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This excerpt taken from the NDAQ 10-Q filed Nov 7, 2008. SRO License The SRO license allows an organization to set and operate under rules approved by the SEC. The BSX SRO license therefore provides NASDAQ OMX with an additional national securities exchange license allowing flexibility around market structure, the ability to offer a second quote for both equities and options, and the opportunity to achieve execution efficiencies. In estimating the Fair Value of the SRO License for BSX, we used the Excess Earnings Method, a version of the Income Approach.
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Table of ContentsThe SRO license once obtained is difficult to lose; the SRO License may be lost if a company fails to adhere to the rules approved by the SEC or it is acquired. Therefore, the SRO license was determined to have a perpetual life and was determined to be an indefinite-lived asset. The cash flows were tax-effected at a rate of 40.0%, and a discounted tax amortization benefit was added to the fair value of the asset under the assumption that the SRO license would be amortized for tax purposes over a period of 15 years. The following is a summary of the indicated fair value for the SRO license:
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