80 FR 25350 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Fees, Dues and Other Charges

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 85 (May 4, 2015)

[Federal Register Volume 80, Number 85 (Monday, May 4, 2015)]
[Notices]
[Pages 25350-25352]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-10281]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74821; File No. SR-NASDAQ-2015-039]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Fees, Dues and Other Charges

April 28, 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 April 17, 2015, The NASDAQ Stock Market LLC (``NASDAQ'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II, below, which Items have been prepared by NASDAQ. 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 Substance 
of the Proposed Rule Change

    NASDAQ proposes to amend Chapter VI, Section 16, entitled ``Fees 
and Charges,'' which rule is applicable to NASDAQ members using the 
NASDAQ Options Market (``NOM''), NASDAQ's facility for executing and 
routing standardized equity and index options.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaq.cchwallstreet.com, at the principal 
office of the Exchange, 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, the Exchange 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. The Exchange 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
    The purpose of the proposed rule change is to amend Chapter VI, 
Section 16, entitled ``Fees and Charges.'' Today, the Exchange's Rule 
at Chapter VI, Section 16 discusses participation Fees and notes that 
the Board in its discretion may fix participations fees payable by 
Options Participants on a quarterly basis.\3\ Also, Options 
Participants shall pay a fee for each transaction they execute on NOM, 
as may be determined by the Board in its discretion. The Board may 
prescribe different or no fees for different types of transactions 
conducted on NOM.\4\ The Board may fix and impose other fees, 
assessments or charges to be paid by Options Participants or by classes 
of Options Participants with respect to applications, registrations, 
approvals, use of NOM and Trading System facilities or other services 
or privileges granted.\5\ Finally, an Options Participant that does not 
pay any fees, assessments, charges, fines or other amounts due to NOM 
within thirty (30) days after they have become due and payable shall be 
reported to the Board or its delegate which may, after giving 
reasonable notice to the Options Participant of such arrearages, 
suspend the Options Participant until payment is made or terminate the 
Options Participant's

[[Page 25351]]

participation on NOM. An associated person of an Options Participant 
who fails to pay any fine or other amounts due to NOM within thirty 
(30) days after such amount has become due and payable and after 
reasonable notice of such arrearages, may be suspended from association 
with an Options Participant until payment is made.\6\
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    \3\ See Chapter VI, Section 16(a).
    \4\ See Chapter VI, Section 16(b).
    \5\ See Chapter VI, Section 16(c).
    \6\ See Chapter VI, Section 16(d).
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    The Exchange is proposing to amend the title of Chapter VI, Section 
16 to ``Fees, Dues and Other Charges'' and adopt the rule text of 
current NASDAQ OMX PHLX LLC (``Phlx'') Rule 52 into current Chapter VI, 
Section 16. The Exchange desires to harmonize Chapter VI, Section 16 
with Phlx Rule 52.
    The new rule text would continue to permit the Board of Directors 
to have the power to fix fees. The proposed new rule would permit the 
Board: (i) to establish, assess and levy such fees, dues and other 
charges (including, without limitation, any extraordinary assessments) 
upon members and any other persons using the facilities or services of 
the Exchange, and upon applicants for and persons being admitted, 
registered, qualified and/or initiated to any such status, in each case 
as the Board of Directors may from time to time establish by resolution 
or in the Rules of the Exchange (which shall be deemed to include any 
schedule of fees, dues, other charges and penalties as may be in effect 
from time to time), (ii) to establish rebates, credits and discounts 
with respect to any of the foregoing, (iii) to establish programs 
whereby the Exchange shares or permits any person to participate in any 
identified source of revenues (less any expenses or other charges as 
the Exchange shall determine) of the Exchange, (iv) to provide for the 
direct reimbursement to the Exchange of any cost, expense or category 
thereof, and (v) except insofar as otherwise specified or provided for 
in the By-Laws, to establish and assess penalties for failure to pay 
any fees, dues or charges owed to the Exchange, including, without 
limitation, termination of membership (which membership may be 
reissued) and forfeiture of all rights as a member. The Board of 
Directors may authorize any committee thereof or the Chair of the Board 
of Directors to exercise any powers of the Board of Directors with 
respect to the assessment of fees, dues, other charges and penalties 
authorized in accordance with this Section.\7\ The Exchange believes 
that the proposed rule text includes a more exhaustive list of powers 
that the Board, or its delegate, may exercise with respect to fees.
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    \7\ See proposed new Chapter VI, Section 16(a).
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    The Board of Directors may also, from time to time, fix and impose 
charges upon members, measured by their respective net commissions on 
transactions effected on the Exchange. Such charges shall be payable at 
such times and shall be collected in such manner as may be determined 
by the Board of Directors.\8\ The Exchange believes that this rule text 
is more expansive than the rule text in current rule Chapter VI, 
Section 16 and provides the board with additional flexibility in 
imposing fees. Participants shall abide by the provisions of the 
Exchange's By-Laws and the Rules, which shall include, without 
limitation, the obligation to pay all applicable fees, dues and other 
charges imposed thereon by the By-Laws or the Rules of the Exchange.\9\ 
Participants today are obligated to abide by the provisions of the 
Exchange's By-Laws and the Rules and pay all applicable fees, dues and 
other charges imposed thereon by the By-Laws or the Rules of the 
Exchange. This provision does not impose any new obligations on 
Participants.
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    \8\ See proposed new Chapter VI, Section 16(b).
    \9\ See proposed new Chapter VI, Section 16(c).
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    Finally, the Board of Directors or their designee may suspend or 
terminate, after due notice, any permit or rights of any Participant or 
employee thereof using facilities or services of the Exchange, or 
enjoying any of the privileges therein, who shall not pay dues, fees, 
other charges, other monies due and owed the Exchange, fines and/or 
other monetary sanctions in accordance with the Rules of the 
Exchange.\10\ Today, the Exchange has the power to suspend Participants 
as noted in current rule Chapter VI, Section 16. The Exchange believes 
that this new provision provides the Board with greater flexibility in 
both suspending and now terminating Participants for failure to pay 
fees. The Exchange's Rules today provide a process for the suspension, 
cancellation and bar of its members.\11\
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    \10\ See proposed new Chapter VI, Section 16(d).
    \11\ See NASDAQ Rule 9553, entitled ``Failure to Pay Nasdaq 
Dues, Fees and Other Charges,'' specifies the process for 
suspension, cancellation and bar applicable to Nasdaq members.
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    The Exchange is not proposing to adopt the provisions of Phlx Rule 
52(e) as those provisions apply today to NOM Participants.\12\
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    \12\ See NASDAQ Rule 8320, entitled ``Payment of Fines, Other 
Monetary Sanctions, or Costs; Summary Action for Failure to Pay.''
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \13\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \14\ in particular, in that it is 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. The Exchange believes that these proposed rule changes will 
harmonize the NOM's Rules related to fees with that of Phlx.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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    The Exchange's process for billing and collecting fees on NOM today 
is the same process which exists on Phlx. The Exchange therefore 
desires to adopt Rule 52 to better describe the Board's powers and the 
obligations of Participants with respect to fees. The Exchange believes 
that this new provision provides the Board with greater flexibility in 
both suspending and now terminating Participants for failure to pay 
fees. The Exchange's By-Laws at Article IX, Section 4 provide the Board 
with authority to fix and levy the amount of fees assessed to members 
and Rule 9553 contemplates the ramifications and process by which 
members are notified and sanctioned for a failure to pay such fees.
    The adoption of an Exchange Rule similar to Phlx Rule 52 will align 
the NOM Rules with that of Phlx, with respect to fees, and reflect the 
current process which exists at both exchanges. The new text adds 
clarity to the NOM Rules and better reflects the current process. The 
Exchange believes that the adoption of the new rule text will provide 
Participants with clear guidelines for the payment of fees and will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule text does 
not impose an undue burden on competition, rather it seeks to clarify 
the power of the Exchange's Board and the manner in which the Exchange 
manages the assessment of fees. NOM Participants will all be subject to 
the same obligations as specified in the proposed rule with respect to 
fees.

[[Page 25352]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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-2015-039 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-2015-039. 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 the filing will also be available 
for inspection and copying at the principal office 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-2015-039 and should 
be submitted on or before May 26, 2015.
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    \17\ 17 CFR 200.30-3(a)(12).
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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\

Brent J. Fields,
Secretary.
[FR Doc. 2015-10281 Filed 5-1-15; 8:45 am]
 BILLING CODE 8011-01-P