Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Create a Uniform Pricing Structure for the Nasdaq Market Center, 22733-22735 [E5-2078]
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Federal Register / Vol. 70, No. 83 / Monday, May 2, 2005 / Notices
corporate name, ‘‘Association,’’ or ‘‘the
NASD.’’
II. Summary of Comment and NASD’s
Response
The Commission received two
comment letters on the proposed rule
change that opposed the adoption of the
proposal in its current form.10
Specifically, one commenter stated
that the proposed rule change requiring
principals to attend compliance
meetings at the NASD was
‘‘bureaucratic excess and self
indulgence’’ as well as difficult to
comply with for handicapped
individuals.11 A second commenter
stated that the NASD’s proposal would
‘‘impose an undue hardship both in
time and monetarily’’ for small firms.12
NASD responded by stating that the
commenters mischaracterized the
proposal. NASD explained that the
proposal requires the attendance of
registered principals (in addition to
registered representatives) at annual
compliance meetings that are conducted
by their respective member firms, not
the NASD. Furthermore, NASD
responded to the commenters’ concerns
by noting that the rule itself states that
members are provided with substantial
flexibility in implementing the
compliance meeting requirement. NASD
further stated that the proposal
expressly allows the compliance
meeting to be conducted at a principal’s
place of business and outside of regular
business hours. Additionally the
meeting may be conducted by video
conference, interactive classroom
setting, telephone or other interactive
means provided appropriate safeguards
are in place.13
III. Discussion
The Commission has carefully
reviewed the proposed rule change, the
comment letters, and NASD’s response
and finds that the proposed rule change,
as amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities association.14 In
particular, the Commission finds that
the proposed rule change, as amended,
is consistent with Section 15A.15
Specifically, the Commission finds that
the proposed rule change is consistent
with Section 15A(b)(6) of the Act
10 See
First Winston Letter and Bandes Letter.
Bandes Letter.
12 See First Winston Letter.
13 See NASD Response Letter.
14 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
15 15 U.S.C. 78o–3.
11 See
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because it is designed to promote just
and equitable principals of trade, to
foster cooperation and coordination
with persons engaged in regulating,
clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.16
The NASD’s response to the
comments adequately addresses the
concerns raised. Moreover, the
Commission believes that requiring
registered principals to attend an
interview or meeting at least annually at
which relevant compliance matters are
discussed will help to ensure that
registered principals are current on new
compliance requirements and changes
at their firms.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–NASD–2005–
004), as amended, is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.18
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2065 Filed 4–29–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51609; File No. SR–NASD–
2005–013]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change and
Amendment No. 1 Thereto To Create a
Uniform Pricing Structure for the
Nasdaq Market Center
April 26, 2005.
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
8, 2005, 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
PO 00000
U.S.C. 78o–3(b)(6).
U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
22733
Items I, II, and III below, which Items
have been prepared by Nasdaq. On
April 19, 2005, Nasdaq amended the
proposed rule change.3 The Commission
is publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to establish a
uniform schedule of fees for all market
participants using the trade execution
services of the Nasdaq Market Center.
Nasdaq would implement the proposed
rule change immediately upon approval
by the Commission. The text of the
proposed rule change, as amended, is
available on Nasdaq’s Web site (https://
www.nasdaq.com/about/
LegalCompliance.stm), at Nasdaq’s
principal office, and at the
Commission’s Public Reference Room.
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 proposing the adoption of
a uniform pricing and credit rebate
structure applicable to all users of the
Nasdaq Market Center. Under the
proposal, all users of the Nasdaq Market
Center would be charged the same tierbased per-share amounts for entering
orders into the system, and all users
would be entitled to the same tier-based
levels of rebate credits based on the
liquidity provided by those orders.4
To accomplish this, Nasdaq proposes
to: (1) Eliminate the separate $0.001 fee
it currently imposes on market
participants for non-directed or
preferenced orders that access the
quote/orders of market participants that
charge access fees for accessing their
16 15
17 15
Frm 00107
Fmt 4703
Sfmt 4703
3 See Amendment No. 1 (replacing and
superseding the original filing in its entirety).
4 This same pricing structure also applies to
Nasdaq’s Brut facility.
E:\FR\FM\02MYN1.SGM
02MYN1
22734
Federal Register / Vol. 70, No. 83 / Monday, May 2, 2005 / Notices
quotes/orders through the Nasdaq
Market Center; and (2) require that
electronic communication networks
(‘‘ECNs’’) and alternative trading
systems (‘‘ATSs’’) that wish to
participate in the Nasdaq Market Center
not charge any fee to broker-dealers that
access them through the Nasdaq Market
Center.
Nasdaq believes that the adoption of
a uniform fee structure appropriately
recognizes the similarities among all
categories of market participants when
they provide liquidity through the
display of priced orders using the
Nasdaq Market Center. Further, Nasdaq
believes that adoption of the uniform
pricing structure described above would
increase the level of cost certainty and
price transparency for users of the
Nasdaq Market Center, thereby allowing
them to make better-informed decisions
about where and how to place their
orders for potential execution. Finally,
by centralizing through Nasdaq the
imposition and collection of fees and
the payment of credit rebates, Nasdaq
expects to reduce the administrative
burden on many market participants
that currently pay execution fees and
receive rebates for transactions initiated
through the Nasdaq Market Center using
a variety of payment processes,
depending on the counter-party to a
specific trade.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of section 15A of the Act,5 in
general and with section 15A(b)(6) of
the Act,6 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
In addition, Nasdaq believes that
establishing uniform pricing across all
categories of market participants is
consistent with section 15A(b)(5),7 as
well as Commission Regulation ATS,8
the Adopting Release for which stated
that ‘‘[t]here are a number of ways the
exchange or association could address
the issue of fees charged by alternative
5 15
U.S.C. 78o–3.
U.S.C. 78o-3(b)(6).
7 15 U.S.C. 78o–3(b)(5).
8 17 CFR 242.300 et seq.
6 15
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trading systems. For example, subject to
Commission review and approval, an
exchange or association could establish
a standard for what constitutes a fair
and reasonable fee for non-subscriber
access to an alternative trading
system.’’ 9 Furthermore, Regulation
ATS’ Rule 301(b)(4) provides in relevant
part that, ‘‘* * * if the national
securities exchange or national
securities association to which an
alternative trading system provides the
prices and sizes of orders * * *
establishes rules designed to ensure
consistency with standards for access to
the quotations displayed on such
national securities exchange, or the
market operated by such national
securities association, the alternative
trading system shall not charge any fee
to members that is contrary to, that is
not disclosed in the manner required by,
or that is inconsistent with any standard
of equivalent access established by such
rules.’’ 10
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change would result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
As the Commission noted in its
approval of SR–NASD–2003–128, which
created the current $0.003 per-share
maximum ECN access fee, the ability of
an SRO to establish access fee standards
is specifically permitted by Regulation
ATS, and not prohibited by either
sections 15A or 6(e) of the Exchange
Act.11 In addition, the Commission
reiterated that, for an access fee rule to
be approved by the Commission, the
rule must be necessary to maintain
consistency within the SRO’s market
and be designed to promote just and
equitable principles of trade, to promote
fair competition, to facilitate
transactions in securities, and in
general, to protect investors and the
public interest.12 Nasdaq believes that
the instant proposal satisfies these
requirements.
First, the Nasdaq Market Center
remains a voluntary system, and ECNs
unwilling to accept the same fee
structure as other users of the Nasdaq
Market Center are free to trade on other
venues or participate in the Nasdaq
Market Center as order-entry firms.
Second, as noted above, Nasdaq’s
9 Securities Exchange Act Release No. 40760 (Dec.
8, 1998), 63 FR 70844, 70871 (Dec. 22, 1998).
10 17 CFR 242.301(b)(4).
11 Securities Exchange Act Release No. 49220
(Feb. 11, 2004), 69 FR 7836, 7841–42 (Feb. 19,
2004).
12 See id. at 7840.
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
proposal is designed to provide a level
of cost-certainty and price transparency
that seeks to encourage greater use of
the Nasdaq Market Center—including
increased participation by market
makers, order-entry firms, and ECNs.
Finally, the proposed uniform fee
structure ensures the equal treatment of
all users of the system, maintains
consistency within the Nasdaq Market
Center, and prevents the system’s
neutral execution algorithms from being
used to impose non-competitive fees on
other market participants.
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 self-regulatory
organization 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, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–013 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–NASD–2005–013. This file
number should be included on the
subject line if e-mail is used. To help the
E:\FR\FM\02MYN1.SGM
02MYN1
Federal Register / Vol. 70, No. 83 / Monday, May 2, 2005 / Notices
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 (https://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
Section. 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–2005–013 and
should be submitted on or before May
23, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2078 Filed 4–29–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51611; File No. SR–NASD–
2005–026]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Order Approving
Proposed Rule Change Relating to
TRACE Market Data Fees
April 26, 2005.
I. Introduction
On February 11, 2005, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’)1 and Rule 19b–4 thereunder,2 a
proposed rule change relating to
Transaction Reporting and Compliance
Engine (‘‘TRACE’’) market data fees. The
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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19:05 Apr 29, 2005
Jkt 205001
Commission published the proposed
rule change for comment in the Federal
Register on March 16, 2005.3 The
Commission received one comment
letter on the proposal.4 On April 25,
2005, NASD filed a response to the
comment letter.5 This order approves
the proposed rule change.
II. Description of the Proposed Rule
Change
The proposed rule change would
amend NASD Rule 7010(k) relating to
TRACE transaction data to: (i)
Terminate the Bond Trade
Dissemination Service (‘‘BTDS’’)
Internal Usage Authorization Fee and
the BTDS External Usage Authorization
Fee and, in lieu of both fees, establish
a Vendor Real-Time Data Feed Fee; (ii)
define the term ‘‘Tax Exempt
Organization,’’ and amend the defined
term ‘‘Non-Professional’’ for purposes of
NASD Rule 7010(k)(3); and (iii) make
other minor, technical amendments.
The proposal is discussed in greater
detail in the Commission’s notice
soliciting public comment.6
III. Summary of Comments Received
and NASD Response
The Commission received one
comment letter on the proposal.7 The
SIA Letter supports NASD’s proposed
rule change. However, the commenter
requests that NASD clarify whether
‘‘market data subscribers who are
natural persons using a brokerage
account established in the name of an
entity name they or their family
control’’ are considered ‘‘NonProfessional’’ within the meaning of the
rule.8 In addition, the commenter states,
with regard to a reduced fee for Tax
Exempt Organizations, that further
review ‘‘may be warranted to determine
the justifiable basis for a reduced fee,
including a better description of the tax
exempt organizations that would benefit
from a reduced price structure, a better
explanation as to why the reduced fee
is necessary, and an analysis of the
potential impact such a proposal may
have on competition.’’9
3 Securities Exchange Act Release No. 51336
(March 9, 2005), 70 FR 12921 (March 16, 2005)
(‘‘Notice’’).
4 See letter from Andrew C. Wels, Chairman,
Technology & Regulation Market Data
Subcommittee, Securities Industry Association
(‘‘SIA’’), to Jonathan G. Katz, Secretary,
Commission, received April 8, 2005 (undated)
(‘‘SIA Letter’’).
5 See letter from Sharon K. Zackula, Associate
General Counsel, NASD, to Katherine A. England,
Assistant Director, Division of Market Regulation,
Commission, dated April 25, 2005 (‘‘NASD Letter’’).
6 See Notice, supra note 3.
7 SIA Letter, supra note 4.
8 Id. at 3.
9 Id. at 4.
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Frm 00109
Fmt 4703
Sfmt 4703
22735
In response to the SIA Letter, NASD
states that it ‘‘will consider identifying
certain non-natural persons as ‘‘NonProfessionals’’ as part of its continuing
review and interpretation of TRACE
data fees and access.’’10 In addition,
NASD states that ‘‘[t]he proposed
definition of Tax-Exempt Organization
limits significantly the number and type
of organizations that may apply to
receive Real-Time TRACE transaction
data at the reduced fee and, by
definition, limits the use of Real-Time
TRACE transaction data solely for data
access programs for the benefit of
individual investors and not for
commercial purposes.’’11 Given these
restrictions, NASD does not believe that
the proposal will result in any burden
on competition that is not necessary or
appropriate in furtherance of the
purposes of the Act.12
The SIA Letter also stated that the
rationale NASD followed in its
proposal—that financial services
industry employees should be
considered non-professionals when they
access data for personal, noncommercial uses—should be applied
uniformly to all other individual
subscribers of bond or equity market
data no matter which self regulatory
organization, directly or indirectly,
controls the market data.13 The SIA
Letter petitions the Commission for
rulemaking to review the definitions of
‘‘Professional’’ and ‘‘Non-Professional’’
as interpreted for market data fee and
administrative purposes by the
Consolidated Tape Association, the
NASDAQ UTP Plan, the New York
Stock Exchange, NASDAQ, the Options
Price Reporting Authority, and NASD.14
This petition will be considered
separately from this proposal.
IV. Discussion
After careful consideration, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder that are
applicable to a national securities
association.15 In particular, the
Commission believes that the proposed
rule change is consistent with section
10 NASD Letter at 2 (‘‘For purposes of TRACE
fees, NASD has interpreted the term ‘‘NonProfessional’’ to further NASD’s goal of providing
access to TRACE market data at no charge to
persons who seek to use TRACE market data for
personal, rather than commercial, purposes.’’).
11 Id. at 3.
12 See id.
13 SIA Letter at 1.
14 See id.
15 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\02MYN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 83 (Monday, May 2, 2005)]
[Notices]
[Pages 22733-22735]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2078]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51609; File No. SR-NASD-2005-013]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendment
No. 1 Thereto To Create a Uniform Pricing Structure for the Nasdaq
Market Center
April 26, 2005.
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 8, 2005, 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. On April 19,
2005, Nasdaq amended the proposed rule change.\3\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Amendment No. 1 (replacing and superseding the original
filing in its entirety).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to establish a uniform schedule of fees for all
market participants using the trade execution services of the Nasdaq
Market Center. Nasdaq would implement the proposed rule change
immediately upon approval by the Commission. The text of the proposed
rule change, as amended, is available on Nasdaq's Web site (https://
www.nasdaq.com/about/LegalCompliance.stm), at Nasdaq's principal
office, and at the Commission's Public Reference Room.
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 proposing the adoption of a uniform pricing and credit
rebate structure applicable to all users of the Nasdaq Market Center.
Under the proposal, all users of the Nasdaq Market Center would be
charged the same tier-based per-share amounts for entering orders into
the system, and all users would be entitled to the same tier-based
levels of rebate credits based on the liquidity provided by those
orders.\4\
---------------------------------------------------------------------------
\4\ This same pricing structure also applies to Nasdaq's Brut
facility.
---------------------------------------------------------------------------
To accomplish this, Nasdaq proposes to: (1) Eliminate the separate
$0.001 fee it currently imposes on market participants for non-directed
or preferenced orders that access the quote/orders of market
participants that charge access fees for accessing their
[[Page 22734]]
quotes/orders through the Nasdaq Market Center; and (2) require that
electronic communication networks (``ECNs'') and alternative trading
systems (``ATSs'') that wish to participate in the Nasdaq Market Center
not charge any fee to broker-dealers that access them through the
Nasdaq Market Center.
Nasdaq believes that the adoption of a uniform fee structure
appropriately recognizes the similarities among all categories of
market participants when they provide liquidity through the display of
priced orders using the Nasdaq Market Center. Further, Nasdaq believes
that adoption of the uniform pricing structure described above would
increase the level of cost certainty and price transparency for users
of the Nasdaq Market Center, thereby allowing them to make better-
informed decisions about where and how to place their orders for
potential execution. Finally, by centralizing through Nasdaq the
imposition and collection of fees and the payment of credit rebates,
Nasdaq expects to reduce the administrative burden on many market
participants that currently pay execution fees and receive rebates for
transactions initiated through the Nasdaq Market Center using a variety
of payment processes, depending on the counter-party to a specific
trade.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of section 15A of the Act,\5\ in general and with
section 15A(b)(6) of the Act,\6\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78o-3.
\6\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
In addition, Nasdaq believes that establishing uniform pricing
across all categories of market participants is consistent with section
15A(b)(5),\7\ as well as Commission Regulation ATS,\8\ the Adopting
Release for which stated that ``[t]here are a number of ways the
exchange or association could address the issue of fees charged by
alternative trading systems. For example, subject to Commission review
and approval, an exchange or association could establish a standard for
what constitutes a fair and reasonable fee for non-subscriber access to
an alternative trading system.'' \9\ Furthermore, Regulation ATS' Rule
301(b)(4) provides in relevant part that, `` * * * if the national
securities exchange or national securities association to which an
alternative trading system provides the prices and sizes of orders * *
* establishes rules designed to ensure consistency with standards for
access to the quotations displayed on such national securities
exchange, or the market operated by such national securities
association, the alternative trading system shall not charge any fee to
members that is contrary to, that is not disclosed in the manner
required by, or that is inconsistent with any standard of equivalent
access established by such rules.'' \10\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78o-3(b)(5).
\8\ 17 CFR 242.300 et seq.
\9\ Securities Exchange Act Release No. 40760 (Dec. 8, 1998), 63
FR 70844, 70871 (Dec. 22, 1998).
\10\ 17 CFR 242.301(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change would result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. As the Commission
noted in its approval of SR-NASD-2003-128, which created the current
$0.003 per-share maximum ECN access fee, the ability of an SRO to
establish access fee standards is specifically permitted by Regulation
ATS, and not prohibited by either sections 15A or 6(e) of the Exchange
Act.\11\ In addition, the Commission reiterated that, for an access fee
rule to be approved by the Commission, the rule must be necessary to
maintain consistency within the SRO's market and be designed to promote
just and equitable principles of trade, to promote fair competition, to
facilitate transactions in securities, and in general, to protect
investors and the public interest.\12\ Nasdaq believes that the instant
proposal satisfies these requirements.
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\11\ Securities Exchange Act Release No. 49220 (Feb. 11, 2004),
69 FR 7836, 7841-42 (Feb. 19, 2004).
\12\ See id. at 7840.
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First, the Nasdaq Market Center remains a voluntary system, and
ECNs unwilling to accept the same fee structure as other users of the
Nasdaq Market Center are free to trade on other venues or participate
in the Nasdaq Market Center as order-entry firms. Second, as noted
above, Nasdaq's proposal is designed to provide a level of cost-
certainty and price transparency that seeks to encourage greater use of
the Nasdaq Market Center--including increased participation by market
makers, order-entry firms, and ECNs. Finally, the proposed uniform fee
structure ensures the equal treatment of all users of the system,
maintains consistency within the Nasdaq Market Center, and prevents the
system's neutral execution algorithms from being used to impose non-
competitive fees on other market participants.
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 self-regulatory organization 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, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2005-013 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-NASD-2005-013. This file
number should be included on the subject line if e-mail is used. To
help the
[[Page 22735]]
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 (https://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 Section. 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-2005-013 and should be submitted on or before May 23, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2078 Filed 4-29-05; 8:45 am]
BILLING CODE 8010-01-P
