Daily Rules, Proposed Rules, and Notices of the Federal Government
Nasdaq proposes to establish fees for an enhancement to the Regulation Reconnaissance Service, which would provide firms with the ability to recreate the Nasdaq/CQS order books and trade data by way of a visual display. The text of the proposed rule change is available on Nasdaq's Web site, at Nasdaq's principal office, and at the Commission's Public Reference Room.
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 these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
Nasdaq proposes to establish a fee for a new enhancement to the Nasdaq Regulation Reconnaissance Service ("Reg Recon"). Reg Recon is currently available as an add-on to the Nasdaq Workstation and Weblink ACT 2.0. Nasdaq is proposing to provide access to the Market Replay function to Reg Recon subscribers for an additional fee. Market Replay is a software program developed by Nasdaq, which uses publicly-available information to recreate and display the Nasdaq/CQS order books and trade data for any point in time.
Nasdaq currently provides Market Replay for free on a publicly-accessible Web site as a demonstration of the product. Nasdaq hopes that vendors will ultimately purchase Market Replay to provide access to the functionality to their customers, either using the software "as is" or integrating the software into their proprietary displays. Nasdaq is proposing to provide Reg Recon subscribers an option to enhance their service with an integrated version of Market Replay.
Market Replay allows users to reconstruct the market for any Nasdaq/CQS security, and view trades and quotes at the millisecond level. In particular, Market Replay allows users to access the historical market for a particular security by entering a symbol, date, and timeframe. Subscribers may
By way of a scrolling chart, Market Replay displays the National Best Bid and Offer together with the consolidated trades for the chosen security in simulated real time. Users are able to zoom in on the chart and manipulate the chart speed and direction. Users may also filter the data presented on the chart by market center.
Similarly, Market Replay can provide a minimum and maximum National Best Bid and Offer for a selected timeframe, as well as the minimum and maximum bid and offer for each exchange trading stock during the timeframe.
In addition to providing a useful analytical tool, Nasdaq believes that firms would find Market Replay helpful in responding to customer inquiries regarding the price received in a particular trade. In particular, firms can send to customers a Nasdaq-validated screen shot of the moment their particular trade occurred, confirming the quality of the execution.
Nasdaq proposes to offer Reg Recon subscribers access to the Market Replay function to [
Nasdaq notes that the Reg Recon service generally, and the Market Replay upgrade are entirely optional services. Firms may choose to purchase Reg Recon or not, and those that choose to purchase it may then choose to purchase the Market Replay upgrade or not. If a firm does not perceive that the Reg Recon and Market Replay services are sufficiently valuable, it will choose not to purchase those services.
Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
Nasdaq also believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The proposed fees will cover the costs associated with establishing the service, responding to customer requests, configuring Nasdaq's systems, programming to user specifications, and administering the service, among other things.
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.
Written comments were neither solicited nor received.
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
At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate 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.
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:
* Use the Commission's Internet comment form (
* Send an e-mail to
* Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.