Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change and Amendment No. 1 Thereto Regarding Pricing for Non-Members Using the Nasdaq Market Center and Nasdaq's Brut and INET Facilities, 42694-42696 [E6-11981]

Download as PDF 42694 Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices is based on (and virtually identical to) CBOE Rule 6.48(b)(ii), which permits cancellation of the options leg of a stock-option order.5 It is important to note that the proposed rule change would require that the CHX floor participant maintain records ‘‘sufficient to establish that market conditions in a non-Exchange market prevented the execution of the option leg(s).’’ The CHX believes this requirement would give the CHX Department of Market Regulation the ability to oversee the cancellation of stock leg orders, to ensure against abusive trade reporting practices.6 2. Statutory Basis The Exchange believes that its proposal, as amended, is consistent with Section 6(b) of the Act 7 in general, and furthers the objectives of Section 6(b)(5) of the Act 8 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest by promoting consistency between the Exchange and options markets relating to cancellation of the components of stock-option orders. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding, or (ii) as to which the CHX consents, the Commission will: A. By order approve such proposed rule change, as amended; or B. Institute proceedings to determine whether the proposed rule change should be disapproved. 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 Exchange. 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 publicly available. All submissions should refer to File Number SR–CHX–2005–34 and should be submitted on or before August 17, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–11980 Filed 7–26–06; 8:45 am] BILLING CODE 8010–01–P IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54159; File No. SR–NASD– 2006–058] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change and Amendment No. 1 Thereto Regarding Pricing for Non-Members Using the Nasdaq Market Center and Nasdaq’s Brut and INET Facilities The Exchange does not believe that the proposed rule change, as amended, would impose any burden on competition. • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CHX–2005–34 on the subject line. execution of the options leg at the agreed upon price. 5 According to CHX, the stock leg of a stockoption order is always presented to the CHX with an identified buyer and seller who have agreed to the terms of the trade. Both buyer and seller are aware of the possibility that the stock leg of a stockoption order may be cancelled on the CHX if the corresponding options leg is cancelled on an options market. The CHX states that, because both the buyer and seller would be identified when the stock leg is presented to the CHX, there would be no possibility that another CHX member’s order could be matched against a stock-option order. Accordingly, the CHX believes that there would be no risk that an investor’s order could be involuntarily cancelled without notice to the investor; the CHX thus believes that this pattern and practice amply satisfies the requirements of proposed Interpretation and Policy .01(d). 6 The recordkeeping requirement would permit the CHX Department of Market Regulation to monitor patterns that may develop, as well as the overall quantity of trade cancellations, to help deter members from simply canceling orders for the sake of convenience. The Exchange believes that the recordkeeping requirement would help ensure that the volume of transactions reported is accurate and complete and not overstated. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2 to Nancy M. Morris, Secretary, notice is hereby given that on May 1, Securities and Exchange Commission, 2006, the National Association of Station Place, 100 F Street, NE., Securities Dealers, Inc. (‘‘NASD’’), Washington, DC 20549–1090. through its subsidiary, The Nasdaq All submissions should refer to File Stock Market, Inc. (‘‘Nasdaq’’), filed Number SR–CHX–2005–34. This file with the Securities and Exchange number should be included on the Commission (‘‘Commission’’) the subject line if e-mail is used. To help the proposed rule change as described in Commission process and review your Items I and II below, which Items have comments more efficiently, please use been prepared by Nasdaq. On June 12, only one method. The Commission will 2006, Nasdaq filed Amendment No. 1 to post all comments on the Commission’s the proposed rule change.3 The Internet Web site (http://www.sec.gov/ 9 17 CFR 200.30–3(a)(12). rules/sro.shtml). Copies of the 1 15 U.S.C. 78s(b)(1). submission, all subsequent 2 17 CFR 240.19b–4. amendments, all written statements 3 In Amendment No. 1, Nasdaq amended the with respect to the proposed rule description of the proposed rule change to indicate change that are filed with the that when a market participant enters an order into Nasdaq’s Brut or INET systems that is sent to a Commission, and all written Nasdaq Market Center market participant that communications relating to the charges an access fee to Brut or INET, the market proposed rule change between the participant entering the order shall be charged (i) Commission and any person, other than the applicable execution fee of the Nasdaq Facilities, or (ii) in the case of executions against those that may be withheld from the rwilkins on PROD1PC63 with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition VerDate Aug<31>2005 16:46 Jul 26, 2006 Jkt 208001 July 17, 2006. Paper Comments PO 00000 Frm 00070 Fmt 4703 Sfmt 4703 E:\FR\FM\27JYN1.SGM 27JYN1 Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons, and at the same time is 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 This filing relates to the pricing for non-members using the Nasdaq Market Center and Nasdaq’s Brut and INET Facilities. The filing will apply to these non-members the same rule change that Nasdaq is instituting for members.4 Nasdaq seeks approval to implement the proposed rule change retroactively as of May 1, 2006. The text of the proposed rule change is below. Proposed new language is in italics.5 7010. System Services rwilkins on PROD1PC63 with NOTICES (a)–(h) No change. (i) Nasdaq Market Center and Brut Facility Order Execution. (1)–(7) No change. (8) The fees applicable to nonmembers using Nasdaq’s Brut and Inet Facilities 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, SR–NASD– 2005–154, SR–NASD–2006–013, SR– NASD–2006–023, [and] SR–NASD– 2006–031, and SR–NASD–2006–057, 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, SR–NASD–2005–155, SR– NASD–2006–014, SR–NASD–2006–024, [and ]SR–NASD–2006–032, and SR– NASD–2006–058. (j)–(w) No change. * * * * * Quotes/Orders at less than $1.00 per share, a passthrough of the access fee charged to Brut or INET. 4 See Securities Exchange Act Release No. 34– 54160 (July 17, 2006). Notice of filing and immediate effectiveness of proposed rule change regarding the pricing schedule for NASD members using the Nasdaq Market Center and Nasdaq’s Brut and INET Facilities. 5 Changes are marked to the rule text that appears in the electronic NASD Manual found at http:// www.nasd.com, as amended by SR–NASD–2006– 013 (January 30, 2006). The NASDAQ Stock Market LLC (‘‘NASDAQ LLC’’) will not file conforming changes to its rules with regard to order execution and routing by non-members, since persons that are not members of NASDAQ LLC will not be permitted to use its order execution and routing systems. VerDate Aug<31>2005 16:46 Jul 26, 2006 Jkt 208001 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. 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 Nasdaq is reducing its fees for market participants routing orders from its three trading platforms—the Nasdaq Market Center, Brut, and Inet—to the American Stock Exchange (‘‘Amex’’). Specifically, whereas Nasdaq previously charged $0.01 per share executed for routing such orders, the fee is be reduced to $0.003 per share executed. However, an additional fee of $0.01 will be charged in cases where the Amex specialist charges a fee to execute the order (which generally occurs when the order remains on the specialist book for more than a certain amount of time before being executed). Nasdaq is also broadening the conditions under which a market participant may qualify for a reduced fee of $0.0028 per share executed to access liquidity and route orders in Nasdaq-listed securities and exchangetraded funds. Currently, market participants qualify for the $0.0028 fee (a reduction from the otherwise applicable fee of $0.003 per share executed) if they (i) provide an daily average of more than 30 million shares of liquidity during a month and (ii) access and/or route a daily average of more than 50 million shares of liquidity during a month. With the proposed rule change, the reduced fee would also be available to market participants that (i) provide a daily average of more than 20 million shares of liquidity during a month and (ii) access and/or route a daily average of more than 60 million shares of liquidity during a month. Thus, the change will broaden the availability of the reduced fee to market participants that provide comparatively less liquidity but access and/or route comparatively more liquidity. Nasdaq is also adding rule text to clarify the application of its current fee PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 42695 schedule to orders that are entered into Brut or Inet, routed to the Nasdaq Market Center for execution, and then delivered for execution to an ECN that receives orders through the order delivery functionality of the Nasdaq Market Center. Because the current fee schedule is ambiguous as to the treatment of such orders, Nasdaq believes that the rule text should be clarified to reflect Nasdaq’s interpretation of the fee schedule. Because the orders are transmitted using Brut/Inet routing technology and then transmitted again for execution through the systems of a third party, Nasdaq believes that it is most appropriate to categorize these orders as routed orders. Accordingly, routing fees, which range from $0.001 to $0.004 per share executed, apply rather than order execution or delivery fees. SR–NASD–2006–057 6 applied these changes to NASD members on an immediately effective basis. Nasdaq is submitting this filing to apply these changes to non-members, who Nasdaq anticipates will be allowed to continue to use the Brut and Inet facilities until NASDAQ LLC begins to operate as a national securities exchange. 2. Statutory Basis Nasdaq believes that the proposed rule change, as amended, is consistent with the provisions of Section 15A of the Act,7 in general, and with Section 15A(b)(5) of the Act,8 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the NASD operates or controls. 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, 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, 6 See supra note 4. U.S.C. 78o–3. 8 15 U.S.C. 78o–3(b)(5). 7 15 E:\FR\FM\27JYN1.SGM 27JYN1 42696 Federal Register / Vol. 71, No. 144 / Thursday, July 27, 2006 / Notices organization.9 Specifically, the Commission believes that the proposed rule change, as amended, is consistent with Section 15A(b)(5) of the Act,10 which requires that the rules of the selfElectronic Comments regulatory organization provide for the equitable allocation of reasonable dues, • Use the Commission’s Internet fees, and other charges among members comment form (http://www.sec.gov/ and issuers and other persons using any rules/sro.shtml); or facilities or system which it operates or • Send an e-mail to rulecontrols. comments@sec.gov. Please include File Number SR–NASD–2006–058 on the The Commission notes that this subject line. proposal would retroactively modify pricing for non-NASD members using Paper Comments the Nasdaq Market Center and Nasdaq’s Brut and INET Facilities that would • Send paper comments in triplicate permit the schedule for non-NASD to Nancy M. Morris, Secretary, members to mirror the schedule Securities and Exchange Commission, applicable to NASD members that 100 F Street, NE, Washington, DC 20549–1090. became effective May 1, 2006, pursuant to SR–NASD–2006–057. All submissions should refer to File The Commission finds good cause for Number SR–NASD–2006–058. This file approving the proposed rule change, as number should be included on the subject line if e-mail is used. To help the amended, prior to the 30th day of the date of publication of the notice thereof Commission process and review your in the Federal Register. The comments more efficiently, please use only one method. The Commission will Commission notes that the proposed post all comments on the Commission’s fees for non-NASD members are Internet Web site (http://www.sec.gov/ identical to those in SR–NASD–2006– rules/sro.shtml). Copies of the 057, which implemented those fees for submission, all subsequent NASD members and which became amendments, all written statements effective as of May 1, 2006. The with respect to the proposed rule Commission notes that this change will change that are filed with the promote consistency in Nasdaq’s fee Commission, and all written schedule by applying the same pricing communications relating to the schedule with the same date of proposed rule change between the effectiveness for both NASD members Commission and any person, other than and non-NASD members. Therefore, the those that may be withheld from the Commission finds that there is good public in accordance with the cause, consistent with Section 19(b)(2) provisions of 5 U.S.C. 552, will be of the Act,11 to approve the proposed available for inspection and copying in rule change, as amended, on an the Commission’s Public Reference accelerated basis. Section, 100 F Street, NE, Washington, DC 20549. Copies of such filing also will V. Conclusion be available for inspection and copying It is therefore ordered, pursuant to at the principal office of the NASD. All Section 19(b)(2) of the Act,12 that the comments received will be posted proposed rule change, as amended, (File without change; the Commission does No. SR–NASD–2006–058) is approved not edit personal identifying information from submissions. You on an accelerated basis. should submit only information that For the Commission, by the Division of you wish to make available publicly. All Market Regulation, pursuant to delegated submissions should refer to File authority.13 Number SR–NASD–2006–058 and Jill M. Peterson, should be submitted on or before Assistant Secretary. August 17, 2006. including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: rwilkins on PROD1PC63 with NOTICES 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 VerDate Aug<31>2005 16:46 Jul 26, 2006 Jkt 208001 [FR Doc. E6–11981 Filed 7–26–06; 8:45 am] BILLING CODE 8010–01–P 9 The Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78o–3(b)(5). 11 15 U.S.C. 78s(b)(2). 12 Id. 13 17 CFR 200.30–3(a)(12). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54160; File No. SR–NASD– 2006–057] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Regarding the Pricing Schedule for NASD Members Using the Nasdaq Market Center and Nasdaq’s Brut and INET Facilities July 17, 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 May 1, 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 June 12, 2006, Nasdaq filed Amendment No. 1 to the proposed rule change.3 Pursuant to Section 19(b)(3)(A)(ii) of the Act 4 and Rule 19b–4(f)(2) thereunder,5 Nasdaq has designated this proposal as establishing or changing a due, fee, or other charge, which renders the proposed rule change effective immediately upon filing. The Commission is publishing this notice, as amended, to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify the pricing for NASD members using the Nasdaq Market Center and Nasdaq’s Brut and INET Facilities (the ‘‘Nasdaq Facilities’’). Nasdaq implemented the proposed rule change on May 1, 2006. The text of the proposed rule change, as amended, is available on the NASD’s 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, Nasdaq amended proposed Rule 7010(i)(7) to indicate that when a market participant enters an order into Nasdaq’s Brut or INET systems that is sent to a Nasdaq Market Center market participant that charges an access fee to Brut or INET, the market participant entering the order shall be charged (i) the applicable execution fee of the Nasdaq Facilities, or (ii) in the case of executions against Quotes/Orders at less than $1.00 per share, a pass-through of the access fee charged to Brut or INET. Nasdaq also made conforming changes to the description of the proposed rule change. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b–4(f)(2). 2 17 E:\FR\FM\27JYN1.SGM 27JYN1

Agencies

[Federal Register Volume 71, Number 144 (Thursday, July 27, 2006)]
[Notices]
[Pages 42694-42696]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-11981]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54159; File No. SR-NASD-2006-058]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change and Amendment No. 1 Thereto Regarding Pricing 
for Non-Members Using the Nasdaq Market Center and Nasdaq's Brut and 
INET Facilities

July 17, 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 May 1, 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. On June 12, 2006, 
Nasdaq filed Amendment No. 1 to the proposed rule change.\3\ The

[[Page 42695]]

Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons, and at the 
same time is granting accelerated approval of the proposed rule change, 
as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, Nasdaq amended the description of the 
proposed rule change to indicate that when a market participant 
enters an order into Nasdaq's Brut or INET systems that is sent to a 
Nasdaq Market Center market participant that charges an access fee 
to Brut or INET, the market participant entering the order shall be 
charged (i) the applicable execution fee of the Nasdaq Facilities, 
or (ii) in the case of executions against Quotes/Orders at less than 
$1.00 per share, a pass-through of the access fee charged to Brut or 
INET.
---------------------------------------------------------------------------

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

    This filing relates to the pricing for non-members using the Nasdaq 
Market Center and Nasdaq's Brut and INET Facilities. The filing will 
apply to these non-members the same rule change that Nasdaq is 
instituting for members.\4\ Nasdaq seeks approval to implement the 
proposed rule change retroactively as of May 1, 2006. The text of the 
proposed rule change is below. Proposed new language is in italics.\5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 34-54160 (July 17, 
2006). Notice of filing and immediate effectiveness of proposed rule 
change regarding the pricing schedule for NASD members using the 
Nasdaq Market Center and Nasdaq's Brut and INET Facilities.
    \5\ Changes are marked to the rule text that appears in the 
electronic NASD Manual found at http://www.nasd.com, as amended by 
SR-NASD-2006-013 (January 30, 2006). The NASDAQ Stock Market LLC 
(``NASDAQ LLC'') will not file conforming changes to its rules with 
regard to order execution and routing by non-members, since persons 
that are not members of NASDAQ LLC will not be permitted to use its 
order execution and routing systems.
---------------------------------------------------------------------------

7010. System Services

    (a)-(h) No change.
    (i) Nasdaq Market Center and Brut Facility Order Execution.
    (1)-(7) No change.
    (8) The fees applicable to non-members using Nasdaq's Brut and Inet 
Facilities 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, SR-
NASD-2005-154, SR-NASD-2006-013, SR-NASD-2006-023, [and] SR-NASD-2006-
031,  and SR-NASD-2006-057, 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, SR-NASD-2005-155, SR-NASD-2006-014, 
SR-NASD-2006-024, [and ]SR-NASD-2006-032, and SR-NASD-2006-058.
    (j)-(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, as 
amended, and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item 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
    Nasdaq is reducing its fees for market participants routing orders 
from its three trading platforms--the Nasdaq Market Center, Brut, and 
Inet--to the American Stock Exchange (``Amex''). Specifically, whereas 
Nasdaq previously charged $0.01 per share executed for routing such 
orders, the fee is be reduced to $0.003 per share executed. However, an 
additional fee of $0.01 will be charged in cases where the Amex 
specialist charges a fee to execute the order (which generally occurs 
when the order remains on the specialist book for more than a certain 
amount of time before being executed).
    Nasdaq is also broadening the conditions under which a market 
participant may qualify for a reduced fee of $0.0028 per share executed 
to access liquidity and route orders in Nasdaq-listed securities and 
exchange-traded funds. Currently, market participants qualify for the 
$0.0028 fee (a reduction from the otherwise applicable fee of $0.003 
per share executed) if they (i) provide an daily average of more than 
30 million shares of liquidity during a month and (ii) access and/or 
route a daily average of more than 50 million shares of liquidity 
during a month. With the proposed rule change, the reduced fee would 
also be available to market participants that (i) provide a daily 
average of more than 20 million shares of liquidity during a month and 
(ii) access and/or route a daily average of more than 60 million shares 
of liquidity during a month. Thus, the change will broaden the 
availability of the reduced fee to market participants that provide 
comparatively less liquidity but access and/or route comparatively more 
liquidity.
    Nasdaq is also adding rule text to clarify the application of its 
current fee schedule to orders that are entered into Brut or Inet, 
routed to the Nasdaq Market Center for execution, and then delivered 
for execution to an ECN that receives orders through the order delivery 
functionality of the Nasdaq Market Center. Because the current fee 
schedule is ambiguous as to the treatment of such orders, Nasdaq 
believes that the rule text should be clarified to reflect Nasdaq's 
interpretation of the fee schedule. Because the orders are transmitted 
using Brut/Inet routing technology and then transmitted again for 
execution through the systems of a third party, Nasdaq believes that it 
is most appropriate to categorize these orders as routed orders. 
Accordingly, routing fees, which range from $0.001 to $0.004 per share 
executed, apply rather than order execution or delivery fees.
    SR-NASD-2006-057 \6\ applied these changes to NASD members on an 
immediately effective basis. Nasdaq is submitting this filing to apply 
these changes to non-members, who Nasdaq anticipates will be allowed to 
continue to use the Brut and Inet facilities until NASDAQ LLC begins to 
operate as a national securities exchange.
---------------------------------------------------------------------------

    \6\ See supra note 4.
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change, as amended, is 
consistent with the provisions of Section 15A of the Act,\7\ in 
general, and with Section 15A(b)(5) of the Act,\8\ in particular, in 
that it provides for the equitable allocation of reasonable dues, fees 
and other charges among members and issuers and other persons using any 
facility or system which the NASD operates or controls.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78o-3.
    \8\ 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, as amended, 
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,

[[Page 42696]]

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASD-2006-058 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-2006-058. 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 Section, 100 F Street, NE, 
Washington, DC 20549. 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-2006-058 and should be 
submitted on or before August 17, 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.\9\ 
Specifically, the Commission believes that the proposed rule change, as 
amended, is consistent with Section 15A(b)(5) of the Act,\10\ 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.
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    \9\ The Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78o-3(b)(5).
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    The Commission notes that this proposal would retroactively modify 
pricing for non-NASD members using the Nasdaq Market Center and 
Nasdaq's Brut and INET Facilities that would permit the schedule for 
non-NASD members to mirror the schedule applicable to NASD members that 
became effective May 1, 2006, pursuant to SR-NASD-2006-057.
    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-2006-057, which implemented those fees for NASD members and which 
became effective as of May 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,\11\ 
to approve the proposed rule change, as amended, on an accelerated 
basis.
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    \11\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change, as amended, (File No. SR-NASD-
2006-058) is approved on an accelerated basis.
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    \12\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-11981 Filed 7-26-06; 8:45 am]
BILLING CODE 8010-01-P