80 FR 39827 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Fees Assessed Under Rules 7015(b) and (g)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 132 (July 10, 2015)

[Federal Register Volume 80, Number 132 (Friday, July 10, 2015)]
[Notices]
[Pages 39827-39829]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-16861]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75366; File No. SR-NASDAQ-2015-067]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Fees Assessed Under Rules 7015(b) and (g)

July 6, 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 June 25, 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 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 revert recently-increased fees assessed 
under Rules 7015(b) and (g) to their levels prior to the fee increase 
and to retroactively apply the lower fees in light of delays in 
implementing hardware upgrades.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

[[Page 39828]]

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
    On April 22, 2015, NASDAQ filed a rule change that increased the 
port fees assessed members and non-members for ports used to enter 
orders into NASDAQ systems, in connection with the use of FIX and OUCH 
trading telecommunication protocols.\3\ The Exchange noted that the 
increased fees would allow it to recoup costs arising from upgrades it 
was making to the hardware supporting the ports to Field Programmable 
Gate Array (``FPGA'') technology.\4\ Specifically, the Exchange 
increased the fee assessed under Rule 7015(b) for a FIX Trading Port 
from $550 per port, per month, to $575 per port, per month. The 
Exchange also increased the fee assessed under Rule 7015(g) for an OUCH 
Port from $550 per port pair, per month to $575 per port pair, per 
month.
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    \3\ See Securities Exchange Act Release No. 74829 (April 29, 
2015), 80 FR 25745 (May 5, 2015) (SR-NASDAQ-2015-042).
    \4\ Id.
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    The Exchange had anticipated purchasing and installing FPGA 
hardware by May 2015, however, NASDAQ encountered an unanticipated 
delay in implementation. As a consequence, the Exchange was unable to 
implement the upgraded hardware in May; however, the increased fees 
assessed to recoup costs arising from the upgrade remain in place. 
NASDAQ does not believe that it is appropriate to assess the increased 
fees under Rules 7015(b) and (g) in the absence of the FPGA hardware 
upgrade, which, as noted, was the basis for increasing the fees.\5\ 
Accordingly, NASDAQ is proposing to revert the fees assessed under 
Rules 7015(b) and (g) to their reduced levels prior to the fee 
increase, and retroactively apply the lower fees for the months of 
April, May and June 2015. Once NASDAQ is prepared to implement the FPGA 
hardware upgrade, it will file a separate rule change proposal with the 
Commission to adjust the fees.
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    \5\ Id.
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2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with 
the provisions of Section 6 of the Act,\6\ in general, and with 
Sections 6(b)(4) and 6(b)(5) of the Act,\7\ 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 the Exchange operates or controls, and is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, 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 are not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that reverting the fees assessed for FIX and 
OUCH ports under Rules 7015(b) and (g), respectively, back to their 
prior levels and retroactively applying those lower fees is reasonable 
because NASDAQ has not provided the upgraded hardware to date, the cost 
of which was the basis for increasing the fees under Rules 7015(b) and 
(g). In addition, applying the lower fees will allow NASDAQ to keep the 
fee increase in line with its realized capital and operating 
expenditures, which have not increased as a result of the delayed 
implementation of the upgrade. The Exchange believes that the proposed 
reduction of the fees to their prior levels and retroactive application 
thereof is both equitably allocated and not unfairly discriminatory 
because it will apply uniformly to all market participants that 
subscribe to FIX and OUCH ports based on the number of such ports 
subscribed. Accordingly, such market participants will be assessed the 
fees in place prior to the increase and will continue to have the same 
hardware supported by those fees.

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

    The Exchange 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 
Exchange believes that the proposal is irrelevant to competition 
because it is not driven by, and will have no impact on, competition. 
Specifically, the Exchange is reverting fees to their prior, lower 
levels and applying them retroactively in light of delays in 
implementing upgrades to NASDAQ systems, the cost of which was the 
basis for fee increase. Reverting the fees to their lower levels will 
keep the fees assessed in line with the Exchange's expenditures at this 
juncture associated with upgrading to FPGA hardware. As such, the 
Exchange does not believe the proposed change will have any impact on 
competition, as market participants will be assessed the same fee for 
their FIX and OUCH ports with the same hardware that was in place prior 
to the fee increase.

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)(iii) of the Act \8\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6)
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative before 30 days from the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay. The Commission believes that waiving the 30-day operative delay 
is consistent with the

[[Page 39829]]

protection of investors and the public interest. Such waiver will allow 
the Exchange to immediately return the fees to the lower levels that 
existed before SR-NASDAQ-2015-042 and retroactively apply the lower 
fees so that market participants will not experience a fee increase in 
the absence of the FPGA hardware upgrade, the cost of which was the 
basis for the fee increase. Therefore, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change to be 
operative upon filing with the Commission.\11\
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    \11\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-2015-067 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-067. 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-
067, and should be submitted on or before July 31, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-16861 Filed 7-9-15; 8:45 am]
 BILLING CODE 8011-01-P