Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify the Fees for Non-Members Using the New Testing Facility, 38987-38989 [E5-3537]
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Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Notices
and market demands, Nasdaq believes
the proposed rule supports efficient use
of existing systems and ensures that the
charges associated with such use are
allocated equitably. The proposed rule
change will apply to NASD members
seeking access to the NTF. This fee
schedule is identical to the new fee
schedule that Nasdaq proposes to charge
persons that are not NASD members
that also seek access to the NTF.
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
Because the foregoing rule change
establishes or changes a due, fee, or
other charge imposed by the NASD, it
has become effective pursuant to
Section 19(b)(3)(A) of the Act 9 and Rule
19b–4(f)(2) 10 thereunder. At any time
within 60 days of the filing of such
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.
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:
Number SR–NASD–2005–076 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–51933; File No. SR–NASD–
2005–075]
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–NASD–2005–076. 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 (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
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of Nasdaq. 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–2005–076 and
should be submitted on or before July
27, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–3536 Filed 7–5–05; 8:45 am]
BILLING CODE 8010–01–P
Electronic Comments
U.S.C. 78s(b)(3)(A).
CFR 19b–4(f)(2).
11 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The Commission has made minor technical
changes to this notice with Nasdaq’s consent.
10 17
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Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Modify the Fees for
Non-Members Using the New Testing
Facility
June 28, 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 June 16,
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.3 Nasdaq
filed the proposed rule change pursuant
to Section 19(b)(3)(A) of the Act 4 and
Rule 19b–4(f)(6) thereunder,5 which
renders the proposed rule change
effective upon filing with the
Commission.6 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq is filing this proposed rule
change to simplify the fee schedule for
connectivity and testing fees for persons
that are not NASD members wishing to
access the Nasdaq Testing Facility
(‘‘NTF’’). Nasdaq will implement the
change to NASD Rule 7050(d) on or
about August 1, 2005.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
[brackets].
*
*
*
*
*
7000. CHARGES FOR SERVICES AND
EQUIPMENT
7050. Other Services
• 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
9 15
38987
(a)–(c) No change.
(d) Nasdaq Testing Facility
(1) Subscribers that conduct tests of
their Nasdaq access protocols
Telephone conversation between Katherine A.
England, Assistant Director, Jan Woo, Attorney,
Division of Market Regulation, Commission, and
Eric Lai, Assistant General Counsel, Nasdaq, dated
June 23, 2005.
4 15 U.S.C. 78s(b)(3)(A).
5 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00126
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Sfmt 4703
6 Nasdaq provided the Commission with written
notice of its intention to file the proposed rule
change on June 14, 2005. The Commission received
Nasdaq’s submission, and asked Nasdaq to file the
instant proposed rule change, pursuant to Rule
19b–4(f)(6) under the Act. 17 CFR 240.19–4(f)(6).
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Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Notices
connection (which includes computerto-computer interface (CTCI), NWII
application programming interface
$285/hour ....................
[$75/hour] ....................
No Charge ...................
$333/hour ....................
data vendor feeds through the Nasdaq
Testing Facility (NTF) shall pay the
following charges:
For [an] Active Connection testing using current Nasdaq access protocols [CTCI/NWII API/FIX testing] during the normal operating hours of the NTF;
[For an Idle Connection for CTCI/NWII API/FIX testing during the normal operating hours of the NTF, unless such an
Idle Connection is over a dedicated circuit;]
For [an ]Idle Connection testing using current Nasdaq access protocols [for CTCI/NWII API/FIX testing if such an Idle
Connection is over a dedicated circuit during the normal operating hours of the NTF];
For Active Connection [CTCI/NWII API/FIX] testing using current Nasdaq access protocols [(for both Active and Idle
Connections)] at all times other than the normal operating hours of the NTF.
(2)(A) An ‘‘Active Connection’’
commences when the user begins to
send and/or receive a transaction to and
from the NTF and continues until the
earlier of disconnection or the
commencement of an Idle Connection.
(B) An ‘‘Idle Connection’’ commences
after a Period of Inactivity and
continues until the earlier of
disconnection or the commencement of
an Active Connection. If a Period of
Inactivity occurs immediately after
subscriber’s connection to the NTF is
established and is then immediately
followed by an Idle Connection, then
such Period of Inactivity shall also be
deemed a part of the Idle Connection.
(C) A ‘‘Period of Inactivity’’ is an
uninterrupted period of time of
specified length when the connection is
open but the NTF is not receiving from
or sending to subscriber any
transactions. The length of the Period of
Inactivity shall be such period of time
between [5]10 minutes and [10]60
minutes in length as Nasdaq may
specify from time to time by giving
notice to users of the NTF.
(3)–(5) 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
parts of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Currently, the fees for the NTF are
assessed based on Active Testing, where
the user is sending and receiving
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(API), Financial Information Exchange
(FIX) interface, and Nasdaq Information
Exchange (QIX) interface) or market
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transactions, and Idle Testing, where the
user is connected to the NTF, but not
sending or receiving transactions. The
current fees for Active Testing and Idle
Testing are $285 per hour and $75 per
hour respectively. The proposed rule
change simplifies the NTF fee schedule
by eliminating the Idle Testing fees and
modifying the parameters for Active
Testing. Nasdaq believes that the
proposed rule change will make the
NTF services more cost-effective for
Nasdaq’s customers.
Nasdaq’s customers have historically
accessed the NTF through dial-up
connections using either Nasdaq’s
computer-to-computer interface (CTCI)
or the NWII application programming
interface (API). As Nasdaq transitions to
new technology (i.e., FIX and QIX) 7,
Nasdaq believes that users will
increasingly access the NTF using high
bandwidth Internet or Extranet
connections that are ‘‘always on’’. The
Idle Testing fee was originally designed
to discourage customers from needlessly
taking a limited number of dial-up
connections when no testing was being
performed. Some NTF users have
created automated connection
mechanisms that automatically access
the NTF on a periodic basis. These firms
sometimes unknowingly maintain idle
connections and only discover the
problem after days or weeks of idly
connecting to the NTF. By eliminating
the Idle Testing fee, these users will
only be charged when Active Testing
occurs, and will not be charged for idle
connections.
In addition to eliminating fees for Idle
Testing, Nasdaq proposes to change the
time period for when an Idle
Connection commences from five to 10
minutes in length to 10 to 60 minutes
in length. Initially, the period during
(Financial Information Exchange) and QIX
(Nasdaq Information Exchange) are new messaging
protocols that are used by customers to
communicate with Nasdaq’s systems. See Securities
Exchange Act Release Nos. 48387 (August 21,
2003), 68 FR 51619 (August 27, 2003) (SR–NASD–
2003–117); 48452 (September 5, 2003), 68 FR 53767
(September 12, 2003) (SR–NASD–2003–118); and
51170 (February 9, 2005), 70 FR 7988 (February 16,
2005) (SR–NASD–2005–002).
PO 00000
7 FIX
Frm 00127
Fmt 4703
Sfmt 4703
which a connection needs to remain
inactive before it will be deemed idle
will be 60 minutes. Nasdaq, however,
reserves the right to adjust this time
within a range of 10 to 60 minutes by
giving notice of the change to NTF
subscribers. The proposed rule change
also clarifies that the fee schedule for
access to the NTF applies to all Active
Connection testing regardless of the
Nasdaq access protocols used to access
the NTF. Thus, the new modified NTF
fee schedule will also apply to QIX and
other access protocols that Nasdaq may
offer in the future.
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) 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. By
modifying the NTF pricing structure to
be more responsive to subscriber needs
and market demands, Nasdaq believes
the proposed rule supports efficient use
of existing systems and ensures that the
charges associated with such use are
allocated equitably. The proposed rule
change will apply to non-members
(usually service bureaus) seeking access
to the NTF. This fee schedule is
identical to the new fee schedule that
Nasdaq proposes to charge NASD
members seeking access to the NTF.
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.
8 15
9 15
E:\FR\FM\06JYN1.SGM
U.S.C. 78o–3.
U.S.C. 78o–3(b)(5).
06JYN1
Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Notices
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: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) 10 of the Act and
Rule 19b–4(f)(6) thereunder.11
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.
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:
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
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of Nasdaq.
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–2005–075 and
should be submitted on or before July
27, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–3537 Filed 7–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51931; File No. SR–NASD–
2005–052]
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–2005–075 on the
subject line.
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Order Approving
Proposed Rule Change and
Amendments No. 1 and No. 2 Thereto
Relating to Honorarium for Arbitrators
Deciding Discovery-Related Motions
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–NASD–2005–075. 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
I. Introduction
On April 14, 2005, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’), through its wholly owned
subsidiary, NASD Dispute Resolution,
Inc. (‘‘NASD Dispute Resolution’’), filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘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 an
honorarium for arbitrators deciding
June 28, 2005.
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
10 15
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
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16:35 Jul 05, 2005
1 15
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38989
discovery-related motions. On April 29,
2005, NASD Dispute Resolution
submitted Amendment No. 1 to the
proposed rule change. On May 6, 2005,
NASD Dispute Resolution submitted
Amendment No. 2. The proposed rule
change, as amended, was published for
comment in the Federal Register on
May 19, 2005.3 The Commission
received one comment on the proposal.
For the reasons discussed below, the
Commission is approving the proposed
rule change, as amended.
II. Description of the Proposed Rule
Change
A. Description of the Proposal
In 2002, NASD Dispute Resolution
conducted arbitrator focus groups across
the country. One of the consistently
raised concerns was the amount of time
and effort invested by chairpersons in
reviewing and deciding various
discovery motions, especially in
situations in which the motions are
decided without a hearing (i.e., on the
papers). Also, Dispute Resolution staff
has found that the current lack of
compensation for deciding such
motions has made it more difficult to
recruit current arbitrators to become
chairpersons. Currently, arbitrators are
not compensated for deciding discovery
motions on the papers. Arbitrators are
compensated, however, when they
conduct pre-hearing conferences to hear
arguments from parties regarding
discovery motions.
NASD, therefore, proposed to adopt a
rule to compensate arbitrators in the
amount of $200 (the same amount that
is paid for an arbitrator to participate in
a pre-hearing conference regarding
discovery) to decide discovery motions
on the papers. The new rule language
states that NASD will pay arbitrators an
honorarium of $200 to decide a
discovery-related motion without a
hearing session. For purposes of this
rule, a discovery-related motion and any
replies or other correspondence relating
to the motion will be considered to be
a single motion. If more than one
arbitrator considers a discovery-related
motion, each arbitrator will receive
$200. The panel will allocate the cost of
the honoraria as part of the eventual
arbitration award. The rule will not
apply to simplified cases administered
under Rules 10203 and 10302.
B. Comment Summary
The proposal was published for
comment in the Federal Register on
3 See Securities Exchange Act Release No. 51693
(May 12, 2005), 70 FR 28972 (May 19, 2005) (the
‘‘Notice’’).
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]]>Agencies
[Federal Register Volume 70, Number 128 (Wednesday, July 6, 2005)]
[Notices]
[Pages 38987-38989]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3537]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51933; File No. SR-NASD-2005-075]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Modify the Fees for Non-Members Using the New Testing
Facility
June 28, 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 June 16, 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.\3\ Nasdaq
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which renders the proposed
rule change effective upon filing with the Commission.\6\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The Commission has made minor technical changes to this
notice with Nasdaq's consent. Telephone conversation between
Katherine A. England, Assistant Director, Jan Woo, Attorney,
Division of Market Regulation, Commission, and Eric Lai, Assistant
General Counsel, Nasdaq, dated June 23, 2005.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
\6\ Nasdaq provided the Commission with written notice of its
intention to file the proposed rule change on June 14, 2005. The
Commission received Nasdaq's submission, and asked Nasdaq to file
the instant proposed rule change, pursuant to Rule 19b-4(f)(6) under
the Act. 17 CFR 240.19-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq is filing this proposed rule change to simplify the fee
schedule for connectivity and testing fees for persons that are not
NASD members wishing to access the Nasdaq Testing Facility (``NTF'').
Nasdaq will implement the change to NASD Rule 7050(d) on or about
August 1, 2005.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in [brackets].
* * * * *
7000. CHARGES FOR SERVICES AND EQUIPMENT
7050. Other Services
(a)-(c) No change.
(d) Nasdaq Testing Facility
(1) Subscribers that conduct tests of their Nasdaq access protocols
[[Page 38988]]
connection (which includes computer-to-computer interface (CTCI), NWII
application programming interface (API), Financial Information Exchange
(FIX) interface, and Nasdaq Information Exchange (QIX) interface) or
market data vendor feeds through the Nasdaq Testing Facility (NTF)
shall pay the following charges:
------------------------------------------------------------------------
------------------------------------------------------------------------
$285/hour.............................. For [an] Active Connection
testing using current Nasdaq
access protocols [CTCI/NWII
API/FIX testing] during the
normal operating hours of the
NTF;
[$75/hour]............................. [For an Idle Connection for
CTCI/NWII API/FIX testing
during the normal operating
hours of the NTF, unless such
an Idle Connection is over a
dedicated circuit;]
No Charge.............................. For [an ]Idle Connection
testing using current Nasdaq
access protocols [for CTCI/
NWII API/FIX testing if such
an Idle Connection is over a
dedicated circuit during the
normal operating hours of the
NTF];
$333/hour.............................. For Active Connection [CTCI/
NWII API/FIX] testing using
current Nasdaq access
protocols [(for both Active
and Idle Connections)] at all
times other than the normal
operating hours of the NTF.
------------------------------------------------------------------------
(2)(A) An ``Active Connection'' commences when the user begins to
send and/or receive a transaction to and from the NTF and continues
until the earlier of disconnection or the commencement of an Idle
Connection.
(B) An ``Idle Connection'' commences after a Period of Inactivity
and continues until the earlier of disconnection or the commencement of
an Active Connection. If a Period of Inactivity occurs immediately
after subscriber's connection to the NTF is established and is then
immediately followed by an Idle Connection, then such Period of
Inactivity shall also be deemed a part of the Idle Connection.
(C) A ``Period of Inactivity'' is an uninterrupted period of time
of specified length when the connection is open but the NTF is not
receiving from or sending to subscriber any transactions. The length of
the Period of Inactivity shall be such period of time between [5]10
minutes and [10]60 minutes in length as Nasdaq may specify from time to
time by giving notice to users of the NTF.
(3)-(5) 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Currently, the fees for the NTF are assessed based on Active
Testing, where the user is sending and receiving transactions, and Idle
Testing, where the user is connected to the NTF, but not sending or
receiving transactions. The current fees for Active Testing and Idle
Testing are $285 per hour and $75 per hour respectively. The proposed
rule change simplifies the NTF fee schedule by eliminating the Idle
Testing fees and modifying the parameters for Active Testing. Nasdaq
believes that the proposed rule change will make the NTF services more
cost-effective for Nasdaq's customers.
Nasdaq's customers have historically accessed the NTF through dial-
up connections using either Nasdaq's computer-to-computer interface
(CTCI) or the NWII application programming interface (API). As Nasdaq
transitions to new technology (i.e., FIX and QIX) \7\, Nasdaq believes
that users will increasingly access the NTF using high bandwidth
Internet or Extranet connections that are ``always on''. The Idle
Testing fee was originally designed to discourage customers from
needlessly taking a limited number of dial-up connections when no
testing was being performed. Some NTF users have created automated
connection mechanisms that automatically access the NTF on a periodic
basis. These firms sometimes unknowingly maintain idle connections and
only discover the problem after days or weeks of idly connecting to the
NTF. By eliminating the Idle Testing fee, these users will only be
charged when Active Testing occurs, and will not be charged for idle
connections.
---------------------------------------------------------------------------
\7\ FIX (Financial Information Exchange) and QIX (Nasdaq
Information Exchange) are new messaging protocols that are used by
customers to communicate with Nasdaq's systems. See Securities
Exchange Act Release Nos. 48387 (August 21, 2003), 68 FR 51619
(August 27, 2003) (SR-NASD-2003-117); 48452 (September 5, 2003), 68
FR 53767 (September 12, 2003) (SR-NASD-2003-118); and 51170
(February 9, 2005), 70 FR 7988 (February 16, 2005) (SR-NASD-2005-
002).
---------------------------------------------------------------------------
In addition to eliminating fees for Idle Testing, Nasdaq proposes
to change the time period for when an Idle Connection commences from
five to 10 minutes in length to 10 to 60 minutes in length. Initially,
the period during which a connection needs to remain inactive before it
will be deemed idle will be 60 minutes. Nasdaq, however, reserves the
right to adjust this time within a range of 10 to 60 minutes by giving
notice of the change to NTF subscribers. The proposed rule change also
clarifies that the fee schedule for access to the NTF applies to all
Active Connection testing regardless of the Nasdaq access protocols
used to access the NTF. Thus, the new modified NTF fee schedule will
also apply to QIX and other access protocols that Nasdaq may offer in
the future.
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) \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. By modifying the NTF pricing
structure to be more responsive to subscriber needs and market demands,
Nasdaq believes the proposed rule supports efficient use of existing
systems and ensures that the charges associated with such use are
allocated equitably. The proposed rule change will apply to non-members
(usually service bureaus) seeking access to the NTF. This fee schedule
is identical to the new fee schedule that Nasdaq proposes to charge
NASD members seeking access to the NTF.
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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.
[[Page 38989]]
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: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) \10\ of the Act and Rule 19b-4(f)(6)
thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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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.
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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2005-075 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-NASD-2005-075. 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 (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 Room. Copies of such
filing also will be available for inspection and copying at the
principal office of Nasdaq.
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-2005-075
and should be submitted on or before July 27, 2005.
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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-3537 Filed 7-5-05; 8:45 am]
BILLING CODE 8010-01-P
