[Federal Register Volume 79, Number 78 (Wednesday, April 23, 2014)]
[Notices]
[Pages 22691-22692]
[FR Doc No: 2014-09189]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2014-D-0363]

Expedited Access for Premarket Approval Medical Devices Intended
for Unmet Medical Need for Life Threatening or Irreversibly
Debilitating Disease or Conditions; Draft Guidance for Industry and
Food and Drug Administration Staff; Availability

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

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SUMMARY: The Food and Drug Administration (FDA or the Agency) is
announcing the availability of the draft guidance entitled ``Expedited
Access for Premarket Approval Medical Devices Intended for Unmet
Medical Need for Life Threatening or Irreversibly Debilitating Disease
or Conditions.'' This draft guidance outlines FDA's proposal for a new,
voluntary program for certain medical devices that demonstrate the
potential to address unmet medical needs for life threatening or
irreversibly debilitating diseases or conditions and are subject to
premarket approval applications (PMA). FDA believes that the Expedited
Access PMA (EAP) program will help patients have more timely access to
these medical devices by expediting their development, assessment, and
review, while preserving the statutory standard of reasonable assurance
of safety and effectiveness for premarket approval, consistent with the
Agency's mission to protect and promote public health. The document
also discusses how the EAP program approaches the balance of premarket
and postmarket data collection and incorporates a benefit-risk
framework. This draft guidance is not final nor is it in effect at this
time.

DATES: Although you can comment on any guidance at any time (see 21 CFR
10.115(g)(5)), to ensure that the Agency considers your comment on this
draft guidance before it begins work on the final version of the
guidance, submit either electronic or written comments on the draft
guidance by July 22, 2014.

ADDRESSES: An electronic copy of the guidance document is available for
download from the Internet. See the SUPPLEMENTARY INFORMATION section
for information on electronic access to the guidance. Submit written
requests for a single hard copy of the draft guidance document entitled
``Expedited Access for Premarket Approval Medical Devices Intended for
Unmet Medical Need for

Life Threatening or Irreversibly Debilitating Disease or Conditions''
to the Office of the Center Director, Guidance and Policy Development,
Center for Devices and Radiological Health, Food and Drug
Administration, 10903 New Hampshire Ave., Bldg. 66, rm. 5431, Silver
Spring, MD 20993-0002; or the Office of Communication, Outreach and
Development (HFM-40), Center for Biologics Evaluation and Research,
Food and Drug Administration, 1401 Rockville Pike, Rockville, MD 20852-
1448. Send one self-addressed adhesive label to assist that office in
processing your request.
    Submit electronic comments on the draft guidance to http://www.regulations.gov. Submit written comments to the Division of Dockets
Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852. Identify comments with the docket number
found in brackets in the heading of this document.

FOR FURTHER INFORMATION CONTACT: Office of the Center Director, Center
for Devices and Radiological Health (CDRH), Food and Drug
Administration, 10903 New Hampshire Ave., Bldg. 66, rm. 5431, Silver
Spring, MD 20993-0002,<PHONE_NUMBER>; or Stephen Ripley, Center for
Biologics Evaluation and Research (HFM-17), Food and Drug
Administration, 1401 Rockville Pike, Suite 200N, Rockville, MD 20852-
1448,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    FDA's proposed EAP program contains features from CDRH's Innovation
Pathway, piloted in 2011 to facilitate the development and expedite the
review of breakthrough technologies. In addition, the proposed EAP
program is based in part on FDA's experience with the Center for Drug
Evaluation and Research and Center for Biologics Evaluation and
Research programs that are intended to facilitate and expedite
development and review of new drugs to address unmet medical needs in
the treatment of serious or life-threatening conditions (``FDA drug
expedited programs''). However, while the EAP program incorporates some
features of the FDA drug expedited programs, it is a separate and
distinct program tailored to devices and intended to further speed the
availability of certain safe and effective devices that address unmet
public health needs.
    As part of the EAP program, FDA intends to provide more interactive
communications during device development and more interactive review of
Investigational Device Exemption applications and PMA applications.
This includes working with the sponsor to create a data development
plan specific to the device, which would outline all data the sponsor
intends to collect in support of device approval, and identifying what
data would be collected premarket and postmarket. In addition, FDA
intends to work interactively with the sponsor within the benefit-risk
framework discussed in the FDA guidance, ``Factors to Consider When
Making Benefit-Risk Determinations in Medical Device Premarket
Approvals and De Novo Classifications,'' issued on March 28, 2012, and
in accordance with statutory and regulatory requirements, to determine
whether certain data may be collected postmarket rather than premarket.
This guidance details the EAP process which will only be utilized at
the request of the sponsor and with FDA's agreement.
    Elsewhere in this issue of the Federal Register, FDA is announcing
another draft guidance entitled ``Balancing Premarket and Postmarket
Data Collection for Devices Subject to Premarket Approval,'' which also
addresses the role of postmarket data and the benefit-risk framework to
support premarket approval, while still meeting the statutory standard
of reasonable assurance of safety and effectiveness.

II. Significance of Guidance

    This draft guidance is being issued consistent with FDA's good
guidance practices regulation (21 CFR 10.115). The draft guidance, when
finalized, will represent the Agency's current thinking on expedited
access for premarket approval medical devices intended for unmet
medical need for life threatening or irreversibly debilitating diseases
or conditions. It does not create or confer any rights for or on any
person and does not operate to bind FDA or the public. An alternative
approach may be used if such approach satisfies the requirements of the
applicable statute and regulations.

III. Electronic Access

    Persons interested in obtaining a copy of the draft guidance may do
so by downloading an electronic copy from the Internet. A search
capability for all Center for Devices and Radiological Health guidance
documents is available at http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/default.htm. Guidance
documents are also available at http://www.regulations.gov or http://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/default.htm. Persons unable to
download an electronic copy of ``Expedited Access for Premarket
Approval Medical Devices Intended for Unmet Medical Need for Life
Threatening or Irreversibly Debilitating Disease or Conditions,'' may
send an email request to<EMAIL_ADDRESS>to receive an
electronic copy of the document. Please use the document number 1400007
to identify the guidance you are requesting.

IV. Paperwork Reduction Act of 1995

    This draft guidance refers to previously approved collections of
information found in FDA regulations. These collections of information
are subject to review by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The
collections of information in 21 CFR part 812 have been approved under
OMB control number 0910-0078, the collections of information in 21 CFR
part 814 have been approved under OMB control number 0910-0231, the
collections of information in 21 CFR part 820 have been approved under
OMB control number 0910-0073, and the collections of information in 21
CFR part 822 have been approved under OMB control number 0910-0449.

V. Comments

    Interested persons may submit either electronic comments regarding
this document to http://www.regulations.gov or written comments to the
Division of Dockets Management (see ADDRESSES). It is only necessary to
send one set of comments. Identify comments with the docket number
found in brackets in the heading of this document. Received comments
may be seen in the Division of Dockets Management between 9 a.m. and 4
p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

    Dated: April 17, 2014.
Leslie Kux,
Assistant Commissioner for Policy.
[FR Doc. 2014-09189 Filed 4-22-14; 8:45 am]
BILLING CODE 4160-01-P


[Federal Register Volume 83, Number 27 (Thursday, February 8, 2018)]
[Notices]
[Pages 5671-5673]
[FR Doc No: 2018-02484]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82625; File No. SR-NYSEArca-2018-11]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Relating to Certain
Changes Regarding the U.S. Equity Cumulative Dividends Fund--Series
2027 and the U.S. Equity Ex-Dividend Fund--Series 2027

February 2, 2018.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on February 1, 2018, NYSE Arca, Inc. (``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 (1) to reflect a change in the description of
the index underlying shares (``Shares'') of the U.S. Equity Ex-Dividend
Fund--Series 2027; and (2) to revise the reference to the Custodian for
the U.S. Equity Cumulative Dividends Fund--Series 2027 and the U.S.
Equity Ex-Dividend Fund--Series 2027 (each a ``Fund'' and,
collectively, the ``Funds''). Shares of the Funds have been approved by
the Securities and Exchange Commission (the ``Commission'') for listing
and trading on the Exchange under NYSE Arca Rule 8.200-E, Commentary
.02. The proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

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 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Commission has approved a proposed rule change relating to
listing and trading on the Exchange of Shares of the Funds under NYSE
Arca Rule 8.200-E,\4\ which governs the listing and trading of Trust
Issued Receipts.\5\ The Shares will be offered by the Metaurus Equity
Component Trust (the ``Trust''). Each Fund is a series of the Trust.\6\
Shares of the Funds have been approved by the Commission for listing
and trading on the Exchange under NYSE Arca Rule 8.200-E, Commentary
.02. The Funds' Shares have not commenced trading on the Exchange.
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    \4\ See Securities Exchange Act Release Nos. 81453 (August 22,
2017), 82 FR 40816 (August 28, 2017) (SR-NYSEArca-2017-88) (Notice
of Filing of Proposed Rule Change to List and Trade the Shares of
the U.S. Equity Cumulative Dividends Fund--Series 2027 and the U.S.
Equity Ex-Dividend Fund--Series 2027 under NYSE Arca Equities Rule
8.200, Commentary .02) (``Prior Notice''); 82138 (November 21,
2017), 82 FR 56311 (November 28, 2017) (SR-NYSEArca-2017-88) (Order
Approving Proposed Rule Change to List and Trade the Shares of the
U.S. Equity Cumulative Dividends Fund--Series 2027 (``Dividend
Fund'') and the U.S. Equity Ex-Dividend Fund--Series 2027 under NYSE
Arca Equities Rule 8.200, Commentary .02) (``Prior Order''). See
also Amendment No. 1 to SR-NYSEArca-2017-88, filed November 14, 2017
(``Amendment No. 1''), and Amendment No. 2 to SR-NYSEArca-2017-88
(``Amendment No. 2''), filed November 16, 2017. Amendment No. 1,
Amendment No. 2 and the Prior Order are referred to collectively as
the ``Prior Releases''. All terms referenced but not defined herein
are defined in the Prior Releases.
    \5\ Commentary .02 to NYSE Arca Rule 8.200-E applies to Trust
Issued Receipts that invest in ``Financial Instruments.'' The term
``Financial Instruments,'' as defined in Commentary .02(b)(4) to
NYSE Arca Rule 8.200-E, means any combination of investments,
including cash; securities; options on securities and indices;
futures contracts; options on futures contracts; forward contracts;
equity caps, collars, and floors; and swap agreements.
    \6\ On January 30, 2018, the Trust filed with the Commission
Pre-Effective Amendment No. 4 to its registration statement on Form
S-1 under the Securities Act of 1933 (15 U.S.C. 77a) relating to the
Funds (File No. 333-221591) (the ``Registration Statement'').
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    With respect to the U.S. Equity Ex-Dividend Fund--Series 2027 Fund
(``Ex-Dividend Fund''), the Prior Releases stated that, according to
the Registration Statement, the Ex-Dividend Fund will seek investment
results that, before fees and expenses, correspond to the performance
of the Solactive U.S. Equity Ex-Dividends Index--Series 2027 so as to
provide shareholders of the Ex-Dividend Fund with returns that are
equivalent to the performance of 0.5 shares of SPDR[supreg] S&P 500 ETF
(``SPDRs'') less the value of current and future expected ordinary cash
dividends to be paid on the S&P 500 constituent companies over the term
of the Ex-Dividend Fund. In addition, the Prior Releases stated that,
according to the Registration Statement, the Solactive Ex-Dividend
Index aims to represent the current value of 0.5 shares of SPDRs, less
the current value of ordinary cash dividends expected to be paid on the
S&P 500, until the Ex-Dividend Fund's maturity as represented by the
Solactive Dividend Index and, because the Solactive Ex-Dividend Index
tracks the performance of 0.5 shares of SPDRs and sums up the
discounted values of the Annual S&P 500 Dividend Futures Contracts, no
weighting is applied.
    The Ex-Dividend Fund proposes to change these representations to
state

that: (i) The Ex-Dividend Fund will seek investment results that,
before fees and expenses, correspond to the performance of the
Solactive U.S. Equity Ex-Dividends Index--Series 2027 so as to provide
shareholders of the Ex-Dividend Fund with returns that are equivalent
to the performance of 0.25 shares of SPDRs less the value of current
and future expected ordinary cash dividends to be paid on the S&P 500
constituent companies over the term of the Ex-Dividend Fund, (ii) the
Solactive Ex-Dividend Index aims to represent the current value of 0.25
shares of SPDRs, less the current value of ordinary cash dividends
expected to be paid on the S&P 500, until the Ex-Dividend Fund's
maturity as represented by the Solactive Dividend Index, and (iii)
because the Solactive Ex-Dividend Index tracks the performance of 0.25
shares of SPDRs and sums up the discounted values of the Annual S&P 500
Dividend Futures Contracts, no weighting is applied.
    Amendment No. 1 to the proposed rule change identified the Funds'
Custodian as Bank of New York Mellon. This representation is changed to
state that the Funds' Custodian will be Brown Brothers, Harriman & Co.,
as stated in the Prior Notice.
    The Funds will comply with all initial and continued listing
requirements under NYSE Arca Rule 8.200-E, Commentary .02. The only
change with respect to the Funds' investment objective is that the Ex-
Dividend Fund will seek investment results that, before fees and
expenses, correspond to the performance of the Solactive U.S. Equity
Ex-Dividends Index--Series 2027 so as to provide shareholders of the
Ex-Dividend Fund with returns that are equivalent to the performance of
0.25 shares (rather than 0.50 shares) of SPDRs less the value of
current and future expected ordinary cash dividends to be paid on the
S&P 500 constituent companies over the term of the Ex-Dividend Fund.
Except for the changes noted above, all other representations made in
the Prior Releases remain unchanged.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) that an exchange have rules that are
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to remove impediments
to, and perfect the mechanism of a free and open market and, in
general, to protect investors and the public interest.
    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest. With respect to the change to the Solactive Ex-
Dividend Index, which aims to represent the current value of 0.25
shares of SPDRs (reduced from 0.50 as stated in the Prior Releases),
less the current value of ordinary cash dividends expected to be paid
on the S&P 500, the net asset value of the Ex-Dividend Fund's Shares
was reduced by half in order to track a reduction by half of the value
of the Solactive Dividend Index and the corresponding reduction by half
of the net asset value of the Dividend Fund's Shares. The Sponsor has
determined that the net asset value of the Dividend Fund's Shares would
be too large for many retail investors of financial intermediaries. The
Sponsor has determined that such reduction, which would consequently
result in a proportionate reduction in the net asset value of Shares of
the Ex-Dividend Fund (to represent the current value of 0.25 shares of
SPDRs less the current value of ordinary cash dividends expected to be
paid on the S&P 500), would be more appropriate for retail investors.
The Exchange believes the proposed rule change relating to the
Solactive Ex-Dividend Index will provide the Funds [sic] with the
ability to price the Funds' [sic] Shares in a manner that the Exchange
believes is more appropriate for retail investors, which will enhance
market competition with respect to the Funds' [sic] Shares and may
enhance liquidity in trading in the Funds' [sic] Shares. Such change
will not impact operation of the Funds and will not adversely impact
investors, Exchange trading or the ability of market participants to
arbitrage the Funds.
    The Funds will comply with all initial and continued listing
requirements under NYSE Arca Equities Rule 8.200-E, Commentary .02.
Except for the changes noted above, all other representations made in
the Prior Releases remain unchanged.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange believes the
proposed rule change relating to the Solactive Ex-Dividend Index will
provide the Funds [sic] with the ability to price the Funds' [sic]
Shares in a manner that the Exchange believes is more appropriate for
retail investors, which will enhance market competition with respect to
the Funds' [sic] Shares.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    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 \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Commission has waived the pre-filing requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \9\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay so that
the proposal may become operative immediately upon filing.
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange states that modification of the investment objective
of the Ex-Dividend Fund will adjust the price of the Shares to a level
that the Exchange believes is more appropriate for retail investors.
The Exchange asserts that this, in turn, will enhance market
competition with respect to the Shares and may enhance their liquidity.
Additionally, the Exchange states that this change, as well as the
designation of a new custodian, will not impact the operation of the
Funds or adversely impact investors. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest. The Commission hereby waives the 30-
day operative delay and designates the proposal operative upon
filing.\11\
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    \11\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).

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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 necessary or
appropriate in the public interest, for the protection of investors, or
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 change 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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEArca-2018-11 on the subject line.

Paper Comments

     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-NYSEArca-2018-11. 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 (http://www.sec.gov/rules/sro.shtml).
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-NYSEArca-2018-11 and should be submitted
on or before March 1, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02484 Filed 2-7-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 69 (Tuesday, April 10, 2012)]
[Notices]
[Pages 21609-21615]
[FR Doc No: 2012-8580]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66740; File No. SR-NASDAQ-2012-042]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Re-Organize NASDAQ's Rules Governing the Fees Applicable to NASDAQ's
Depth-of-Book Market Data

April 5, 2012.
    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 March 28, 2012, The NASDAQ Stock Market LLC (``NASDAQ'') 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 NASDAQ. 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 the
Substance of the Proposed Rule Change

    NASDAQ proposes to: (1) Re-organize NASDAQ's rules governing the
fees applicable to NASDAQ's Depth-of-Book market data; and (2)
establish an Enterprise License for Non-Professional Usage of certain
NASDAQ Depth-of-Book market data.
    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at NASDAQ's principal office, and at the
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is proposing two changes to the fees governing distribution
of NASDAQ market data: (1) Re-organize NASDAQ's rules governing the
fees applicable to NASDAQ's Depth-of-Book market data; and (2)
establish an Enterprise License for Non-Professional Usage of certain
NASDAQ Depth-of-Book market data.
Re-Organizing NASDAQ Rules 7017 and 7023
    NASDAQ proposes to create a single rule containing all fees
applicable to NASDAQ Depth-of-Book market data. To accomplish this,
NASDAQ will combine NASDAQ Rule 7017 which governs the NASDAQ Quotation
Data Service or NQDS and NASDAQ Rule 7023 which governs NASDAQ
TotalView and NASDAQ OpenView. In doing so, NASDAQ will collect and
improve all existing defined terms and add several new defined terms
where needed to enhance the clarity of NASDAQ's rules. None of these
proposed modifications will change the substance of NASDAQ's rules or
the manner in which NASDAQ applies the existing fees for NASDAQ Depth-
of-Book data.
    New Rule 7023 begins by defining the relevant terminology in
subsection (a). New Rule 7023(a)(1) defines in one place the three
Depth-of-Book feeds that NASDAQ offers: NASDAQ Level 2 (formerly known
as the NASDAQ Quotation Data Service or NQDS) currently defined in Rule
7017(a); NASDAQ TotalView, currently defined in Rule 7023(a), and
NASDAQ OpenView, currently defined at Rule 7023(c).
    NASDAQ is proposing to rename NQDS as NASDAQ Level 2, and to
clarify the definition of NASDAQ Level 2 without substantively
modifying its content or cost. NQDS (now Level 2) currently consists of
three components: individual market maker quotations from NASDAQ,
NASDAQ Level 1, and the Last Sale Information Service (``Last Sale'').
The NASDAQ Level 1 and Last Sale Services are consolidated data feeds
disseminated by the network processor for NASDAQ-listed stocks. The
current monthly fee for NASDAQ Level 1 is $20 per Professional
Subscriber and $1 per Non-Professional Subscriber for NASDAQ Level 1
and Last Sale. However, because NASDAQ Level 1 and Last Sale are
consolidated feeds, the fees for those services are remitted to the
network processor rather than to the Exchange.
    The current fee for NASDAQ Level 2, listed in Rule 7017(a) and (b),
is $50 monthly for Professional Subscribers and $10 monthly for Non-
Professional Subscribers. Of that $50 for Professional Subscribers, $20
is attributable to NASDAQ Level 1; and of that $10 for Non-Professional
Subscribers, $1 is attributable to NASDAQ Level 1. Thus, the current
monthly fee attributable to individual market maker quotations from
NASDAQ is $30 for Professional Subscribers and $9 for Non-Professional
Subscribers.
    Going forward, new NASDAQ Rule 7023(a)(1)(A) will properly define
NASDAQ Level 2 to include only individual market maker quotations from
NASDAQ (thereby excluding the consolidated data feeds), and new Rule
7023(b)(1) will properly list the monthly fee of $30 for Professional
Subscribers and $9 for Non-Professional Subscribers (thereby excluding
the fees for the consolidated data feeds). As a result, there will be
no impact to current or future Subscribers either in the price or
content of NASDAQ Level 2.
    New NASDAQ Rule 7023(a)(2) contains new definitions of Display and
Non-Display Usage of Depth-of-Book data based on the distinction
already reflected throughout current NASDAQ Rule 7023, most clearly at
subsection (a)(1)(D). NASDAQ has assessed fees for Display and Non-
Display Usage since 2006, although it was not until 2010 that NASDAQ
assessed different fees based on the two different usage methods.\3\
---------------------------------------------------------------------------

    \3\ See NASDAQ Rule 7023(a)(1)((D). See also Securities Exchange
Act Release No. 34-61700 (Mar. 12, 2010), 75 FR 13172 (Mar. 18,
2010).
---------------------------------------------------------------------------

    New NASDAQ Rule 7023(a)(3) defines and distinguishes between
Professional and Non-Professional Subscribers, carrying forward the
same definition set forth in current NASDAQ Rule 7017(c).
    New NASDAQ Rule 7023(a)(4) defines Distributor and distinguishes
between Internal and External Distribution.
    New NASDAQ Rule 7023(a)(5) defines and distinguishes between Direct
Access and Indirect Access based on the existing definition and
distinction set forth at NASDAQ Rule 7019(d). This will not change the
application of NASDAQ rules or fees.
    New NASDAQ Rule 7023(a)(6) defines Controlled Device with minor,
stylistic changes to the definition set forth at existing NASDAQ Rule
7023(b). The stylistic changes are intended only to improve the clarity
and not to change the application or impact of the defined term.
    New NASDAQ Rule 7023(b) collects and reorganizes the Subscriber
fees for NASDAQ Level 2, NASDAQ TotalView, and NASDAQ OpenView.
Subsection (b)(1)(A) and (b)(1)(B) set forth the monthly Non-
Professional and Professional Subscriber fees currently set forth in
NASDAQ Rule 7017(a) and (b). The fee for Professional usage of NASDAQ
Level 2 will appear lower by $20 (down from $50 to $30) per month
because (as stated above) NASDAQ is removing the $20 monthly fee for
NASDAQ Level 1 that previously had been combined in the fee for NASDAQ
Level 2. The fee for Non-Professional usage of Level 2 will also appear
lower by $1 (from $10 to $9) because NASDAQ is removing the $1 fee for
NASDAQ Level 1 which also had been combined with the fee for NASDAQ
Level 2. New NASDAQ Rule 7023(b)(1)(C) states clearly that the fees for
NASDAQ Level 1 and NASDAQ Level 2 are completely separate, as they have
been and should be. The feeds themselves also have been and will remain
separately available for the same monthly Subscriber fees.
    The Subscriber fees for NASDAQ TotalView and NASDAQ OpenView are
now set forth at NASDAQ Rule 7023(b)(2) and (b)(3) in the same form as
currently set forth in NASDAQ Rule 7023(a) and (c).
    New NASDAQ Rule 7023(c) sets forth the fee caps generally referred
to as Enterprise Licenses. Subsections (c)(1), (c)(2), and (c)(4)
reflect the enterprise licenses currently set forth in NASDAQ Rule
7023(a)(1)(C) and (D). Current Rule 7023(a)(1)(E) is being modified and
moved to new NASDAQ Rule 7023(c)(3) as described in more detail below
in the second section of this proposed rule change.
    New NASDAQ Rule 7023(d) and (e) are repeated almost verbatim from
current Rule 7023(a)(2) and (d). NASDAQ is proposing to make minor,
stylistic changes to those provisions, which will have no impact on the
application of the rule.
    With the exception of those provisions identified above and
described in detail below, the elimination of NASDAQ Rule 7017 and the
proposed changes to NASDAQ Rule 7023 are technical and administrative
changes that will not impact the fees assessed to any Subscriber.

Depth-of-Book Enterprise License for Non-Professional Usage
    New NASDAQ Rule 7023(c)(3) will offer an optional Enterprise
License for unlimited Non-Professional Usage of NASDAQ Level 2, NASDAQ
TotalView, or NASDAQ OpenView for certain NASDAQ members. Specifically,
Distributors that are also broker-dealers registered under the Act can
choose to pay a fee of $325,000 per month that covers all Non-
Professional Usage fees to Subscribers with whom the firm has a
brokerage relationship.\4\ This Depth-of-Book Enterprise License Fee
includes Non-Professional Usage fees, but does not include Distributor
fees. Non-broker-dealer vendors and application service providers are
not eligible for the enterprise license; such firms typically pass
through the cost of market data Subscriber fees to their customers.\5\
---------------------------------------------------------------------------

    \4\ NASDAQ previously offered the same optional Enterprise
License on a pilot basis. See Securities Exchange Act Release No.
63892 (Feb. 11, 2011); 76 FR 9391 (Feb. 17, 2011) (SR-NASDAQ-2011-
021); Securities Exchange Act Release No. 63084 (Oct. 13, 2010); 75
FR 64379 (Oct. 19, 2010) (SR-NASDAQ-2010-125). See also Securities
Exchange Act Release No. 62908 (Sept. 14, 2010); 75 FR 57321 (Sept.
20, 2010) (SR-NASDAQ-2010-111). The proposed Depth Enterprise
License will be a permanent rule rather than a pilot.
    \5\ NASDAQ relies on Distributor self-reporting of usage rather
than on individual contact with each end-user Subscriber. NASDAQ
permits Distributors to designate an entire Subscriber population as
Non-Professional provided that the number of Professional
Subscribers within that Subscriber population does not exceed ten
percent (10%) of the total population.
---------------------------------------------------------------------------

    NASDAQ continues to seek broader distribution of Depth-of-Book data
and to reduce the cost of providing Depth-of-Book data to larger
numbers of investors. In the past, NASDAQ has accomplished this goal in
part by offering similar enterprise licenses for Professional and Non-
Professional Usage of TotalView which contains the full Depth-of-Book
data for the NASDAQ Market Center Execution System. NASDAQ believes
that the adoption of enterprise licenses has led to greater
distribution of market data, particularly among Non-Professional
Subscribers.
    Based on input from market participants, NASDAQ believes that this
increase in distribution is attributable in part to the relief it
provides distributors from the NASDAQ requirement that distributors
count and report each Non-Professional Subscriber of NASDAQ Depth-of-
Book data. In addition to increased administrative flexibility,
enterprise licenses also encourage broader distribution by firms that
are currently over the fee cap as well as those that are approaching
the cap and wish to take advantage of the benefits of the program.
Further, NASDAQ believes that capping fees in this manner creates
goodwill with broker-dealers and increases transparency for retail
investors.
    The Depth-of-Book Enterprise License Fee covers usage fees for data
received directly from NASDAQ as well as data received from third-party
vendors (e.g., Bloomberg, Thomson-Reuters, etc.). Upon joining the
program, firms may inform third-party market data vendors they utilize
(through a NASDAQ-provided form) that, going forward, depth data usage
by the broker-dealer may be reported to NASDAQ on a non-billable basis.
This structure attempts to address a long-standing concern that broker-
dealers are over-billed for market data consumed by one person through
multiple market-data display devices. At the same time, the proposed
billing structure will continue to provide NASDAQ with accurate
reporting information for purposes of usage monitoring and auditing.
    The proposed Depth-of-Book Enterprise License Fee is completely
optional and does not replace existing enterprise license fee
alternatives set forth in Rule 7023. Additionally, the proposal does
not impact individual usage fees for any product or raise the costs of
any Subscriber of any NASDAQ data product. To the contrary, it provides
broker-dealers with an additional approach to providing more NASDAQ
data at a fixed cost.
b. [sic] Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and with Section
6(b)(4) of the Act,\7\ in particular, in that it provides an equitable
allocation of reasonable fees among Subscribers and recipients of
NASDAQ data. In adopting Regulation NMS, the Commission granted self-
regulatory organizations and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Commission concluded that Regulation NMS--by deregulating the
market in proprietary data--would itself further the Act's goals of
facilitating efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the
data beyond the prices, sizes, market center identifications of the
NBBO and consolidated last sale information are not required to
receive (and pay for) such data. The Commission also believes that
efficiency is promoted when broker-dealers may choose to receive
(and pay for) additional market data based on their own internal
analysis of the need for such data.\8\
---------------------------------------------------------------------------

    \8\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496 (June 29, 2005).

    By removing ``unnecessary regulatory restrictions'' on the ability
of exchanges to sell their own data, Regulation NMS advanced the goals
of the Act and the principles reflected in its legislative history. If
the free market should determine whether proprietary data is sold to
broker-dealers at all, it follows that the price at which such data is
sold should be set by the market as well. Level 2, TotalView and
OpenView are precisely the sort of market data product that the
Commission envisioned when it adopted Regulation NMS.
    On July 21, 2010, President Barack Obama signed into law H.R. 4173,
the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
(``Dodd-Frank Act''), which amended Section 19 of the Act. Among other
things, Section 916 of the Dodd-Frank Act amended paragraph (A) of
Section 19(b)(3) of the Act by inserting the phrase ``on any person,
whether or not the person is a member of the self-regulatory
organization'' after ``due, fee or other charge imposed by the self-
regulatory organization.'' As a result, all SRO rule proposals
establishing or changing dues, fees, or other charges are immediately
effective upon filing regardless of whether such dues, fees, or other
charges are imposed on members of the SRO, non-members, or both.
Section 916 further amended paragraph (C) of Section 19(b)(3) of the
Act to read, in pertinent part, ``At any time within the 60-day period
beginning on the date of filing of such a proposed rule change in
accordance with the provisions of paragraph (1) [of Section 19(b)], the
Commission summarily may temporarily suspend the change in the rules of
the self-regulatory organization made thereby, 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 this title. If the Commission takes such action, the
Commission shall institute proceedings under paragraph (2)(B) [of
Section 19(b)] to determine whether the proposed rule should be
approved or disapproved.''
    The decision of the United States Court of Appeals for the District
of Columbia Circuit in NetCoalition v.

SEC, No. 09-1042 (DC Cir. 2010), although reviewing a Commission
decision made prior to the effective date of the Dodd-Frank Act, upheld
the Commission's reliance upon competitive markets to set reasonable
and equitably allocated fees for market data. ``In fact, the
legislative history indicates that the Congress intended that the
market system `evolve through the interplay of competitive forces as
unnecessary regulatory restrictions are removed' and that the SEC wield
its regulatory power `in those situations where competition may not be
sufficient,' such as in the creation of a `consolidated transactional
reporting system.' '' NetCoalition, at 15 (quoting H.R. Rep. No. 94-
229, at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 321, 323). The
court's conclusions about Congressional intent are therefore reinforced
by the Dodd-Frank Act amendments, which create a presumption that
exchange fees, including market data fees, may take effect immediately,
without prior Commission approval, and that the Commission should take
action to suspend a fee change and institute a proceeding to determine
whether the fee change should be approved or disapproved only where the
Commission has concerns that the change may not be consistent with the
Act.
    For the reasons stated above, NASDAQ believes that the proposed
fees are fair and equitable, and not unreasonably discriminatory. As
described above, the proposed fees are based on pricing conventions and
distinctions that exist in NASDAQ's current fee schedule, and the fee
schedules of other exchanges. These distinctions (top-of-book versus
Depth-of-Book, Professional versus non-Professional Subscribers, Direct
versus Indirect Access, Internal versus External Distribution) are each
based on principles of fairness and equity that have helped for many
years to maintain fair, equitable, and not unreasonably discriminatory
fees, and that apply with equal or greater force to the current
proposal.
    As described in greater detail below, if NASDAQ has calculated
improperly and the market deems the proposed fees to be unfair,
inequitable, or unreasonably discriminatory, firms can diminish or
discontinue the use of their data because the proposed fee is entirely
optional to all parties. Firms are not required to purchase Depth-of-
Book data or to utilize any specific pricing alternative if they do
choose to purchase Depth-of-Book data. NASDAQ is not required to make
Depth-of-Book data available or to offer specific pricing alternatives
for potential purchases. NASDAQ can discontinue offering a pricing
alternative (as it has in the past) and firms can discontinue their use
at any time and for any reason (as they often do), including due to
their assessment of the reasonableness of fees charged. NASDAQ
continues to create new pricing policies aimed at increasing fairness
and equitable allocation of fees among Subscribers, and NASDAQ believes
this is another useful step in that direction.
    NASDAQ believes that the Depth-of-Book Enterprise License promotes
increased transparency by offering a new pricing option resulting in
lower fees for heavy users of Depth-of-Book data. This fee limitation
will, in turn, enable firms to make additional information available to
the firms' clients, thereby increasing transparency of the market.
Additionally, the proposal provides for simplified market data
administration by eliminating the current requirement that firms
identify and track the number of individual Subscribers of Depth-of-
Book data. NASDAQ continues to create new pricing policies aimed at
increasing transparency in the market and believes this is useful step
in that direction.

B. Self-Regulatory Organization's Statement on Burden on Competition

    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. Notwithstanding its
determination that the Commission may rely upon competition to
establish fair and equitably allocated fees for market data, the
NetCoalition court found that the Commission had not, in that case,
compiled a record that adequately supported its conclusion that the
market for the data at issue in the case was competitive. NASDAQ
believes that a record may readily be established to demonstrate the
competitive nature of the market in question.
    There is intense competition between trading platforms that provide
transaction execution and routing services and proprietary data
products. Transaction execution and proprietary data products are
complementary in that market data is both an input and a byproduct of
the execution service. In fact, market data and trade execution are a
paradigmatic example of joint products with joint costs. The decision
whether and on which platform to post an order will depend on the
attributes of the platform where the order can be posted, including the
execution fees, data quality and price and distribution of its data
products. Without the prospect of a taking order seeing and reacting to
a posted order on a particular platform, the posting of the order would
accomplish little. Without trade executions, exchange data products
cannot exist. Data products are valuable to many end Subscribers only
insofar as they provide information that end Subscribers expect will
assist them or their customers in making trading decisions.
    The costs of producing market data include not only the costs of
the data distribution infrastructure, but also the costs of designing,
maintaining, and operating the exchange's transaction execution
platform and the cost of regulating the exchange to ensure its fair
operation and maintain investor confidence. The total return that a
trading platform earns reflects the revenues it receives from both
products and the joint costs it incurs. Moreover, an exchange's
customers view the costs of transaction executions and of data as a
unified cost of doing business with the exchange. A broker-dealer will
direct orders to a particular exchange only if the expected revenues
from executing trades on the exchange exceed net transaction execution
costs and the cost of data that the broker-dealer chooses to buy to
support its trading decisions (or those of its customers). The choice
of data products is, in turn, a product of the value of the products in
making profitable trading decisions. If the cost of the product exceeds
its expected value, the broker-dealer will choose not to buy it.
Moreover, as a broker-dealer chooses to direct fewer orders to a
particular exchange, the value of the product to that broker-dealer
decreases, for two reasons. First, the product will contain less
information, because executions of the broker-dealer's orders will not
be reflected in it. Second, and perhaps more important, the product
will be less valuable to that broker-dealer because it does not provide
information about the venue to which it is directing its orders. Data
from the competing venue to which the broker-dealer is directing orders
will become correspondingly more valuable.
    Thus, a super-competitive increase in the fees charged for either
transactions or data has the potential to impair revenues from both
products. ``No one disputes that competition for order flow is
`fierce'.'' NetCoalition at 24. However, the existence of fierce
competition for order flow implies a high degree of price sensitivity
on the part of broker-dealers with order flow, since they may readily
reduce costs by directing orders toward the lowest-cost trading venues.
A

broker-dealer that shifted its order flow from one platform to another
in response to order execution price differentials would both reduce
the value of that platform's market data and reduce its own need to
consume data from the disfavored platform. Similarly, if a platform
increases its market data fees, the change will affect the overall cost
of doing business with the platform, and affected broker-dealers will
assess whether they can lower their trading costs by directing orders
elsewhere and thereby lessening the need for the more expensive data.
    Analyzing the cost of market data distribution in isolation from
the cost of all of the inputs supporting the creation of market data
will inevitably underestimate the cost of the data. Thus, because it is
impossible to create data without a fast, technologically robust, and
well-regulated execution system, system costs and regulatory costs
affect the price of market data. It would be equally misleading,
however, to attribute all of the exchange's costs to the market data
portion of an exchange's joint product. Rather, all of the exchange's
costs are incurred for the unified purposes of attracting order flow,
executing and/or routing orders, and generating and selling data about
market activity. The total return that an exchange earns reflects the
revenues it receives from the joint products and the total costs of the
joint products.
    Competition among trading platforms can be expected to constrain
the aggregate return each platform earns from the sale of its joint
products, but different platforms may choose from a range of possible,
and equally reasonable, pricing strategies as the means of recovering
total costs. For example, some platform may choose to pay rebates to
attract orders, charge relatively low prices for market information (or
provide information free of charge) and charge relatively high prices
for accessing posted liquidity. Other platforms may choose a strategy
of paying lower rebates (or no rebates) to attract orders, setting
relatively high prices for market information, and setting relatively
low prices for accessing posted liquidity. In this environment, there
is no economic basis for regulating maximum prices for one of the joint
products in an industry in which suppliers face competitive constraints
with regard to the joint offering. This would be akin to strictly
regulating the price that an automobile manufacturer can charge for car
sound systems despite the existence of a highly competitive market for
cars and the availability of after-market alternatives to the
manufacturer-supplied system.
    The market for market data products is competitive and inherently
contestable because there is fierce competition for the inputs
necessary to the creation of proprietary data and strict pricing
discipline for the proprietary products themselves. Numerous exchanges
compete with each other for listings, trades, and market data itself,
providing virtually limitless opportunities for entrepreneurs who wish
to produce and distribute their own market data. This proprietary data
is produced by each individual exchange, as well as other entities, in
a vigorously competitive market.
    Broker-dealers currently have numerous alternative venues for their
order flow, including ten SRO markets, as well as internalizing BDs and
various forms of alternative trading systems (``ATSs''), including dark
pools and electronic communication networks (``ECNs''). Each SRO market
competes to produce transaction reports via trade executions, and two
FINRA-regulated Trade Reporting Facilities (``TRFs'') compete to
attract internalized transaction reports. Competitive markets for order
flow, executions, and transaction reports provide pricing discipline
for the inputs of proprietary data products.
    The large number of SROs, TRFs, BDs, and ATSs that currently
produce proprietary data or are currently capable of producing it
provides further pricing discipline for proprietary data products. Each
SRO, TRF, ATS, and BD is currently permitted to produce proprietary
data products, and many currently do or have announced plans to do so,
including NASDAQ, NYSE, NYSE Amex, NYSEArca, and BATS.
    Any ATS or BD can combine with any other ATS, BD, or multiple ATSs
or BDs to produce joint proprietary data products. Additionally, order
routers and market data vendors can facilitate single or multiple
broker-dealers' production of proprietary data products. The potential
sources of proprietary products are virtually limitless.
    The fact that proprietary data from ATSs, BDs, and vendors can by-
pass SROs is significant in two respects. First, non-SROs can compete
directly with SROs for the production and sale of proprietary data
products, as BATS and Arca did before registering as exchanges by
publishing Depth-of-Book data on the Internet. Second, because a single
order or transaction report can appear in an SRO proprietary product, a
non-SRO proprietary product, or both, the data available in proprietary
products is exponentially greater than the actual number of orders and
transaction reports that exist in the marketplace.
    Market data vendors provide another form of price discipline for
proprietary data products because they control the primary means of
access to end Subscribers. Vendors impose price restraints based upon
their business models. For example, vendors such as Bloomberg and
Thomson Reuters that assess a surcharge on data they sell may refuse to
offer proprietary products that end Subscribers will not purchase in
sufficient numbers. Internet portals, such as Google, impose a
discipline by providing only data that will enable them to attract
``eyeballs'' that contribute to their advertising revenue. Retail
broker-dealers, such as Schwab and Fidelity, offer their customers
proprietary data only if it promotes trading and generates sufficient
commission revenue. Although the business models may differ, these
vendors' pricing discipline is the same: they can simply refuse to
purchase any proprietary data product that fails to provide sufficient
value. NASDAQ and other producers of proprietary data products must
understand and respond to these varying business models and pricing
disciplines in order to market proprietary data products successfully.
    In addition to the competition and price discipline described
above, the market for proprietary data products is also highly
contestable because market entry is rapid, inexpensive, and profitable.
The history of electronic trading is replete with examples of entrants
that swiftly grew into some of the largest electronic trading platforms
and proprietary data producers: Archipelago, Bloomberg Tradebook,
Island, RediBook, Attain, TracECN, BATS Trading and Direct Edge. A
proliferation of dark pools and other ATSs operate profitably with
fragmentary shares of consolidated market volume.
    Regulation NMS, by deregulating the market for proprietary data,
has increased the contestability of that market. While broker-dealers
have previously published their proprietary data individually,
Regulation NMS encourages market data vendors and broker-dealers to
produce proprietary products cooperatively in a manner never before
possible. Multiple market data vendors already have the capability to
aggregate data and disseminate it on a profitable scale, including
Bloomberg, and Thomson Reuters.
    The court in NetCoalition concluded that the Commission had failed
to demonstrate that the market for market data was competitive based on
the reasoning of the Commission's

NetCoalition order because, in the court's view, the Commission had not
adequately demonstrated that the Depth-of-Book data at issue in the
case is used to attract order flow. NASDAQ believes, however, that
evidence not before the court clearly demonstrates that availability of
data attracts order flow. For example, as of July 2010, 92 of the top
100 broker-dealers by shares executed on NASDAQ consumed NQDS and 80 of
the top 100 broker-dealers consumed TotalView. During that month, the
NQDS-Subscribers were responsible for 94.44% of the orders entered into
NASDAQ and TotalView Subscribers were responsible for 92.98%.
    Competition among platforms has driven NASDAQ continually to
improve its platform data offerings and to cater to customers' data
needs. For example, NASDAQ has developed and maintained multiple
delivery mechanisms (IP, multi-cast, and compression) that enable
customers to receive data in the form and manner they prefer and at the
lowest cost to them. NASDAQ offers front end applications such as its
``Bookviewer'' to help customers utilize data. NASDAQ has created new
products like TotalView Aggregate to complement TotalView ITCH and/
NQDS, because offering data in multiple formatting allows NASDAQ to
better fit customer needs. NASDAQ offers data via multiple extranet
providers, thereby helping to reduce network and total cost for its
data products. NASDAQ has developed an online administrative system to
provide customers transparency into their data feed requests and
streamline data usage reporting. NASDAQ has also expanded its
Enterprise License options that reduce the administrative burden and
costs to firms that purchase market data.
    Despite these enhancements and a dramatic increase in message
traffic, NASDAQ's fees for market data have remained flat. In fact, as
a percent of total Subscriber costs, NASDAQ data fees have fallen
relative to other data usage costs--including bandwidth, programming,
and infrastructure--that have risen. The same holds true for execution
services; despite numerous enhancements to NASDAQ's trading platform,
absolute and relative trading costs have declined. Platform competition
has intensified as new entrants have emerged, constraining prices for
both executions and for data.
    The vigor of competition for Depth-of-Book information is
significant and the Exchange believes that this proposal itself clearly
evidences such competition. NASDAQ is offering a new pricing model in
order to keep pace with changes in the industry and evolving customer
needs. It is entirely optional and is geared towards attracting new
customers, as well as retaining existing customers.
    The Exchange has witnessed competitors creating new products and
innovative pricing in this space over the course of the past year.
NASDAQ continues to see firms challenge its pricing on the basis of the
Exchange's explicit fees being higher than the zero-priced fees from
other competitors such as BATS. In all cases, firms make decisions on
how much and what types of data to consume on the basis of the total
cost of interacting with NASDAQ or other exchanges. Of course, the
explicit data fees are but one factor in a total platform analysis.
Some competitors have lower transactions fees and higher data fees, and
others are vice versa. The market for this Depth-of-Book information is
highly competitive and continually evolves as products develop and
change.
    Additional evidence cited by NYSE Arca in SR-NYSE Arca-2010-097 \9\
[sic] which was not before the NetCoalition court also demonstrates
that availability of Depth-of-Book data attracts order flow and that
competition for order flow can constrain the price of market data:
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 63291 (Nov. 9, 2010)
75 FR 70311 (Nov. 17, 2010) (SR-NYSEArca-2010-97).

    1. Terrence Hendershott & Charles M. Jones, Island Goes Dark:
Transparence, Fragmentation, and Regulation, 18 Review of Financial
Studies 743 (2005);
    2. Charts and Tables referenced in Exhibit 3B to that filing;
    3. PHB Hagler Bailly, Inc., ``Issues Surrounding Cost-Based
Regulation of Market Data Prices;'' and
    4. PHB Hagler Bailly, Inc., ``The Economic Perspective on
Regulation of Market Data.''

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\10\ 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 necessary or appropriate in the public interest,
for the protection of investors, or 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2012-042 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2012-042. 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 Web site (http://www.sec.gov/rules/sro.shtml). 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 Web site
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 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal offices of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-

NASDAQ-2012-042, and should be submitted on or before May 1, 2012.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8580 Filed 4-9-12; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 53 (Monday, March 19, 2012)]
[Notices]
[Pages 16028-16029]
[FR Doc No: 2012-6507]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER12-1238-000]

Broken Bow Wind, LLC; Supplemental Notice That Initial Market-
Based Rate Filing Includes Request for Blanket Section 204
Authorization

    This is a supplemental notice in the above-referenced proceeding of
Broken Bow Wind, LLC's application for market-based rate authority,
with an accompanying rate tariff, noting that such application includes
a request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone
filing a motion to intervene or protest must serve a copy of that
document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is April 2, 2012.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the

eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First Street NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive email notification
when a document is added to a subscribed docket(s). For assistance with
any FERC Online service, please email<EMAIL_ADDRESS>or
call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

    Dated: March 13, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-6507 Filed 3-16-12; 8:45 am]
BILLING CODE 6717-01-P