[Federal Register: February 15, 2006 (Volume 71, Number 31)]
[Notices]
[Page 8027-8029]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15fe06-145]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53254; File No. SR-NASD-2006-008]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Proposed Rule Change To Re-establish
a Fee Pilot for National Quotation Data Service
February 8, 2006.
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 January 24, 2006, 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 the Nasdaq. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to re-establish retroactively through September 1,
2005, a pilot program under NASD Rule 7010(h), which reduced from $50
to $10 the monthly fee that non-professional users pay to receive
National Quotation Data Service (``NQDS''). Nasdaq is simultaneously
filing a separate rule proposal to re-establish the same pilot program
prospectively through December 29, 2006, the date the pilot
inadvertently was permitted to lapse. The text of the rule is below.
There is no new proposed language.\3\
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\3\ Changes are marked to the rule text that appears in the
electronic NASD Manual found at http://www.nasd.com. Prior to the
date when The Nasdaq Stock Market LLC (``Nasdaq LLC'' commences
operations, Nasdaq LLC will file a conforming change to the rules of
Nasdaq LLC approved in Securities Exchange Act Release No. 53128
(January 13, 2006).
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7010. System Services
* * * * *
(h) National Quotation Data Service (NQDS)
(1) Except as provided in subparagraph (2) of this section, the
charge to be paid for each interrogation or display device receiving
all or any portion of the information disseminated through the NQDS
shall be $50.00 per
[[Page 8028]]
month. The NQDS information that will be provided through service
consists of individual market maker quotations, Nasdaq Level 1 Service
and the Last Sale Information Service.
(2) The charge to be paid by a non-professional for each
interrogation or display device receiving all or any portion of the
NQDS information disseminated through an authorized vendor shall be
$10.00 per month.
(3) A ``non-professional'' is a natural person who is neither:
(A) Registered or qualified in any capacity with the Commission,
the Commodity Futures Trading Commission, any state securities agency,
any securities exchange or association, or any commodities or futures
contract market or association;
(B) Engaged as an ``investment adviser'' as that term defined in
Section 201(11) of the Investment Advisors Act of 1940 (whether or not
registered or qualified under that Act); nor
(C) Employed by a bank or other organization exempt from
registration under federal or state securities laws to perform
functions that would require registration or qualification if such
functions were performed for an organization not so exempt.
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
Nasdaq proposes to re-establish retroactively through September 1,
2005, 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 \4\ 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-
professionals 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.\5\ The Commission approved
the pilot on August 22, 2000, and the fee reduction commenced on August
31, 2000 on a one-year pilot basis.\6\ On September 5, 2001, August 29,
2002, August 15, 2003, and August 20, 2004, Nasdaq filed proposed rule
changes to extend the pilot for additional one-year periods.\7\
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\4\ Pursuant to NASD Rule 7010(e), Nasdaq separately distributes
Level 1 data to non-professionals for a monthly fee of $1.00.
\5\ See Securities Exchange Act Release No. 43190 (August 22,
2000), 65 FR 52460 (August 29, 2000) (notice of filing and order
granting accelerated approval of NASD-00-47).
\6\ Id.
\7\ See Securities Exchange Act Release Nos. 44788 (September
13, 2001), 66 FR 48303 (September 19, 2001); 46446 (August 30,
2002), 67 FR 57260 (September 9, 2002); 48386 (August 21, 2003), 68
FR 51618 (August 27, 2003); and 50318 (September 3, 2004), 69 FR
54821 (September 10, 2004).
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Nasdaq has consistently supported broad, effective dissemination of
market information to public investors. Thus, Nasdaq is proposing to
re-establish the fee-reduction pilot for the remainder of 2006. The
pilot would cover the period from January 24, 2006, through December
29, 2006. 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 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 would 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
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 Nasdaq operates or controls, and it does not unfairly
discriminate between customers, issuers, brokers or dealers. Nasdaq
also believes that the fee reduction enhances the public's access to
market data that is relevant to investors when they make financial
decisions and encourages 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).
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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.
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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the NASD consents, the Commission will:
(A) By order approve such proposed rule change or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2006-008 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
[[Page 8029]]
All submissions should refer to File Number SR-NASD-2006-008. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 also will be available for inspection and copying at the
principal office of the NASD. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NASD-2006-008 and should be submitted on or before March
8, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
J. Lynn Taylor,
Assistant Secretary.
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\10\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E6-2110 Filed 2-14-06; 8:45 am]
BILLING CODE 8010-01-P