81 FR 70207 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rule 7046
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 196 (October 11, 2016)
Federal Register Volume 81, Issue 196 (October 11, 2016)
| Page Range | 70207-70210 | |
| FR Document | 2016-24420 |
[Federal Register Volume 81, Number 196 (Tuesday, October 11, 2016)] [Notices] [Pages 70207-70210] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-24420] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79035; File No. SR-NASDAQ-2016-124] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rule 7046 October 4, 2016. 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 September 23, 2016, 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, 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq is proposing to amend proposed [sic] Nasdaq Rule 7046 (Nasdaq Trading Insights) by adding the corresponding fee for the optional Nasdaq Trading Insights product. The text of the proposed rule change is available at 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 The Exchange proposes to amend Nasdaq Rule 7046 (Nasdaq Trading [[Page 70208]] Insights) by adding the corresponding fees for the optional Nasdaq Trading Insights product.\3\ As discussed in the NTI Filing, the Nasdaq Trading Insights product is a single optional market data service comprised of four market data components: (a) Missed Opportunity-- Liquidity; (b) Missed Opportunity--Latency; (c) Peer Benchmarking; and (d) Liquidity Dynamics Analysis. --------------------------------------------------------------------------- \3\ This filing is referenced in the recently approved Nasdaq Trading Insights filing (the ``NTI Filing'') that proposed Nasdaq Rule 7046 (Nasdaq Trading Insights) to the Exchange rule book. See Securities Exchange Act Release No. 78886 (Sept. 20, 2016) (SR- NASDAQ-2016-101) (order granting approval). --------------------------------------------------------------------------- Upon request by a potential subscribing firm, Nasdaq will provide the Nasdaq Trading Insights product for a 14-day period at no charge. This waiver may be provided only once per firm. A firm will be charged the monthly fee rate listed in Nasdaq Rule 7046(b)(2) if it does not cancel by the conclusion of the trial offer and the fee will not be pro-rated. The monthly fee rates set forth in Nasdaq Rule 7046(b), as well as in the chart below, will apply to a firm that subscribes to the Nasdaq Trading Insights product. The monthly fee will be based on the number of ports the firm is subscribing to within the Nasdaq Trading Insights product and in no case will the Nasdaq Trading Insights fees be pro- rated. The fees for the Nasdaq Trading Insights product will be in accordance with the following table. ------------------------------------------------------------------------ Number of Monthly Tiers ports charges ------------------------------------------------------------------------ Tier 1........................................ 1-5 $1,500 Tier 2........................................ 6-15 2,000 Tier 3........................................ 16-25 2,500 Tier 4........................................ 26+ 3,500 ------------------------------------------------------------------------ 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\4\ in general, and with Sections 6(b)(4) and (5) of the Act,\5\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities, and does not unfairly discriminate between customers, issuers, brokers or dealers. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f. \5\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- In adopting Regulation NMS,\6\ the Commission granted SROs and broker-dealers (``BDs'') increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. Nasdaq believes that its Nasdaq Trading Insights market data product is precisely the sort of market data product that the Commission envisioned when it adopted Regulation NMS. The Commission concluded that Regulation NMS--by deregulating the market in proprietary data-- would itself further the Act's goals of facilitating efficiency and competition: --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) (``Regulation NMS Adopting Release''). [E]fficiency is promoted when broker-dealers who do not need the data beyond the prices, sizes, market center identifications of the NBBO and consolidated last sale information are not required to receive (and pay for) such data. The Commission also believes that efficiency is promoted when broker-dealers may choose to receive (and pay for) additional market data based on their own internal analysis of the need for such data.\7\ --------------------------------------------------------------------------- \7\ Id. By removing unnecessary regulatory restrictions on the ability of exchanges to sell their own data, Regulation NMS advanced the goals of the Act and the principles reflected in its legislative history. If the free market should determine whether proprietary data is sold to BDs at all, it follows that the price at which such data is sold should be set by the market as well. Moreover, fee liable data products such as the Nasdaq Trading Insights product are a means by which exchanges compete to attract order flow, and this proposal simply adds the relevant fee structure into an Exchange rule. To the extent that exchanges are successful in such competition, they earn trading revenues and also enhance the value of their data products by increasing the amount of data they are able to provide. Conversely, to the extent that exchanges are unsuccessful, the inputs needed to add value to data products are diminished. Accordingly, the need to compete for order flow places substantial pressure upon exchanges to keep their fees for both executions and data reasonable. The fee structure for the Nasdaq Trading Insights product, including the 14-day trial offer, also reflects an equitable allocation and will not be unfairly discriminatory because it is a voluntary product designed to ensure that the amount of the charge is tailored to the specific port usage patterns of the subscriber. Thus, for example, a subscriber's monthly charge for receiving access to the Nasdaq Trading Insights product for five ports is $1,500, while a subscriber's monthly charge for receiving access to the Nasdaq Trading Insights product for 26 ports is $3,500. The range of fee options further ensures that subscribers are not charged a fee that is inequitably disproportionate to the use that they make of the product. Additionally, the 14-day trial offer provides a potential subscriber an opportunity to try the product before signing on to receive it for a fee. The proposal would not permit unfair discrimination because the Nasdaq Trading Insights product will be available to all interested market participants opting to subscribe, regardless of whether they take advantage of the 14-day trial offer, and will help to protect a free and open market by continuing to provide additional non-core data (offered on an optional basis for a fee) to the marketplace and by providing investors with greater choices.\8\ --------------------------------------------------------------------------- \8\ See Sec. Indus. Fin. Mkts. Ass'n (SIFMA), Initial Decision Release No. 1015, 2016 SEC LEXIS 2278 (ALJ June 1, 2016) (finding the existence of vigorous competition with respect to non-core market data). See also the decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010) (``NetCoalition I'') (upholding the Commission's reliance upon competitive markets to set reasonable and equitably allocated fees for market data). --------------------------------------------------------------------------- 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 not necessary or appropriate in furtherance of the purposes of the Act. The proposed fee structure is designed to ensure a fair and reasonable use of Exchange resources by allowing the Exchange to recoup costs while continuing to offer its data products at competitive rates to firms. The market for data products is extremely competitive and firms may freely choose alternative venues and data vendors based on the aggregate fees assessed, the data offered, and the value provided. The Nasdaq Trading Insights product is part of the existing market for proprietary market data products that is currently competitive and inherently contestable because there is fierce competition for the inputs necessary to the creation of proprietary data and strict pricing discipline for the proprietary products themselves. Numerous exchanges compete with each other for listings, trades, and market data itself, providing virtually limitless opportunities for entrepreneurs who wish to produce and distribute their own market data. This proprietary data is produced by each individual exchange, as well as other entities, in a vigorously competitive market. [[Page 70209]] Transaction execution and proprietary data products are complementary in that market data is both an input and a byproduct of the execution service. In fact, market data and trade execution are a paradigmatic example of joint products with joint costs. The decision whether and on which platform to post an order will depend on the attributes of the platform where the order can be posted, including the execution fees, data quality and price, and distribution of its data products. Without trade executions, exchange data products cannot exist. Moreover, data products are valuable to many end users only insofar as they provide information that end users expect will assist them or their customers in making trading decisions. The costs of producing market data include not only the costs of the data distribution infrastructure, but also the costs of designing, maintaining, and operating the exchange's transaction execution platform and the cost of regulating the exchange to ensure its fair operation and maintain investor confidence. The total return that a trading platform earns reflects the revenues it receives from both products and the joint costs it incurs. Moreover, the operation of the exchange is characterized by high fixed costs and low marginal costs. This cost structure is common in content and content distribution industries such as software, where developing new software typically requires a large initial investment (and continuing large investments to upgrade the software), but once the software is developed, the incremental cost of providing that software to an additional user is typically small, or even zero (e.g., if the software can be downloaded over the internet after being purchased).\9\ In Nasdaq's case, it is costly to build and maintain a trading platform, but the incremental cost of trading each additional share on an existing platform, or distributing an additional instance of data, is very low. Market information and executions are each produced jointly (in the sense that the activities of trading and placing orders are the source of the information that is distributed) and are each subject to significant scale economies. In such cases, marginal cost pricing is not feasible because if all sales were priced at the margin, Nasdaq would be unable to defray its platform costs of providing the joint products. --------------------------------------------------------------------------- \9\ See William J. Baumol and Daniel G. Swanson, ``The New Economy and Ubiquitous Competitive Price Discrimination: Identifying Defensible Criteria of Market Power,'' Antitrust Law Journal, Vol. 70, No. 3 (2003). --------------------------------------------------------------------------- Competition among trading platforms can be expected to constrain the aggregate return each platform earns from the sale of its joint products, but different platforms may choose from a range of possible, and equally reasonable, pricing strategies as the means of recovering total costs. Nasdaq pays rebates and credits to attract orders, charges relatively low prices for market information and charges relatively high prices for accessing posted liquidity. Other platforms may choose a strategy of paying lower liquidity rebates to attract orders, setting relatively low prices for accessing posted liquidity, and setting relatively high prices for market information. Still others may provide most data free of charge and rely exclusively on transaction fees to recover their costs. Finally, some platforms may incentivize use by providing opportunities for equity ownership, which may allow them to charge lower direct fees for executions and data. In this environment, there is no economic basis for regulating maximum prices for one of the joint products in an industry in which suppliers face competitive constraints with regard to the joint offering. Such regulation is unnecessary because an ``excessive'' price for one of the joint products will ultimately have to be reflected in lower prices for other products sold by the firm, or otherwise the firm will experience a loss in the volume of its sales that will be adverse to its overall profitability. In other words, an increase in the price of data will ultimately have to be accompanied by a decrease in the cost of executions, or the volume of both data and executions will fall.\10\ --------------------------------------------------------------------------- \10\ Moreover, the level of competition and contestability in the market is evident in the numerous alternative venues that compete for order flow, including eleven SRO markets, as well as internalizing BDs and various forms of alternative trading systems (``ATSs''), including dark pools and electronic communication networks (``ECNs''). Each SRO market competes to produce transaction reports via trade executions, and two FINRA-regulated TRFs compete to attract internalized transaction reports. It is common for BDs to further and exploit this competition by sending their order flow and transaction reports to multiple markets, rather than providing them all to a single market. Competitive markets for order flow, executions, and transaction reports provide pricing discipline for the inputs of proprietary data products. The large number of SROs, TRFs, BDs, and ATSs that currently produce proprietary data or are currently capable of producing it provides further pricing discipline for proprietary data products. Each SRO, TRF, ATS, and BD is currently permitted to produce proprietary data products, and many currently do or have announced plans to do so, including Nasdaq, NYSE, NYSE MKT, NYSE Arca, and BATS/Direct Edge. --------------------------------------------------------------------------- The proposed charges for the Nasdaq Trading Insights product are designed to ensure a fair and reasonable use of Exchange resources by allowing the Exchange to recoup costs and ease administrative burden while continuing to offer its data products at competitive rates to firms. 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)(ii) of the Act.\11\ --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- 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. 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 CommentsUse 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-2016-124 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-2016-124. 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 [[Page 70210]] 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 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-2016-124, and should be submitted on or before November 1, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ Robert W. Errett, Deputy Secretary. --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-24420 Filed 10-7-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 196 / Tuesday, October 11, 2016 / Notices 70207
markets to all registered Options Market • Send an email to rule-comments@ SECURITIES AND EXCHANGE
Makers equally. sec.gov. Please include File Number SR– COMMISSION
C. Self-Regulatory Organization’s BatsBZX–2016–62 on the subject line.
[Release No. 34–79035; File No. SR–
Statement on Comments on the Paper Comments NASDAQ–2016–124]
Proposed Rule Change Received From
Members, Participants, or Others • Send paper comments in triplicate Self-Regulatory Organizations; The
to Brent J. Fields, Secretary, Securities NASDAQ Stock Market LLC; Notice of
The Exchange has not solicited, and Filing and Immediate Effectiveness of
does not intend to solicit, comments on and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090. Proposed Rule Change To Amend
this proposed rule change. The Nasdaq Rule 7046
Exchange has not received any written All submissions should refer to File
comments from members or other Number SR–BatsBZX–2016–62. This file October 4, 2016.
interested parties. number should be included on the Pursuant to Section 19(b)(1) of the
subject line if email is used. To help the Securities Exchange Act of 1934
III. Date of Effectiveness of the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Proposed Rule Change and Timing for Commission process and review your
notice is hereby given that, on
Commission Action comments more efficiently, please use
September 23, 2016, The NASDAQ
Because the foregoing proposed rule only one method. The Commission will Stock Market LLC (‘‘Nasdaq’’ or
change does not: (A) Significantly affect post all comments on the Commission’s ‘‘Exchange’’) filed with the Securities
the protection of investors or the public Internet Web site (http://www.sec.gov/ and Exchange Commission (‘‘SEC’’ or
interest; (B) impose any significant rules/sro.shtml). Copies of the ‘‘Commission’’) the proposed rule
burden on competition; and (C) by its submission, all subsequent change as described in Items I, II, and
terms, become operative for 30 days amendments, all written statements III below, which Items have been
from the date on which it was filed or with respect to the proposed rule prepared by the Exchange. The
such shorter time as the Commission change that are filed with the Commission is publishing this notice to
may designate it has become effective Commission, and all written solicit comments on the proposed rule
pursuant to Section 19(b)(3)(A) of the communications relating to the change from interested persons.
Act 9 and paragraph (f)(6) of Rule 19b– proposed rule change between the I. Self-Regulatory Organization’s
4 thereunder,10 the Exchange has Commission and any person, other than Statement of the Terms of Substance of
designated this rule filing as non- those that may be withheld from the the Proposed Rule Change
controversial. The Exchange has given public in accordance with the
the Commission written notice of its provisions of 5 U.S.C. 552, will be Nasdaq is proposing to amend
intent to file the proposed rule change, proposed [sic] Nasdaq Rule 7046
available for Web site viewing and
along with a brief description and text (Nasdaq Trading Insights) by adding the
printing in the Commission’s Public
of the proposed rule change at least five corresponding fee for the optional
Reference Room, 100 F Street NE., Nasdaq Trading Insights product.
business days prior to the date of filing Washington, DC 20549 on official
of the proposed rule change, or such The text of the proposed rule change
business days between the hours of is available at
shorter time as designated by the 10:00 a.m. and 3:00 p.m. Copies of such
Commission. nasdaq.cchwallstreet.com, at Nasdaq’s
filing also will be available for principal office, and at the
At any time within 60 days of the
inspection and copying at the principal Commission’s Public Reference Room.
filing of the proposed rule change, the
office of the Exchange. All comments
Commission summarily may II. Self-Regulatory Organization’s
temporarily suspend such rule change if received will be posted without change;
Statement of the Purpose of, and
it appears to the Commission that such the Commission does not edit personal
Statutory Basis for, the Proposed Rule
action is: (1) Necessary or appropriate in identifying information from Change
the public interest; (2) for the protection submissions. You should submit only
information that you wish to make In its filing with the Commission,
of investors; or (3) otherwise in Nasdaq included statements concerning
furtherance of the purposes of the Act. available publicly. All submissions
should refer to File Number SR– the purpose of, and basis for, the
If the Commission takes such action, the proposed rule change and discussed any
Commission shall institute proceedings BatsBZX–2016–62, and should be
comments it received on the proposed
to determine whether the proposed rule submitted on or before November 1,
rule change. The text of those
should be approved or disapproved. 2016.
statements may be examined at the
IV. Solicitation of Comments For the Commission, by the Division of places specified in Item IV below. The
Trading and Markets, pursuant to delegated Exchange has prepared summaries, set
Interested persons are invited to authority.11
submit written data, views, and forth in sections A, B, and C below, of
arguments concerning the foregoing, Robert W. Errett, the most significant parts of such
including whether the proposed rule Deputy Secretary. statements.
change is consistent with the Act. [FR Doc. 2016–24424 Filed 10–7–16; 8:45 am] A. Self-Regulatory Organization’s
Comments may be submitted by any of BILLING CODE 8011–01–P Statement of the Purpose of, and
asabaliauskas on DSK3SPTVN1PROD with NOTICES
the following methods: Statutory Basis for, the Proposed Rule
Change
Electronic Comments
• Use the Commission’s Internet 1. Purpose
comment form (http://www.sec.gov/ The Exchange proposes to amend
rules/sro.shtml); or Nasdaq Rule 7046 (Nasdaq Trading
9 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
10 17 CFR 240.19b–4. 11 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
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Insights) by adding the corresponding believed that this authority would receiving access to the Nasdaq Trading
fees for the optional Nasdaq Trading expand the amount of data available to Insights product for 26 ports is $3,500.
Insights product.3 As discussed in the consumers, and also spur innovation The range of fee options further ensures
NTI Filing, the Nasdaq Trading Insights and competition for the provision of that subscribers are not charged a fee
product is a single optional market data market data. Nasdaq believes that its that is inequitably disproportionate to
service comprised of four market data Nasdaq Trading Insights market data the use that they make of the product.
components: (a) Missed Opportunity— product is precisely the sort of market Additionally, the 14-day trial offer
Liquidity; (b) Missed Opportunity— data product that the Commission provides a potential subscriber an
Latency; (c) Peer Benchmarking; and (d) envisioned when it adopted Regulation opportunity to try the product before
Liquidity Dynamics Analysis. NMS. The Commission concluded that signing on to receive it for a fee.
Upon request by a potential Regulation NMS—by deregulating the The proposal would not permit unfair
subscribing firm, Nasdaq will provide market in proprietary data—would itself discrimination because the Nasdaq
the Nasdaq Trading Insights product for further the Act’s goals of facilitating Trading Insights product will be
a 14-day period at no charge. This efficiency and competition: available to all interested market
waiver may be provided only once per participants opting to subscribe,
[E]fficiency is promoted when broker-
firm. A firm will be charged the dealers who do not need the data beyond the regardless of whether they take
monthly fee rate listed in Nasdaq Rule prices, sizes, market center identifications of advantage of the 14-day trial offer, and
7046(b)(2) if it does not cancel by the the NBBO and consolidated last sale will help to protect a free and open
conclusion of the trial offer and the fee information are not required to receive (and market by continuing to provide
will not be pro-rated. pay for) such data. The Commission also additional non-core data (offered on an
The monthly fee rates set forth in believes that efficiency is promoted when optional basis for a fee) to the
Nasdaq Rule 7046(b), as well as in the broker-dealers may choose to receive (and marketplace and by providing investors
pay for) additional market data based on their with greater choices.8
chart below, will apply to a firm that own internal analysis of the need for such
subscribes to the Nasdaq Trading data.7 B. Self-Regulatory Organization’s
Insights product. The monthly fee will Statement on Burden on Competition
be based on the number of ports the firm By removing unnecessary regulatory
is subscribing to within the Nasdaq restrictions on the ability of exchanges The Exchange does not believe that
Trading Insights product and in no case to sell their own data, Regulation NMS the proposed rule change will impose
will the Nasdaq Trading Insights fees be advanced the goals of the Act and the any burden on competition not
pro-rated. The fees for the Nasdaq principles reflected in its legislative necessary or appropriate in furtherance
Trading Insights product will be in history. If the free market should of the purposes of the Act. The
accordance with the following table. determine whether proprietary data is proposed fee structure is designed to
sold to BDs at all, it follows that the ensure a fair and reasonable use of
Number of Monthly price at which such data is sold should Exchange resources by allowing the
Tiers be set by the market as well. Exchange to recoup costs while
ports charges
Moreover, fee liable data products continuing to offer its data products at
Tier 1 ................ 1–5 $1,500 such as the Nasdaq Trading Insights competitive rates to firms.
Tier 2 ................ 6–15 2,000 product are a means by which The market for data products is
Tier 3 ................ 16–25 2,500 exchanges compete to attract order flow, extremely competitive and firms may
Tier 4 ................ 26+ 3,500
and this proposal simply adds the freely choose alternative venues and
relevant fee structure into an Exchange data vendors based on the aggregate fees
2. Statutory Basis assessed, the data offered, and the value
rule. To the extent that exchanges are
The Exchange believes that the successful in such competition, they provided. The Nasdaq Trading Insights
proposed rule change is consistent with earn trading revenues and also enhance product is part of the existing market for
the provisions of Section 6 of the Act,4 the value of their data products by proprietary market data products that is
in general, and with Sections 6(b)(4) and increasing the amount of data they are currently competitive and inherently
(5) of the Act,5 in particular, in that it able to provide. Conversely, to the contestable because there is fierce
provides for the equitable allocation of extent that exchanges are unsuccessful, competition for the inputs necessary to
reasonable dues, fees, and other charges the inputs needed to add value to data the creation of proprietary data and
among its members, issuers and other products are diminished. Accordingly, strict pricing discipline for the
persons using its facilities, and does not the need to compete for order flow proprietary products themselves.
unfairly discriminate between places substantial pressure upon Numerous exchanges compete with
customers, issuers, brokers or dealers. exchanges to keep their fees for both each other for listings, trades, and
In adopting Regulation NMS,6 the executions and data reasonable. market data itself, providing virtually
Commission granted SROs and broker- The fee structure for the Nasdaq limitless opportunities for entrepreneurs
dealers (‘‘BDs’’) increased authority and Trading Insights product, including the who wish to produce and distribute
flexibility to offer new and unique 14-day trial offer, also reflects an their own market data. This proprietary
market data to the public. It was equitable allocation and will not be data is produced by each individual
unfairly discriminatory because it is a exchange, as well as other entities, in a
3 This filing is referenced in the recently
voluntary product designed to ensure vigorously competitive market.
approved Nasdaq Trading Insights filing (the ‘‘NTI
that the amount of the charge is tailored
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Filing’’) that proposed Nasdaq Rule 7046 (Nasdaq 8 See Sec. Indus. Fin. Mkts. Ass’n (SIFMA), Initial
Trading Insights) to the Exchange rule book. See to the specific port usage patterns of the
Decision Release No. 1015, 2016 SEC LEXIS 2278
Securities Exchange Act Release No. 78886 (Sept. subscriber. Thus, for example, a (ALJ June 1, 2016) (finding the existence of vigorous
20, 2016) (SR–NASDAQ–2016–101) (order granting subscriber’s monthly charge for competition with respect to non-core market data).
approval).
4 15 U.S.C. 78f.
receiving access to the Nasdaq Trading See also the decision of the United States Court of
Insights product for five ports is $1,500, Appeals for the District of Columbia Circuit in
5 15 U.S.C. 78f(b)(4) and (5).
NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010)
6 See Securities Exchange Act Release No. 51808 while a subscriber’s monthly charge for (‘‘NetCoalition I’’) (upholding the Commission’s
(June 9, 2005), 70 FR 37496 (June 29, 2005) reliance upon competitive markets to set reasonable
(‘‘Regulation NMS Adopting Release’’). 7 Id. and equitably allocated fees for market data).
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change that are filed with the Secured Income Fund 3, LLC (‘‘TSIF meaning of section 2(a)(48) of the Act.2
Commission, and all written 3’’), Terra Secured Income Fund 4, LLC Terra 6 is a specialty finance company
communications relating to the (‘‘TSIF 4’’), Terra Secured Income Fund formed to invest primarily in
proposed rule change between the 5, LLC (‘‘TSIF 5’’), Terra Property Trust, commercial real estate loans to, and
Commission and any person, other than Inc. (‘‘Terra REIT’’), Terra Secured preferred equity investments in, U.S.
those that may be withheld from the Income Fund 5 International (‘‘Terra companies qualifying as ‘‘eligible
public in accordance with the International’’), and Terra Income portfolio companies’’ under the Act.
provisions of 5 U.S.C. 552, will be Advisors, LLC (‘‘Terra Income Terra 6 may also purchase other select
available for Web site viewing and Advisors’’), on behalf of itself and its commercial real estate-related debt
printing in the Commission’s Public successors.1 securities of private companies. Terra
Reference Room, 100 F Street NE., FILING DATES: The application was filed 6’s Objectives and Strategies 3 are to pay
Washington, DC 20549 on official on April 29, 2015 and amended on attractive and stable cash distributions
business days between the hours of November 3, 2015, May 11, 2016 and and to preserve, protect and return
10:00 a.m. and 3:00 p.m. Copies of such September 14, 2016. capital contributions to stockholders.
filing also will be available for HEARING OR NOTIFICATION OF HEARING: An
The board of directors (‘‘Board’’) of
inspection and copying at the principal order granting the requested relief will Terra 6 is comprised of five directors,
office of the Exchange. All comments be issued unless the Commission orders three of whom are not ‘‘interested
received will be posted without change; a hearing. Interested persons may persons,’’ within the meaning of section
the Commission does not edit personal request a hearing by writing to the 2(a)(19) of the Act (the ‘‘Non-Interested
identifying information from Commission’s Secretary and serving Directors’’), of Terra 6.
submissions. You should submit only applicants with a copy of the request, 2. Each of TSIF, TSIF 2, TSIF 3, TSIF
information that you wish to make personally or by mail. Hearing requests 4 and TSIF 5 is organized as a Delaware
available publicly. All submissions should be received by the Commission limited liability company and would be
should refer to File Number SR– by 5:30 p.m. on October 31, 2016, and an investment company but for section
NASDAQ–2016–124, and should be should be accompanied by proof of 3(c)(5)(C) of the Act. Each of TSIF, TSIF
submitted on or before November 1, service on applicants, in the form of an 2, TSIF 3, TSIF 4 and TSIF 5 was
2016. affidavit or, for lawyers, a certificate of formed to originate, fund, acquire and
For the Commission, by the Division of service. Pursuant to rule 0–5 under the structure real estate-related loans,
Trading and Markets, pursuant to delegated Act, hearing requests should state the including mezzanine loans, first and
authority.12 nature of the writer’s interest, any facts second mortgage loans, subordinated
Robert W. Errett, bearing upon the desirability of a mortgage loans, bridge loans, preferred
Deputy Secretary. hearing on the matter, the reason for the equity investments and other loans
[FR Doc. 2016–24420 Filed 10–7–16; 8:45 am] request, and the issues contested. related to high quality commercial real
Persons who wish to be notified of a estate in the United States. TSIF, TSIF
BILLING CODE 8011–01–P
hearing may request notification by 2, TSIF 3 and TSIF 4 currently exist as
writing to the Commission’s Secretary. wholly-owned subsidiaries of TSIF 5.
SECURITIES AND EXCHANGE 3. Terra REIT is a Maryland
ADDRESSES: Brent J. Fields, Secretary,
COMMISSION corporation that intends to qualify to be
U.S. Securities and Exchange taxed as a REIT and would be an
[Release No. IC–32303; File No. 812–14452] Commission, 100 F St. NE., Washington, investment company but for section
DC 20549–1090. Applicants: Bruce D. 3(c)(5)(C) of the Act. Terra REIT exists
Terra Income Fund 6, Inc., et al.; Notice Batkin, 805 Third Avenue, 8th Floor, as a wholly-owned subsidiary of TSIF 5
of Application New York, NY 10022. and holds the portfolio assets of each of
October 4, 2016. FOR FURTHER INFORMATION CONTACT: Kay- TSIF, TSIF 2, TSIF 3, TSIF 4 and TSIF
AGENCY: Securities and Exchange Mario Vobis, Senior Counsel, at (202) 5.
Commission (‘‘Commission’’). 551–6728, or Mary Kay Frech, Branch 4. Terra International is a Cayman
Chief, at (202) 551–6821 (Chief Islands exempted company and would
ACTION: Notice of application for an
Counsel’s Office, Division of Investment be an investment company but for
order under sections 17(d) and 57(i) of
Management). section 3(c)(1) of the Act. Terra
the Investment Company Act of 1940
(the ‘‘Act’’) and rule 17d–1 under the SUPPLEMENTARY INFORMATION: The International was formed to acquire real
Act permitting certain joint transactions following is a summary of the estate-related loans, including
otherwise prohibited by sections 17(d) application. The complete application mezzanine loans, first and second
and 57(a)(4) of the Act and rule 17d–1 may be obtained via the Commission’s mortgage loans, subordinated mortgage
under the Act. Web site by searching for the file loans, bridge loans and other loans
number, or for an applicant using the
SUMMARY OF APPLICATION: Applicants Company name box, at http:// 2 Section 2(a)(48) defines a BDC to be any closed-
request an order to permit a business www.sec.gov/search/search.htm or by end investment company that operates for the
calling (202) 551–8090. purpose of making investments in securities
development company (‘‘BDC’’) and described in section 55(a)(1) through 55(a)(3) of the
certain closed-end investment Applicants’ Representations Act and makes available significant managerial
companies to co-invest in portfolio assistance with respect to the issuers of such
asabaliauskas on DSK3SPTVN1PROD with NOTICES
companies with each other and with 1. Terra 6 is a Maryland corporation securities.
affiliated investment funds. organized as a closed-end management 3 ‘‘Objectives and Strategies’’ means, with respect
investment company that has elected to to a Regulated Fund (defined below), the
APPLICANTS: Terra Income Fund 6, Inc. investment objectives and strategies, as described in
(‘‘Terra 6’’), Terra Secured Income be regulated as a BDC within the the Regulated Fund’s registration statement on
Fund, LLC (‘‘TSIF’’), Terra Secured Form N–2, other filings the Regulated Fund has
1 The term ‘‘successor’’ means an entity that made with the Commission under the Securities
Income Fund 2, LLC (‘‘TSIF 2’’), Terra results from a reorganization into another Act of 1933 (the ‘‘Securities Act’’), or under the
jurisdiction or change in the type of business Securities Exchange Act of 1934, and the Regulated
12 17 CFR 200.30–3(a)(12). organization. Fund’s reports to shareholders.
VerDate Sep<11>2014 20:12 Oct 07, 2016 Jkt 241001 PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 E:\FR\FM\11OCN1.SGM 11OCN1](https://thefederalregister.org/doc/81_FR_70403/page/4.svg)
Document Created: 2018-02-13 16:34:12
Document Modified: 2018-02-13 16:34:12
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 70207 |
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