Daily Rules, Proposed Rules, and Notices of the Federal Government
Nasdaq proposes to modify Rule 7050 governing pricing for Nasdaq members using the NASDAQ Options Market ("NOM"), Nasdaq's facility for executing and routing standardized equity and index options. Specifically, Nasdaq proposes to adopt a credit of $0.35 per executed contract to members who provide liquidity using price-improving orders through NOM. Nasdaq will make the proposed rule change effective on December 1, 2008. The text of the proposed rule change is below. Proposed new language is in italics.
7050. NASDAQ Options Market.
The following charges shall apply to the use of the order execution and routing services of the NASDAQ Options Market by members for all securities.
(1) Fees for Execution of Contracts on the NASDAQ Options Market.
Charge to member entering order that executes in the NASDAQ Options Market: $0.45 per executed contract.
For a pilot period ending July 31, 2009, charge for members or non-members entering order via the Options Intermarket Linkage that executes in the Nasdaq Options Market.
Credit to member providing liquidity through the NASDAQ Options Market: $0.30 per executed contract.
(2)--(4) No 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 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 is proposing to modify Rule 7050 to allow for a credit of $0.35 per executed contract to members who provide liquidity using price-improving orders through NOM. Currently, members that provide liquidity through NOM receive a credit of $0.30 per executed contract. Nasdaq believes increasing the credit to $0.35 per executed contract for those members that provide liquidity using price-improving orders through NOM should help to encourage additional price improvement, which should in turn, benefit takers of liquidity and investors.
Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
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. To the contrary, Nasdaq has designed its fees to compete effectively for the execution and routing of options contracts and to reduce the overall cost to investors of options trading.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) 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.