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Tuesday, June 2, 2020

Data Technical News #2020 - 15
Nasdaq issues policy clarification for application of “brokerage relationship”

Markets Impacted:

  • Nasdaq Basic
  • Nasdaq TotalView

Contact Information:

What you need to know:

Nasdaq is announcing a clarification of the term “brokerage relationship,” which is used to determine the types of data distribution permissible through several proprietary Enterprise License options.

What is being clarified?

Data may be distributed through one of the five enterprise licenses identified below in the context of a “brokerage relationship.” The purpose of this notice is to clarify that, for the purpose of these enterprise licenses, a “brokerage relationship” exists when a customer opens an account with a broker dealer to obtain information about U.S. equity markets.

In which rule is this term used?

The term “brokerage relationship” is used in the following Nasdaq Proprietary Enterprise Licenses. These licenses are described in detail in Section 5 of the US Equities and Options Data Polices document located here.

  • EL # 1: U.S. NASDAQ DEPTH [TOTALVIEW/LEVEL 2] DISPLAY PROFESSIONAL [INTERNAL] AND NON PROFESSIONAL [EXTERNAL]
  • EL # 10: U.S. NASDAQ DEPTH [TOTALVIEW/LEVEL 2] DISPLAY PROFESSIONAL [INTERNAL & EXTERNAL] AND NON PROFESSIONAL [EXTERNAL]
  • EL # 2: U.S. NASDAQ DEPTH [TOTALVIEW/LEVEL 2] DISPLAY PROFESSIONAL AND NON-PROFESSIONAL [EXTERNAL]
  • EL # 5: U.S. NASDAQ BASIC [INTERNAL & EXTERNAL]
  • EL # 8: U.S. NASDAQ BASIC, TOTALVIEW and NLS [INTERNAL AND EXTERNAL]

Why is Nasdaq clarifying this now?

The markets have seen a significant increase in first-time investors looking to access market data. New investors may, for example, wish to open accounts with broker dealers to obtain market information while evaluating whether and how to engage in actual securities trading, or otherwise open accounts to learn about markets. Nasdaq wishes to clarify that it considers the opening of an account to establish the “brokerage relationship,” and therefore to be within the scope of these five enterprise licenses.

Who should I contact for additional information?


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