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Friday, June 8, 2012

Data News #2012 - 9
NASDAQ OMX Provides Additional Guidance for Non-Professional Usage

Market Impacted:

  • All Markets

Products Impacted:

  • All Products

Contact Information:

What you need to know:

  • NASDAQ OMX® is providing clarification on the administration of the Non-Professional policy, specifically for Trusts, Investment Clubs, Retired and Inactive Professionals and Large Traders.
  • Distributors and Vendors are required to verify the status of any Subscriber receiving UTP Level 1 ServicesSM and/or NASDAQ OMX Services at the Non-Professional rates.
  • Refer to Data News #2007 – 33 for information regarding previous clarifications.

What has changed?

In response to industry demand, NASDAQ OMX is clarifying the Non-Professional policy. As the Administrator for the UTP Level 1 Services, NASDAQ OMX, in conjunction with other U.S. exchanges, has prepared a uniform Non-Professional policy clarification to simplify market data administration. NASDAQ OMX will also extend this policy to all NASDAQ OMX U.S. global data products.

NASDAQ OMX is providing additional clarification on the administration of the Non-Professional policy, specifically for Trusts, Investment Clubs, Retired and Inactive Professionals as well as Large Traders. Please Refer to Data News #2007 – 33 for information regarding previous clarifications and to the NASDAQ OMX Global Subscriber Agreement Policy for the current policy.

What is the definition of a Non-Professional?

As a reminder, the definition of a "Non-Professional" can be found in the NASDAQ OMX Global Subscriber Agreement.

The phrase "Professional Subscriber" applies to all other persons who do not meet the definition of Non-Professional Subscriber. Distributors and Vendors are required to verify the status of any Subscriber receiving data at the Non-Professional rates.

What additional guidance is being provided?

The Non-Professional policy continues to permit individuals associated with certain non-commercial organizations (i.e., family investment trusts, investment clubs) to access data at Non-Professional rates. Please note that the organization itself cannot be considered a Non-Professional Subscriber, nor can any professional staff paid to support the organization’s activities (i.e., attorneys, accountants, administrative staff, etc.)

The questions below provide additional guidance regarding the administration for Trusts and Investment Clubs.

Question Discussion
Can the Trust itself qualify as a Non-Professional? No, the Trust is an organization, and by definition only natural persons can qualify as Non-Professionals. A single, unpaid natural person associated with the Trust, who qualifies as a Non-Professional Subscriber, may be reported as a Non-Professional Subscriber if the reporting includes the name of the person. The name of the Trust may also be reported, but a report that includes only the name of the Trust would be qualified as a Professional.
May a Trustee qualify as a Non-Professional? Yes, if the Trustee is an unpaid natural person who qualifies as a Non-Professional Subscriber.
May Trustees who receive compensation qualify as Non-Professionals? No.
May Trustees who receive professional assistance qualify as Non-Professionals? No.
May the Trust have more than one Trustee? No.
May a Beneficiary of the Trust qualify as a Non-Professional?? Yes, if the Beneficiary is an unpaid natural person who qualifies as a Non-Professional Subscriber.
May multiple Beneficiaries qualify as Non-Professional? Yes, if the Beneficiary is an unpaid natural person who qualifies as a Non-Professional Subscriber.

Please see the below chart for additional guidance related to qualifying Investments Clubs as Non-Professionals:

Question Discussion
May Investment Club members qualify as Non-Professionals? Yes, if the Investment Club member is an unpaid natural person who qualifies as a Non-Professional Subscriber.
Must all Investment Club members qualify as Non-Professionals for the Non-Professional rates to apply? No. Each unpaid natural person associated with the Investment Club, who qualifies as a Non-Professional Subscriber, may be reported as a Non-Professional Subscriber.
If the Investment Club member qualifies as a Non-Professional, may its Non-Professional members receive market data under the Investment Club’s account? The Investment Club is an organization, and by definition only natural persons can qualify as Non-Professionals. Each unpaid natural person associated with the Investment Club, who qualifies as a Non-Professional Subscriber, may be reported as a Non-Professional Subscriber.
May Investment Club members who receive compensation qualify as Non-Professionals? No. In addition, compensation would disqualify the Investment Club as a Non-Professional.
May the Investment Club members who receive professional assistance qualify as Non-Professionals? No, the Investment Club members who receive professional assistance related to the activities of the Investment Club may not qualify as Non-Professionals.

What is the Non-Professional policy regarding Retired and Inactive Professionals?

Please see the below chart for additional guidance related to qualifying Retired and Inactive Professionals as Non-Professionals:

Question Discussion
Do Retired Professionals qualify as Non-Professionals? Yes, Retired Professionals no longer providing services in a Professional capacity may qualify as Non-Professionals if listed as Not-Registered with FINRA. To continue to receive the Non-Professional rates, Subscribers must re-verify their Non-Professional semi-annually.
Do Non-working Professionals qualify as Non-Professionals? Yes, Professionals no longer providing services may qualify as Non-Professionals if listed as Not-Registered with FINRA. To continue to receive the Non-Professional rates, Subscribers must re-verify their Non-Professional semi-annually.

What is the Non-Professional policy regarding Large Traders?

Please see the below chart for additional guidance related to qualifying certain Large Traders as Non-Professionals:

Question Discussion
Are Large Traders always qualified as Professionals? If a large trader otherwise meets the definition of “Non-Professional Subscriber,” the Large Trader does not lose his or her “Non-Professional Subscriber” status merely because he or she falls within SEC Rule 13h-1(a)’s definition of Large Trader.

What are the reporting requirements?

As always, Distributors and Vendors are required to comply with the NASDAQ OMX Global Data Policies, including submission of regular usage reports listing the total number of devices with ability to access NASDAQ data during the reporting period. Upon request, Distributors and Vendors paying Non-Professional rates must have the ability to provide NASDAQ OMX with a report detailing the name of each individual Subscriber included under each account and each Subscriber's respective Professional or Non-Professional status.

Where can I find additional information?


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