This excerpt taken from the NDAQ 10-K filed Mar 14, 2005.
Nasdaq Member Revenue Sharing
Effective June 1, 2002, Nasdaq terminated its market data revenue sharing program for securities listed on The Nasdaq Stock Market, as a result of the SECs decision to abrogate certain market participant tape sharing pilot programs. The SECs action was in response to concerns about the effect of market data rebates on the accuracy of market data and the regulatory functions of self-regulatory organizations. The SECs action allows Nasdaq and competing exchanges to retain tape revenue. However, Nasdaq continues to share market data revenue with the exchanges that participate in the UTP Plan based on their respective share of volume and trades of securities listed on The Nasdaq Stock Market. In addition, Nasdaq continues to share tape revenue with Nasdaq market participants who report trades in the NYSE and the Amex-listed securities through Nasdaq.
In August 2003, Nasdaq implemented the Nasdaq General Revenue Sharing Program, which like the General Revenue Sharing Program of The National Stock Exchange, a regional stock exchange, shares operating revenue from multiple business lines in addition to tape fee revenue. The new discretionary program shares operating revenue, which is interpreted to mean net revenue after expenses from all services that derive revenue from member trading and trade-reporting activity in Nasdaq-listed securities. As such, the program is designed to provide an incentive for quoting market participants to send orders and report trades to the Nasdaq Market Center. Nasdaq did not share any revenues during 2003 under the General Revenue Sharing Program. For the year ended December 31, 2004, Nasdaq shared approximately $20.1 million under this new program which is shown net within Market Services revenues. See Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations, Market Services, for further discussion.