80 FR 18471 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify NASDAQ Rule 7001(c)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 65 (April 6, 2015)

[Federal Register Volume 80, Number 65 (Monday, April 6, 2015)]
[Notices]
[Pages 18471-18472]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-07883]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74629; File No. SR-NASDAQ-2015-030]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify NASDAQ Rule 7001(c)

April 1, 2015.
    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 March 26, 2015, 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. 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.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to modify NASDAQ Rule 7001(c) concerning 
market maker participant identifier \3\ (``MPID'') fees. The Exchange 
proposes to implement the proposed rule change on April 1, 2015.
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    \3\ When applied to a market maker, sometimes referred to as a 
``maker participant identifier.''
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    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com at NASDAQ's principal office, and at the 
Commission's Public Reference Room.

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 fee assessed under Rule 7001(c) 
for MPIDs. MPIDs are special alphabetical identifiers assigned to 
certain broker-dealers to identify the firms' transaction and quoting 
activity. NASDAQ administers the assignment of MPIDs, which may be 
requested by a broker-dealer for use on NASDAQ systems, reporting to 
the Financial Industry Regulatory Authority (``FINRA''), or a 
combination of the two. NASDAQ member firms must subscribe to at least 
one MPID upon gaining NASDAQ membership, but may also request 
additional MPIDs. Member firms are not assessed a fee for an MPID used 
exclusively for reporting information to facilities of FINRA, such as 
the FINRA/NASDAQ Trade Reporting Facility.
    In December 2014, NASDAQ modified how the fee under Rule 7001(c) is 
assessed by reducing the fee, but applying the fee to all MPIDs 
subscribed.\4\ The rule had previously provided that the first MPID 
subscribed was available at no cost. In making the change, the Exchange 
more closely aligned the fee assessed with the benefit provided and the 
costs incurred in offering an MPID, which includes regulatory oversight 
associated with each MPID. The Exchange is now proposing to modestly 
increase the fee assessed for subscription to an MPID from $500 to $550 
per month.
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    \4\ See Securities Exchange Act Release No. 73705 (December 1, 
2015), 79 FR 72221 (December 5, 2014)(SR-NASDAQ-2014-118).
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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,\5\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\6\ 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, and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    NASDAQ believes that the proposed change is reasonable because it 
has reviewed the impact of the prior change to the fee and is now 
proposing to modestly increase the fee to ensure that NASDAQ is able to 
realize a reasonable profit in addition to covering costs. The Exchange 
believes that it is reasonable to adjust fees from time to time so that 
it can continue to make a profit on the products and services it 
offers. Ensuring that its products and services provide the Exchange 
with a profit allows it continue to offer and enhance such products and 
services, such as MPIDs. Moreover, the Exchange notes that its 
membership fees will continue to remain substantially lower than the 
analogous fees assessed by the New York Stock Exchange for 
membership.\7\ The Exchange believes that the proposed change is both 
an equitable allocation and is not designed to permit unfair 
discrimination between member firms because the fee is applied to all 
member firms equally based on the number of MPIDs subscribed.
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    \7\ The Exchange believes that the New York Stock Exchange 
(``NYSE'') Trading License Fee is analogous to membership fees of 
NASDAQ as they both provide access to the trading facilities of 
their respective exchanges. In this regard, NYSE assesses an annual 
fee of $50,000 for the first license held by a member organization, 
and $15,000 for each additional license. See https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf. By contrast, 
NASDAQ would assess the proposed monthly fee of $550 per MPID 
($6,600 annually), an annual membership fee of $3,000, and a monthly 
trading rights fee of $1,000 ($12,000 annually). See NASDAQ Rule 
7001(a).
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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.\8\ NASDAQ does not 
believe that the proposed rule change places an unnecessary burden on 
competition because it is a modest fee increase that will allow NASDAQ 
to realize a reasonable profit in addition to covering costs. As noted 
above, NASDAQ's membership fees remain substantially lower than the 
analogous fees of the NYSE, and membership fees are subject to 
competition from other exchanges. Accordingly, if the changes proposed 
herein are unattractive to market participants, it is likely that 
NASDAQ will experience a decline in membership and/or order flow as a 
result.
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    \8\ 15 U.S.C. 78f(b)(8).

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[[Page 18472]]

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,\9\ and paragraph (f) \10\ 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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-2015-030 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-030. 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 the Exchange. 
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-2015-
030, and should be submitted on or before April 27, 2015.
    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).

Brent J. Fields,
Secretary.
[FR Doc. 2015-07883 Filed 4-3-15; 8:45 am]
BILLING CODE 8011-01-P