Daily Rules, Proposed Rules, and Notices of the Federal Government
NASDAQ proposes to amend NASDAQ's fee schedule governing order routing under Rule 7018. NASDAQ will implement the proposed change on October 1, 2012. The text of the proposed rule change is available at
In its filing with the Commission, the self-regulatory organization 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.
NASDAQ is amending its fee schedule governing order routing to modify fees for routing orders to the New York Stock Exchange ("NYSE") and NASDAQ OMX PSX ("PSX") to reflect announced price changes by those venues.
With respect to orders that route to PSX using the TFTY, SOLV, or SAVE routing strategies, the fee will be fixed at $0.0028 per share executed. The change reflects the fact that PSX has replaced provisions under which the fee charged to access liquidity vary [sic] considerably based on the listing venue of the security being traded, with a simpler fee schedule under which NASDAQ would be charged either $0.0028 or $0.0030 per share executed with respect to the orders it routes to PSX. Accordingly, NASDAQ is opting to replace the current pass-through fee for orders routed to PSX using the TFTY, SOLV, or SAVE routing strategies with a flat rate of $0.0028 that will either recoup the applicable routing charge or provide routing at a slight discount.
Second, with respect to orders routed to NYSE, NASDAQ is making the following changes:
* The fee for DOTI, STGY, SCAN, SKNY or SKIP orders that execute at NYSE will increase from $0.0023 per share executed to $0.0025 per share executed.
* The fee for directed intermarket sweep orders that execute at NYSE will increase from $0.0025 per share executed to $0.0027 per share executed.
* The fee for other directed orders that execute at NYSE will increase from $0.0024 per share executed to $0.0026 per share executed for members with an average daily volume through the Nasdaq Market Center in all securities during the month of more than 35 million shares of liquidity provided through one or more MPIDs; and will increase from $0.0025 per share executed to $0.0027 per share executed for other members.
* The fee for MOPP orders that execute at NYSE will increase from $0.0025 per share executed to $0.0027 per share executed.
* The fee for TFTY orders that execute at NYSE will increase from $0.0023 per share executed to $0.0024 per share executed.
* The fee for SAVE and SOLV orders that execute at NYSE will increase from $0.0023 per share executed to $0.0025 per share executed.
NASDAQ believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The changes to routing fees are reasonable because the proposed fees for routing orders to NYSE and PSX reflect changes in the fees that will be charged by NYSE or PSX to NASDAQ with respect to such orders. The changes are consistent with an equitable allocation of fees because they will bring the economic attributes of routing orders to NYSE and PSX in line with the cost of executing orders there. Finally, the changes are not unfairly discriminatory because they solely apply to members that opt to route orders to NYSE or PSX.
Finally, NASDAQ notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, NASDAQ must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. NASDAQ believes that the proposed rule change reflects this competitive environment because it is designed to ensure that the charges for use of the NASDAQ routing facility to route to NYSE or PSX reflect changes in the cost of such routing.
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. Because the market for order routing is extremely competitive, members may readily opt to disfavor NASDAQ's routing services if they believe that alternatives offer them better value. For
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 email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.