Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Establish a Unified Pricing Schedule for NASD Members Using the Nasdaq Market Center and Nasdaq's Brut and Inet Facilities, 8020-8027 [E6-2106]
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8020
Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
rule change, as amended, is consistent
with section 15A(b)(5) of the Act,12
which requires that the rules of the selfregulatory organization provide for the
equitable allocation of reasonable dues,
fees, and other charges among members
and issuers and other persons using any
facilities or system which it operates or
controls.
The Commission notes that this
proposal would retroactively modify
pricing for non-NASD members using
the Nasdaq Facilities that would permit
the schedule for non-NASD members to
mirror the schedule applicable to NASD
members that became effective February
1, 2006, pursuant to SR–NASD–2006–
013.
The Commission finds good cause for
approving the proposed rule change, as
amended, prior to the 30th day of the
date of publication of the notice thereof
in the Federal Register. The
Commission notes that the proposed
fees for non-NASD members are
identical to those in SR–NASD–2006–
013, which implemented those fees for
NASD members and which became
effective as of February 1, 2006. The
Commission notes that this change will
promote consistency in Nasdaq’s fee
schedule by applying the same pricing
schedule with the same date of
effectiveness for both NASD members
and non-NASD members. Therefore, the
Commission finds that there is good
cause, consistent with section 19(b)(2)
of the Act,13 to approve the proposed
rule change, as amended, on an
accelerated basis.
V. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,14 that the
proposed rule change, as amended, (File
No. SR–NASD–2006–014), is approved
on an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–2105 Filed 2–14–06; 8:45 am]
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BILLING CODE 8010–01–P
12 15
U.S.C. 78o–3(b)(5).
U.S.C. 78s(b)(2).
14 15 U.S.C. 78s(b)(2).
15 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
13:17 Feb 14, 2006
[Release No. 34–53256; File No. SR–NASD–
2006–013]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto To Establish a Unified Pricing
Schedule for NASD Members Using the
Nasdaq Market Center and Nasdaq’s
Brut and Inet Facilities
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
30, 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. On
February 1, 2006, Nasdaq submitted
Amendment No. 1 to the proposed rule
change.3 Nasdaq has designated this
proposal as one establishing or changing
a due, fee, or other charge imposed by
the self-regulatory organization under
Section 19(b)(3)(A)(ii) 4 of the Act and
Rule 19b–4(f)(2) thereunder,5 which
renders the proposal 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.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
Nasdaq proposes to modify the
pricing for NASD members using the
Nasdaq Market Center and Nasdaq’s
Brut and Inet Facilities (‘‘Nasdaq
Facilities’’). Nasdaq states that it will
implement the proposed rule change on
February 1, 2006.
The text of the proposed rule change,
as amended, is below. Proposed new
language is in italics; proposed
deletions are in [brackets].6
*
*
*
*
*
3 Partial Amendment No. 1 (‘‘Amendment No. 1’’)
clarifies that the proposed rule change was
approved by the Nasdaq Board of Directors on
February 1, 2006 and not January 24, 2006.
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2).
6 Changes are marked to the rule text that appears
in the electronic NASD Manual found at https://
13 15
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SECURITIES AND EXCHANGE
COMMISSION
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7010. System Services
(a)–(b) No change.
(c)(1) No change.
(2) Exchange-Listed Securities
Transaction Credit
NASD members that trade securities
listed on the NYSE (‘‘Tape A’’) and
Amex (‘‘Tape B’’) in over-the-counter
transactions may receive from the NASD
transaction credits based on the number
of transactions attributed to them. A
transaction is attributed to a member if
(i) for Tape B securities, the transaction
is executed through CAES, ITS, or
Nasdaq’s Brut or Inet Facilit[y]ies, and
the member acts as liquidity provider
(i.e., the member sells in response to a
buy order or buys in response to a sell
order) or (ii) for Tape A and Tape B
securities, the transaction is not
executed through CAES, ITS, or
Nasdaq’s Brut or Inet Facilit[y]ies, and
the member is identified as the
executing party in a trade report
submitted to the NASD that the NASD
submits to the Consolidated Tape
Association. An NASD member may
earn credits from one or both pools
maintained by the NASD, each pool
representing 50% of the revenue paid by
the Consolidated Tape Association to
the NASD for each of Tape A and Tape
B transactions after deducting the
amount that the NASD pays to the
Consolidated Tape Association for
capacity usage. An NASD member may
earn credits from the pools according to
the member’s pro rata share of all overthe-counter transactions attributed to
NASD members in each of Tape A and
Tape B for each calendar quarter.
(d)–(h) No change.
(i) Nasdaq Market Center, [and] Brut,
and Inet [Facility] Order Execution and
Routing
(1) The following charges shall apply
to the use of the order execution and
routing services of the Nasdaq Market
Center, [and Nasdaq’s] Brut, and Inet
[Facility] (the ‘‘Nasdaq Facilities’’) by
members for all Nasdaq-listed securities
subject to the Nasdaq UTP Plan and for
Exchange-Traded Funds that are not
listed on Nasdaq [a national securities
exchange]. The term ‘‘Exchange-Traded
Funds’’ shall mean Portfolio Depository
Receipts, Index Fund Shares, and Trust
Issued Receipts as such terms are
defined in Rule 4420(i), (j), and (l),
respectively.
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), 71 FR 3550 (January 23,
2006) (File No. 10–131).
E:\FR\FM\15FEN1.SGM
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Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
8021
[Order Entry]
[Non-Directed Orders and Preferenced Orders] ......................................
[No charge]
Order Execution
[Non-Directed or Preferenced] Order that accesses the Quote/Order of
a market participant that does not charge an access fee to market
participants accessing its Quotes/Orders through the Nasdaq Facilities [Market Center and/or Nasdaq’s Brut Facility]:
Charge to member entering order:
[Average daily shares of liquidity provided through the Nasdaq Market
Center and/or Nasdaq’s Brut Facility by the member during the
month:]
[Greater than 10 million] ...........................................................................
Members with an average daily volume through the Nasdaq Facilities
in all securities during the month of (i) more than 30 million shares of
liquidity provided, and (ii) more than 50 million shares of liquidity
accessed and/or routed [Greater than 2,000,000 but less than or
equal to 10,000,000].
2,000,000 or less] Other members ..........................................................
Credit to member providing liquidity:
[Average daily shares of liquidity provided through the Nasdaq Market
Center and/or Nasdaq’s Brut Facility by the member during the
month:]
Members with an average daily volume through the Nasdaq Facilities
in all securities during the month of more than 30 million shares of liquidity provided.
[Greater than 20 million] ...........................................................................
[Greater than 2,000,000 but less than or equal to 20,000,000] ..............
Other members [Less than or equal to 2,000,000] ..................................
[Non-Directed or Preferenced] Order that accesses the Quote/Order of
a market participant that charges an access fee to market participants accessing its Quotes/Orders through the Nasdaq Market Center:
Charge to member entering order:
[Average daily shares of liquidity provided through the Nasdaq Market
Center and/or Nasdaq’s Brut Facility by the member during the
month:]
Members with an average daily volume through the Nasdaq Facilities
in all securities during the month of more than 500,000 shares of liquidity provided.
[500,000 or less] .......................................................................................
Other members [500,001 or more] ...........................................................
[$0.0027 per share executed (but no more than
trades in securities executed at $1.00 or less per
$0.0028 per share executed [(but no more than
trades in securities executed at $1.00 or less per
$108 per trade for
share)]
$112 per trade for
share)]
$0.0030 per share executed [(but no more than $120 per trade for
trades in securities executed at $1.00 or less per share)]
$0.0025 per share executed [(but no more than $100 per trade for
trades in securities executed at $1.00 or less per share)]
[$0.0022 per share executed (but no
trades in securities executed at $1.00
$0.0020 per share executed [(but no
trades in securities executed at $1.00
more than $88 per trade for
or less per share)]
more than $80 per trade for
or less per share)]
$0.001 per share executed (but no more than $10,000 per month) [$40
per trade for trades in securities executed at $1.00 or less per
share)]
$0.001 per share executed [(but no more than $40 per trade for trades
in securities executed at $1.00 or less per share, and no more than
$10,000 per month)]
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[Routed] Order[s] Routing for Nasdaq-Listed Securities
Any order entered by a member that is routed outside of [both] the
Nasdaq [Market Center and Nasdaq’s Brut] Facilit[y]ies and that
does not attempt to execute in the Nasdaq[’s Brut] Facilit[y]ies prior
to routing.
Any other order entered by a member that is routed outside of [both]
the Nasdaq [Market Center and Nasdaq’s Brut] Facilit[y]ies:
[Average daily shares of liquidity provided through the Nasdaq Market
Center and/or Nasdaq’s Brut Facility by the member during the
month and average daily shares accessed through and/or routed
from the Nasdaq Market Center and/or Nasdaq’s Brut Facility by the
member during the month (excluding orders routed outside of both
the Nasdaq Market Center and Nasdaq’s Brut Facility that do not attempt to execute in Nasdaq’s Brut Facility prior to routing):]
[Greater than 20 million shares of liquidity provided and greater than 40
million shares accessed and/or routed]
[Greater than 10 million but less than or equal to 20 million shares of liquidity provided and any amount accessed or routed, OR greater
than 20 million shares of liquidity provided and 40 million or fewer
shares accessed and/or routed]
VerDate Aug<31>2005
16:15 Feb 14, 2006
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The greater of (i) $0.004 per share executed or (ii) a pass-through of
all applicable access fees charged by electronic communications networks that charge more than $0.003 per share executed.
[$0.0025 per share executed]
[$0.0027 per share executed]
Sfmt 4703
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15FEN1
8022
Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
Members with an average daily volume through the Nasdaq Facilities
in all securities during the month of (i) more than 30 million shares of
liquidity provided, and (ii) more than 50 million shares of liquidity
accessed and/or routed [Greater than 2,000,000 but less than or
equal to 10,000,000 shares of liquidity provided and any amount
accessed and/or routed].
Other members [Less than or equal to 2,000,000 shares of liquidity
provided and any amount accessed and/or routed].
The greater of (i) $0.0028 per share executed or (ii) a pass-through of
all applicable access fees charged by electronic communications networks that charge more than $0.003 per share executed.
The greater of (i) $0.0030 per share executed or (ii) a pass-through of
all applicable access fees charged by electronic communications networks that charge more than $0.003 per share executed.
Order Routing for Exchange-Traded Funds Not Listed On Nasdaq
Order routed to the New York Stock Exchange (‘‘NYSE’’) through its
DOT system.
Any other order entered by a member that is routed outside of the
Nasdaq Facilities and that does not attempt to execute in the
Nasdaq Facilities prior to routing.
Order routed to the American Stock Exchange (‘‘Amex’’) after attempting to execute in the Nasdaq Facilities.
Order routed through the Intermarket Trading System (‘‘ITS’’) after attempting to execute in the Nasdaq Facilities.
Order routed to venues other than the NYSE and Amex after attempting to execute in the Nasdaq Facilities.
See DOT fee schedule in Rule 7010(i)(6).
$0.004 per share executed.
$0.01 per share executed.
$0.0007 per share executed.
$0.0035 per share executed.
[Order Cancellation]
[Non-Directed and Preferenced Orders] ..................................................
(2) For purposes of assessing Nasdaq
[Market Center and Brut] Facilit[y]ies
fees and credits hereunder, (A) a
Discretionary Order that executes prior
to being displayed as a Quote/Order will
always be deemed to be accessing
liquidity unless it is executed by (or
receives delivery of) a displayed
Discretionary Order at a price in the
discretionary price range of the
displayed Discretionary Order, and (B) a
Discretionary Order that executes after
being displayed as a Quote/Order will
always be deemed to be providing
liquidity, unless the displayed
Discretionary Order executes against (or
is delivered to) a Quote/Order or NonDirected Order that has not been
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Market-on-Open, Limit-on-Open, Good-till-Cancelled, Immediate-orCancel, and Day orders executed in the Nasdaq Opening Cross.
All other quotes and orders executed in the Nasdaq Opening Cross .....
(5) Except as provided in paragraph
(6), the following charges shall apply to
the use of the order execution and
routing services of the Nasdaq Facilities
by members for [There shall be no
charges or credits for order entry,
execution, routing, or cancellation by
members accessing the Nasdaq Market
Center or Nasdaq’s Brut Facility to buy
or sell exchange-listed] securities
subject to the Consolidated Quotations
Service and Consolidated Tape
Association plans[,] other than
Exchange-Traded Funds (‘‘Covered
Securities’’):
[(A) the charges in Rule 7010(i)(1) for
Exchange-Traded Funds,]
[(B) charges described in Rule
7010(d),]
[(C) a fee of $0.0004 per share
executed for orders delivered by
Nasdaq’s Brut Facility to an exchange
using the exchange’s proprietary order
delivery system if such orders do not
VerDate Aug<31>2005
13:17 Feb 14, 2006
Jkt 208001
[No charge].
$0.0005 per share executed for the net number of buy and sell shares
up to a maximum of $10,000 per firm per month.
No charge for execution.
attempt to execute in Nasdaq’s Brut
Facility or the Nasdaq Market Center
prior to routing to the exchange,]
[(D) a fee of $0.009 per share executed
for any limit order delivered by
Nasdaq’s Brut Facility to the New York
Stock Exchange (‘‘NYSE’’) using the
NYSE’s proprietory order delivery
system if such an order is not an onclose order, is not executed in the
opening, and remains at the NYSE for
more than 5 minutes]
[(E) for a pilot period beginning
December 1, 2005 and ending February
28, 2006, a credit of $0.0005 per share
executed to a member providing
liquidity for a transaction in the
following stocks: Advanced Micro
Devices Inc. (AMD); Apache Corp.
(APA); AT&T Corp. (T); Avaya, Inc.
(AV); Baker Hughes, Inc. (BHI); BJ
Services Co. (BJS); Bristol-Myers Squibb
Co. (BMY); Burlington Resources, Inc.
(BR); Calpine Corp. (CPN); Charles
PO 00000
Frm 00111
Fmt 4703
designated ‘‘Immediate or Cancel,’’ at a
price in its discretionary price range.
(3) No change.
(4) Opening Cross.
[Commencing on January 1, 2006,
m]Members shall be assessed the
following Nasdaq Market Center
execution fees for quotes and orders
executed in the Nasdaq Opening Cross:
Sfmt 4703
Schwab Corp. (SCH); Citigroup Inc. (C);
ConocoPhillips (COP); Corning Inc.
(GLW); Devon Energy Corp. (DVN); EMC
Corp. (EMC); Exxon Mobil Corp. (XOM);
Ford Motor Co. (F); Gateway, Inc.
(GTW); General Electric Co. (GE);
Halliburton Co. (HAL); Hewlett-Packard
Co. (HPQ); Johnson & Johnson (JNJ);
JPMorgan Chase & Co. (JPM); Kohl’s
Corp. (KSS); LSI Logic Corp. (LSI);
Micron Technology, Inc. (MU);
Motorola, Inc. (MOT); Noble Corp. (NE);
Occidental Petroleum Corp. (OXY);
Office Depot Inc. (ODP); Pfizer Inc.
(PFE); Phelps Dodge Corp. (PD); Pulte
Homes, Inc. (PHM); Qwest
Communications International Inc. (Q);
Schlumberger Ltd. (SLB); Solectron
Corp. (SLR); Sovereign Bancorp, Inc.
(SOV); Time Warner, Inc. (TWX); Valero
Energy Corp. (VLO); and Verizon
Communications, Inc. (VZ).]
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Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
8023
Order Execution
Order that accesses the Quote/Order of a Nasdaq Facility market participant:
Charge to member entering order ....................................................
Credit to member providing liquidity:
Members with an average daily volume through the Nasdaq Facilities in Covered Securities during the month of more than 5 million shares of liquidity accessed, provided, or routed.
Other members .................................................................................
$0.0007 per share executed.
$0.0005 per share executed.
No credit.
Order Routing
Order routed to Amex ...............................................................................
Order routed through the ITS ...................................................................
Order routed to NYSE ..............................................................................
Order for NYSE-listed Covered Security routed to venue other than the
NYSE.
Order for Covered Security listed on venue other than the NYSE and
routed to venue other than Amex.
(6) The following charges shall apply
to the use of the Nasdaq Facilities by
$0.0035 per share executed.
members for routing to the NYSE
through its DOT system for all
Order charged a fee by the NYSE specialist ...........................................
Order that attempts to execute in the Nasdaq Facilities prior to routing
and that is not charged a fee by the NYSE specialist.
Order that does not attempt to execute in the Nasdaq Facilities prior to
routing and that is not charged a fee by the NYSE specialist:
Average daily shares of liquidity routed through Nasdaq’s DOT linkage
by the member during the month:
More than 30 million ..........................................................................
Between 2,000,001 and 30 million ....................................................
Between 250,001 and 2 million .........................................................
Between 100,001 and 250,000 .........................................................
100,000 or less ..................................................................................
[(6)](7) The fees applicable to nonmembers using Nasdaq’s Brut Facility
shall be the fees established for
members under Rule 7010(i), as
amended by SR–NASD–2005–019, SR–
NASD–2005–035, SR–NASD–2005–048,
SR–NASD–2005–071, SR–NASD–2005–
125, SR–NASD–2005–137, and SR–
$0.01 per share executed.
$0.0007 per share executed.
See DOT fee schedule in Rule 7010(i)(6).
$0.0015 per share executed.
securities, including Exchange-Traded
Funds:
$0.01 per share executed.
No charge.
$0.0001 per share executed.
$0.0003 per share executed.
$0.0005 per share executed.
$0.001 per share executed.
$0.01 per share executed.
NASD–2005–154, and as applied to
non-members by SR–NASD–2005–020,
SR–NASD–2005–038, SR–NASD–2005–
049, SR–NASD–2005–072, SR–NASD–
2005–126, SR–NASD–2005–138, and
SR–NASD–2005–155.
(j)–(v) No change.
(w) INET System [Order Execution]
Connectivity
(1) [For a period of time not to exceed
60 days after INET becomes a facility of
Nasdaq, t]T he following charges shall
apply to telecommunication protocols
[the] used [of the order execution
services of] to access Nasdaq’s INET
System [by Participants for]:
[NASDAQ-listed securities]
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[Order Execution]
[Non-Directed Order that accesses the Quote/Order of a market Participant through Nasdaq’s INET System:].
[Charge to Participant entering order:].
[Average daily shares of liquidity provided through Nasdaq’s INET System by the Participant during the month:].
[Greater than 60 million shares accessed or routed and 5 million
shares provided].
[Greater than 40 million shares but less than 60 million shares
accessed or routed and 5 million shares provided].
[Less than 5 million shares provided or less than 40 million shares
accessed or routed].
[Credit to Participant providing liquidity:].
[Average daily shares of liquidity provided through Nasdaq’s INET System by the Participant during the month:].
[Greater than 30 million shares provided or greater than 30 million
shares accessed or routed or greater than 50 million shares combined provided, accessed or routed].
[Less than or equal to 30 million shares provided and less than or
equal to 30 million shares accessed or routed and less than or equal
to 50 million shares combined provided, accessed, or routed].
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13:17 Feb 14, 2006
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[$0.0027 per share executed].
[$0.0028 per share executed].
[$0.0030 per share executed].
[$0.0025 per share executed].
[$0.002 per share executed].
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15FEN1
8024
Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
[Any order that matches against another order of the same Participant]
[$0.00025 per share per side.].
[Routed Orders]
[Any other order entered by a Participant that is routed outside of
Nasdaq’s INET System].
[Any other order entered by a Participant that is routed to the NASDAQ
Opening or Closing Cross].
[$0.0025 per share executed].
[$0.001 per share executed]
[AMEX-listed stocks]
[Order Execution]
[Non-Directed Order that accesses the Quote/Order of a market Participant through Nasdaq’s INET System:].
[Credit to Participant entering order:] .......................................................
[Charge to Participant providing liquidity:] ................................................
[Any order that matches against another order of the same Participant]
[$0.0009 per share executed].
[$0.001 per share executed].
[No charge].
[Routed Orders]
[Any order entered by a Participant that is routed outside of Nasdaq’s
INET System through DOT].
[Any order entered by a Participant that is routed outside of Nasdaq’s
INET System other than through DOT].
[$0.01 per share executed].
[$0.0035 per share executed].
[AMEX-listed ETFs]
[Order Execution]
[Non-Directed Order that accesses the Quote/Order of a market Participant through Nasdaq’s INET System:].
[Charge to Participant entering order:].
[Average daily shares of liquidity provided through Nasdaq’s INET System by the Participant during the month:].
[Greater than 60 million shares accessed or routed and 5 million
shares provided].
[Greater than 40 million shares but less than 60 million shares
accessed or routed and 5 million shares provided].
[Less than 5 million shares provided or less than 40 million shares
accessed or routed].
[Credit to Participant providing liquidity:].
[Average daily shares of liquidity provided through Nasdaq’s INET System by the Participant during the month:].
[Greater than 30 million shares provided or greater than 30 million
shares accessed or routed or greater than 50 million shares combined provided, accessed or routed].
[Less than or equal to 30 million shares provided and less than or
equal to 30 million shares accessed or routed and less than or equal
to 50 million shares combined provided, accessed, or routed].
[Any order that matches against another order of the same Participant]
[$0.0027 per share executed].
[$0.0028 per share executed].
[$0.0030 per share executed].
[$0.0025 per share executed].
[$0.002 per share executed].
[$0.00025 per share per side.].
[Routed Orders]
[Any order entered by a Participant that is routed outside of Nasdaq’s
INET System to the AMEX].
[Any order entered by a Participant that is routed outside of Nasdaq’s
INET System other than to the AMEX].
[$0.01 per share executed].
[$0.0035 per share executed].
[NYSE-listed stocks]
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[Order Execution]
[Non-Directed Order that accesses the Quote/Order of a market Participant through Nasdaq’s INET System:].
[Credit to Participant entering order:] .......................................................
[Charge to Participant providing liquidity:] ................................................
[Any order that matches against another order of the same Participant]
[$0.0009 per share executed].
[$0.001 per share executed].
[No charge].
[Routed Orders]
[Any order entered by a Participant that is routed outside of Nasdaq’s
INET System through DOT that is charged a fee by the specialist
(billable)].
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13:17 Feb 14, 2006
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[$0.01 per share executed].
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Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
[Charge to any order entered by a Participant that is routed outside of
Nasdaq’s INET System through DOT that is not charged a fee by the
specialist (non-billable):].
[Average daily shares of billable and non-billable NYSE DOT shares:].
[Greater than 30 million shares] ...............................................................
[Greater than 2 million shares but less than or equal to 30 million
shares].
[Greater than 250,000 shares but less than or equal to 2 million
shares].
[Greater than 100,000 shares but less than or equal to 250,000 shares]
[Less than or equal to 100,000 shares] ...................................................
[Any order entered by a Participant that is routed outside of Nasdaq’s
INET System other than through DOT].
[Upon Participant’s request, added
liquidity among Participants that are
wholly owned by a common parent may
be aggregated. INET will distribute the
market data revenue based on the
number of tape reportable transactions
executed by the Participant, as paid to
INET.]
[Market Data Revenue Sharing for
AMEX Listed (Tape B) Securities]
[Subscribers that add liquidity to the
INET limit order book in Tape B
securities (e.g. AMEX listed securities)
will receive 50% of the market data
revenue paid by the Consolidated Tape
Association.]
Port Fees:
Connectivity to Harborside Financial
Center and Secaucus Datacenters
• [$400 per month for each OUCH/
FIX pair
• $400 per month for each ITCH
data feed pair
• $400 per month for each DROP
pair]
• $400 per month for each
[Compressed ITCH data feed] port pair,
other than
• [$1000 per month for each]
Multicast ITCH data feed pairs, for
which the fee is $1000 per month
Internet Ports: An additional $200 per
month for each Internet port that
requires additional bandwidth.
cprice-sewell on PROD1PC66 with NOTICES
Connectivity to Chicago Datacenter
• $800 per month for each [OUCH/
FIX] port pair
• [$800 per month for each ITCH
data feed pair
• $800 per month for each DROP
pair]
All port fees, not including Internet
Bandwidth surcharges, will be waived
for Subscribers that for a calendar
month have an average daily share
volume for executed orders exceeding
30 million shares of added liquidity.
INET Terminal Fees:
Each ID is subject to a minimum
commission fee of $50 per month unless
it executes a minimum of 100,000
shares.
VerDate Aug<31>2005
13:17 Feb 14, 2006
Jkt 208001
[$0.0001].
[$0.0003].
[$0.0005].
[$0.001].
[$0.01].
[$0.0015 per share executed].
Each ID receiving market data is
subject to pass-through fees for use of
these services. Pricing for these services
is determined by the exchanges and/or
market center.
• Each ID that is given web access is
subject to a $50 monthly fee.
Portal Fees:
Each ID is subject to a monthly user
fee of $150.
Each ID receiving market data is
subject to pass-through fees for use of
these services. Pricing for these services
is determined by the exchanges and/or
market center.
(2) 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, as amended, and
discussed any comments it received on
the proposed rule change, as amended.
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 establish a new
fee and credit schedule for order
execution and routing that spans
activity on the Nasdaq Facilities.7 In
SR–NASD–2005–128,8 Nasdaq’s filing
to establish rules for the newly acquired
Inet ECN, Nasdaq committed that it
7 This filing would apply to NASD members.
Nasdaq has submitted SR–NASD–2006–014 to
apply the same pricing structure to non-members.
8 Securities Exchange Act Release Nos. 52902
(December 7, 2005), 70 FR 73810 (December 13,
2005) (SR–NASD–2005–128) and 52723 (November
2, 2005), 70 FR 67513 (November 7, 2005) (SR–
NASD–2005–128).
PO 00000
Frm 00114
Fmt 4703
8025
Sfmt 4703
would, within 60 days of the closing of
the acquisition of Inet, file an integrated
fee and credit structure governing the
use of all of the Nasdaq Facilities.
Nasdaq states that the fee and rebate
structure is based on multiple volumebased usage tiers that take into account
the combined volume of a market
participant on all of the Nasdaq
Facilities. Nasdaq believes that this
integrated and uniform pricing structure
will encourage activity on the Nasdaq
Facilities and will not provide financial
incentives to use one system versus the
other. Nasdaq notes that under the new
structure, the volumes required to
receive certain discounted fees or
enhanced credits are higher than is the
case under current pricing for the
Nasdaq Market Center and Brut. Nasdaq
states that this is a function of the fact
that the combined volume of the three
systems would be markedly higher than
that of any system in isolation, so an
adjustment of the tier thresholds would
be necessary to prevent the combining
of the systems from resulting in
unwarranted fee decreases. As stated in
a Current Report on Form 8–K and
related press release filed by Nasdaq
with the Commission, Nasdaq does not
currently anticipate that the new pricing
structure would have a material impact
on its financial results.9
Specific features of the new pricing
structure for Nasdaq-listed securities
and exchange-traded funds (‘‘ETFs’’) are
as follows:
• Members with an average daily
volume through the Nasdaq Facilities in
all securities (i.e., listed on Nasdaq or
elsewhere) during the month of (i) more
than 30 million shares of liquidity
provided, and (ii) more than 50 million
shares of liquidity accessed and/or
routed would pay $0.0028 per share to
access liquidity from market
participants that do not charge an access
fee; all others would pay $0.003 per
9 See Current Report on Form 8-K of The Nasdaq
Stock Market, Inc. (January 6, 2006) (available at
https://www.sec.gov/Archives/edgar/data/1120193/
000119312506002815/0001193125-06-002815index.htm).
E:\FR\FM\15FEN1.SGM
15FEN1
cprice-sewell on PROD1PC66 with NOTICES
8026
Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
share to access liquidity from market
participants that do not charge an access
fee.10
• Members with an average daily
volume through the Nasdaq Facilities in
all securities during the month of more
than 30 million shares of liquidity
provided and that do not charge an
access fee would receive a credit of
$0.0025 per share when providing
liquidity; others that do not charge an
access fee would receive $0.002 per
share; and members that charge an
access fee would not receive a credit.
• Members with an average daily
volume through the Nasdaq Facilities in
all securities during the month of more
than 500,000 shares of liquidity
provided would pay $0.001 per share to
access liquidity from market
participants that charge an access fee,
with a cap of $10,000 per month; all
others would pay $0.001 per share with
no cap.
When routing orders for Nasdaq-listed
securities that check the books of the
Nasdaq Facilities before routing,
members with an average daily volume
through the Nasdaq Facilities in all
securities during the month of (i) more
than 30 million shares of liquidity
provided, and (ii) more than 50 million
shares of liquidity accessed and/or
routed would pay the greater of $0.0028
per share or the applicable access fees
of electronic communications networks
(ECNs) that charge more than $0.003 per
share. Other members would pay the
greater of $0.003 per share or the
applicable access fees of ECNs that
charge more than $0.003 per share.
Finally, members routing orders for
Nasdaq-listed securities that do not first
check the books of the Nasdaq Facilities
would pay the greater of $0.004 per
share or the applicable access fees of
ECNs that charge more than $0.003 per
share. Thus, in most cases, Nasdaq
would pass through to its market
participants the cost that it is charged
when routing to ECNs that charge more
than $0.003 per share.
The fees for routing ETFs not listed on
Nasdaq would be as follows: (i) $0.01
per share for an order executed to the
American Stock Exchange (‘‘Amex’’)
after checking the Nasdaq Facilities, (ii)
$0.0035 per share for an order executed
on venues other than the New York
Stock Exchange (‘‘NYSE’’) and Amex
after checking the Nasdaq Facilities, (iii)
$0.0007 for an order executed through
the Intermarket Trading System (‘‘ITS’’)
after checking the Nasdaq Facilities, and
10 Telephone conversation between John Yetter,
Associate General Counsel, Exchange, and David
Liu and Michou Nguyen, Attorneys, Division of
Market Regulation (‘‘Division’’), Commission, on
February 2, 2006.
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13:17 Feb 14, 2006
Jkt 208001
(iv) $0.004 per share for an order that is
executed without checking the Nasdaq
Facilities.11 Fees for ETF orders
executed on the NYSE are described
below.12
Specific features of the new pricing
structure for non-Nasdaq-listed
securities other than ETFs (‘‘Covered
Securities’’) would be as follows:
• All members would pay $0.0007
per share for orders that access liquidity
from the Nasdaq Facilities.
• Members with an average daily
volume through the Nasdaq Facilities in
Covered Securities during the month of
more than 5 million shares of liquidity
accessed, provided, or executed13
would receive a credit of $0.0005 per
share of liquidity provided; others
would not receive a liquidity provider
credit. As a result, Nasdaq would be
ending the liquidity provider credit
pilot for 40 NYSE-listed stocks under
Rule 7010(i)(5)(E).14
• The fees for routing Covered
Securities would be as follows: (i) $0.01
per share for an order executed on
Amex, (ii) $0.0035 per share for an order
for a security listed on a venue other
than the NYSE and executed on a venue
other than Amex, (iii) $0.0015 per share
for an NYSE-listed Covered Security
executed on a venue other than the
NYSE, and (iv) $0.0007 per share for an
order executed on the ITS.15
Fees for orders in NYSE-listed
Covered Securities and NYSE-listed
ETFs routed to the NYSE through its
DOT system are described below:
• Orders that are routed through DOT
after accessing the Nasdaq Facilities and
that are not charged a fee by the NYSE
specialist would be free. Members
would pay a fee of $0.01 per share for
orders that are charged a fee by the
NYSE specialist.
• The fee for orders routed through
DOT without accessing the Nasdaq
Facilities would depend on a member’s
volume of usage of Nasdaq’s DOT
linkage. Members routing an average
daily volume of more than 30 million
shares during the month would pay
$0.0001 per share executed; members
routing between 2,000,001 and 30
million shares would pay $0.0003 per
share executed; members routing
between 250,001 and 2 million shares
11 Id.
12 Id.
13 Id.
14 See Securities Exchange Act Release Nos.
53081 (January 9, 2006), 71 FR 2608 (January 17,
2006) (SR–NASD–2005–154) and 53082 (January 9,
2006), 71 FR 2607 (January 17, 2006) (SR–NASD–
2005–155).
15 Telephone conversation between John Yetter,
Associate General Counsel, Exchange, and David
Liu and Michou Nguyen, Attorneys, Division,
Commission, on February 2, 2006.
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
would pay $0.0005 per share executed;
members routing between 100,001 and
250,000 shares would pay $0.001 per
share executed; and members routing
100,000 shares or less would pay $0.01
per share executed.
Other changes being effected by the
proposed rule change would be as
follows:
• Nasdaq would be eliminating fee
and credit caps currently in place for
trades priced under $1. Nasdaq states
that the caps were instituted as a
response to high trading volumes in
certain low-priced stocks several years
ago and have less relevance to the
current trading environment.
• Good-till-Cancelled and Immediateor-Cancel orders would be added to the
list of order types that pay a $0.0005 per
share fee when executed in Nasdaq’s
Opening Cross. Other fees for the
Opening Cross and the Closing Cross
would be unchanged.
• The Nasdaq Market Center and Brut
would no longer share market data
revenue associated with transactions in
securities listed on the NYSE that are
executed through these systems. Nasdaq
represents that Inet does not currently
share such revenue.
• Most Inet fees contained in Rule
7010(w) would be deleted. However,
fees for use of Inet’s
telecommunications protocols would be
maintained. Since Inet continues to use
different telecommunications protocols
and is operated out of its own data
centers, Nasdaq believes that it is
appropriate to maintain Inet’s current
connectivity pricing. Nasdaq believes
that the telecommunications charges
associated with accessing Inet are
comparable to those associated with
accessing the Nasdaq Market Center and
Brut. However, Nasdaq would be
deleting some redundant language from
the rule language describing these fees.
Nasdaq would be deleting
unnecessary references to order entry
fees, order cancellation fees, and
preferenced orders.
2. Statutory Basis
Nasdaq believes that the proposed
rule change, as amended, is consistent
with the provisions of Section 15A of
the Act,16 in general, and with Section
15A(b)(5) of the Act,17 in particular, in
that the proposed rule change, as
amended, 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. Nasdaq states that
16 15
17 15
E:\FR\FM\15FEN1.SGM
U.S.C. 78o–3.
U.S.C. 78o–3(b)(5).
15FEN1
8027
Federal Register / Vol. 71, No. 31 / Wednesday, February 15, 2006 / Notices
the proposed rule change, as amended,
would establish a uniform fee schedule
for the Nasdaq Facilities that takes
account of the higher volumes
associated with the combining of the
Nasdaq Facilities for purposes of
determining pricing discounts. Nasdaq
does not currently anticipate that the
new pricing structure would have a
material impact on its financial results.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change, as amended, 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
Nasdaq states that written comments
were neither solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change, as
amended, is subject to Section
19(b)(3)(A)(ii) of the Act 18 and
subparagraph (f)(2) of Rule 19b–4 19
thereunder because it establishes or
changes a due, fee, or other charge
imposed by the self-regulatory
organization. Accordingly, the proposal
is effective upon Commission receipt of
the filing. 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.20
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:
18 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
20 The effective date of the original proposed rule
change is January 30, 2006, and the effective date
of Amendment No. 1 is February 1, 2006. For
purposes of calculating the 60-day period within
which the Commission may summarily abrogate the
proposed rule change, as amended, the Commission
considers the period to commence on February 1,
2006, the date on which the Exchange submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
cprice-sewell on PROD1PC66 with NOTICES
19 17
VerDate Aug<31>2005
13:17 Feb 14, 2006
Jkt 208001
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–2006–013 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 SR–NASD–2006–013. 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 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–2006–013 and
should be submitted on or before March
8, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.21
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–2106 Filed 2–14–06; 8:45 am]
BILLING CODE 8010–01–P
21 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00116
Fmt 4703
Sfmt 4703
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 Reestablish 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.
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
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Changes are marked to the rule text that appears
in the electronic NASD Manual found at https://
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).
2 17
E:\FR\FM\15FEN1.SGM
15FEN1
]]>Agencies
[Federal Register Volume 71, Number 31 (Wednesday, February 15, 2006)]
[Notices]
[Pages 8020-8027]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2106]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53256; File No. SR-NASD-2006-013]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1 Thereto To Establish a Unified Pricing
Schedule for NASD Members Using the Nasdaq Market Center and Nasdaq's
Brut and Inet Facilities
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 30, 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. On February 1,
2006, Nasdaq submitted Amendment No. 1 to the proposed rule change.\3\
Nasdaq has designated this proposal as one establishing or changing a
due, fee, or other charge imposed by the self-regulatory organization
under Section 19(b)(3)(A)(ii) \4\ of the Act and Rule 19b-4(f)(2)
thereunder,\5\ which renders the proposal 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Partial Amendment No. 1 (``Amendment No. 1'') clarifies that
the proposed rule change was approved by the Nasdaq Board of
Directors on February 1, 2006 and not January 24, 2006.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to modify the pricing for NASD members using the
Nasdaq Market Center and Nasdaq's Brut and Inet Facilities (``Nasdaq
Facilities''). Nasdaq states that it will implement the proposed rule
change on February 1, 2006.
The text of the proposed rule change, as amended, is below.
Proposed new language is in italics; proposed deletions are in
[brackets].\6\
---------------------------------------------------------------------------
\6\ Changes are marked to the rule text that appears in the
electronic NASD Manual found at https://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), 71 FR 3550 (January 23, 2006) (File No. 10-131).
---------------------------------------------------------------------------
* * * * *
7010. System Services
(a)-(b) No change.
(c)(1) No change.
(2) Exchange-Listed Securities Transaction Credit
NASD members that trade securities listed on the NYSE (``Tape A'')
and Amex (``Tape B'') in over-the-counter transactions may receive from
the NASD transaction credits based on the number of transactions
attributed to them. A transaction is attributed to a member if (i) for
Tape B securities, the transaction is executed through CAES, ITS, or
Nasdaq's Brut or Inet Facilit[y]ies, and the member acts as liquidity
provider (i.e., the member sells in response to a buy order or buys in
response to a sell order) or (ii) for Tape A and Tape B securities, the
transaction is not executed through CAES, ITS, or Nasdaq's Brut or Inet
Facilit[y]ies, and the member is identified as the executing party in a
trade report submitted to the NASD that the NASD submits to the
Consolidated Tape Association. An NASD member may earn credits from one
or both pools maintained by the NASD, each pool representing 50% of the
revenue paid by the Consolidated Tape Association to the NASD for each
of Tape A and Tape B transactions after deducting the amount that the
NASD pays to the Consolidated Tape Association for capacity usage. An
NASD member may earn credits from the pools according to the member's
pro rata share of all over-the-counter transactions attributed to NASD
members in each of Tape A and Tape B for each calendar quarter.
(d)-(h) No change.
(i) Nasdaq Market Center, [and] Brut, and Inet [Facility] Order
Execution and Routing
(1) The following charges shall apply to the use of the order
execution and routing services of the Nasdaq Market Center, [and
Nasdaq's] Brut, and Inet [Facility] (the ``Nasdaq Facilities'') by
members for all Nasdaq-listed securities subject to the Nasdaq UTP Plan
and for Exchange-Traded Funds that are not listed on Nasdaq [a national
securities exchange]. The term ``Exchange-Traded Funds'' shall mean
Portfolio Depository Receipts, Index Fund Shares, and Trust Issued
Receipts as such terms are defined in Rule 4420(i), (j), and (l),
respectively.
[[Page 8021]]
------------------------------------------------------------------------
------------------------------------------------------------------------
[Order Entry]
------------------------------------------------------------------------
[Non-Directed Orders and Preferenced [No charge]
Orders].
----------------------------------------
Order Execution
------------------------------------------------------------------------
[Non-Directed or Preferenced] Order
that accesses the Quote/Order of a
market participant that does not
charge an access fee to market
participants accessing its Quotes/
Orders through the Nasdaq Facilities
[Market Center and/or Nasdaq's Brut
Facility]:
Charge to member entering order:
[Average daily shares of liquidity
provided through the Nasdaq Market
Center and/or Nasdaq's Brut Facility
by the member during the month:]
[Greater than 10 million].............. [$0.0027 per share executed
(but no more than $108 per
trade for trades in securities
executed at $1.00 or less per
share)]
Members with an average daily volume $0.0028 per share executed
through the Nasdaq Facilities in all [(but no more than $112 per
securities during the month of (i) trade for trades in securities
more than 30 million shares of executed at $1.00 or less per
liquidity provided, and (ii) more than share)]
50 million shares of liquidity
accessed and/or routed [Greater than
2,000,000 but less than or equal to
10,000,000].
2,000,000 or less] Other members....... $0.0030 per share executed
[(but no more than $120 per
trade for trades in securities
executed at $1.00 or less per
share)]
Credit to member providing liquidity:
[Average daily shares of liquidity
provided through the Nasdaq Market
Center and/or Nasdaq's Brut Facility
by the member during the month:]
Members with an average daily volume $0.0025 per share executed
through the Nasdaq Facilities in all [(but no more than $100 per
securities during the month of more trade for trades in securities
than 30 million shares of liquidity executed at $1.00 or less per
provided. share)]
[Greater than 20 million]..............
[Greater than 2,000,000 but less than [$0.0022 per share executed
or equal to 20,000,000]. (but no more than $88 per
trade for trades in securities
executed at $1.00 or less per
share)]
Other members [Less than or equal to $0.0020 per share executed
2,000,000]. [(but no more than $80 per
trade for trades in securities
executed at $1.00 or less per
share)]
[Non-Directed or Preferenced] Order
that accesses the Quote/Order of a
market participant that charges an
access fee to market participants
accessing its Quotes/Orders through
the Nasdaq Market Center:
Charge to member entering order:
[Average daily shares of liquidity
provided through the Nasdaq Market
Center and/or Nasdaq's Brut Facility
by the member during the month:]
Members with an average daily volume $0.001 per share executed (but
through the Nasdaq Facilities in all no more than $10,000 per
securities during the month of more month) [$40 per trade for
than 500,000 shares of liquidity trades in securities executed
provided. at $1.00 or less per share)]
[500,000 or less]......................
Other members [500,001 or more]........ $0.001 per share executed [(but
no more than $40 per trade for
trades in securities executed
at $1.00 or less per share,
and no more than $10,000 per
month)]
----------------------------------------
[Routed] Order[s] Routing for Nasdaq-Listed Securities
------------------------------------------------------------------------
Any order entered by a member that is The greater of (i) $0.004 per
routed outside of [both] the Nasdaq share executed or (ii) a pass-
[Market Center and Nasdaq's Brut] through of all applicable
Facilit[y]ies and that does not access fees charged by
attempt to execute in the Nasdaq['s electronic communications
Brut] Facilit[y]ies prior to routing. networks that charge more than
$0.003 per share executed.
Any other order entered by a member
that is routed outside of [both] the
Nasdaq [Market Center and Nasdaq's
Brut] Facilit[y]ies:
[Average daily shares of liquidity
provided through the Nasdaq Market
Center and/or Nasdaq's Brut Facility
by the member during the month and
average daily shares accessed through
and/or routed from the Nasdaq Market
Center and/or Nasdaq's Brut Facility
by the member during the month
(excluding orders routed outside of
both the Nasdaq Market Center and
Nasdaq's Brut Facility that do not
attempt to execute in Nasdaq's Brut
Facility prior to routing):]
[Greater than 20 million shares of [$0.0025 per share executed]
liquidity provided and greater than 40
million shares accessed and/or routed]
[Greater than 10 million but less than [$0.0027 per share executed]
or equal to 20 million shares of
liquidity provided and any amount
accessed or routed, OR greater than 20
million shares of liquidity provided
and 40 million or fewer shares
accessed and/or routed]
[[Page 8022]]
Members with an average daily volume The greater of (i) $0.0028 per
through the Nasdaq Facilities in all share executed or (ii) a pass-
securities during the month of (i) through of all applicable
more than 30 million shares of access fees charged by
liquidity provided, and (ii) more than electronic communications
50 million shares of liquidity networks that charge more than
accessed and/or routed [Greater than $0.003 per share executed.
2,000,000 but less than or equal to
10,000,000 shares of liquidity
provided and any amount accessed and/
or routed].
Other members [Less than or equal to The greater of (i) $0.0030 per
2,000,000 shares of liquidity provided share executed or (ii) a pass-
and any amount accessed and/or routed]. through of all applicable
access fees charged by
electronic communications
networks that charge more than
$0.003 per share executed.
----------------------------------------
Order Routing for Exchange-Traded Funds Not Listed On Nasdaq
------------------------------------------------------------------------
Order routed to the New York Stock See DOT fee schedule in Rule
Exchange (``NYSE'') through its DOT 7010(i)(6).
system.
Any other order entered by a member $0.004 per share executed.
that is routed outside of the Nasdaq
Facilities and that does not attempt
to execute in the Nasdaq Facilities
prior to routing.
Order routed to the American Stock $0.01 per share executed.
Exchange (``Amex'') after attempting
to execute in the Nasdaq Facilities.
Order routed through the Intermarket $0.0007 per share executed.
Trading System (``ITS'') after
attempting to execute in the Nasdaq
Facilities.
Order routed to venues other than the $0.0035 per share executed.
NYSE and Amex after attempting to
execute in the Nasdaq Facilities.
----------------------------------------
[Order Cancellation]
------------------------------------------------------------------------
[Non-Directed and Preferenced Orders].. [No charge].
------------------------------------------------------------------------
(2) For purposes of assessing Nasdaq [Market Center and Brut]
Facilit[y]ies fees and credits hereunder, (A) a Discretionary Order
that executes prior to being displayed as a Quote/Order will always be
deemed to be accessing liquidity unless it is executed by (or receives
delivery of) a displayed Discretionary Order at a price in the
discretionary price range of the displayed Discretionary Order, and (B)
a Discretionary Order that executes after being displayed as a Quote/
Order will always be deemed to be providing liquidity, unless the
displayed Discretionary Order executes against (or is delivered to) a
Quote/Order or Non-Directed Order that has not been designated
``Immediate or Cancel,'' at a price in its discretionary price range.
(3) No change.
(4) Opening Cross.
[Commencing on January 1, 2006, m]Members shall be assessed the
following Nasdaq Market Center execution fees for quotes and orders
executed in the Nasdaq Opening Cross:
------------------------------------------------------------------------
------------------------------------------------------------------------
Market-on-Open, Limit-on-Open, Good- $0.0005 per share executed for
till-Cancelled, Immediate-or-Cancel, the net number of buy and sell
and Day orders executed in the Nasdaq shares up to a maximum of
Opening Cross. $10,000 per firm per month.
All other quotes and orders executed in No charge for execution.
the Nasdaq Opening Cross.
------------------------------------------------------------------------
(5) Except as provided in paragraph (6), the following charges
shall apply to the use of the order execution and routing services of
the Nasdaq Facilities by members for [There shall be no charges or
credits for order entry, execution, routing, or cancellation by members
accessing the Nasdaq Market Center or Nasdaq's Brut Facility to buy or
sell exchange-listed] securities subject to the Consolidated Quotations
Service and Consolidated Tape Association plans[,] other than Exchange-
Traded Funds (``Covered Securities''):
[(A) the charges in Rule 7010(i)(1) for Exchange-Traded Funds,]
[(B) charges described in Rule 7010(d),]
[(C) a fee of $0.0004 per share executed for orders delivered by
Nasdaq's Brut Facility to an exchange using the exchange's proprietary
order delivery system if such orders do not attempt to execute in
Nasdaq's Brut Facility or the Nasdaq Market Center prior to routing to
the exchange,]
[(D) a fee of $0.009 per share executed for any limit order
delivered by Nasdaq's Brut Facility to the New York Stock Exchange
(``NYSE'') using the NYSE's proprietory order delivery system if such
an order is not an on-close order, is not executed in the opening, and
remains at the NYSE for more than 5 minutes]
[(E) for a pilot period beginning December 1, 2005 and ending
February 28, 2006, a credit of $0.0005 per share executed to a member
providing liquidity for a transaction in the following stocks: Advanced
Micro Devices Inc. (AMD); Apache Corp. (APA); AT&T Corp. (T); Avaya,
Inc. (AV); Baker Hughes, Inc. (BHI); BJ Services Co. (BJS); Bristol-
Myers Squibb Co. (BMY); Burlington Resources, Inc. (BR); Calpine Corp.
(CPN); Charles Schwab Corp. (SCH); Citigroup Inc. (C); ConocoPhillips
(COP); Corning Inc. (GLW); Devon Energy Corp. (DVN); EMC Corp. (EMC);
Exxon Mobil Corp. (XOM); Ford Motor Co. (F); Gateway, Inc. (GTW);
General Electric Co. (GE); Halliburton Co. (HAL); Hewlett-Packard Co.
(HPQ); Johnson & Johnson (JNJ); JPMorgan Chase & Co. (JPM); Kohl's
Corp. (KSS); LSI Logic Corp. (LSI); Micron Technology, Inc. (MU);
Motorola, Inc. (MOT); Noble Corp. (NE); Occidental Petroleum Corp.
(OXY); Office Depot Inc. (ODP); Pfizer Inc. (PFE); Phelps Dodge Corp.
(PD); Pulte Homes, Inc. (PHM); Qwest Communications International Inc.
(Q); Schlumberger Ltd. (SLB); Solectron Corp. (SLR); Sovereign Bancorp,
Inc. (SOV); Time Warner, Inc. (TWX); Valero Energy Corp. (VLO); and
Verizon Communications, Inc. (VZ).]
[[Page 8023]]
------------------------------------------------------------------------
------------------------------------------------------------------------
Order Execution
------------------------------------------------------------------------
Order that accesses the Quote/Order of
a Nasdaq Facility market participant:
Charge to member entering order.... $0.0007 per share executed.
Credit to member providing liquidity:
Members with an average daily $0.0005 per share executed.
volume through the Nasdaq
Facilities in Covered Securities
during the month of more than 5
million shares of liquidity
accessed, provided, or routed.
Other members...................... No credit.
----------------------------------------
Order Routing
------------------------------------------------------------------------
Order routed to Amex................... $0.01 per share executed.
Order routed through the ITS........... $0.0007 per share executed.
Order routed to NYSE................... See DOT fee schedule in Rule
7010(i)(6).
Order for NYSE-listed Covered Security $0.0015 per share executed.
routed to venue other than the NYSE.
Order for Covered Security listed on $0.0035 per share executed.
venue other than the NYSE and routed
to venue other than Amex.
------------------------------------------------------------------------
(6) The following charges shall apply to the use of the Nasdaq
Facilities by members for routing to the NYSE through its DOT system
for all securities, including Exchange-Traded Funds:
------------------------------------------------------------------------
------------------------------------------------------------------------
Order charged a fee by the NYSE $0.01 per share executed.
specialist.
Order that attempts to execute in the No charge.
Nasdaq Facilities prior to routing and
that is not charged a fee by the NYSE
specialist.
Order that does not attempt to execute
in the Nasdaq Facilities prior to
routing and that is not charged a fee
by the NYSE specialist:
Average daily shares of liquidity
routed through Nasdaq's DOT linkage by
the member during the month:
More than 30 million............... $0.0001 per share executed.
Between 2,000,001 and 30 million... $0.0003 per share executed.
Between 250,001 and 2 million...... $0.0005 per share executed.
Between 100,001 and 250,000........ $0.001 per share executed.
100,000 or less.................... $0.01 per share executed.
------------------------------------------------------------------------
[(6)](7) The fees applicable to non-members using Nasdaq's Brut
Facility shall be the fees established for members under Rule 7010(i),
as amended by SR-NASD-2005-019, SR-NASD-2005-035, SR-NASD-2005-048, SR-
NASD-2005-071, SR-NASD-2005-125, SR-NASD-2005-137, and SR-NASD-2005-
154, and as applied to non-members by SR-NASD-2005-020, SR-NASD-2005-
038, SR-NASD-2005-049, SR-NASD-2005-072, SR-NASD-2005-126, SR-NASD-
2005-138, and SR-NASD-2005-155.
(j)-(v) No change.
(w) INET System [Order Execution] Connectivity
(1) [For a period of time not to exceed 60 days after INET becomes
a facility of Nasdaq, t]T he following charges shall apply to
telecommunication protocols [the] used [of the order execution services
of] to access Nasdaq's INET System [by Participants for]:
------------------------------------------------------------------------
------------------------------------------------------------------------
[NASDAQ-listed securities]
------------------------------------------------------------------------
[Order Execution]
------------------------------------------------------------------------
[Non-Directed Order that accesses the
Quote/Order of a market Participant
through Nasdaq's INET System:].
[Charge to Participant entering order:]
[Average daily shares of liquidity
provided through Nasdaq's INET System
by the Participant during the month:].
[Greater than 60 million shares [$0.0027 per share executed].
accessed or routed and 5 million
shares provided].
[Greater than 40 million shares but [$0.0028 per share executed].
less than 60 million shares accessed
or routed and 5 million shares
provided].
[Less than 5 million shares provided or [$0.0030 per share executed].
less than 40 million shares accessed
or routed].
[Credit to Participant providing
liquidity:].
[Average daily shares of liquidity
provided through Nasdaq's INET System
by the Participant during the month:].
[Greater than 30 million shares [$0.0025 per share executed].
provided or greater than 30 million
shares accessed or routed or greater
than 50 million shares combined
provided, accessed or routed].
[Less than or equal to 30 million [$0.002 per share executed].
shares provided and less than or equal
to 30 million shares accessed or
routed and less than or equal to 50
million shares combined provided,
accessed, or routed].
[[Page 8024]]
[Any order that matches against another [$0.00025 per share per side.].
order of the same Participant].
----------------------------------------
[Routed Orders]
------------------------------------------------------------------------
[Any other order entered by a [$0.0025 per share executed].
Participant that is routed outside of
Nasdaq's INET System].
[Any other order entered by a [$0.001 per share executed]
Participant that is routed to the
NASDAQ Opening or Closing Cross].
----------------------------------------
[AMEX-listed stocks]
------------------------------------------------------------------------
[Order Execution]
------------------------------------------------------------------------
[Non-Directed Order that accesses the
Quote/Order of a market Participant
through Nasdaq's INET System:].
[Credit to Participant entering order:] [$0.0009 per share executed].
[Charge to Participant providing [$0.001 per share executed].
liquidity:].
[Any order that matches against another [No charge].
order of the same Participant].
----------------------------------------
[Routed Orders]
------------------------------------------------------------------------
[Any order entered by a Participant [$0.01 per share executed].
that is routed outside of Nasdaq's
INET System through DOT].
[Any order entered by a Participant [$0.0035 per share executed].
that is routed outside of Nasdaq's
INET System other than through DOT].
----------------------------------------
[AMEX-listed ETFs]
------------------------------------------------------------------------
[Order Execution]
------------------------------------------------------------------------
[Non-Directed Order that accesses the
Quote/Order of a market Participant
through Nasdaq's INET System:].
[Charge to Participant entering order:]
[Average daily shares of liquidity
provided through Nasdaq's INET System
by the Participant during the month:].
[Greater than 60 million shares [$0.0027 per share executed].
accessed or routed and 5 million
shares provided].
[Greater than 40 million shares but [$0.0028 per share executed].
less than 60 million shares accessed
or routed and 5 million shares
provided].
[Less than 5 million shares provided or [$0.0030 per share executed].
less than 40 million shares accessed
or routed].
[Credit to Participant providing
liquidity:].
[Average daily shares of liquidity
provided through Nasdaq's INET System
by the Participant during the month:].
[Greater than 30 million shares [$0.0025 per share executed].
provided or greater than 30 million
shares accessed or routed or greater
than 50 million shares combined
provided, accessed or routed].
[Less than or equal to 30 million [$0.002 per share executed].
shares provided and less than or equal
to 30 million shares accessed or
routed and less than or equal to 50
million shares combined provided,
accessed, or routed].
----------------------------------------
[Any order that matches against another [$0.00025 per share per side.].
order of the same Participant].
----------------------------------------
[Routed Orders]
------------------------------------------------------------------------
[Any order entered by a Participant [$0.01 per share executed].
that is routed outside of Nasdaq's
INET System to the AMEX].
[Any order entered by a Participant [$0.0035 per share executed].
that is routed outside of Nasdaq's
INET System other than to the AMEX].
----------------------------------------
[NYSE-listed stocks]
------------------------------------------------------------------------
[Order Execution]
------------------------------------------------------------------------
[Non-Directed Order that accesses the
Quote/Order of a market Participant
through Nasdaq's INET System:].
[Credit to Participant entering order:] [$0.0009 per share executed].
[Charge to Participant providing [$0.001 per share executed].
liquidity:].
[Any order that matches against another [No charge].
order of the same Participant].
----------------------------------------
[Routed Orders]
------------------------------------------------------------------------
[Any order entered by a Participant [$0.01 per share executed].
that is routed outside of Nasdaq's
INET System through DOT that is
charged a fee by the specialist
(billable)].
[[Page 8025]]
[Charge to any order entered by a
Participant that is routed outside of
Nasdaq's INET System through DOT that
is not charged a fee by the specialist
(non-billable):].
[Average daily shares of billable and
non-billable NYSE DOT shares:].
[Greater than 30 million shares]....... [$0.0001].
[Greater than 2 million shares but less [$0.0003].
than or equal to 30 million shares].
[Greater than 250,000 shares but less [$0.0005].
than or equal to 2 million shares].
[Greater than 100,000 shares but less [$0.001].
than or equal to 250,000 shares].
[Less than or equal to 100,000 shares]. [$0.01].
[Any order entered by a Participant [$0.0015 per share executed].
that is routed outside of Nasdaq's
INET System other than through DOT].
------------------------------------------------------------------------
[Upon Participant's request, added liquidity among Participants
that are wholly owned by a common parent may be aggregated. INET will
distribute the market data revenue based on the number of tape
reportable transactions executed by the Participant, as paid to INET.]
[Market Data Revenue Sharing for AMEX Listed (Tape B) Securities]
[Subscribers that add liquidity to the INET limit order book in
Tape B securities (e.g. AMEX listed securities) will receive 50% of the
market data revenue paid by the Consolidated Tape Association.]
Port Fees:
Connectivity to Harborside Financial Center and Secaucus Datacenters
[$400 per month for each OUCH[supreg]/FIX pair
$400 per month for each ITCH[supreg] data feed pair
$400 per month for each DROP[supreg] pair]
$400 per month for each [Compressed ITCH[supreg] data
feed] port pair, other than
[$1000 per month for each] Multicast ITCH[supreg] data
feed pairs, for which the fee is $1000 per month
Internet Ports: An additional $200 per month for each Internet port
that requires additional bandwidth.
Connectivity to Chicago Datacenter
$800 per month for each [OUCH[supreg]/FIX] port pair
[$800 per month for each ITCH[supreg] data feed pair
$800 per month for each DROP[supreg] pair]
All port fees, not including Internet Bandwidth surcharges, will be
waived for Subscribers that for a calendar month have an average daily
share volume for executed orders exceeding 30 million shares of added
liquidity.
INET Terminal Fees:
Each ID is subject to a minimum commission fee of $50 per month
unless it executes a minimum of 100,000 shares.
Each ID receiving market data is subject to pass-through fees for
use of these services. Pricing for these services is determined by the
exchanges and/or market center.
Each ID that is given web access is subject to a $50
monthly fee.
Portal Fees:
Each ID is subject to a monthly user fee of $150.
Each ID receiving market data is subject to pass-through fees for
use of these services. Pricing for these services is determined by the
exchanges and/or market center.
(2) 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, as
amended, and discussed any comments it received on the proposed rule
change, as amended. 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 establish a new fee and credit schedule for
order execution and routing that spans activity on the Nasdaq
Facilities.\7\ In SR-NASD-2005-128,\8\ Nasdaq's filing to establish
rules for the newly acquired Inet ECN, Nasdaq committed that it would,
within 60 days of the closing of the acquisition of Inet, file an
integrated fee and credit structure governing the use of all of the
Nasdaq Facilities. Nasdaq states that the fee and rebate structure is
based on multiple volume-based usage tiers that take into account the
combined volume of a market participant on all of the Nasdaq
Facilities. Nasdaq believes that this integrated and uniform pricing
structure will encourage activity on the Nasdaq Facilities and will not
provide financial incentives to use one system versus the other. Nasdaq
notes that under the new structure, the volumes required to receive
certain discounted fees or enhanced credits are higher than is the case
under current pricing for the Nasdaq Market Center and Brut. Nasdaq
states that this is a function of the fact that the combined volume of
the three systems would be markedly higher than that of any system in
isolation, so an adjustment of the tier thresholds would be necessary
to prevent the combining of the systems from resulting in unwarranted
fee decreases. As stated in a Current Report on Form 8-K and related
press release filed by Nasdaq with the Commission, Nasdaq does not
currently anticipate that the new pricing structure would have a
material impact on its financial results.\9\
---------------------------------------------------------------------------
\7\ This filing would apply to NASD members. Nasdaq has
submitted SR-NASD-2006-014 to apply the same pricing structure to
non-members.
\8\ Securities Exchange Act Release Nos. 52902 (December 7,
2005), 70 FR 73810 (December 13, 2005) (SR-NASD-2005-128) and 52723
(November 2, 2005), 70 FR 67513 (November 7, 2005) (SR-NASD-2005-
128).
\9\ See Current Report on Form 8-K of The Nasdaq Stock Market,
Inc. (January 6, 2006) (available at https://www.sec.gov/Archives/
edgar/data/1120193/000119312506002815/0001193125-06-002815-
index.htm).
---------------------------------------------------------------------------
Specific features of the new pricing structure for Nasdaq-listed
securities and exchange-traded funds (``ETFs'') are as follows:
Members with an average daily volume through the Nasdaq
Facilities in all securities (i.e., listed on Nasdaq or elsewhere)
during the month of (i) more than 30 million shares of liquidity
provided, and (ii) more than 50 million shares of liquidity accessed
and/or routed would pay $0.0028 per share to access liquidity from
market participants that do not charge an access fee; all others would
pay $0.003 per
[[Page 8026]]
share to access liquidity from market participants that do not charge
an access fee.\10\
---------------------------------------------------------------------------
\10\ Telephone conversation between John Yetter, Associate
General Counsel, Exchange, and David Liu and Michou Nguyen,
Attorneys, Division of Market Regulation (``Division''), Commission,
on February 2, 2006.
---------------------------------------------------------------------------
Members with an average daily volume through the Nasdaq
Facilities in all securities during the month of more than 30 million
shares of liquidity provided and that do not charge an access fee would
receive a credit of $0.0025 per share when providing liquidity; others
that do not charge an access fee would receive $0.002 per share; and
members that charge an access fee would not receive a credit.
Members with an average daily volume through the Nasdaq
Facilities in all securities during the month of more than 500,000
shares of liquidity provided would pay $0.001 per share to access
liquidity from market participants that charge an access fee, with a
cap of $10,000 per month; all others would pay $0.001 per share with no
cap.
When routing orders for Nasdaq-listed securities that check the
books of the Nasdaq Facilities before routing, members with an average
daily volume through the Nasdaq Facilities in all securities during the
month of (i) more than 30 million shares of liquidity provided, and
(ii) more than 50 million shares of liquidity accessed and/or routed
would pay the greater of $0.0028 per share or the applicable access
fees of electronic communications networks (ECNs) that charge more than
$0.003 per share. Other members would pay the greater of $0.003 per
share or the applicable access fees of ECNs that charge more than
$0.003 per share. Finally, members routing orders for Nasdaq-listed
securities that do not first check the books of the Nasdaq Facilities
would pay the greater of $0.004 per share or the applicable access fees
of ECNs that charge more than $0.003 per share. Thus, in most cases,
Nasdaq would pass through to its market participants the cost that it
is charged when routing to ECNs that charge more than $0.003 per share.
The fees for routing ETFs not listed on Nasdaq would be as follows:
(i) $0.01 per share for an order executed to the American Stock
Exchange (``Amex'') after checking the Nasdaq Facilities, (ii) $0.0035
per share for an order executed on venues other than the New York Stock
Exchange (``NYSE'') and Amex after checking the Nasdaq Facilities,
(iii) $0.0007 for an order executed through the Intermarket Trading
System (``ITS'') after checking the Nasdaq Facilities, and (iv) $0.004
per share for an order that is executed without checking the Nasdaq
Facilities.\11\ Fees for ETF orders executed on the NYSE are described
below.\12\
---------------------------------------------------------------------------
\11\ Id.
\12\ Id.
---------------------------------------------------------------------------
Specific features of the new pricing structure for non-Nasdaq-
listed securities other than ETFs (``Covered Securities'') would be as
follows:
All members would pay $0.0007 per share for orders that
access liquidity from the Nasdaq Facilities.
Members with an average daily volume through the Nasdaq
Facilities in Covered Securities during the month of more than 5
million shares of liquidity accessed, provided, or executed\13\ would
receive a credit of $0.0005 per share of liquidity provided; others
would not receive a liquidity provider credit. As a result, Nasdaq
would be ending the liquidity provider credit pilot for 40 NYSE-listed
stocks under Rule 7010(i)(5)(E).\14\
---------------------------------------------------------------------------
\13\ Id.
\14\ See Securities Exchange Act Release Nos. 53081 (January 9,
2006), 71 FR 2608 (January 17, 2006) (SR-NASD-2005-154) and 53082
(January 9, 2006), 71 FR 2607 (January 17, 2006) (SR-NASD-2005-155).
---------------------------------------------------------------------------
The fees for routing Covered Securities would be as
follows: (i) $0.01 per share for an order executed on Amex, (ii)
$0.0035 per share for an order for a security listed on a venue other
than the NYSE and executed on a venue other than Amex, (iii) $0.0015
per share for an NYSE-listed Covered Security executed on a venue other
than the NYSE, and (iv) $0.0007 per share for an order executed on the
ITS.\15\
---------------------------------------------------------------------------
\15\ Telephone conversation between John Yetter, Associate
General Counsel, Exchange, and David Liu and Michou Nguyen,
Attorneys, Division, Commission, on February 2, 2006.
---------------------------------------------------------------------------
Fees for orders in NYSE-listed Covered Securities and NYSE-listed
ETFs routed to the NYSE through its DOT system are described below:
Orders that are routed through DOT after accessing the
Nasdaq Facilities and that are not charged a fee by the NYSE specialist
would be free. Members would pay a fee of $0.01 per share for orders
that are charged a fee by the NYSE specialist.
The fee for orders routed through DOT without accessing
the Nasdaq Facilities would depend on a member's volume of usage of
Nasdaq's DOT linkage. Members routing an average daily volume of more
than 30 million shares during the month would pay $0.0001 per share
executed; members routing between 2,000,001 and 30 million shares would
pay $0.0003 per share executed; members routing between 250,001 and 2
million shares would pay $0.0005 per share executed; members routing
between 100,001 and 250,000 shares would pay $0.001 per share executed;
and members routing 100,000 shares or less would pay $0.01 per share
executed.
Other changes being effected by the proposed rule change would be
as follows:
Nasdaq would be eliminating fee and credit caps currently
in place for trades priced under $1. Nasdaq states that the caps were
instituted as a response to high trading volumes in certain low-priced
stocks several years ago and have less relevance to the current trading
environment.
Good-till-Cancelled and Immediate-or-Cancel orders would
be added to the list of order types that pay a $0.0005 per share fee
when executed in Nasdaq's Opening Cross. Other fees for the Opening
Cross and the Closing Cross would be unchanged.
The Nasdaq Market Center and Brut would no longer share
market data revenue associated with transactions in securities listed
on the NYSE that are executed through these systems. Nasdaq represents
that Inet does not currently share such revenue.
Most Inet fees contained in Rule 7010(w) would be deleted.
However, fees for use of Inet's telecommunications protocols would be
maintained. Since Inet continues to use different telecommunications
protocols and is operated out of its own data centers, Nasdaq believes
that it is appropriate to maintain Inet's current connectivity pricing.
Nasdaq believes that the telecommunications charges associated with
accessing Inet are comparable to those associated with accessing the
Nasdaq Market Center and Brut. However, Nasdaq would be deleting some
redundant language from the rule language describing these fees.
Nasdaq would be deleting unnecessary references to order entry
fees, order cancellation fees, and preferenced orders.
2. Statutory Basis
Nasdaq believes that the proposed rule change, as amended, is
consistent with the provisions of Section 15A of the Act,\16\ in
general, and with Section 15A(b)(5) of the Act,\17\ in particular, in
that the proposed rule change, as amended, 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. Nasdaq states that
[[Page 8027]]
the proposed rule change, as amended, would establish a uniform fee
schedule for the Nasdaq Facilities that takes account of the higher
volumes associated with the combining of the Nasdaq Facilities for
purposes of determining pricing discounts. Nasdaq does not currently
anticipate that the new pricing structure would have a material impact
on its financial results.
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\16\ 15 U.S.C. 78o-3.
\17\ 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, as amended,
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
Nasdaq states that written comments were neither solicited nor
received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change, as amended, is subject to Section
19(b)(3)(A)(ii) of the Act \18\ and subparagraph (f)(2) of Rule 19b-4
\19\ thereunder because it establishes or changes a due, fee, or other
charge imposed by the self-regulatory organization. Accordingly, the
proposal is effective upon Commission receipt of the filing. 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.\20\
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\18\ 15 U.S.C. 78s(b)(3)(A)(ii).
\19\ 17 CFR 240.19b-4(f)(2).
\20\ The effective date of the original proposed rule change is
January 30, 2006, and the effective date of Amendment No. 1 is
February 1, 2006. For purposes of calculating the 60-day period
within which the Commission may summarily abrogate the proposed rule
change, as amended, the Commission considers the period to commence
on February 1, 2006, the date on which the Exchange submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, 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-2006-013 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 SR-NASD-2006-013. 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 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-2006-013 and should be submitted on or before March
8, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-2106 Filed 2-14-06; 8:45 am]
BILLING CODE 8010-01-P
