
[Federal Register: July 21, 2008 (Volume 73, Number 140)]
[Notices]
[Page 42397-42399]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jy08-104]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58152; File No. SR-NASDAQ-2008-059]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Modify Fees for Members Using the NASDAQ Options Market

July 14, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 1, 2008, 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 substantially by Nasdaq.
Pursuant to Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
\4\ thereunder, Nasdaq has designated this proposal as establishing or
changing a due, fee, or other charge, which renders the proposed rule
change effective upon filing. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    Nasdaq proposes to modify Rule 7050 governing pricing for Nasdaq
members using the NASDAQ Options Market (``NOM''), Nasdaq's facility
for executing and routing standardized equity and index options. Nasdaq
will implement the proposed rule change on July 1, 2008.
    The text of the proposed rule change is below. Proposed new
language is italicized; proposed deletions are in brackets.\5\
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    \5\ Changes are marked to the rule text that appears in the
electronic Nasdaq Manual found at http://nasdaq.complinet.com.
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* * * * *

7050. NASDAQ Options Market

    The following charges shall apply to the use of the order execution
and routing services of the NASDAQ Options Market by members for all
securities.
    (1)-(3) No Change.
    (4) Fees for executions of contracts other than those executed on
the

[[Page 42398]]

NASDAQ Options Market shall include execution and clearing fees charged
to NASDAQ for executing on away markets, as follows:

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                                                                     Customer          Firm             MM
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                                                      AMEX
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                                                                           $0.06           $0.63           $0.66
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                                                       BOX
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Penny Pilot.....................................................            0.51            0.51            0.51
Non-Penny Pilot.................................................            0.06            0.26            0.26
BKX.............................................................            0.06            0.41            0.41
NDX.............................................................            0.06            0.42            0.42
MNX.............................................................            0.06            0.42            0.42
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                                                      CBOE
----------------------------------------------------------------------------------------------------------------
Equity Options..................................................            0.06            0.51            0.51
QQQQ............................................................            0.06            0.31            0.31
SPY.............................................................            0.24            0.51            0.51
OEX, XEO........................................................            0.42            0.42            0.42
SPX >= $1.......................................................            0.56            0.52            0.52
SPX < $1........................................................            0.47            0.52            0.52
MVR.............................................................            0.46            0.31            0.31
Volatility Indices..............................................            0.52            0.57            0.57
DXL.............................................................            0.56            0.61            0.61
IWM.............................................................            0.24            0.31            0.31
DJX, MNX, NDX, & RUT............................................            0.34            0.61            0.61
Other indices, ETFs, & HOLDRs...................................            0.24            0.51            0.51
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                                                       ISE
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Equity Options..................................................            0.06            0.24     [0.46] 0.51
Premium Products **.............................................            0.24            0.24     [0.46] 0.51
BKX, FTZ, IJH, IJR, IJS, MFX, MID, MSH, SML, UKX................            0.24            0.34     [0.56] 0.61
RMN, RUI, RUT...................................................            0.24            0.39     [0.61] 0.66
NDX, MNX........................................................            0.24            0.40     [0.62] 0.67
FUM, HSX, POW, TNY, WMX.........................................            0.24            0.29     [0.51] 0.56
[FTZ]...........................................................          [0.06]          [0.34]          [0.56]
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** Premium products: BBH, BYT, DBA, DBO, DBS, DDM, DGL, DIA, DMA, DSI, DUG, DVY, DXD, EEM, EEV, EFA, ERF, EWA,
 EWC, EWG, EWH, EWJ, EWT, EWW, EWY, EWZ, FCG, FDG, FDM, FIW, FNI, FXA, FXB, FXC, FXE, FXF, FXI, FXP, FXY, GDX,
 GLD, HHH, HHO, HVY, IAI, IBB, IEF, IGW, ILF, IVE, IVV, IVW, IWB, IWD, IWF, IWM, IWN, IWO, IXX, IXZ, IYE, IYM,
 IYR, IYT, JLO, KBE, KCE, KIE, KLD, MDY, MOO, MYP, OEF, OIH, OOG, PBW, PGJ, PHO, PMP, PPH, PUF, QID, QLD, RND,
 RSP, RTH, RUF, SAW, SDS, SHY, SKF, SIN, SMH, SPY, SSO, TAN, TLT, TTH, TWM, UNG, USO, UTH, UWM, UYG, WSI, XHB,
 XLB, XLE, XLF, XLI, XLK, XLP, XLU, XLV, XLY, XME, XRT.
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                                                    NYSE-Arca
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Penny Pilot.....................................................            0.51            0.51            0.51
Non-Penny Pilot.................................................            0.06            0.56            0.56
BKX.............................................................            0.06            0.66            0.66
RUT.............................................................            0.06            0.71            0.71
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                                                      PHLX
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Equity Options..................................................            0.06            0.30            0.51
MNX & NDX Options...............................................            0.18            0.30            0.51
Index Options...................................................            0.50            0.30            0.26
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Nasdaq is proposing to modify the fees assessed for execution of
options orders entered into NOM but routed to away markets. On June 30,
2008, Nasdaq filed SR-2008-058, a proposal to pass through to Exchange
members the actual fees assessed by away markets plus the clearing fees
for the execution of orders routed from Nasdaq. Nasdaq collected and
organized in chart format the fees to be assessed for routing to each
destination exchange.
    Nasdaq is filing this proposed rule change to reflect a change
proposed by the International Securities Exchange on

[[Page 42399]]

June 30, 2008, in SR-ISE-2008-55.\6\ In addition, Nasdaq is adding to
the list of products that ISE treats as ``premium'' options symbol FXY,
which had been inadvertently omitted from Nasdaq's fee schedule.
Finally, within Nasdaq's fee schedule for executions occurring at ISE,
Nasdaq is proposing to classify options class FTZ as a premium product
with a fee of $.24, $.34, and $.61 for customers, firms, and market
makers. Options class FTZ had previously been listed in a category by
itself with executions fees of $.06, $.34, and $.56 for customers,
firms, and market makers. Nasdaq expects that ISE will charge Nasdaq
members $.24, $.34, and $.61, respectively, as set forth in Nasdaq's
proposed rule language.\7\ All fees for markets other than ISE remain
unchanged.
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    \6\ See Securities Exchange Act Release No. 58091 (July 3,
2008), 73 FR 39754 (July 10, 2008) (SR-ISE-2008-55).
    \7\ See e-mail from Jeffrey S. Davis, Vice President and Deputy
General Counsel, Nasdaq, to Joseph P. Morra, Special Counsel, and
Andrew Madar, Attorney-Advisor, Commission, dated July 10, 2008,
adding the prior 3 sentences.
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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,\8\ in general, and with Section
6(b)(4) of the Act,\9\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which Nasdaq operates or controls.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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    Nasdaq is one of seven options markets in the national market
system for standardized options. Joining Nasdaq and electing to trade
options is entirely voluntary. Under these circumstances, Nasdaq's fees
must be competitive and low in order for Nasdaq to attract order flow,
execute orders, and grow as a market. The various exchanges have filed
these fees with the Commission and it is reasonable for Nasdaq to pass
those fees through to its members. As such, Nasdaq believes that its
fees are fair and reasonable and consistent with the Exchange Act.

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. To the contrary,
Nasdaq has designed its fees to compete effectively for the execution
and routing of options contracts and to reduce the overall cost to
investors of options trading.

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 \10\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\11\ because it establishes or changes a due, fee, or other
charge imposed on members by Nasdaq. Accordingly, the proposal is
effective upon filing with the Commission. At any time within 60 days
of the filing of the proposed rule change, the Commission may summarily
abrogate 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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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 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 e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2008-059 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, Station Place, 100 F Street, NE., Washington,
DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2008-059. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (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 inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office 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 publicly available. All
submissions should refer to File Number SR-NASDAQ-2008-059 and should
be submitted on or before August 11, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16588 Filed 7-18-08; 8:45 am]

BILLING CODE 8010-01-P
