Proposed Rule Change to Link Market Data Fees and Transaction Execution Fees

SEC Release (Nasdaq Rulemaking)

The SEC declared immediately effective a Nasdaq proposal to reduce the costs of executing trades and providing "depth of book" data products for Nasdaq firms that service "non-professional" (retail) users with which the firm has a brokerage relationship. The filing is intended to address a concern that retail orders are increasingly being executed by internalizers (i.e. off exchanges), and thus lacking pre-trade transparency, exposure, or order interaction. The filing contains a lengthy discussion from Nasdaq as to competition in the market for transaction execution and routing services, and expresses a general view that so-called "dark" markets have certain unfair advantages over exchanges, with whom they compete for order flow.

Please contact any of the following Cadwalader attorneys if you have any questions about this item:

Steven Lofchie; [email protected]

Jeffrey Robins; [email protected]

Maurine Bartlett; [email protected]

Glen Barrentine; [email protected]

Document Number

SEC Release 34-63745

Date

January 20, 2011

Cross References (links may require a Cabinet subscription)

SR-NASDAQ-2011-010

SEC Release 34-61358 (Concept Release on Equity Market Structure)