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Nasdaq Has Proposed a New Rule Change To Modify Its System of Volume-Based Credits

The Nasdaq Stock Market LLC (Nasdaq) has filed with the Securities and Exchange Commission a proposed rule change to modify the current system of credits Nasdaq offers to members that add liquidity in securities that are listed on exchanges other than Nasdaq or the New York Stock Exchange. In particular, Nasdaq is seeking to modify one and eliminate another one of the volume-based credits that it offers for displayed quotes/orders that provide liquidity on Nasdaq in Tape B Securities.

Nasdaq offers a member a credit of $0.0001 per share executed if the member provides liquidity in securities that are listed on exchanges other than Nasdaq or NYSE during the month representing at least .06 percent, but less than 0.12 percent, of consolidated volume during the month through one or more of the member’s Nasdaq Market Center Market Participant Identifiers. Nasdaq has proposed to change the lower threshold from .06 percent to 0.10 percent, and remove the upper 0.12 percent threshold entirely.

Additionally, Nasdaq proposes to eliminate the $0.0002 per share executed credit that it currently provides for members that provide liquidity in securities that are listed on exchanges other than Nasdaq or NYSE during the month representing at least 0.12 percent of consolidated volume during the month.

Nasdaq has designated the proposed rule change to be effective on April 2.

The text of the proposed rule change is available here.

©2018 Katten Muchin Rosenman LLP

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About this Author

Special Counsel

Michael Foley represents broker-dealers, investment advisers and other financial services industry participants with respect to a broad spectrum of legal and regulatory matters arising under the federal securities laws.

Michael has nearly 20 years of experience in private practice and in-house at both a large, full-service broker-dealer and at an online discount broker-dealer, advising broker-dealers and other financial institutions regarding compliance with the federal securities and commodities laws, and with the regulations of the US Securities and Exchange...

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Gregory Uffner, Financial Services Attorney, Katten Law Firm
Associate

Gregory Uffner is an associate in the Financial Services practice. 

While in law school, Gregory was an associate editor for the Moot Court Board, a member of the Fordham Urban Law Journal and served as managing editor for the Fordham Sports Law Forum.

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