Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Establishing CTCI Station-Based Pricing for Non-Members, 15788-15789 [E6-4538]

Download as PDF 15788 Federal Register / Vol. 71, No. 60 / Wednesday, March 29, 2006 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53535; File No. SR–NASD– 2006–027] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Establishing CTCI Station-Based Pricing for Non-Members March 21, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 22, 2006, the National Association of Securities Dealers, Inc. (‘‘NASD’’), through its subsidiary, The Nasdaq Stock Market, Inc. (‘‘Nasdaq’’), filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by Nasdaq. Nasdaq filed Amendment No. 1 on March 10, 2006, and Amendment No. 2 on March 14, 2006. The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment Nos. 1 and 2, from interested persons, and simultaneously granting accelerated approval of the proposed rule change, as amended. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify fees for Nasdaq access through the Computer to Computer Interface (‘‘CTCI’’) protocol for non-members. The text of the proposed rule change is below. Proposed new language is in italics; proposed deletions are in brackets.3 Rule 7010. System Services (a)–(e) No Change (f)(1)–(3) No Change (4) Computer to Computer Interface (CTCI) The fees in the table below are applicable to CTCI subscribers [NASD members] that have transitioned off of Nasdaq-supported circuits, and as of the July 1, 2006, also apply to CTCI subscribers [NASD members] that have not transitioned. STATIONS Fee component Fee Station/month 1st Station ........................... Each Additional Station ...... $200 600 The bandwidth fees in the table below apply to [NASD members] CTCI subscribers that have not transitioned off of Nasdaq-supported circuits[, and, pending approval of SR–NASD–2006– 027, to non-members as indicated]. BANDWIDTH Fee component Fee Single 56kb line with single hub and router (for remote disaster recovery sites only). Option 1 Dual 56kb lines (one for redundancy) and single hub and router. Option 2 Dual 56kb lines (one for redundancy), dual hubs (one for redundancy), and dual router (one for redundancy). Option 3 Dual T1 lines (one for redundancy), dual hubs (one for redundancy), and dual routers (one for redundancy). Includes base bandwidth of 128kb. Bandwidth Enhancement Fee (for T1 subscribers only) Per 64kb increase above 128kb T1 base. Option 1, 2, or 3 with Message Queue software enhancement .............. Installation Fee ......................................................................................... Relocation Fee (for the movement of TCP/IP—capable lines within a single location). hsrobinson on PROD1PC68 with NOTICES (5) New Nasdaq Workstation No Change (g)–(w) No Change * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item III below. Nasdaq has prepared summaries, set 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 http:// www.nasd.com, as amended on an immediately 2 17 VerDate Aug<31>2005 15:39 Mar 28, 2006 Jkt 208001 $900/month [for members $975/month for non-members]. $1,000/month [for members $1,275/month for non-members]. $1,200/month [for members $1,600/month for non-members]. $2,500/month [for members $8,000/month for non-members]. $200/month [for members $600/month for non-members] Fee for Option 1, 2, or 3 (including any Bandwidth Enhancement Fee) plus 20% $2,000 per site for dual hubs and routers. $1,000 per site for single hub and router. $1,700 per relocation. 1. Purpose On February 22, 2006, Nasdaq filed SR–NASD–2006–026, to modify fees for members to establish access to Nasdaq through the CTCI protocol (effective February 22, 2006). The instant proposed rule change will apply to non- members a pricing schedule identical to that schedule Nasdaq instituted for members in SR–NASD–2006–026.4 Through the implementation of FIX and QIX and the sunset of the SDP/API, Nasdaq has continued towards its goal of allowing firms and service bureaus to choose their own circuit connectivity provider for access to Nasdaq’s products and services. CTCI is the only remaining Nasdaq protocol that requires the firm to choose a Nasdaq-provided circuit for connectivity. In order for Nasdaq to complete its strategy, Nasdaq seeks to modify the CTCI pricing structure in effective basis by SR–NASD–2006–026. See footnote 3 supra. 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). 4 See Securities Exchange Act Release No. 53536 (March 21, 2006). 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 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 71, No. 60 / Wednesday, March 29, 2006 / Notices order to transition from circuit-based fee components based on bandwidth to ‘‘Station’’ fee components that are more synonymous with logical access ports. CTCI Stations are logical channels used to manage the flow of data to and from the firm user. Stations are synonymous with the logical access ports used for FIX and QIX as they have the same characteristics, including a one to one relationship between the firm and Station and throughput limits. For this reason, Nasdaq chose a Stationbased fee component for its new pricing. In order to facilitate the transition, Nasdaq seeks to modify the current bandwidth based fees to Nasdaq’s circuit cost imposed by its carrier plus an administration cost. Firms that decide not to transition off of Nasdaq supported circuits will pay the new bandwidth-based fees in addition to Station fees. Nasdaq expects almost all firms to transition to new circuit connections but that the transition date will be different for each firm. As a result, Nasdaq intends to implement the new pricing structure once a firm has transitioned to a different circuit connection. However, the new pricing will be applied to all firms on July 1, 2006 regardless of the firm’s transition plan. Thus, a firm that transitions will pay only the station fee. A firm that does not transition will pay only the bandwidth fee prior to July 1, but will pay both the station and the bandwidth fee between July 1 and the date when it does transition. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 15A of the Act,5 in general, and with Section 15A(b)(5) of the Act,6 in particular, in that the proposal 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 NASD operates or controls. The proposed rule change applies to non-members and will modify the current CTCI pricing structure in order to transition from circuit-based fee components based on bandwidth to ‘‘Station’’ fee components that are more synonymous with logical access ports. hsrobinson on PROD1PC68 with NOTICES 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 5 15 6 15 U.S.C. 78o–3. U.S.C. 78o–3(b)(5). VerDate Aug<31>2005 15:39 Mar 28, 2006 Jkt 208001 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. 15789 IV. Commission’s Findings and Order Granting Accelerated Approval of Proposed Rule Change The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a self-regulatory organization.7 Specifically, the III. Solicitation of Comments Commission believes that the proposed rule change, as amended, is consistent Interested persons are invited to with Section 15A(b)(5) of the Act,8 submit written data, views, and which requires that the rules of the selfarguments concerning the foregoing, regulatory organization provide for the including whether the proposed rule equitable allocation of reasonable dues, change is consistent with the Act. fees, and other charges among members Comments may be submitted by any of and issuers and other persons using any the following methods: facilities or system which it operates or Electronic Comments controls. • Use the Commission’s Internet The Commission notes that this comment form (http://www.sec.gov/ proposal would permit the schedule for rules/sro.shtml); or non-NASD members to mirror the • Send an e-mail to ruleschedule applicable to NASD members comments@sec.gov. Please include File that became effective on February 22, Number SR–NASD–2006–027 on the 2006, pursuant to SR–NASD–2006–026. subject line. The Commission finds good cause for approving the proposed rule change, as Paper Comments amended, prior to the 30th day of the • Send paper comments in triplicate date of publication of the notice thereof to Nancy M. Morris, Secretary, in the Federal Register. The proposed Securities and Exchange Commission, fees for non-NASD members are 100 F Street, NE., Washington, DC identical to those in SR–NASD–2006– 20549–1090. 026, which implemented those fees for All submissions should refer to File NASD members and which became Number NASD–2006–027. This file effective as of February 22, 2006. The number should be included on the Commission notes that the instant subject line if e-mail is used. To help the proposed rule change will promote Commission process and review your consistency in Nasdaq’s fee schedule by comments more efficiently, please use applying simultaneously the same only one method. The Commission will pricing schedule for NASD members post all comments on the Commission’s and non-NASD members alike. Internet Web site (http://www.sec.gov/ Therefore, the Commission finds that rules/sro.shtml). Copies of the there is good cause, consistent with submission, all subsequent Section 19(b)(2) of the Act, to approve amendments, all written statements the proposed rule change, as modified with respect to the proposed rule by Amendment Nos. 1 and 2, on an change that are filed with the accelerated basis. Commission, and all written V. Conclusion communications relating to the proposed rule change between the It is therefore ordered, pursuant to Commission and any person, other than Section 19(b)(2) of the Act, that the those that may be withheld from the proposed rule change, as amended (SR– public in accordance with the NASD–2006–027), is approved on an provisions of 5 U.S.C. 552, will be accelerated basis. available for inspection and copying in For the Commission, by the Division of the Commission’s Public Reference Market Regulation, pursuant to delegated Room. Copies of the filing also will be authority.9 available for inspection and copying at Nancy M. Morris, the principal offices of NASD. All Secretary. comments received will be posted [FR Doc. E6–4538 Filed 3–28–06; 8:45 am] without change; the Commission does BILLING CODE 8010–01–P not edit personal identifying information from submissions. You 7 In approving the proposed rule change, the should submit only information that Commission has considered the proposed rule’s you wish to make available publicly. All impact on efficiency, competition and capital submissions should refer to File formation. See 15 U.S.C. 78c(f). 8 15 U.S.C. 78o–3(b)(5). Number NASD–2006–027 and should be 9 17 CFR 200.30–3(a)(12). submitted on or before April 19, 2006. PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 E:\FR\FM\29MRN1.SGM 29MRN1

Agencies

[Federal Register Volume 71, Number 60 (Wednesday, March 29, 2006)]
[Notices]
[Pages 15788-15789]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4538]



[[Page 15788]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53535; File No. SR-NASD-2006-027]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Establishing 
CTCI Station-Based Pricing for Non-Members

March 21, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 22, 2006, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by Nasdaq. Nasdaq filed 
Amendment No. 1 on March 10, 2006, and Amendment No. 2 on March 14, 
2006. The Commission is publishing this notice to solicit comments on 
the proposed rule change, as modified by Amendment Nos. 1 and 2, from 
interested persons, and simultaneously granting accelerated approval of 
the proposed rule change, as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify fees for Nasdaq access through the 
Computer to Computer Interface (``CTCI'') protocol for non-members. The 
text of the proposed rule change is below. Proposed new language is in 
italics; proposed deletions are in brackets.\3\
---------------------------------------------------------------------------

    \3\ Changes are marked to the rule text that appears in the 
electronic NASD Manual found at http://www.nasd.com, as amended on 
an immediately effective basis by SR-NASD-2006-026. See footnote 3 
supra. 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).
---------------------------------------------------------------------------

Rule 7010. System Services
    (a)-(e) No Change
    (f)(1)-(3) No Change
(4) Computer to Computer Interface (CTCI)
    The fees in the table below are applicable to CTCI subscribers 
[NASD members] that have transitioned off of Nasdaq-supported circuits, 
and as of the July 1, 2006, also apply to CTCI subscribers [NASD 
members] that have not transitioned.

                                Stations
------------------------------------------------------------------------
                                                          Fee  Station/
                     Fee component                            month
------------------------------------------------------------------------
1st Station............................................             $200
Each Additional Station................................              600
------------------------------------------------------------------------

    The bandwidth fees in the table below apply to [NASD members] CTCI 
subscribers that have not transitioned off of Nasdaq-supported 
circuits[, and, pending approval of SR-NASD-2006-027, to non-members as 
indicated].

                                Bandwidth
------------------------------------------------------------------------
             Fee component                             Fee
------------------------------------------------------------------------
Single 56kb line with single hub and     $900/month [for members $975/
 router (for remote disaster recovery     month for non-members].
 sites only).
Option 1 Dual 56kb lines (one for        $1,000/month [for members
 redundancy) and single hub and router.   $1,275/month for non-members].
Option 2 Dual 56kb lines (one for        $1,200/month [for members
 redundancy), dual hubs (one for          $1,600/month for non-members].
 redundancy), and dual router (one for
 redundancy).
Option 3 Dual T1 lines (one for          $2,500/month [for members
 redundancy), dual hubs (one for          $8,000/month for non-members].
 redundancy), and dual routers (one for
 redundancy). Includes base bandwidth
 of 128kb.
Bandwidth Enhancement Fee (for T1        $200/month [for members $600/
 subscribers only) Per 64kb increase      month for non-members]
 above 128kb T1 base.
Option 1, 2, or 3 with Message Queue     Fee for Option 1, 2, or 3
 software enhancement.                    (including any Bandwidth
                                          Enhancement Fee) plus 20%
Installation Fee.......................  $2,000 per site for dual hubs
                                          and routers.
                                         $1,000 per site for single hub
                                          and router.
Relocation Fee (for the movement of TCP/ $1,700 per relocation.
 IP--capable lines within a single
 location).
------------------------------------------------------------------------

(5) New Nasdaq Workstation No Change
    (g)-(w) No Change
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III 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
    On February 22, 2006, Nasdaq filed SR-NASD-2006-026, to modify fees 
for members to establish access to Nasdaq through the CTCI protocol 
(effective February 22, 2006). The instant proposed rule change will 
apply to non-members a pricing schedule identical to that schedule 
Nasdaq instituted for members in SR-NASD-2006-026.\4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 53536 (March 21, 
2006).
---------------------------------------------------------------------------

    Through the implementation of FIX and QIX and the sunset of the 
SDP/API, Nasdaq has continued towards its goal of allowing firms and 
service bureaus to choose their own circuit connectivity provider for 
access to Nasdaq's products and services. CTCI is the only remaining 
Nasdaq protocol that requires the firm to choose a Nasdaq-provided 
circuit for connectivity. In order for Nasdaq to complete its strategy, 
Nasdaq seeks to modify the CTCI pricing structure in

[[Page 15789]]

order to transition from circuit-based fee components based on 
bandwidth to ``Station'' fee components that are more synonymous with 
logical access ports.
    CTCI Stations are logical channels used to manage the flow of data 
to and from the firm user. Stations are synonymous with the logical 
access ports used for FIX and QIX as they have the same 
characteristics, including a one to one relationship between the firm 
and Station and throughput limits. For this reason, Nasdaq chose a 
Station-based fee component for its new pricing. In order to facilitate 
the transition, Nasdaq seeks to modify the current bandwidth based fees 
to Nasdaq's circuit cost imposed by its carrier plus an administration 
cost. Firms that decide not to transition off of Nasdaq supported 
circuits will pay the new bandwidth-based fees in addition to Station 
fees. Nasdaq expects almost all firms to transition to new circuit 
connections but that the transition date will be different for each 
firm. As a result, Nasdaq intends to implement the new pricing 
structure once a firm has transitioned to a different circuit 
connection. However, the new pricing will be applied to all firms on 
July 1, 2006 regardless of the firm's transition plan. Thus, a firm 
that transitions will pay only the station fee. A firm that does not 
transition will pay only the bandwidth fee prior to July 1, but will 
pay both the station and the bandwidth fee between July 1 and the date 
when it does transition.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\5\ in general, and with 
Section 15A(b)(5) of the Act,\6\ in particular, in that the proposal 
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 NASD operates or controls. The proposed rule 
change applies to non-members and will modify the current CTCI pricing 
structure in order to transition from circuit-based fee components 
based on bandwidth to ``Station'' fee components that are more 
synonymous with logical access ports.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78o-3.
    \6\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

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. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASD-2006-027 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number NASD-2006-027. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of the filing 
also will be available for inspection and copying at the principal 
offices of NASD. All comments received will be posted without change; 
the Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number NASD-
2006-027 and should be submitted on or before April 19, 2006.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a self-regulatory organization.\7\ 
Specifically, the Commission believes that the proposed rule change, as 
amended, is consistent with Section 15A(b)(5) of the Act,\8\ which 
requires that the rules of the self-regulatory 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.
---------------------------------------------------------------------------

    \7\ In approving the proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition and 
capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

    The Commission notes that this proposal would permit the schedule 
for non-NASD members to mirror the schedule applicable to NASD members 
that became effective on February 22, 2006, pursuant to SR-NASD-2006-
026.
    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 proposed fees for non-
NASD members are identical to those in SR-NASD-2006-026, which 
implemented those fees for NASD members and which became effective as 
of February 22, 2006. The Commission notes that the instant proposed 
rule change will promote consistency in Nasdaq's fee schedule by 
applying simultaneously the same pricing schedule for NASD members and 
non-NASD members alike. Therefore, the Commission finds that there is 
good cause, consistent with Section 19(b)(2) of the Act, to approve the 
proposed rule change, as modified by Amendment Nos. 1 and 2, on an 
accelerated basis.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change, as amended (SR-NASD-2006-027), is 
approved on an accelerated basis.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-4538 Filed 3-28-06; 8:45 am]
BILLING CODE 8010-01-P