Friday, December 31, 2010

Data News #2010 - 35
REVISED 1-28-11: NASDAQ OMX Begins Offering New Non-Professional Platform Pricing January 1, 2011

Why is NASDAQ OMX instituting this program?

This program reduces prices for The NASDAQ Stock Market^® (NASDAQ^®) market data based on trading on NASDAQ. The proposed price reduction is targeted at retaining the business of members that represent long-term investors, those that generally consume market data in a non-professional capacity. This promotes NASDAQ’s goal of better serving long-term, non-professional investors and restoring confidence in public capital markets. The participation of these investors in NASDAQ’s market benefits NASDAQ, its listed companies, its market quality and the quality of its data products.

What does this new offering entail?

NASDAQ OMX is adding a new non-professional platform pricing program whereby broker-dealers receive a discount on depth-of-book market data fees and an enhanced rebate based upon the extent to which a NASDAQ member both consumes NASDAQ market data and also contributes to the quality of NASDAQ data through liquidity provisioning. This program focuses on non-professional use of “NASDAQ Depth Data Product Fees” which are the fees for NASDAQ Level 2 (Rule 7017) and NASDAQ TotalView^® and NASDAQ OpenView^® (Rule 7023), including fees for usage and enterprise license fees. It also focuses on average daily liquidity provision to the NASDAQ Market Center^® as that activity is measured today in NASDAQ Rule 7018. This pricing is completely optional; no broker-dealer is required to participate or excluded from participating.

How does a customer qualify for this program?

A member will qualify as a “Tier 1 Firm” for purposes of the discount during a particular month if it

1. has an average daily volume of 12 million or more shares of liquidity provided through the NASDAQ Market Center in all securities during the month; and
2. incurs NASDAQ Depth Data Product Fees (as defined below) during the month of $150,000 or more.

A member will qualify as a “Tier 2 Firm” for purposes of the discount during a particular month if it

1. has an average daily volume of 35 million or more shares of liquidity provided through the NASDAQ Market Center in all securities during the month; and
2. incurs NASDAQ Depth Data Product Fees during the month of $300,000 or more.

A member will qualify as a “Tier 3 Firm” for purposes of the discount during a particular month if it

1. has an average daily volume of 65 million or more shares of liquidity provided through the NASDAQ Market Center in all securities during the month; and
2. incurs NASDAQ Depth Data Product Fees during the month of $500,000 or more.

Broker-dealers that qualify as Tier 1, 2 or 3 firms should report monthly to NASDAQ their volume of liquidity provided and non-professional depth data fees incurred. This will ensure proper measurement and application of the discounts and rebates offered under the platform pricing program.

What data sets are covered by this new program?

Broker-dealers opting into this program will be allowed to provide real-time access to NASDAQ TotalView, NASDAQ OpenView and/or NASDAQ Level 2 data to all of its non-professional users and receive the associated discount.

Please note that the new license covers non-professional users of NASDAQ depth data entitlements only. Firms must continue to report and pay the applicable usage fees for professional users of its NASDAQ depth products as well as non-professional and professional users accessing UTP Level 1 data. In addition, firms must also continue to pay the applicable NASDAQ depth distributor fees.

When will NASDAQ OMX introduce the new non-professional platform pricing program?

NASDAQ OMX will begin offering the non-professional platform pricing program to broker-dealer firms beginning with the billing month of January 2011. The program has been filed with the Securities and Exchange Commission (SEC) on an immediately effective basis on December 30, 2010.

Will any changes be made to current products because of the introduction of this program?

Yes. Because this new program aims to achieve similar results as the NASDAQ Depth Data Enterprise License instituted in October 2010, NASDAQ OMX will not renew this entitlement in January 2011. The new non-professional pricing platform program further enhances the benefits to customers by allowing them to potentially save more money on data fees and receive new rebates on liquidity provision.

Therefore, the monthly $325,000 enterprise license (inclusive of Level 2 subscriber fees) will no longer be available as of January 2011. The current $25,000 enterprise license (exclusive of Level 2 subscriber fees) will not be removed and will still be in effect.

For firms already participating in the depth data enterprise license program, please contact your NASDAQ OMX Global Data Products Account Manager.

How do I sign up for this program?

To enroll in the program, contact your NASDAQ OMX Global Data Products Account Manager.

Where can I find additional information?

• Contact NASDAQ OMX Global Data Products at +1 301 978 5307.
• Refer to SR-NASDAQ-174 and the Statement of Ordover and Bamberger (Exhibit 3) included in the filing.