[Federal Register: August 27, 2003 (Volume 68, Number 166)]
[Notices]
[Page 51618-51619]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27au03-118]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48386; File No. SR-NASD-2003-132]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. To Extend the Pilot Period for Fees for the
National Quotation Data Service
August 21, 2003.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 18, 2003, the National Association of Securities Dealers,
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc.
(``Nasdaq''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by Nasdaq. Nasdaq filed the
proposal pursuant to Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposal effective upon filing
with the Commission.\5\ The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ Nasdaq asked the Commission to waive the five-day pre-filing
notice requirement and the 30-day operative day. See Rule 19b-
4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to extend a one-year pilot program under NASD Rule
7010(h), which reduced from $50 to $10 the monthly fee that non-
professional users pay to receive the National Quotation Data Service
(``NQDS'').\6\ The purpose of this proposed rule change is to extend
the one-year fee reduction pilot program for non-professional users of
NQDS through August 31, 2004. Nasdaq proposes no other changes to the
pilot as it is currently operating. Accordingly, there is no new
proposed rule language.
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\6\ See Securities Exchange Act Release No. 43190 (August 22,
2000), 65 FR 52460 (August 29, 2000) (SR-NASD-2000-47). NQDS is also
referred to as the ``Nasdaq Quotation Dissemination Service.''
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the NASD included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The NASD has prepared summaries, set forth in Sections
A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq is proposing to extend for one year the fee reduction pilot
program under NASD Rule 7010(h) that reduced from $50 to $10 the
monthly fee that non-professional users pay to receive NQDS.
NQDS delivers market maker quotations, Nasdaq Level 1 \7\ service
(including calculation and display of the inside market), and last sale
information that is dynamically updated on a real-time basis. NQDS data
is used not only by firms, associated persons, and other market
professionals, but also by non-professionals who receive the service
through authorized vendors, including, for example, on-line brokerage
firms. Prior to August 31, 2000, NQDS data was available through
authorized vendors at a monthly rate of $50 for professionals and non-
professional users alike. In August 2000, the NASD through Nasdaq filed
a rule change to reduce from $50 to $10 the monthly fee that non-
professional users pay to receive NQDS data. The Commission approved
the pilot on August 22, 2000, and the fee reduction commenced on August
31, 2000 on a one-year pilot basis. On September 4, 2001, and again on
August 29, 2002, Nasdaq filed proposed rule changes to extend the pilot
for another one-year period.
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\7\ Pursuant to NASD Rule 7010(e), Nasdaq separately distributes
Level 1 data to non-professionals for a monthly fee of $1.00.
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Nasdaq has consistently supported broad, effective dissemination of
market information to public investors. Thus, Nasdaq is proposing to
extend the one-year fee-reduction pilot for another year. The pilot
would cover twelve months, commencing with September 2003 and expiring
on August 31, 2004. Nasdaq notes that the existing pilot reduced by 80%
the fees that non-professionals paid for NQDS data prior to August 31,
2000. Continuing the reduction of NQDS charges for non-professional
users demonstrates Nasdaq's continued commitment to individual
investors and responds to the dramatic increase in the demand for real-
time market data by non-professional market participants. In addition,
NASD member firms often supply real-time market data to their customers
through automated means. Thus, NASD member firms' customers will
benefit from the continued fee reduction.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 15A of the Act,\8\ in general, and with
Sections 15A(b)(5) \9\ and 15A(b)(6) \10\ of the Act, in particular, in
that the proposal is designed to provide for the equitable allocation
of reasonable fees among members and other persons using any facility
or system which the Association operates or controls, and it does not
unfairly discriminate between customers, issuers, brokers or dealers.
In addition, Nasdaq believes that the fee reduction enhances the
public's access to market data that is relevant to investors when they
make financial decisions. Nasdaq further believes that the public's
enhanced access to this data may encourage increased public
participation in the securities markets.
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\8\ 15 U.S.C. 78o-3.
\9\ 15 U.S.C. 78o-3(b)(5).
\10\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq believes that the proposed rule change will impose no burden
on competition that is not necessary or
[[Page 51619]]
appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \11\ and
Rule 19b-4(f)(6) thereunder.\12\ At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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Nasdaq has asked the Commission to waive the five-day pre-filing
notice requirement and the 30-day operative delay contained in Rule
19b-4(f)(6).\13\ The Commission believes waiving the five-day pre-
filing notice requirement and the 30-day operative delay is consistent
with the protection of investors and the public interest. Such waiver
will allow the reduction in fees reflected in the proposal to be made
available on an uninterrupted basis. For these reasons, the Commission
designates the proposal to be effective and operative upon filing with
the Commission.\14\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposal is
consistent with the Act. Persons making written submissions should file
six copies thereof with the Secretary, Securities and Exchange
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of
the submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for inspection and copying in the Commission's
Public Reference Room. Copies of such filing will also be available for
inspection and copying at the principal office of the NASD. All
submissions should refer to file number SR-NASD-2003-132 and should be
submitted by September 17, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-21942 Filed 8-26-03; 8:45 am]
BILLING CODE 8010-01-P