overhead and technology
infrastructure costs. In order to continue to offer this service,
NASDAQ must increase the subscriber fees as proposed to cover the
overall general increase in cost to support the service, and to cover
the increased cost resulting from a smaller subscriber base. The
proposed fees realign the balance of the costs discussed above to the
fees received for the service so that it is similar to the ratio at the
time of the last fee increase. NASDAQ notes that it operates in a
highly competitive market in which market participants can readily
favor competing venues if they deem fee levels at a particular venue to
be excessive. Use of VTE terminals is entirely optional and members can
avail themselves of numerous other means of accessing The Nasdaq Market
Center. Members are not obligated to subscribe to VTE terminals and may
cancel an existing subscription at any time, with the obligation to pay
only for full the monthly fee for the month canceled. As such, the
Exchange believes that the proposed fees are reasonable.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. The proposed fees
merely allow NASDAQ to recapture the increasing platform, overhead and
technology infrastructure costs it incurs in support of the service,
which are magnified on a per subscription basis given a declining
subscriber base. The fees are applied uniformly among subscribing
member firms, which are not compelled to subscribe to the service and
may access the information provided through other means. For these
reasons, any burden arising from the fees is necessary in the interest
of promoting the equitable allocation of a reasonable fee.
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 change has become effective pursuant to Section
19(b)(3)(A) of the Act,\6\ and paragraph (f) \7\ of Rule 19b-4,
thereunder. 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.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f).
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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-2013-072 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-2013-072. 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, 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 such filing also will be
available for inspection and copying at the principal offices of
NASDAQ. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NASDAQ-2013-072, and should be submitted on or before June 4, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11367 Filed 5-13-13; 8:45 am]
BILLING CODE 8011-01-P