Self-Regulatory Organizations: National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NASD Rule 7000 Series To Delete References To Systems and Services That Will No Longer Be Provided by NASD, 15924-15926 [E7-6125]
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15924
Federal Register / Vol. 72, No. 63 / Tuesday, April 3, 2007 / Notices
listing standards for ETFs would
potentially reduce the time frame for
bringing ETFs based on indexes with
nontraditional weighting techniques to
the market, thereby reducing the
burdens on issuers and other market
participants and promoting competition,
without compromising investor
protection.
The Commission notes that the
generic listing standards for domestic
indexes will continue to require,
without limitation, that the most heavily
weighted component stock of an index
not exceed 30% of the weight of the
index, and the five most heavily
weighted component stocks of an index
not exceed 65% of the weight of the
index,13 and that an index include a
minimum of 13 component stocks.14
Similarly, the generic listing standards
for international or global indexes
require, without limitation, that the
most heavily weighted component stock
of an index not exceed 25% of the
weight of the index, and the five most
heavily weighted component stocks of
an index not exceed 60% of the weight
of the index,15 and that an index
include a minimum of 20 component
stocks.16 Therefore, the Commission
believes that indexes underlying ETFs
will continue to be sufficiently broadbased in scope to minimize potential
manipulation.
The Commission believes that the
proposed rule change will enable the
Exchange and issuers to benefit from the
expected efficiencies resultant from this
proposed rule change while at the same
time still ensuring adequate protection
for investors and the public in general.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–Amex–2007–
07), as amended, be, and is hereby
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.18
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6083 Filed 4–2–07; 8:45 am]
ycherry on PROD1PC64 with NOTICES
BILLING CODE 8010–01–P
13 See Commentary .03(a)(A)(3) to Amex Rule
1000–AEMI and Commentary .02(a)(A)(3) to Amex
Rule 1000A–AEMI.
14 See Commentary .03(a)(A)(4) to Amex Rule
1000–AEMI and Commentary .02(a)(A)(4) to Amex
Rule 1000A–AEMI.
15 See Commentary .03(a)(B)(3) to Amex Rule
1000–AEMI and Commentary .02(a)(B)(3) to Amex
Rule 1000A–AEMI.
16 See Commentary .03(a)(B)(4) to Amex Rule
1000–AEMI and Commentary .02(a)(B)(4) to Amex
Rule 1000A–AEMI.
17 15 U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
VerDate Aug<31>2005
18:30 Apr 02, 2007
Jkt 211001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55538; File No. SR–NASD–
2007–018]
Self-Regulatory Organizations:
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NASD Rule
7000 Series To Delete References To
Systems and Services That Will No
Longer Be Provided by NASD
March 27, 2007.
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 March 1,
2007, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) 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 substantially by
NASD. NASD has designated this
proposal as ‘‘establishing or changing a
due, fee, or other charge’’ under 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 the Substance
of the Proposed Rule Change
NASD is proposing to amend the
NASD Rule 7000 Series (Charges for
Services and Equipment) to delete
references to systems and services that
will no longer be provided by NASD
upon the operation of NASD’s
Alternative Display Facility (the ‘‘ADF’’)
for non-Nasdaq exchange-listed
securities, which is anticipated to be
March 5, 2007. The Rule 7000 Series
only will apply to NASD’s OTC Bulletin
Board Service, OTC Reporting Facility
(‘‘ORF’’) and Trade Reporting and
Compliance Engine (‘‘TRACE’’). In this
proposed rule change, NASD also is
providing notice relating to the
calculation of fees under Rule 7010 for
use of NASD’s Intermarket Trading
System/Computer Assisted Execution
Service (the ‘‘ITS/CAES System’’) on
March 1 and 2, 2007, which will apply
if the changes proposed herein are
implemented on March 5, 2007 as
anticipated. The text of the proposed
1 15
U.S.C. 78s(b)(1).
CFR 240.19b-4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
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Sfmt 4703
rule change is available at NASD, the
Commission’s Public Reference Room,
and www.nasd.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. NASD 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 June 30, 2006, the Commission
approved SR–NASD–2005–087, which,
among other things, proposed an
implementation strategy for the
operation of the Nasdaq Stock Market
LLC (the ‘‘Nasdaq Exchange’’) as a
national securities exchange for Nasdaqlisted securities during a transitional
period.5 On November 21, 2006, the
Commission approved SR–NASD–2006–
104, which, among other things,
proposed amendments necessary to
reflect the complete separation of The
Nasdaq Stock Market Inc. (‘‘Nasdaq’’)
from NASD upon the operation of the
Nasdaq Exchange as a national
securities exchange for non-Nasdaq
exchange-listed securities.6 As
described in SR–NASD–2006–135, for a
transitional period, Nasdaq has
continued to operate the
SuperIntermarket (SiM) trading platform
on NASD’s behalf via the Transitional
System and Regulatory Services
Agreement, even upon commencement
of the Nasdaq Exchange’s operation as
an exchange for non-Nasdaq exchangelisted securities on February 12, 2007.7
Upon the operation of the ADF for nonNasdaq exchange-listed securities, SiM
5 See Securities Exchange Act Release No. 54084
(June 30, 2006), 71 FR 38935 (July 10, 2006) (order
approving SR–NASD–2005–087).
6 See Securities Exchange Act Release No. 54798
(November 21, 2006), 71 FR 69156 (November 29,
2006) (order approving SR–NASD–2006–104).
7 See Securities Exchange Act Release Nos. 54984
(December 20, 2006), 71 FR 78245 (December 28,
2006) (notice of filing and immediate effectiveness
of SR–NASD–2006–135) and 55274 (February 12,
2007), 72 FR 7785 (February 20, 2007) (notice of
filing and immediate effectiveness of SR–NASD–
2007–012).
E:\FR\FM\03APN1.SGM
03APN1
Federal Register / Vol. 72, No. 63 / Tuesday, April 3, 2007 / Notices
ycherry on PROD1PC64 with NOTICES
will no longer be operated as a facility
of NASD.
Currently, the NASD Rule 7000 Series
addresses, among other things, the
pricing schedule for the Consolidated
Quotation Service and ITS/CAES
System, which operate as part of, or in
conjunction with, the SiM platform.
Once the ADF becomes operational for
non-Nasdaq exchange-listed securities,
these systems will no longer be operated
as NASD facilities and as such, the
pricing schedule for use of these
systems, as well as associated
equipment and other fees, must be
deleted from NASD’s rules.
Accordingly, NASD is proposing to
rename the Rule 7000 Series as
‘‘Charges For OTC Reporting Facility,
OTC Bulletin Board and Trade
Reporting and Compliance Engine
Services’’ and delete from the Rule 7000
Series all fee provisions that are no
longer applicable. The current pricing
schedule for members’ use of the OTC
Bulletin Board Service, ORF and TRACE
will be retained and renumbered.
Specifically, current Rule 7010(g) will
be renumbered as Rule 7010 (OTC
Reporting Facility) and amended to
apply only to the ORF; current Rule
7010(j) will be renumbered as Rule 7020
(OTC Bulletin Board Service); current
Rule 7010(k) will be renumbered as
Rule 7030 (Trade Reporting and
Compliance Engine (TRACE)); and
paragraphs (3) and (4) of current Rule
7010(p) will be renumbered as
paragraphs (a) and (b) of Rule 7040
(Historical Research and Administrative
Reports). NASD is not proposing to
modify any of the fees relating to such
services in this proposed rule change; it
is only deleting those fee provisions that
are no longer applicable.8
NASD also notes that the fee schedule
currently set forth in Rule 7010 relating
to the use of the ITS/CAES System
varies based upon the member’s
monthly volume. Assuming
implementation of the changes
proposed herein on March 5, 2007, the
fees in Rule 7010 will apply only to two
trading dates in March. Thus, NASD is
clarifying that the fees charged for use
of the ITS/CAES System on March 1 and
8 NASD notes that NASD members will continue
to access the OTC Bulletin Board, which Nasdaq
operates on NASD’s behalf, via the Nasdaq
Workstation. The Nasdaq Workstation also provides
access to a variety of Nasdaq Exchange systems and
services. Pursuant to the proposed rule change, the
fees relating to access to and use of the Nasdaq
Workstation will be deleted from NASD’s rules as
NASD does not charge for this service. However,
NASD members are nonetheless required to pay all
fees for access to and use of the Nasdaq Workstation
pursuant to the applicable rules of the Nasdaq
Exchange (see, e.g., Rules 7011 and 7015), which
apply to members and non-members of the Nasdaq
Exchange.
VerDate Aug<31>2005
18:30 Apr 02, 2007
Jkt 211001
15925
2, 2007 will be based on the member’s
volume for February 2007. In other
words, the fee rates charged to a
member for March 1 and 2, 2007 will be
the same rates charged to the member
for February 2007.
NASD has filed the proposed rule
change for immediate effectiveness. The
operative date of the proposed rule
change will be the date upon which the
ADF begins operating for non-Nasdaq
exchange-listed securities, currently
scheduled for March 5, 2007.
or otherwise in furtherance of the
purposes of the Act.
2. Statutory Basis
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2007–018 on the
subject line.
NASD 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. NASD is proposing
to delete references to fees for systems
and services that NASD will no longer
provide and is not proposing to modify
the fees for use of any of the systems
and services that NASD will continue to
provide.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD 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. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change establishes or changes a member
due, fee, or other charge imposed by the
Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 11 and subparagraph (f)(2) of Rule
19b–4 12 thereunder. At any time within
60 days of the filing of the proposed rule
change, the Commission may summarily
abrogate such rule change if it appears
to the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
9 15
U.S.C. 78o–3.
U.S.C. 78o–3(b)(5).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(2).
10 15
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Frm 00066
Fmt 4703
Sfmt 4703
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
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–2007–018. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of 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–2007–018 and
should be submitted on or before April
24, 2007.
E:\FR\FM\03APN1.SGM
03APN1
15926
Federal Register / Vol. 72, No. 63 / Tuesday, April 3, 2007 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6125 Filed 4–2–07; 8:45 am]
Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55543; File No. SR–NYSE–
2007–31]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
60 To Allow the Exchange To Identify
Its Quotation as Slow Non-Firm During
the Manual Reporting of a Block-Sized
Transaction
19(b)(1) 1
Pursuant to Section
of the
Securities Exchange Act of 1934 (the
‘‘Act’’) and Rule 19b–4 thereunder,2
notice is hereby given that on March 20,
2007, the New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II, below, which Items have
been substantially prepared by the
Exchange. NYSE has designated the
proposed rule change as constituting a
‘‘non-controversial’’ rule change under
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) 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
The Exchange is proposing to amend
Rule 60 to provide that when the
Exchange quotation is not available for
automatic execution due to the manual
reporting of a block-sized transaction,
the Exchange will identify such quotes
with an indicator signifying that they
are non-firm within the context of
Regulation National Market System
(‘‘Reg. NMS’’).5 The text of the rule
proposal is available on the Exchange’s
Web site (https://www.nyse.com), at the
ycherry on PROD1PC64 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
March 27, 2007.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005).
1 15
VerDate Aug<31>2005
In its filing with the Commission, the
Exchange 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 IV below.
The Exchange has prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
18:30 Apr 02, 2007
Jkt 211001
The NYSE proposes to amend Rule 60
to specify that when a specialist
manually reports a block-sized
transaction 6 that involves orders in the
Display Book( system (‘‘block-sized
transaction’’), the Exchange will use an
indicator to signify that the NYSE quote
is non-firm. During the brief moment it
takes a specialist to manually report a
block-sized transaction in a security,
autoquoting of the highest bid/lowest
offer is suspended in that stock.7 In
addition, during that same period of
time, automatic executions against the
displayed quotation are not available.8
After the specialist has completed the
report of a block-sized transaction,
autoquote will resume immediately,9
and the NYSE quotation will similarly
again be available for automatic
executions.10
In the NYSE Hybrid MarketSM
(‘‘Hybrid Market’’), autoquote and the
availability of the Exchange quotation
for automatic executions are likewise
both disengaged for limited periods in
connection with two other specific
auction market activities: (1) When the
specialist gaps the quotation in
accordance with Exchange policies and
procedures,11 and (2) when trading on
the Exchange reaches a Liquidity
6 NYSE Rule 127.10 defines a ‘‘block’’ size as at
least 10,000 shares or a quantity of stock having a
market value of $200,000 or more, whichever is
less.
7 See NYSE Rule 60(e)(i)(B).
8 See NYSE Rule 1000(a)(v).
9 See NYSE Rule 60(e)(ii)(B).
10 See NYSE Rule 1000(b).
11 See NYSE Rule 60(e)(i)(A). For a description of
gapped quotations, see Securities Exchange Act
Release No. 53539 (March 22, 2006), 71 FR 16353
(March 31, 2006) (SR–NYSE–2004–05) (the ‘‘Hybrid
MarketSM Approval Order’’).
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
Replenishment Point (‘‘LRP’’).12 For
both of these situations, as provided in
Rule 60(c)(2)(b), the Exchange identifies
its quotation as unavailable for
automatic execution in accordance with
Reg. NMS.
Through this filing, the Exchange
proposes to specify in Rule 60(c)(2)(b)
that in addition to the two situations
described in the preceding paragraph,
the NYSE will identify its quotation as
non-firm as soon as the report template
is opened by the specialist to report a
block-sized transaction, and will
continue to do so until the trade has
been reported. This change is necessary
because the quotation that is
disseminated when a block-sized
transaction is being manually reported
may not reflect the current state of the
market in the stock, given the temporary
suspension of autoquoting of the highest
bid/lowest offer that occurs during the
reporting of a block-sized transaction.
Thus, identifying the quotation as nonfirm when autoquote and automatic
executions are suspended by a blocksized transaction will provide market
participants with more accurate
information about the state of the NYSE
quotation. Moreover, identifying the
NYSE quotation as non-firm will bring
the dissemination of the quotation
during block-sized transactions more in
line with the way in which they are
identified during other Exchange
manual auction market activities that
similarly cause the suspension of
autoquote and automatic executions—
i.e., gap quotes and LRPs.
The Exchange completed Phase IV of
the Hybrid MarketSM rollout on
February 28, 2007. However, the Phase
IV software does not contain the coding
necessary to properly identify the
Exchange quotation as non-firm during
the manual report of a block-sized
transaction that involves orders in the
Display Book. The NYSE has made the
software changes required and is
currently rolling it out as part of the
post-Phase IV software in phases
through March 30, 2007, the date by
which it currently expects the rollout to
be completed.
In addition, the NYSE notes that it has
requested from the Commission limited
no-action relief from the requirement
that the NYSE enforce compliance by its
specialist members with NYSE Rule 19
(Locking or Crossing Protected
Quotations in NMS Stocks), with
respect only to the display of a
quotation when a block-sized
transaction is being manually reported,
12 See NYSE Rule 60(e)(i)(C). For a description of
LRPs, see Hybrid MarketSM Approval Order, supra
note 11.
E:\FR\FM\03APN1.SGM
03APN1
]]>Agencies
[Federal Register Volume 72, Number 63 (Tuesday, April 3, 2007)]
[Notices]
[Pages 15924-15926]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6125]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55538; File No. SR-NASD-2007-018]
Self-Regulatory Organizations: National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Amend the NASD Rule 7000 Series To Delete References To
Systems and Services That Will No Longer Be Provided by NASD
March 27, 2007.
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 March 1, 2007, the National Association of Securities Dealers, Inc.
(``NASD'') 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 substantially by NASD.
NASD has designated this proposal as ``establishing or changing a due,
fee, or other charge'' under 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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
NASD is proposing to amend the NASD Rule 7000 Series (Charges for
Services and Equipment) to delete references to systems and services
that will no longer be provided by NASD upon the operation of NASD's
Alternative Display Facility (the ``ADF'') for non-Nasdaq exchange-
listed securities, which is anticipated to be March 5, 2007. The Rule
7000 Series only will apply to NASD's OTC Bulletin Board Service, OTC
Reporting Facility (``ORF'') and Trade Reporting and Compliance Engine
(``TRACE''). In this proposed rule change, NASD also is providing
notice relating to the calculation of fees under Rule 7010 for use of
NASD's Intermarket Trading System/Computer Assisted Execution Service
(the ``ITS/CAES System'') on March 1 and 2, 2007, which will apply if
the changes proposed herein are implemented on March 5, 2007 as
anticipated. The text of the proposed rule change is available at NASD,
the Commission's Public Reference Room, and www.nasd.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NASD 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 June 30, 2006, the Commission approved SR-NASD-2005-087, which,
among other things, proposed an implementation strategy for the
operation of the Nasdaq Stock Market LLC (the ``Nasdaq Exchange'') as a
national securities exchange for Nasdaq-listed securities during a
transitional period.\5\ On November 21, 2006, the Commission approved
SR-NASD-2006-104, which, among other things, proposed amendments
necessary to reflect the complete separation of The Nasdaq Stock Market
Inc. (``Nasdaq'') from NASD upon the operation of the Nasdaq Exchange
as a national securities exchange for non-Nasdaq exchange-listed
securities.\6\ As described in SR-NASD-2006-135, for a transitional
period, Nasdaq has continued to operate the SuperIntermarket (SiM)
trading platform on NASD's behalf via the Transitional System and
Regulatory Services Agreement, even upon commencement of the Nasdaq
Exchange's operation as an exchange for non-Nasdaq exchange-listed
securities on February 12, 2007.\7\ Upon the operation of the ADF for
non-Nasdaq exchange-listed securities, SiM
[[Page 15925]]
will no longer be operated as a facility of NASD.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 54084 (June 30,
2006), 71 FR 38935 (July 10, 2006) (order approving SR-NASD-2005-
087).
\6\ See Securities Exchange Act Release No. 54798 (November 21,
2006), 71 FR 69156 (November 29, 2006) (order approving SR-NASD-
2006-104).
\7\ See Securities Exchange Act Release Nos. 54984 (December 20,
2006), 71 FR 78245 (December 28, 2006) (notice of filing and
immediate effectiveness of SR-NASD-2006-135) and 55274 (February 12,
2007), 72 FR 7785 (February 20, 2007) (notice of filing and
immediate effectiveness of SR-NASD-2007-012).
---------------------------------------------------------------------------
Currently, the NASD Rule 7000 Series addresses, among other things,
the pricing schedule for the Consolidated Quotation Service and ITS/
CAES System, which operate as part of, or in conjunction with, the SiM
platform. Once the ADF becomes operational for non-Nasdaq exchange-
listed securities, these systems will no longer be operated as NASD
facilities and as such, the pricing schedule for use of these systems,
as well as associated equipment and other fees, must be deleted from
NASD's rules. Accordingly, NASD is proposing to rename the Rule 7000
Series as ``Charges For OTC Reporting Facility, OTC Bulletin Board and
Trade Reporting and Compliance Engine Services'' and delete from the
Rule 7000 Series all fee provisions that are no longer applicable. The
current pricing schedule for members' use of the OTC Bulletin Board
Service, ORF and TRACE will be retained and renumbered. Specifically,
current Rule 7010(g) will be renumbered as Rule 7010 (OTC Reporting
Facility) and amended to apply only to the ORF; current Rule 7010(j)
will be renumbered as Rule 7020 (OTC Bulletin Board Service); current
Rule 7010(k) will be renumbered as Rule 7030 (Trade Reporting and
Compliance Engine (TRACE)); and paragraphs (3) and (4) of current Rule
7010(p) will be renumbered as paragraphs (a) and (b) of Rule 7040
(Historical Research and Administrative Reports). NASD is not proposing
to modify any of the fees relating to such services in this proposed
rule change; it is only deleting those fee provisions that are no
longer applicable.\8\
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\8\ NASD notes that NASD members will continue to access the OTC
Bulletin Board, which Nasdaq operates on NASD's behalf, via the
Nasdaq Workstation. The Nasdaq Workstation also provides access to a
variety of Nasdaq Exchange systems and services. Pursuant to the
proposed rule change, the fees relating to access to and use of the
Nasdaq Workstation will be deleted from NASD's rules as NASD does
not charge for this service. However, NASD members are nonetheless
required to pay all fees for access to and use of the Nasdaq
Workstation pursuant to the applicable rules of the Nasdaq Exchange
(see, e.g., Rules 7011 and 7015), which apply to members and non-
members of the Nasdaq Exchange.
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NASD also notes that the fee schedule currently set forth in Rule
7010 relating to the use of the ITS/CAES System varies based upon the
member's monthly volume. Assuming implementation of the changes
proposed herein on March 5, 2007, the fees in Rule 7010 will apply only
to two trading dates in March. Thus, NASD is clarifying that the fees
charged for use of the ITS/CAES System on March 1 and 2, 2007 will be
based on the member's volume for February 2007. In other words, the fee
rates charged to a member for March 1 and 2, 2007 will be the same
rates charged to the member for February 2007.
NASD has filed the proposed rule change for immediate
effectiveness. The operative date of the proposed rule change will be
the date upon which the ADF begins operating for non-Nasdaq exchange-
listed securities, currently scheduled for March 5, 2007.
2. Statutory Basis
NASD 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. NASD is proposing to delete
references to fees for systems and services that NASD will no longer
provide and is not proposing to modify the fees for use of any of the
systems and services that NASD will continue to provide.
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\9\ 15 U.S.C. 78o-3.
\10\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD 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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change establishes or changes a
member due, fee, or other charge imposed by the Exchange, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and
subparagraph (f)(2) of Rule 19b-4 \12\ thereunder. At any time within
60 days of the filing of the proposed rule change, the Commission may
summarily abrogate such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2007-018 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-2007-018. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of 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-2007-018 and should be submitted on or before April 24, 2007.
[[Page 15926]]
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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6125 Filed 4-2-07; 8:45 am]
BILLING CODE 8010-01-P
