FR 2025-00414

Nasdaq PHLX LLC has submitted a proposed rule change to the Securities and Exchange Commission (SEC). The proposal, made at the end of December 2024, suggests adjusting certain fees based on the inflation rate. Specifically, the adjustments pertain to the Non-Display Enterprise License and PHLX Depth Data. Although these changes have been proposed for immediate effect, they are intended to be operational from January 1, 2025.

Significant Issues and Concerns

The main aspect of the proposal is its lack of specificity concerning the rate of inflation used for the fee adjustments. This omission could result in uncertainties regarding how the fees will be calculated. Without clarity on the inflation rate or the basis for its calculation, stakeholders might be left in the dark about the fairness and accuracy of these adjustments.

Additionally, the proposal makes reference to several external websites for more detailed information. However, these URLs may become outdated or inaccessible over time, posing a challenge for those trying to access the necessary data or clarification. Lastly, the proposal invites public commentary but fails to provide detailed information on how these adjustments will affect users, leaving room for concern about the potential impacts on different groups.

Impact on the Public

For the public, particularly those who interact with Nasdaq PHLX services, the adjustments could mean financial implications depending on how the rates of inflation alter the fees. Users might experience increased costs which could affect their participation in financial markets. It is important for individuals and companies to be aware of these changes and consider their own financial planning and strategies accordingly.

Impact on Specific Stakeholders

The document is likely to have varied effects on different stakeholders—

1. Financial Analysts and Traders: Professionals in the financial industry who rely on Nasdaq PHLX data could be directly affected by the changes in the Non-Display Enterprise License fees. It might result in increased operational costs, potentially affecting their data usage patterns or investment strategies.

2. Regulators and Policymakers: They might express concerns about the lack of a specified cap on fee adjustments. Unlimited inflation-based increases could lead to excessive charges, prompting further scrutiny and discussion on regulatory oversight.

3. General Public and Small Investors: While the primary users are professionals, changes in market data costs can eventually trickle down, affecting small investors through increased brokerage fees as firms adjust to higher operating costs.

In summary, the rule change proposal represents an attempt to update fees in line with inflation but lacks detailed information that could alleviate concerns about transparency and fairness. As stakeholders prepare for these changes, public commentary invited by February 3, 2025, offers an opportunity to seek clarifications or express concerns.