Notice2022-03391
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Equity 7, Section 115 of the Fee Schedule
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Published
February 17, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 33 (Thursday, February 17, 2022)</title>
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[Federal Register Volume 87, Number 33 (Thursday, February 17, 2022)]
[Notices]
[Pages 9096-9099]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-03391]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94226; File No. SR-NASDAQ-2022-012]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Equity 7, Section 115 of the Fee Schedule
February 11, 2022.
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 January 31, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's pricing schedule at
Equity 7, Section 115, as described further below.
The text of the proposed rule change is detailed below: proposed
new language is italicized and proposed deletions are in brackets.
* * * * *
The Nasdaq Stock Market Rules
* * * * *
Equity Rules
* * * * *
Equity 7 Pricing Schedule
* * * * *
Section 115. Ports and Services[dagger]
The charges under this section are assessed by Nasdaq for
connectivity to services and the following systems operated by
Nasdaq or FINRA: The Nasdaq Market Center, FINRA Trade Reporting and
Compliance Engine (TRACE), the FINRA/Nasdaq Trade Reporting
Facility, and the FINRA OTC Reporting Facility (ORF). The following
fees are not applicable to The Nasdaq Options Market LLC. For
related options fees for Ports and other Services refer to Options
7, Section 3 of the Options Rules.
(a)-(d) No change.
(e) Specialized Services Related to FINRA/Nasdaq Trade Reporting
Facility.
[[Page 9097]]
WebLink ACT or Nasdaq............. $[5]625[.00]/month
Workstation Post Trade............ A subscription includes: The Trade
Reporting File Upload service,
which allows members to upload
multiple trade reports in batches
to ACT; and the ACT Reject Scan
service, which provides a list of
all of a member's rejected ACT
trade entries and a copy of each
rejected trade report form
submitted to ACT.
[$225 per month for the ACT Trade
History service which provides
searchable access to a member's
trades that are older than six
months dating back to 2009.]
ACT Workstation................... $[5]625/logon/month
[$225 per month for the ACT Trade
History service which provides
searchable access to a member's
trades that are older than six
months dating back to 2009.]
Nasdaq WorkX...................... $[5]625/logon/month
[$225 per month for the ACT Trade
History service which provides
searchable access to a member's
trades that are older than one year
dating back five years.] For
customers using both Act
Workstation and Nasdaq WorkX, fees
for Nasdaq WorkX will be waived for
the first month of service.
(f)-(j) No change.
[dagger] Fees, other than the specialized service fees in
Section 115(e), are assessed in full month increments under this
section, and thus are not prorated.
* * * * *
(b) Not applicable.
(c) Not applicable.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange 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. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend the Exchange's
schedule of fees, at Equity 7, Section 115(e). In April 2021, the
Exchange enhanced its connectivity, surveillance and risk management
services by launching three re-platformed products including Nasdaq
WorkX\TM\ (``WorkX'').\3\ These changes were filed by the Exchange on
April 20, 2021 and published in the Federal Register on May 7, 2021.\4\
The Exchange noted in the filing that as it rolled out the enhanced
products, the fees for the re-platformed products would be the same as
the fees for the corresponding non-re-platformed products. After the
first month of service on WorkX, a member firm is expected to fully
migrate to the new product and is charged for any fees incurred for
using the new products thereafter. To date, the Exchange continues to
assist its members in migrating from Workstation to WorkX.
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\3\ WorkX is a re-platformed version of Workstation that
simplifies compliance with regulatory responsibilities and enhances
the user experience with improved workflow, system performance, and
data visualization. WorkX also upgrades trade reporting and
monitoring with a modern user interface using cloud-based
technology.
\4\ See Securities Exchange Act Release No. 91744 (May 3, 2021),
86 FR 24685 (May 7, 2021) (NASDAQ-2021-025).
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The Exchange proposes to increase its existing fees for ACT
Workstation (``Workstation''),\5\ WebLink ACT or Nasdaq Workstation
Post Trade (``WebLink''), \6\ and WorkX from $525 to $625. These fees
solely apply to the FINRA/Nasdaq Trade Reporting Facility (TRF) related
services.
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\5\ Workstation is a web-based application that electronically
facilitates trade reporting and clearing functions for trades
reported to the FINRA/Nasdaq TRF. Workstation services include trade
entry, trade scan, and uploads for bulk trade entry to support
FINRA/Nasdaq TRF participant trade reporting in accordance with
Financial Industry Regulatory Authority (``FINRA'') rules.
\6\ Workstation and WebLink are identical applications that
perform the same functions. For historical reasons, they each have
separate entries on the Exchange's fee schedule. WebLink, the same
as Workstation, is a web-based application that electronically
facilitates trade reporting and clearing functions for trades
reported to the FINRA/Nasdaq TRF.
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The Exchange also proposes to eliminate the ACT Trade History
service fee of $225 for each of these existing products. The ACT Trade
History service provides searchable access to a member's trades.\7\ The
Exchange believes it is important for users to freely perform unlimited
scans and queries of their trade history to effectively perform their
regulatory responsibilities without being hampered by the separate ACT
Trade History charge.\8\
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\7\ WebLink and Workstation provide searchable access to a
member's trades that are older than six months dating back to 2009.
WorkX provides searchable access to a member's trades that are older
than one year dating back five years.
\8\ In its capacity as a Business Member of the FINRA/Nasdaq
TRF, Nasdaq also plans to separately eliminate the $0.50 per query
fee that is charged for querying reported transactions in the FINRA/
Nasdaq TRF using Workstation, WebLink and WorkX. The change was
proposed in FINRA-2022-002, which was filed on January 31, 2022.
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Additionally, the Exchange proposes to prorate the cost of the
first and last month of a user's subscription to the WebLink,
Workstation and WorkX products.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal is reasonable in several respects. As a
threshold matter, the FINRA/Nasdaq TRF and its related front-end
products are subjected to significant competitive forces in the market
for trade reporting and regulatory compliance services that constrain
the Exchange's pricing determinations for Workstation, WebLinks and
WorkX. The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets.
The competitive nature of this market is evidenced by the FINRA/
NYSE TRF, to which firms may report their trade instead of the FINRA/
Nasdaq TRF, and which offers a similar front-end trade reporting and
regulatory compliance service to trade report, clear and monitor
compliance for activity on its facility. Firms may choose to trade
report with the FINRA/NYSE TRF based on the features and functionality
of the TRF or based on the features and functionality of the regulatory
reporting and compliance front-end services
[[Page 9098]]
offered for the FINRA/NYSE TRF. Within this competitive environment,
customers can freely select the FINRA/NYSE trade reporting facility and
its trade reporting and compliance front-end services in response to
changes in the Exchange's pricing schedule.
The Proposal Is Reasonable
The Exchange believes that the proposal to raise fees for
Workstation, WebLinks and WorkX is reasonable because of the
competitive forces described above. Moreover, the Exchange has not
adjusted its fees for these products since 2016.
Additionally, the Exchange believes that it is reasonable to remove
the ACT Trade History data charge from WebLink, Workstation and WorkX
because removal of this fee streamlines the cost to one base fee with
no add-on search charges and will allow users to freely perform
unlimited query searches of their trade history. As discussed above,
these searches assist users in performing their regulatory
responsibilities. Additionally, the proposed fee increase of $100 for
using Weblink, Workstation or WorkX is less than half of the current
ACT Trade History fee. Therefore, users who utilize the trade history
feature may incur decreased fees. For example, a user who is subscribed
to one log-on for WorkX and utilizes the ACT Trade History search
feature currently pays $750/month. Under the proposed fee changes, the
subscriber will pay $625/month. Although some users will incur a
decrease in fees as a result of the proposed changes, there are some
users whose fees may increase. For example, a user who is subscribed to
one log-on for WorkX and does not utilize the ACT Trade History search
feature currently pays $525/month. Under the proposed fee changes, the
subscriber will pay $625/month with no additional charge for the use of
the ACT Trade History. Because users who choose to utilize the optional
ACT Trade History function have historically incurred a higher fee than
those who have not utilized the function, the impact of the proposed
change will be different for those users. The Exchange believes that
the difference in impact resulting from the proposed changes is
reasonable and not unfairly discriminatory because all users will be
able to use ACT Trade History without a separate fee and those who have
not used ACT Trade History in the past may decide to start using the
service. Moreover, the Exchange notes that users who are dissatisfied
with the proposal (e.g., if they experience an overall increase) are
free to utilize the FINRA/NYSE TRF and its related front-end service.
Additionally, the Exchange believes that it is reasonable to
prorate the fees for the first and last month of a user's subscription
to Workstation, Weblink and WorkX. For example, the Exchange believes
that it is reasonable to charge a user who unsubscribes to any of the
three products on December 2 or subscribes on December 30 only for the
days that they are actually subscribed to the products.
The Proposal Is an Equitable Allocation of Fees
Nasdaq believes that the proposed rule change will allocate fees
fairly among the users of WebLink, Workstation and WorkX.
The Exchange believes that it protects investors and is an
equitable allocation to eliminate its existing $225 ACT Trade History
fee. As discussed above, removal of the fee eliminates any impediment
for users to freely utilize the search functions to monitor and satisfy
their regulatory responsibilities. Moreover, the Exchange believes that
prorating the fees for the first and final month of a user's
subscription will ensure that the fees are equitable to a user's
utilization of the products.
Lastly, although all users of Workstation, WebLink and WorkX
products will incur an increased monthly fee for use of the products,
some users who utilize the optional ACT Trade History function will
receive a decrease in their overall fees. The Exchange believes it is
equitable for some users to incur an increased fee and for other users
to receive a decrease because users who choose to utilize the ACT Trade
History function have historically incurred a higher fee than those who
have not utilized the function. Therefore, the impact of the proposed
change will affect users differently than users who have not
historically utilized the function. The Exchange believes that the
difference in impact resulting from the proposed changes is equitable
because all users will be able to use ACT Trade History without a
separate fee and those who have not used ACT Trade History in the past
may decide to start using the service. Moreover, the Exchange notes
that users who are dissatisfied with the proposal (e.g., if they
experience an overall increase) are free to utilize the FINRA/NYSE TRF
and its related front-end service.
The Proposal Is Not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. All users of WebLink, Workstation and WorkX will be
required to pay the proposed increased subscription fee and the
proposed fees will apply to all users in the same manner. As discussed
above, although some users will incur a decrease in fees as a result of
the proposed changes, there are some users whose fees may increase.
Users who have historically chosen to not incur the additional cost of
the ACT Trade History will pay a modestly higher proportionate amount.
The Exchange does not believe that this disparity among users is
unfairly discriminatory because users who choose to utilize the
optional ACT Trade History function have historically incurred a higher
fee than those who have not utilized the function. Therefore, the
impact of the proposed change will be different for those users. The
Exchange believes that the difference in impact resulting from the
proposed changes is not unfairly discriminatory because all users will
be able to use ACT Trade History without a separate fee and those who
have not used ACT Trade History in the past may decide to start using
the service. Additionally, all users, to the extent that they already
subscribe to ACT Trade History will benefit from the proposed removal
of the ACT Trade History fee and all users will benefit from the
proration of the first and last month of their subscription.
Moreover, the Exchange notes that users who are dissatisfied with
the proposal (e.g., if they experience an overall increase) are free to
utilize the FINRA/NYSE TRF and its related front-end service.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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.
Intramarket Competition
The Exchange does not believe that its proposals will place any
category of Exchange participant at a competitive disadvantage. All
users of WebLink, Workstation and WorkX will be required to pay the
proposed increase fee for a subscription to any of the three products
and will receive a proration for the first and last month of their
subscription. To the extent that members were not utilizing any of the
three products, the proposed fee change will not place them at a
competitive disadvantage. The Exchange notes that its members are not
required to subscribe to the products if they believe
[[Page 9099]]
that the cost of the subscriptions is not attractive.
The proposed elimination of the ACT Trade History fee for WebLink,
Workstation and WorkX will have minimal competitive effect insofar as
some users that utilize the ACT Trade History service may receive a
decrease in their overall subscription to the products. As discussed
above, although some users will incur a decrease in fees and others
will incur a fee increase because of the proposed changes, the Exchange
does not believe that this difference will result in a competitive
disadvantage to any users because the proposed rule change will allow
all users of WebLink, Workstation and WorkX to freely use the tool at
no additional cost.
Firms also have the option of reporting their trades on the FINRA/
NYSE TRF and utilizing its trade reporting and regulatory compliance
service products if they are dissatisfied with the Exchange's fee
proposal.
Intermarket Competition
The Exchange believes that its proposed modifications to its fee
schedule will not impose any burden on competition because the
increased fees, proration and removal of ACT Trade History charges
simplifies the subscription rates for these products and ensures that
the Exchange is able to continue to provide the best products that
benefit member firms. The Exchange notes that it operates in a highly
competitive market in which market participants can readily favor the
FINRA/NYSE TRF if they are dissatisfied with the fee change or deem the
FINRA/NYSE TRF and its related front-end products to be more favorable.
The proposed fee changes to WebLink, Workstation and WorkX are
reflective of this competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A)(ii) of the Act,\11\ the Exchange
has designated this proposal as establishing or changing a due, fee, or
other charge imposed by the self-regulatory organization on any person,
whether or not the person is a member of the self-regulatory
organization, which renders the proposed rule change effective upon
filing.
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\11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
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 Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#f587809990d8969a9898909b8186b5869096db929a83"><span class="__cf_email__" data-cfemail="bfcdcad3da92dcd0d2d2dad1cbccffccdadc91d8d0c9">[email protected]</span></a>. Please include
File Number SR-NASDAQ-2022-012 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2022-012. 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 website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule 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 website 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 the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2022-012 and should be submitted
on or before March 10, 2022.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-03391 Filed 2-16-22; 8:45 am]
BILLING CODE 8011-01-P
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