
[Federal Register Volume 78, Number 93 (Tuesday, May 14, 2013)]
[Notices]
[Pages 28272-28273]
From the Federal Register Online via the Government Printing 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 rule-comments@sec.gov. 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


