Daily Rules, Proposed Rules, and Notices of the Federal Government
NASDAQ proposes to modify pricing for NASDAQ members using the Nasdaq Market Center. This proposed rule change, which is effective upon filing, will become operative on May 1, 2009. The text of the proposed rule change is available at
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 modifying the price of trading equities and options on NASDAQ in several ways. First, NASDAQ is increasing the rebate for providing liquidity in equities traded on NASDAQ for members that actively trade both equities and options on NASDAQ. Currently, NASDAQ offers rebates of $0.0020 to $0.00295 per share for all members that provide liquidity in equities traded on NASDAQ depending on the volume of liquidity provided in equities.
Effective May 1, 2009, a member firm that accesses liquidity of more than 200,000 contracts per day from The NASDAQ Options Market ("NOM") and provides average daily volume of liquidity exceeding 25 million shares per day in the NASDAQ equities market, will be credited a rebate of $0.0029 for providing liquidity in securities listed on NASDAQ or the New York Stock Exchange ("NYSE") or on other exchanges. A member that provides 25 million shares of liquidity per day in equities and does not have the requisite options participation receives a rebate of $0.0025 per share.
Second, also effective May 1, 2009, member firms will have the opportunity to earn a waiver of applicable fees charged for executing Mid-point Pegged orders (as defined in Nasdaq Rule 4751(f)(4)). Firms can earn this fee waiver by providing average daily volume of liquidity through the Nasdaq Market Center in all securities during the month of more than 125 million shares.
Third, NASDAQ is implementing pricing for the routing strategy set forth in Nasdaq Rule 4758(a)(1)(A)(i), as set forth in SR-NASDAQ-2009-036.
Fourth, NASDAQ is also eliminating from Rule 7018 all provisions related to process that were in effect from April 1 through April 14, 2009.
NASDAQ believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
NASDAQ notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The proposed rule change reflects a significant reduction in the overall cost of trading on NASDAQ. NASDAQ believes that the applicable fees and credits remain competitive with those charged by other venues and therefore continue to be reasonable and equitably allocated to those members that opt to direct orders to NASDAQ rather than competing venues.
NASDAQ is also responding to the convergence of trading in which members simultaneously trade different asset classes within a single strategy. This has been true of equities and options trading which is increasing, and is now visible in equities and futures trading. For example, on April 1, 2009, NYSE Euronext LLC announced the "Futures Incentive Program" or "FIP" which coordinates fee schedules between NYSE Liffe US and NYSE Arca with respect to trading gold and silver futures contracts on NYSE Liffe US and gold and silver based exchange traded funds on NYSE Arca. Like the NYSE Euronext FIP proposal, NASDAQ's current proposal enables NASDAQ members to continue to recognize the full benefit of trading on NASDAQ.
Additionally, NASDAQ and its members will both recognize additional operational and administrative efficiencies from linking the billing of equities and options trading. In addition to the efficiencies associated with existing volume discounts for equities trading, this proposal will enable NASDAQ to issue a single invoice to replace two invoices in various circumstances.
Finally, this proposal is voluntary with respect to all firms and should be considered as one among many alternatives within NASDAQ's current tiered pricing structure. For example, Nasdaq is offering to waive execution fees for Mid-point Pegged Orders for firms with high equities trading volume. This fee waiver lowers the total cost of trading on Nasdaq, and responds to a similar waiver by the ArcaNYSE [sic] Exchange.
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.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) 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 Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.