[Federal Register: September 2, 2003 (Volume 68, Number 169)]
[Notices]
[Page 52262-52264]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02se03-150]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48395; File No. SR-NASD-2003-124]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. To Institute an Hourly Maintenance Fee
Associated With the Use of the Nasdaq Workstation II Service by Persons
That Are Not NASD Members
August 22, 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 6, 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, II,
and III below, which Items have been prepared by Nasdaq.\3\ Nasdaq has
designated the proposed rule change as constituting a ``non-
controversial'' rule change under section 19(b)(3)(A)(iii) of the
Act,\4\ and paragraph (f)(6) of Rule 19b-4 under the Act,\5\ which
renders the proposal effective upon receipt of this filing by the
Commission. 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\ On August 12, 2003, Nasdaq filed an amendment to the
proposed rule change, which it subsequently withdrew. Telephone
conversation between John M. Yetter, Associate General Counsel,
Nasdaq, and Frank N. Genco, Division of Market Regulation
(``Division''), Commission, on August 19, 2003.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to institute an hourly fee for maintenance services
supplied for equipment used in connection with the Nasdaq
WorkstationTM II (``NWII'') service.\6\ Nasdaq proposes to
implement the proposed rule change thirty days after August 6, 2003.\7\
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\6\ This filing applies to persons that are not NASD members. On
August 6, 2003, Nasdaq also submitted a proposed rule change to
implement an identical charge for NASD members. See File No. SR-
NASD-2003-123.
\7\ In this filing, Nasdaq is also moving the text of the
footnote to NASD Rule 7010(f) into the text of the rule to improve
the clarity of the rule's presentation in the NASD Manual.
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[[Page 52263]]
The text of the proposed rule change appears below. New text is in
italics. Deleted text is in brackets.
* * * * *
7000. Charges for Services and Equipment
7010. System Services
(a)-(e) No change.
(f) Nasdaq WorkstationTM Service
(1) The following charges shall apply to the receipt of Level 2 or
Level 3 Nasdaq Service via equipment and communications linkages
prescribed for the Nasdaq.
Workstation II Service:
Service Charge.......................... $2,035/month per service
delivery platform (``SDP'')
Display Charge.......................... $525/month per logon for the
first 150 logons
$200/month for each
additional logon
Additional Circuit/SDP Charge........... $3,235/month[*]
PD and SDP Maintenance:
Monthly maintenance agreement........... $55/presentation device
(``PD'') logon or SDP/month
Hourly fee for maintenance provided $195 per hour (two hour
without monthly maintenance agreement. minimum), plus cost of
parts
A subscriber that accesses Nasdaq Workstation II Service via an
application programming interface (``API'') shall be assessed the
Service Charge for each of the subscriber's SDPs and shall be assessed
the Display Charge for each of the subscriber's logons, including
logons of an NWII substitute or quote-update facility. API subscribers
also shall be subject to the Additional Circuit/SDP Charge.
A subscriber shall be subject to the Additional Circuit/SDP Charge
when the subscriber has not maximized capacity on its SDP(s) by placing
eight logons on an SDP and obtains an additional SDP(s); in such case,
the subscriber shall be charged the Additional Circuit/SDP Charge (in
lieu of the service charge) for each ``underutilized'' SDP(s) i.e., the
difference between the number of SDPs a subscriber has and the number
of SDPs the subscriber would need to support its logons, assuming an
eight-to-one ratio). A subscriber also shall be subject to the
Additional Circuit/SDP Charge when the subscriber has not maximized
capacity on its T1 circuits by placing eighteen SDPs on a T1 circuit;
in such case, the subscriber shall be charged the Additional Circuit/
SDP Charge (in lieu of the service charge) for each ``underutilized''
SDP slot on the existing T1 circuit(s). Regardless of the SDP
allocation across T1 circuits, a subscriber will not be subject to the
Additional Circuit/SDP Charge if the subscriber does not exceed the
minimum number of T1 circuits needed to support its SDP, assuming an
eighteen-to-one ratio.
(2) No change.
[* A subscriber shall be subject to the Additional Circuit/SDP
Charge when the subscriber has not maximized capacity on its SDP(s) by
placing eight logons on an SDP and obtains an additional SDP(s); in
such case, the subscriber shall be charged the Additional Circuit/SDP
Charge (in lieu of the service charge) for each ``underutilized''
SDP(s) (i.e., the difference between the number of SDPs a subscriber
has and the number of SDPs the subscriber would need to support its
logons, assuming an eight-to-one ratio). A subscriber also shall be
subject to the Additional Circuit/SDP Charge when the subscriber has
not maximized capacity on its T1 circuits by placing eighteen SDPs on a
T1 circuit; in such case, the subscriber shall be charged the
Additional Circuit/SDP Charge (in lieu of the service charge) for each
``underutilized'' SDP slot on the existing T1 circuit(s). Regardless of
the SDP allocation across T1 circuits, a subscriber will not be subject
to the Additional Circuit/SDP Charge if the subscriber does not exceed
the minimum number of T1 circuits needed to support its SDP, assuming
an eighteen-to-one ratio.]
(g)-(u) No change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq 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. Nasdaq 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
The NWII service allows market participants to access SuperMontage
and other Nasdaq facilities through Nasdaq's Enterprise Wide Network II
(``EWN II''). Each NWII subscriber location has at least one service
delivery platform (``SDP'') that connects to the EWN II by a dedicated
T1 circuit pair. The subscriber then connects the workstations used by
its employees to the SDP. Workstations may be either Nasdaq Workstation
presentation devices (``PDs'') provided by Nasdaq, or workstations and
software supplied by the subscriber (often referred to as an
``application programming interface'' device, or an ``NWII
substitute'').
Nasdaq currently allows subscribers to contract with Nasdaq for
maintenance of their NWII PDs and SDPs on a monthly basis, at the rate
of $55 per PD logon or SDP per month. Maintenance is provided by Nasdaq
personnel in the New York metropolitan area and by a contractor in
other areas of the country. Nasdaq is now proposing to supplement this
monthly maintenance option with an hourly maintenance option for
subscribers that may not wish to commit to a monthly maintenance
agreement. The fee for maintenance provided without a monthly
maintenance agreement will be $195 per hour, with a two-hour minimum
charge for all service calls, plus the cost of parts supplied.
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 section
15A(b)(5) of the Act,\9\ in particular, in that it provides for the
equitable allocation of reasonable dues, fees, and other charges among
members and issuers and other persons using any facility or system
which the NASD operates or controls.
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\8\ 15 U.S.C. 78o-3.
\9\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
[[Page 52264]]
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
The foregoing proposed rule change has become effective pursuant to
section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6)
thereunder,\11\ because the proposal does not: (1) Significantly affect
the protection of investors or the public interest; (2) impose any
significant burden on competition; and (3) become operative until 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, and Nasdaq provided the Commission with
written notice of its intent to file the proposed rule change at least
five business days prior to the date of filing of the proposed rule
change,\12\ or such shorter time as designated by the Commission.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ On July 28, 2003, Nasdaq provided the Commission with
written notice of its intent to file the proposed rule change. See
letter from John M. Yetter, Associate General Counsel, Nasdaq, to
Katherine A. England, Assistant Director, Division, Commission,
dated July 28, 2003.
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At any time within 60 days of August 6, 2003, 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.\13\
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\13\ See 15 U.S.C. 78(b)(3)(C).
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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 proposed rule
change 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 filings will also be
available for inspection and copying at the principal office of the
NASD. All submissions should refer to File No. SR-NASD-2003-124 and
should be submitted by September 23, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-22231 Filed 8-29-03; 8:45 am]
BILLING CODE 8010-01-P