
[Federal Register Volume 74, Number 99 (Tuesday, May 26, 2009)]
[Notices]
[Pages 24889-24890]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12143]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 59933; File No. SR-NASDAQ-2009-028]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Approving Proposed Rule Change to Reduce Fees for NASDAQ Basic Data 
Feeds

May 15, 2009.

I. Introduction

    On March 27, 2009, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to reduce the fees for NASDAQ Basic, a real time 
data feed combining both NASDAQ's Best Bid and Offer (``QBBO'') and the 
NASDAQ Last Sale. The proposed rule change was published for comment in 
the Federal Register on April 14, 2009.\3\ The Commission received no 
comment letters on the proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59712 (April 6, 
2009), 74 FR 17273.
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II. Description of the Proposal

    NASDAQ Basic is a ``Level 1'' data product containing quotation 
information from the NASDAQ Market Center and last sale data from the 
NASDAQ Market Center. NASDAQ Basic was approved on March 16, 2009,\4\ 
as a pilot program and includes fees for usage and distribution of the 
data. NASDAQ Basic is available in three forms, NASDAQ Basic for 
NASDAQ, NASDAQ Basic for NYSE, and NASDAQ Basic for Alternext. NASDAQ 
Basic is designed to meet the needs of current and prospective 
subscribers that do not need or are unwilling to pay for the 
consolidated data provided by the consolidated Level 1 products.
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    \4\ See Securities Exchange Act Release No. 59582 (March 16, 
2009) 74 FR 12423 (March 24, 2009) (SR-NASDAQ-2008-102) (``Pilot 
Approval Order'').

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[[Page 24890]]

    NASDAQ assesses a monthly fee for distributors of NASDAQ Basic in 
addition to applicable monthly per user fees. Currently, each 
Distributor of NASDAQ Basic for NASDAQ-listed stocks currently pays a 
monthly fee of $1,500 for either internal or external distribution, 
each Distributor of NASDAQ Basic for NYSE-listed stocks pays a monthly 
fee of $250 for internal distribution or $625 for external 
distribution, and each Distributor of NASDAQ Basic for Alternext-listed 
stocks pays a monthly fee of $250 for internal distribution or $625 for 
external distribution. In addition, each Distributor that receives 
Direct Access to the NASDAQ Basic pays a monthly fee of $2,000 for 
NASDAQ-listed stocks, $1,000 for NYSE-listed stocks, and $1,000 for 
Alternext-listed stocks.
    NASDAQ proposes to reduce the distribution fees for NASDAQ Basic. 
First, NASDAQ proposes to make all three feeds available for a single 
monthly Distributor Fee of $1,500, rather than add separate fees for 
NYSE- and Alternext-listed securities. Second, NASDAQ proposes to 
eliminate the fee for Direct Access to NASDAQ Basic, currently set 
forth in Rule 7047(b). Finally, NASDAQ proposes to credit each 
Distributor of NASDAQ Basic up to $1,500 per month based upon that 
Distributor's monthly usage fees. For example, a Distributor that 
reports $1,500 or more of monthly usage of NASDAQ Basic will pay no net 
Distributor Fee, whereas a Distributor that reports $1,000 of monthly 
usage will pay a net of $500 for the Distributor Fee.

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange.\5\ In 
particular, it is consistent with Section 6(b)(4) of the Act,\6\ which 
requires that the rules of a national securities exchange provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members and issuers and other parties using its facilities, 
and Section 6(b)(5) of the Act,\7\ which requires, among other things, 
that the rules of a national securities exchange be 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 not be designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Commission also finds that the proposed rule change is 
consistent with the provisions of Section 6(b)(8) of the Act,\8\ which 
requires that the rules of an exchange not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act. Finally, the Commission finds that the proposed rule change 
is consistent with Rule 603(a) of Regulation NMS,\9\ adopted under 
Section 11A(c)(1) of the Act, which requires an exclusive processor 
that distributes information with respect to quotations for or 
transactions in an NMS stock to do so on terms that are fair and 
reasonable and that are not unreasonably discriminatory.\10\
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    \8\ 15 U.S.C. 78f(b)(6).
    \9\ 17 CFR 242.603(a).
    \10\ NASDAQ is an exclusive processor of NASDAQ Basic under 
Section 3(a)(22)(B) of the Act, 15 U.S.C. 78c(a)(22)(B), which 
defines an exclusive processor as, among other things, an exchange 
that distributes information with respect to quotations or 
transactions on an exclusive basis on its own behalf.
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    This proposal would reduce the distribution fees for NASDAQ Basic 
by charging a single monthly Distributor Fee of $1,500 for all three 
NASDAQ Basic feeds, eliminating the fee for Direct Access to NASDAQ 
Basic, and providing a credit to each Distributor of NASDAQ Basic up to 
$1,500 per month based upon that Distributor's monthly usage fees. The 
Commission has reviewed the proposal using the approach set forth in 
the NYSE Arca Order for non-core market data fees.\11\ The Commission 
recently found that NASDAQ was subject to competitive forces in setting 
fees for NASAQ Basic in the Pilot Approval Order.\12\ There are a 
variety of alternative sources of information that impose significant 
competitive pressures on NASDAQ in setting the terms for distributing 
NASDAQ Basic. The Commission believes that the availability of those 
alternatives, as well as NASDAQ's compelling need to attract order 
flow, imposed significant competitive pressure on NASDAQ to act 
equitably, fairly, and reasonably in setting the terms of its proposal.
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    \11\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21) (``NYSE 
Arca Order''). In the NYSE Arca Order, the Commission describes the 
competitive factors that apply to non-core market data products. The 
Commission hereby incorporates by reference the data and analysis 
from the NYSE Arca Order into this order.
    \12\ See Pilot Approval Order, supra note 4.
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    Because NASDAQ was subject to significant competitive forces in 
setting the terms of the proposal, the Commission will approve the 
proposal in the absence of a substantial countervailing basis to find 
that its terms nevertheless fail to meet an applicable requirement of 
the Act or the rules thereunder. An analysis of the proposal does not 
provide such a basis.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-NASDAQ-2009-028), be, and it 
hereby is, approved.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-12143 Filed 5-22-09; 8:45 am]
BILLING CODE 8010-01-P


