November 19, 2020
Securities and Exchange Commission
100 F Street NE., Washington, DC 20549
Re: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Lower the Enterprise License Fee for Broker-Dealers (Release No. 34-90177; File No. SR-NASDAQ-2020-065)
Dear Ms. Countryman:
The Securities Industry and Financial Markets Association (“SIFMA”)1respectfully submits this letter to the U.S. Securities and Exchange Commission (“Commission” or “SEC”) to comment on the proposal filed by The Nasdaq Stock Market LLC (“Nasdaq”) to lower the enterprise license fee for broker-dealers distributing Nasdaq Basic to internal Professional Subscribers and the enterprise license fee for broker-dealers distributing Nasdaq Last Sale to Professional Subscribers (the “Proposal”).2
SIFMA supports the reduction in fees that is contemplated by the Proposal. The primary users of Nasdaq Basic are retail brokers who handle order flow based on behalf of retail investors. We are concerned, however, with Nasdaq’s use of rationales to support its Proposal that have been rejected by numerous parties over the years.
Nasdaq’s Proposal would lower enterprise fees for Nasdaq Basic and Nasdaq Last Sale. These are both “top-of-book” market data products that provide last sale information and best bid and offer information from Nasdaq. These products provide a subset of the core data distributed by the CTA/CQ Plan and the UTP Plan, but with less latency. The Commission has previously emphasized the importance of ensuring that core data is widely available for reasonable fees.3 The Commission has also stated, among other things, that investors “must have [core data] to participate in the U.S. equity markets,” and “preserv[ing] the integrity and affordability of the consolidated data stream” is “one of the Commission’s most important responsibilities.”4 Still, SIFMA and many others have previously pointed out that brokers also need faster data streams, even for top-of-book data.5 Nasdaq and other exchanges have long enjoyed above-competitive prices for their proprietary top-of-book feeds, because many market participants need these feeds, and each exchange has monopoly control over its own high-speed data feed. A reduction in fees for these data streams is certainly appropriate, and we support Nasdaq’s effort to lower those fees.