
[Federal Register: September 22, 2010 (Volume 75, Number 183)]
[Notices]               
[Page 57822-57823]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22se10-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62925; File No. SR-NASDAQ-2010-096]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval to a Proposed Rule Change Relating to the National 
Quotation Dissemination Service

September 16, 2010.

I. Introduction

    On August 2, 2010, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission (the 
``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 amend NASDAQ Rule 7017(b) to re-establish 
retroactively from January 1, 2008, a pilot program reducing the 
monthly fee that non-professional users pay to receive the National 
Quotation Dissemination Service (``NQDS'') from $50 to $10. The 
proposed rule change was published for comment in the

[[Page 57823]]

Federal Register on August 9, 2010.\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. 62629 (August 3, 
2010), 75 FR 47871 (``Notice'').
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II. Description of the Proposal

    NASDAQ is proposing to re-establish retroactively from January 1, 
2008 through July 27, 2010,\4\ the fee reduction pilot program that 
reduced the monthly fee that non-professional users pay to receive NQDS 
from $50 to $10, to correct for the lapse in the pilot and to prevent 
the collection of the additional $40 in monthly fees from investors for 
the period during which the pilot had lapsed.\5\ Prior to August 31, 
2000, NQDS data was available through authorized vendors at a monthly 
rate of $50 for professionals and non-professionals users alike. In 
August 2000, NASDAQ filed a proposed rule change to reduce from $50 to 
$10 the monthly fee that non-professional users pay to receive NQDS 
data. The Commission approved the pilot on August 22, 2000, and the fee 
reduction commenced on August 31, 2000 on a one-year pilot basis.\6\ On 
September 5, 2001, August 30, 2002, August 18, 2003, August 23, 2004, 
January 24, 2006, and March 29, 2007, NASDAQ filed proposed rule 
changes to extend the pilot for additional one-year periods.\7\
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    \4\ On July 27, 2010, NASDAQ filed a proposed rule change to 
make the pilot fee reduction permanent. See Securities Exchange Act 
Release No. 62614 (July 30, 2010), 75 FR 47668 (August 6, 2010).
    \5\ NQDS is a proprietary data product that contains the best 
bid and offer quotation of each registered market maker quoting in 
NASDAQ-listed securities on the NASDAQ Stock Market. NQDS data is 
used not only by firms, associated persons, and other market 
professionals, but also by non-professionals who receive the service 
through authorized vendors, including, for example, on-line 
brokerage firms. For a more detailed discussion of NQDS, see Notice.
    \6\ See Securities Exchange Act Release No. 43190 (August 22, 
2000), 65 FR 52460 (August 29, 2000).
    \7\ See Securities Exchange Act Release Nos. 44788 (September 
13, 2001), 66 FR 48303 (September 19, 2001); 46446 (August 30, 
2002), 67 FR 57260 (September 9, 2002); 48386 (August 21, 2003), 68 
FR 51618 (August 27, 2003); 50318 (September 3, 2004), 69 FR 54821 
(September 10, 2004); 53531 (March 21, 2006), 71 FR 15506 (March 28, 
2006); and 55668 (April 25, 2007), 72 FR 24347 (May 2, 2007).
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    NASDAQ believes that continuing the reduction of NQDS for non-
professional users demonstrates NASDAQ's continued commitment to 
provide data to non-professional market participants and individual 
investors.

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.\8\ In 
particular, it is consistent with Section 6(b)(4) of the Act,\9\ 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,\10\ 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. The Commission also finds that the 
proposed rule change is consistent with the provisions of Section 
6(b)(8) of the Act,\11\ 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,\12\ 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.\13\
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    \8\ 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).
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 15 U.S.C. 78f(b)(8).
    \12\ 17 CFR 242.603(a).
    \13\ NASDAQ is an exclusive processor of its NQDS data 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 data on an exclusive basis on its own behalf.
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    The Commission notes that the proposed rule change involves the 
retroactive application of a fee reduction pilot that benefits non-
professional market participants and that has been in effect in 
practice since 2000. The Commission approved the reduced fee pilot at 
its inception in 2000, and subsequently extended the pilot as cited 
above. NASDAQ charged the reduced fee, although its NQDS fee reduction 
pilot had expired, during the period from January 1, 2008 through July 
27, 2010, at which time NASDAQ filed an immediately effective proposal 
that made the reduced NQDS fee for non-professionals permanent. The 
Commission notes that no comments were received from any market 
participants, including NASDAQ members, information vendors, investors, 
non-professionals, or any other interested parties, on the initial 
pilot filing in 2000, on any of the pilot's extensions, on the 
immediately effective filing for permanent approval of the reduced fee, 
or on this filing. For the reasons discussed above, the Commission 
believes that retroactive approval of the fee reduction pilot from 
January 1, 2008 is appropriate.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-NASDAQ-2010-096), be, and it 
hereby is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-23631 Filed 9-21-10; 8:45 am]
BILLING CODE 8010-01-P

