[Federal Register: March 29, 2006 (Volume 71, Number 60)]
[Notices]
[Page 15784-15786]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29mr06-143]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53536; File No. SR-NASD-2006-026]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1 Thereto Establishing CTCI Station-Based
Pricing for Members
March 21, 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 February 22, 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 Nasdaq. Nasdaq filed
Amendment No. 1 to the proposed rule change on March 10, 2006.\3\
Nasdaq has designated this proposal as establishing or changing a due,
fee, or other charge of a self-regulatory organization, pursuant to
section 19(b)(3)(A)(ii) of the Act,\4\ and Rule 19b-4(f)(2)
thereunder,\5\ which renders the proposed rule change effective upon
filing with the Commission. 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.
\3\ For purposes of calculating the 60-day abrogation period,
the Commission considers the period to have commenced on March 10,
2006, the date Nasdaq filed Amendment No. 1.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to modify fees for Nasdaq access through the
Computer to Computer Interface (``CTCI'') protocol.\6\ The text of the
proposed rule change is below. Proposed new language is in italics;
proposed deletions are in brackets.\7\
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\6\ The instant proposed rule change establishes fees for NASD
members. The identical fees for non-memebers were established in SR-
NASD-2006-027. See Securities Exchange Act Release No. 53535 (March
21, 2006).
\7\ 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 confirming change to the rules of
NASDAQ LLC approved in Securites Exchange Act Release No. 53128
(January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131).
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Rule 7010. System Services
(a)-(e) No Change
(f)(1)-(2) No Change
(3) [Computer to computer interface (CTCI) and] Financial
Information Exchange (FIX)
------------------------------------------------------------------------
Options Price
------------------------------------------------------------------------
[Option 1: Dual 56kb lines (one for [$1275/month].
redundancy) single hub and router, and
optional single FIX port.].
[Option 2: Dual 56kb lines (one for [$1600/month].
redundancy), dual hubs (one for
redundancy), and dual routers (one for
redundancy), and optional single FIX
port.].
[Option 3: Dual T1 lines (one for [$8000/month (CTCI or CTCI/
redundancy), dual hubs (one for FIX lines) $4000/month (FIX-
redundancy), dual routers (one for only lines)].
redundancy), and optional single FIX
port. Includes base bandwidth of 128kb.].
FIX Trading Port (NMC and Brut)........... $400/port/month.
FIX Port for Services Other than Trading.. $500/port/month.
Dedicated FIX server...................... $1,000/server/month.
Dedicated FIX server (Brut)............... $3,000/server/month; initial
term of not less than 12
months is required.
[Option 1, 2, or 3 with Message Queue [Fee for Option 1, 2, or 3
software enhancement]. (including any Bandwidth
Enhancement Fee) plus 20%].
[Disaster Recovery Option: Single 56kb [$975/month].
line with single hub and router and
optional single FIX port. (For remote
disaster recovery sites only.)].
[Bandwidth Enhancement Fee (for T1 [$600/month per 64kb
subscribers only)]. increase above 128kb T1
base].
[Installation Fee]........................ [$2000 per site for dual
hubs and routers
$1000 per site for single
hub and router].
[Relocation Fee (for the movement of TCP/ [$1700 per relocation].
IP-capable lines within a single
location)].
------------------------------------------------------------------------
[FIX connectivity through Options 1, 2, or 3 or the Disaster
Recovery Option will not be available to new subscribers that are (i)
NASD members after January 1, 2004, or (ii) not NASD members after the
effective date of SR-NASD-2003-196.]
(4) Computer to Computer Interface (CTCI).
The fees in the table below are applicable to NASD members that
have transitioned off of Nasdaq-supported circuits, and as of July 1,
2006, also apply to NASD members that have not transitioned.
Stations
------------------------------------------------------------------------
Fee component Fee
------------------------------------------------------------------------
1st Station............................... $200/Station/month
Each Additional Station................... $600/Station/month
------------------------------------------------------------------------
[[Page 15785]]
The bandwidth-based fees in the table below apply to NASD members
that have not transitioned off of Nasdaq-supported circuits, and,
pending approval of SR-NASD-2006-027, to non-members as indicated.
Bandwidth
------------------------------------------------------------------------
Fee component Fee
------------------------------------------------------------------------
Single 56kb line with single hub and $900/month for members
router (for remote disaster recovery $975/month for non-members
sites only).
Option 1
Dual 56kb lines (one for redundancy) and $1,000/month for members
single hub and router. $1,275/month for non-members
Option 2
Dual 56kb lines (one for redundancy), dual $1,200/month for members
hubs (one for redundancy), and dual $1,600/month for non-members
router (one for redundancy).
Option 3
Dual T1 lines (one for redundancy), dual $2,500/month for members
hubs (one for redundancy), and dual $8,000/month for non-members
routers (one for redundancy). Includes
base bandwidth of 128kb.
Bandwidth Enhancement Fee (for T1 subscribers only)
Per 64kb increase above 128kb T1 base..... $200/month for members
$600/month for non-members
Option 1, 2, or 3 with Message Queue Fee for Option 1, 2, or 3
software enhancement. (including any Bandwidth
Enhancement Fee) plus 20%
Installation Fee.......................... $2,000 per site for dual
hubs and routers
$1,000 per site for single
hub and router
Relocation Fee (for the movement of TCP/IP- $1,700 per relocation
capable lines within a single location).
------------------------------------------------------------------------
[(4)] (5) New Nasdaq Workstation.
(g)-(w) 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
Nasdaq is modifying fees for member access to Nasdaq through the
CTCI protocol. Through the implementation of FIX and QIX and the sunset
of the SDP/API, Nasdaq has continued towards its goal of allowing firms
and service bureaus to choose their own circuit connectivity provider
for access to Nasdaq's products and services. CTCI is the only
remaining Nasdaq protocol that requires the firm to choose a Nasdaq-
provided circuit for connectivity. In order for Nasdaq to complete its
strategy, Nasdaq seeks to modify the CTCI pricing structure in order to
transition from circuit-based fee components based on bandwidth to
``Station'' fee components that are more synonymous with logical access
ports.
CTCI Stations are logical channels used to manage the flow of data
to and from the firm user. Stations are synonymous with the logical
access ports used for FIX and QIX as they have the same
characteristics, including a one-to-one relationship between the firm
and Station and throughput limits. For this reason, Nasdaq chose a
Station-based fee component for its new pricing. In order to facilitate
the transition, Nasdaq seeks to modify the current bandwidth based fees
to Nasdaq's circuit cost imposed by its carrier plus an administration
cost. Firms that decide not to transition off of Nasdaq supported
circuits will pay the new bandwidth-based fees in addition to Station
fees.
Nasdaq expects almost all firms to transition to new circuit
connections but that the transition date will be different for each
firm. As a result, Nasdaq intends to implement the new pricing
structure once a firm has transitioned to a different circuit
connection. However, the new pricing will be applied to all firms on
July 1, 2006 regardless of the firm's transition plan. Thus, a firm
that transitions will pay only the station fee. A firm that does not
transition will pay only the bandwidth fee prior to July 1, but will
pay both the station and the bandwidth fee between July 1 and the date
when it does transition.
2. Statutory Basis
Nasdaq believes the proposed rule change is consistent with the
provisions of section 15A of the Act,\8\ in general, and sections
15A(b)(5) \9\ of the Act, 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. The proposed rule change will
modify the current CTCI pricing structure in order to transition from
circuit-based fee components based on bandwidth to ``Station'' fee
components that are more synonymous with logical access ports.
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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, as amended.
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 proposed rule change has become effective pursuant to section
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 19b-4
thereunder,\11\ because it establishes or changes a due, fee, or other
charge imposed by NASD. 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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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 15786]]
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-2006-026 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number NASD-2006-026. 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 the filing
also will be available for inspection and copying at the principal
offices of 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 NASD-
2006-026 and should be submitted on or before April 19, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-4515 Filed 3-28-06; 8:45 am]
BILLING CODE 8010-01-P