Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Regarding Pricing for Non-Members Using Nasdaq's Brut and Inet Facilities, 52356-52358 [E6-14598]

Download as PDF 52356 Federal Register / Vol. 71, No. 171 / Tuesday, September 5, 2006 / Notices approval to implement the proposed rule change retroactively as of August 1, 2006. The text of the proposed rule change is set forth below. Proposed new language is in italics; proposed deletions are in [brackets].4 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–NASDAQ–2006–032 and should be submitted on or before September 26, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Nancy M. Morris, Secretary. [FR Doc. E6–14651 Filed 9–1–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54376; File No. SR–NASD– 2006–093] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Regarding Pricing for Non-Members Using Nasdaq’s Brut and Inet Facilities August 28, 2006. sroberts on PROD1PC70 with NOTICES 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 July 31, 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. In addition, the Commission is granting accelerated approval of the proposed rule change. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify the pricing for non-NASD members using Nasdaq’s Brut and Inet Facilities to trade non-Nasdaq securities. The filing will apply to these non-members the same rule change that Nasdaq is instituting for members.3 Nasdaq seeks 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 54375 (August 28, 2006) (File No. SR–NASD–2006–092). 1 15 VerDate Aug<31>2005 17:24 Sep 01, 2006 Jkt 208001 7010. System Services (a)–(h) No change. (i) ITS/CAES System, Brut, and Inet Order Execution and Routing (1)–(8) No change. (9) 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, SR–NASD–2006–031, SR–NASD–2006–057, [and] SR–NASD– 2006–078, and SR–NASD–2006–092 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, SR–NASD–2006–032, SR–NASD–2006– 058, [and] SR–NASD–2006–079, and SR–NASD–2006–093. (j)–(y) No change. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it had 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 In SR–NASD–2006–092,5 Nasdaq amended NASD Rule 7010(i), which has 4 Changes are marked to the rule text that appears in the electronic NASD Manual found at http:// www.nasd.com. The Nasdaq Exchange states that it will not file conforming changes to its rules with regard to order execution and routing by nonmembers, since persons that are not members of the Nasdaq Exchange will not be permitted to use its order execution and routing systems. 5 See supra note 3. PO 00000 Frm 00040 Fmt 4703 Sfmt 4703 historically contained the fees for the trading systems of The Nasdaq Stock Market, to reflect the Nasdaq Exchange’s commencing operations for trading of securities listed on the Nasdaq Exchange. During a transitional period, the Nasdaq Exchange will operate for its own listed stocks, while The Nasdaq Stock Market, Inc. continues to operate under authority delegated by NASD to provide quotation, execution, and trade reporting services for non-Nasdaq listed securities. Nasdaq states that the Brut and Inet platforms owned by Nasdaq will be operated as facilities of the Nasdaq Exchange for purposes of trading Nasdaq-listed securities, and as facilities of NASD for purposes of trading non-Nasdaq securities. Accordingly, SR–NASD–2006–092 amended NASD Rule 7010(i) to remove fees and credits associated with trading Nasdaq-listed stocks, which are now contained in Rule 7018 of the Nasdaq Exchange.6 Nasdaq states that NASD Rule 7010(i) would continue to govern fees and credits for the ITS/CAES System (formerly the Nasdaq Market Center) operated by Nasdaq for trading non-Nasdaq securities, as well as Brut and Inet to the extent that they are used for trading non-Nasdaq securities. The ITS/CAES System, Brut and Inet are collectively referred to in the rule as the Nasdaq Facilities. SR–NASD–2006–092 also added a sentence to the rule to provide that for purposes of determining a member’s volume in all securities under NASD Rule 7010(i), the term ‘‘Nasdaq Facilities,’’ shall also be deemed to include the member’s volume in Nasdaq-listed securities traded through the facilities of the Nasdaq Exchange (i.e., the Nasdaq Market Center, Brut and Inet). Nasdaq states that this clarification was necessary to ensure that fees and credits for trading nonNasdaq securities remain at their current levels during the transitional period before the Nasdaq Exchange begins to trade non-Nasdaq securities. In SR–NASD–2006–092, Nasdaq also changed its fees for routing orders to the New York Stock Exchange (‘‘NYSE’’) through its DOT system. NYSE recently announced that it would impose a significant fee increase on brokerdealers, such as Nasdaq’s Brut broker6 See Securities Exchange Act Release No. 54285 (August 8, 2006) (File No. SR–NASDAQ–2006–023) (notice of filing and immediate effectiveness of proposed rule change regarding technical and conforming changes to Nasdaq Rule 7018). Telephone conversation among John Yetter, Senior Associate General Counsel, Nasdaq, David Liu, Special Counsel, Division of Market Regulation (‘‘Division’’), Commission, and Theodore S. Venuti, Attorney, Division, Commission, on August 14, 2006. E:\FR\FM\05SEN1.SGM 05SEN1 Federal Register / Vol. 71, No. 171 / Tuesday, September 5, 2006 / Notices dealer, that route orders to the NYSE floor through DOT, effective August 1, 2006.7 Nasdaq states that as a result, it must pass these increased costs through to market participants that make use of the routing service. Specifically, for orders that attempt to execute in the Nasdaq Facilities prior to routing and that are not charged a fee by the NYSE specialist,8 Nasdaq is imposing a charge of $0.0002 per share executed; however, the total fee for all such orders routed during a month is capped at $60,000 per firm. For orders that are routed through DOT but that do not attempt to execute in the Nasdaq Facilities, the routing fee is $0.0003 per share executed, with no cap. Finally, to encourage greater liquidity provision with respect to securities that are listed on both the NYSE and the Nasdaq Exchange, SR–NASD–2006–092 increased the credit to liquidity providers in these securities, from $0.0005 or $0.0006 per share executed to $0.0007 per share executed. Nasdaq believes that the change would promote greater competition between Nasdaq and NYSE and enhance market quality with respect to Nasdaq’s trading of these dual-listed securities. Nasdaq is submitting this filing to apply the foregoing changes to nonNASD members using Nasdaq’s Brut and Inet Facilities to trade non-Nasdaq securities. These non-members cannot use the facilities of the Nasdaq Exchange to trade Nasdaq-listed securities, but are currently permitted to use Brut and Inet to trade non-Nasdaq securities. sroberts on PROD1PC70 with NOTICES 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 15A of the Act,9 in general, and with Section 15A(b)(5) of the Act,10 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. Nasdaq states that the proposed rule change applies to non-members that use 7 See Securities Exchange Act Release No. 54142(July 13, 2006), 71 FR 41493 (July 21, 2006) (File No. SR–NYSE–2006–46). Effective August 1, 2006, the NYSE is imposing a new charge of $0.00025 per share executed, subject to a monthly cap of $750,000. 8 Nasdaq states that the NYSE specialist fees are distinct from the newDOT fees imposed by the NYSE itself. Specialist fees are generally imposed when orders routed to the NYSE remain unexecuted for a period of time. The routing fee for orders that are charged by the specialist remains $0.01 per share executed. 9 15 U.S.C. 78o–3. 10 15 U.S.C. 78o–3(b)(5). VerDate Aug<31>2005 17:24 Sep 01, 2006 Jkt 208001 Brut and Inet a fee change that is being implemented for NASD members that use Brut, Inet, and the ITS/CAES System to trade non-Nasdaq securities. Accordingly, Nasdaq believes that the proposed rule change promotes an equitable allocation of fees between members and non-members using these order execution facilities. 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. 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. 52357 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 publicly available. All submissions should refer to File Number SR–NASD–2006–093 and should be submitted on or before September 26, 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.11 Specifically, the III. Solicitation of Comments Commission believes that the proposed Interested persons are invited to rule change is consistent with Section submit written data, views, and 15A(b)(5) of the Act,12 which requires arguments concerning the foregoing, that the rules of the self-regulatory including whether the proposed rule organization provide for the equitable change is consistent with the Act. allocation of reasonable dues, fees, and Comments may be submitted by any of other charges among members and the following methods: issuers and other persons using any Electronic comments: facilities or system which it operates or • Use the Commission’s Internet controls. comment form (http://www.sec.gov/ rules/sro.shtml); or The Commission notes that this • Send an e-mail to ruleproposal would retroactively modify comments@sec.gov. Please include File pricing for non-NASD members using Number SR–NASD–2006–093 on the Nasdaq’s Brut and Inet Facilities that subject line. would permit the schedule for nonNASD members to mirror the schedule Paper Comments applicable to NASD members that • Send paper comments in triplicate became effective July 31, 2006, pursuant to Nancy M. Morris, Secretary, to SR–NASD–2006–092. Securities and Exchange Commission, Nasdaq has requested that the 100 F Street, NE., Washington, DC Commission find good cause for 20549–1090. approving the proposed rule change All submissions should refer to File prior to the thirtieth day after Number SR–NASD–2006–093. This file publication of notice thereof in the number should be included on the Federal Register. The Commission notes subject line if e-mail is used. To help the that the proposed fees for non-NASD Commission process and review your members are identical to those in SR– comments more efficiently, please use NASD–2006–092, which implemented only one method. The Commission will those fees for NASD members and post all comments on the Commission’s which became effective as of July 31, Internet Web site (http://www.sec.gov/ 2006. The Commission notes that this rules/sro.shtml). Copies of the change will promote consistency in submission, all subsequent Nasdaq’s fee schedule by applying the amendments, all written statements same pricing schedule with the same with respect to the proposed rule date of effectiveness for both NASD change that are filed with the members and non-NASD members. Commission, and all written Accordingly, the Commission finds communications relating to the good cause, pursuant to Section 19(b)(2) proposed rule change between the Commission and any person, other than 11 In approving this proposal, the Commission has those that may be withheld from the considered its impact on efficiency, competition, public in accordance with the and capital formation. 15 U.S.C. 78c(f). 12 15 U.S.C. 78o–3(b)(5). provisions of 5 U.S.C. 552, will be PO 00000 Frm 00041 Fmt 4703 Sfmt 4703 E:\FR\FM\05SEN1.SGM 05SEN1 52358 Federal Register / Vol. 71, No. 171 / Tuesday, September 5, 2006 / Notices of the Act,13 for approving the proposed rule change prior to the thirtieth day after the date of publication of notice thereof in the Federal Register. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,14 that the proposed rule change (SR–NASD–2006– 093) be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Nancy M. Morris, Secretary. [FR Doc. E6–14598 Filed 8–29–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54375; File No. SR–NASD– 2006–092] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding the Pricing Schedule for NASD Members Using the ITS/CAES System, Brut, and Inet To Trade Securities Not Listed on The NASDAQ Stock Market LLC August 28, 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 July 31, 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. Nasdaq filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify the pricing for NASD members using the ITS/CAES System and Brut and Inet (‘‘Nasdaq Facilities’’) to trade securities that are not listed on The NASDAQ Stock Market LLC (‘‘Nasdaq Exchange’’).5 Nasdaq states that it will implement the proposed rule change on August 1, 2006. The text of the proposed rule change is set forth below. Proposed new language is in italics; proposed deletions are in [brackets].6 7010. System Services (a)–(h) No change. Order Execution: 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: Charge to member entering order: 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; or members with an average daily volume through the Nasdaq Facilities in all securities during the month of (i) more than 20 million shares of liquidity provided, and (ii) more than 60 million shares of liquidity accessed and/or routed. Other members ................................................................................. Credit to member providing liquidity: 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. Other members .......................................................................... sroberts on PROD1PC70 with NOTICES 13 15 U.S.C. 78s(b)(2). 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. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). VerDate Aug<31>2005 17:24 Sep 01, 2006 $0.0028 per share executed (or, in the case of executions against Quotes/Orders at less than $1.00 per share, 0.1% of the total transaction cost). $0.0030 per share executed (or, in the case of executions against Quotes/Orders at less than $1.00 per share, 0.1% of the total transaction cost). $0.0025 per share executed (or $0, in the case of executions against Quotes/Orders at less than $1.00 per share). $0.0020 per share executed (or $0, in the case of executions against Quotes/Orders at less than $1.00 per share). 5 The Commission notes that Nasdaq filed a proposed rule change to apply the same pricing change to non-members. See Securities Exchange Act Release No. 54376 (August 28, 2006) (File No. SR–NASD–2006–093). 6 Nasdaq states that changes are marked to the rule text that appears in the electronic NASD Manual found at www.nasd.com, as further amended on an immediately effective basis by SR– 14 15 Jkt 208001 (i) [Nasdaq Market Center]ITS/CAES System, Brut, and Inet 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]ITS/CAES System, Brut, and Inet (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 The NASDAQ Stock Market LLC [Nasdaq]. The term ‘‘ExchangeTraded 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, of The NASDAQ Stock Market LLC. For purposes of determining a member’s volume in all securities under Rule 7010(i), the term ‘‘Nasdaq Facilities’’ shall also be deemed to include the member’s volume in Nasdaq-listed securities through the facilities of The NASDAQ Stock Market LLC. PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 NASD–2006–078 (June 30, 2006). See Securities Exchange Act Release No. 54268 (August 3, 2006), 71 FR 45882 (August 10, 2006). Nasdaq states that prior to the date when the Nasdaq Exchange begins to trade securities that are not listed on the Nasdaq Exchange, the Nasdaq Exchange will file a conforming change to the rules of the Nasdaq Exchange. The rules of the Nasdaq Exchange are found at www.complinet.com/nasdaq. E:\FR\FM\05SEN1.SGM 05SEN1

Agencies

[Federal Register Volume 71, Number 171 (Tuesday, September 5, 2006)]
[Notices]
[Pages 52356-52358]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-14598]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54376; File No. SR-NASD-2006-093]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change Regarding Pricing for Non-Members Using 
Nasdaq's Brut and Inet Facilities

August 28, 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 July 31, 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. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons. In addition, the Commission is granting 
accelerated approval of the proposed rule change.
---------------------------------------------------------------------------

    \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 the pricing for non-NASD members using 
Nasdaq's Brut and Inet Facilities to trade non-Nasdaq securities. The 
filing will apply to these non-members the same rule change that Nasdaq 
is instituting for members.\3\ Nasdaq seeks approval to implement the 
proposed rule change retroactively as of August 1, 2006. The text of 
the proposed rule change is set forth below. Proposed new language is 
in italics; proposed deletions are in [brackets].\4\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 54375 (August 28, 
2006) (File No. SR-NASD-2006-092).
    \4\ Changes are marked to the rule text that appears in the 
electronic NASD Manual found at http://www.nasd.com. The Nasdaq 
Exchange states that it 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 the Nasdaq Exchange will not 
be permitted to use its order execution and routing systems.
---------------------------------------------------------------------------

7010. System Services

    (a)-(h) No change.
    (i) ITS/CAES System, Brut, and Inet Order Execution and Routing
    (1)-(8) No change.
    (9) 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, SR-NASD-2006-031, 
SR-NASD-2006-057, [and] SR-NASD-2006-078, and SR-NASD-2006-092 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, SR-NASD-2006-032, 
SR-NASD-2006-058, [and] SR-NASD-2006-079, and SR-NASD-2006-093.
    (j)-(y) No change.
* * * * *

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

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had 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
    In SR-NASD-2006-092,\5\ Nasdaq amended NASD Rule 7010(i), which has 
historically contained the fees for the trading systems of The Nasdaq 
Stock Market, to reflect the Nasdaq Exchange's commencing operations 
for trading of securities listed on the Nasdaq Exchange. During a 
transitional period, the Nasdaq Exchange will operate for its own 
listed stocks, while The Nasdaq Stock Market, Inc. continues to operate 
under authority delegated by NASD to provide quotation, execution, and 
trade reporting services for non-Nasdaq listed securities. Nasdaq 
states that the Brut and Inet platforms owned by Nasdaq will be 
operated as facilities of the Nasdaq Exchange for purposes of trading 
Nasdaq-listed securities, and as facilities of NASD for purposes of 
trading non-Nasdaq securities. Accordingly, SR-NASD-2006-092 amended 
NASD Rule 7010(i) to remove fees and credits associated with trading 
Nasdaq-listed stocks, which are now contained in Rule 7018 of the 
Nasdaq Exchange.\6\ Nasdaq states that NASD Rule 7010(i) would continue 
to govern fees and credits for the ITS/CAES System (formerly the Nasdaq 
Market Center) operated by Nasdaq for trading non-Nasdaq securities, as 
well as Brut and Inet to the extent that they are used for trading non-
Nasdaq securities. The ITS/CAES System, Brut and Inet are collectively 
referred to in the rule as the Nasdaq Facilities.
---------------------------------------------------------------------------

    \5\ See supra note 3.
    \6\ See Securities Exchange Act Release No. 54285 (August 8, 
2006) (File No. SR-NASDAQ-2006-023) (notice of filing and immediate 
effectiveness of proposed rule change regarding technical and 
conforming changes to Nasdaq Rule 7018). Telephone conversation 
among John Yetter, Senior Associate General Counsel, Nasdaq, David 
Liu, Special Counsel, Division of Market Regulation (``Division''), 
Commission, and Theodore S. Venuti, Attorney, Division, Commission, 
on August 14, 2006.
---------------------------------------------------------------------------

    SR-NASD-2006-092 also added a sentence to the rule to provide that 
for purposes of determining a member's volume in all securities under 
NASD Rule 7010(i), the term ``Nasdaq Facilities,'' shall also be deemed 
to include the member's volume in Nasdaq-listed securities traded 
through the facilities of the Nasdaq Exchange (i.e., the Nasdaq Market 
Center, Brut and Inet). Nasdaq states that this clarification was 
necessary to ensure that fees and credits for trading non-Nasdaq 
securities remain at their current levels during the transitional 
period before the Nasdaq Exchange begins to trade non-Nasdaq 
securities.
    In SR-NASD-2006-092, Nasdaq also changed its fees for routing 
orders to the New York Stock Exchange (``NYSE'') through its DOT 
system. NYSE recently announced that it would impose a significant fee 
increase on broker-dealers, such as Nasdaq's Brut broker-

[[Page 52357]]

dealer, that route orders to the NYSE floor through DOT, effective 
August 1, 2006.\7\ Nasdaq states that as a result, it must pass these 
increased costs through to market participants that make use of the 
routing service. Specifically, for orders that attempt to execute in 
the Nasdaq Facilities prior to routing and that are not charged a fee 
by the NYSE specialist,\8\ Nasdaq is imposing a charge of $0.0002 per 
share executed; however, the total fee for all such orders routed 
during a month is capped at $60,000 per firm. For orders that are 
routed through DOT but that do not attempt to execute in the Nasdaq 
Facilities, the routing fee is $0.0003 per share executed, with no cap.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 54142(July 13, 
2006), 71 FR 41493 (July 21, 2006) (File No. SR-NYSE-2006-46). 
Effective August 1, 2006, the NYSE is imposing a new charge of 
$0.00025 per share executed, subject to a monthly cap of $750,000.
    \8\ Nasdaq states that the NYSE specialist fees are distinct 
from the newDOT fees imposed by the NYSE itself. Specialist fees are 
generally imposed when orders routed to the NYSE remain unexecuted 
for a period of time. The routing fee for orders that are charged by 
the specialist remains $0.01 per share executed.
---------------------------------------------------------------------------

    Finally, to encourage greater liquidity provision with respect to 
securities that are listed on both the NYSE and the Nasdaq Exchange, 
SR-NASD-2006-092 increased the credit to liquidity providers in these 
securities, from $0.0005 or $0.0006 per share executed to $0.0007 per 
share executed. Nasdaq believes that the change would promote greater 
competition between Nasdaq and NYSE and enhance market quality with 
respect to Nasdaq's trading of these dual-listed securities.
    Nasdaq is submitting this filing to apply the foregoing changes to 
non-NASD members using Nasdaq's Brut and Inet Facilities to trade non-
Nasdaq securities. These non-members cannot use the facilities of the 
Nasdaq Exchange to trade Nasdaq-listed securities, but are currently 
permitted to use Brut and Inet to trade non-Nasdaq securities.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\9\ in general, and with 
Section 15A(b)(5) of the Act,\10\ 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. Nasdaq states that the 
proposed rule change applies to non-members that use Brut and Inet a 
fee change that is being implemented for NASD members that use Brut, 
Inet, and the ITS/CAES System to trade non-Nasdaq securities. 
Accordingly, Nasdaq believes that the proposed rule change promotes an 
equitable allocation of fees between members and non-members using 
these order execution facilities.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78o-3.
    \10\ 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.

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-2006-093 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-2006-093. 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 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 publicly available. All submissions should refer to 
File Number SR-NASD-2006-093 and should be submitted on or before 
September 26, 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.\11\ 
Specifically, the Commission believes that the proposed rule change is 
consistent with Section 15A(b)(5) of the Act,\12\ 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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    \11\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \12\ 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 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 July 31, 
2006, pursuant to SR-NASD-2006-092.
    Nasdaq has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of notice thereof in the Federal Register. The Commission 
notes that the proposed fees for non-NASD members are identical to 
those in SR-NASD-2006-092, which implemented those fees for NASD 
members and which became effective as of July 31, 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. Accordingly, 
the Commission finds good cause, pursuant to Section 19(b)(2)

[[Page 52358]]

of the Act,\13\ for approving the proposed rule change prior to the 
thirtieth day after the date of publication of notice thereof in the 
Federal Register.
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    \13\ 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,\14\ that the proposed rule change (SR-NASD-2006-093) be, and 
hereby is, approved on an accelerated basis.
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    \14\ 15 U.S.C. 78s(b)(2).
    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
Nancy M. Morris,
Secretary.
[FR Doc. E6-14598 Filed 8-29-06; 8:45 am]
BILLING CODE 8010-01-P