Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 2 Thereto, To Modify Pricing for Nasdaq Members Using the Nasdaq Market Center, 45848-45850 [E7-15965]

Download as PDF 45848 Federal Register / Vol. 72, No. 157 / Wednesday, August 15, 2007 / Notices between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the CBOE. 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–CBOE–2007–83 and should be submitted on or before September 5, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–15901 Filed 8–14–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56225; File No. SR–ISE– 2007–32] Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving Proposed Rule Change as Modified by Amendment No. 1 Thereto To Remove Certain Rules From Its Rulebook August 8, 2007. On May 9, 2007, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’), filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to remove certain ISE rules. On June 8, 2007, ISE filed Amendment No. 1 to the proposed rule change. The proposed rule change was published for comment in the Federal Register on June 27, 2007.3 The Commission received no comments on the proposal. 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 registered securities exchange.4 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,5 which requires, 12 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. 55936 (June 21, 2007), 72 FR 35276 (‘‘Notice’’). 4 In approving this proposal, the Commission considered the proposed rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 5 15 U.S.C. 78f(b)(5). ebenthall on PROD1PC69 with NOTICES 1 15 VerDate Aug<31>2005 17:41 Aug 14, 2007 Jkt 211001 among other things, that the Exchange’s rules be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. The ISE proposes to remove Rule 403 (Nominal Employment), Rule 605 (Other Affiliations of Registered Persons), and Rule 615 (Addressing of Communications to Customers). The Exchange believes that the concern addressed by Rule 403, which prohibits members from obtaining business by employing a person in a nominal position, is adequately addressed in existing Rule 406, which limits gratuities.6 The Exchange also believes that Rule 605, which effectively prohibits registered persons of its members from engaging in outside business activities unless approved by the Exchange or the member’s designated examining authority, is no longer necessary given significant market structure changes.7 Lastly, the Exchange believes that Rule 615 is unnecessary as ISE members are also subject to ISE Rules 600 and 2114, which effectively require ISE members that do a public business to be registered with FINRA, and the Exchange believes that the FINRA rules pertaining to the customer communication policies for its members conducting a public business should sufficiently address the topic covered by Rule 615. The Commission therefore believes it is consistent with the Act for the Exchange to delete these rules. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (File No. SR–ISE– 2007–32), as modified by Amendment No. 1, be, and hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–15902 Filed 8–14–07; 8:45 am] BILLING CODE 8010–01–P 6 Rule 406 prohibits a member from giving any compensation or gratuity in any one year in excess of $50.00 to any employee of the Exchange or in excess of $100.00 to any employee of any other member or of any non-member broker, dealer, bank or institution, without the prior consent of the employer and of the Exchange. 7 The Exchange also notes that rules of the Financial Industry Regulatory Authority Inc. (‘‘FINRA’’)(f/k/a the National Association of Securities Dealers, Inc.) governing its members’ dealing with the public do not have a comparable provision. 8 15 U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56228; File No. SR– NASDAQ–2007–056] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 2 Thereto, To Modify Pricing for Nasdaq Members Using the Nasdaq Market Center August 8, 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 June 1, 2007, The NASDAQ Stock Market LLC (‘‘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 July 27, 2007, Nasdaq filed Amendment No. 1. On August 6, 2007, Nasdaq withdrew Amendment No. 1 and filed Amendment No. 2, which replaced the text of the original filing in its entirety. The Commission is publishing this notice to solicit comment on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to modify pricing for the Nasdaq Market Center. Nasdaq will make the proposed rule change effective retroactively as of February 12, 2007. The text of the proposed rule change appears below. Proposed new language is italicized and proposed deletions are in brackets.3 * * * * * 7013. Consolidated Quotation Service and Exchange-Listed Securities Transaction Credit (a) No change. (b) Nasdaq members that trade securities listed on [the NYSE (‘‘Tape A’’) and] Amex (‘‘Tape B’’) through Nasdaq may receive from Nasdaq transaction credits based on the number 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Changes are marked to the rule text that appears in the electronic Nasdaq Manual found at https:// nasdaq.complinet.com. 2 17 E:\FR\FM\15AUN1.SGM 15AUN1 Federal Register / Vol. 72, No. 157 / Wednesday, August 15, 2007 / Notices of transactions attributed to them. A transaction is attributed to a member if the transaction is executed through the Nasdaq Market Center, and the member acts as liquidity provider (i.e., the member sells in response to a buy order or buys in response to a sell order). A Nasdaq member may earn credits from [one or both] a pool[s] maintained by Nasdaq[, each pool] representing 50% of the revenue paid by the Consolidated Tape Association to Nasdaq for [each of Tape A and] Tape B transactions after deducting the amount that Nasdaq pays to the Consolidated Tape Association for capacity usage. A Nasdaq member may earn credits from the pool[s] according to the member’s pro rata share of transactions attributed to Nasdaq members in [each of Tape A and] Tape B for each calendar quarter. Liquidity providers executing transactions in Tape B securities through the Nasdaq Market Center will receive credits with respect to such transactions on an estimated monthly basis[; all other credits under this rule will be paid on a quarterly basis]. 7014. [Nasdaq Market Center for NonNasdaq Securities] Reserved. [The charges to be paid by members using the Nasdaq Market Center for trading non-Nasdaq exchange-listed securities through the Nasdaq Market Center shall consist of a fixed service charge of $200 per member per month, transaction charges as provided in Nasdaq Rule 7018 and equipmentrelated charges as provided elsewhere in the Rule 7000 Series.] * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of, and basis for, the proposed rule change. The text of these statements may be examined at the places specified in Item III below, and is set forth in Sections A, B, and C below. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change ebenthall on PROD1PC69 with NOTICES 1. Purpose Nasdaq proposes two retroactive changes to its fee schedule to address transition issues arising from its commencing operations as a national securities exchange for trading nonNasdaq securities on February 12, 2007. First, Nasdaq proposes to eliminate a VerDate Aug<31>2005 15:00 Aug 14, 2007 Jkt 211001 monthly fixed fee for trading nonNasdaq securities through the Nasdaq Market Center, as provided in Rule 7014. That rule states that members trading such securities will pay a fixed service charge of $200 per member per month, transaction charges as provided in Nasdaq Rule 7018, and equipmentrelated charges as provided elsewhere in the Rule 7000 Series. Prior to February 12, 2007, Nasdaq’s parent corporation, The Nasdaq Stock Market, Inc. (‘‘Nasdaq Inc.’’), operated multiple platforms for trading non-Nasdaq securities, and charged a $200 monthly service fee under NASD rules. On February 12, 2007, Nasdaq began to trade non-Nasdaq securities as an exchange on a single platform, but Nasdaq Inc. continued to operate a separate platform for trading non-Nasdaq securities under NASD rules until March 5, 2007. Accordingly, the charge under NASD rules remained in place until March 5, 2007. Because trading all securities on a single platform governed by a common set of trading rules reduces Nasdaq’s costs, and because Nasdaq’s pricing now makes few distinctions between the trading of Nasdaq-listed and nonNasdaq securities, Nasdaq believes that it is appropriate to eliminate the $200 monthly service charge. Nasdaq seeks to make the change retroactive to February 12, 2007, the date when Nasdaq began trading these securities as an exchange. Making the change retroactive to February 12, 2007 will also ensure that members are not charged duplicative fees (a fee under NASD rules and a fee under Nasdaq rules) for the period from February 12, 2007 to March 5, 2007. The rule’s reference to equipment related charges is now obsolete, since trading through Nasdaq is no longer reliant on equipment provided by Nasdaq for use on the premises of its market participants. Finally, although transaction charges under Rule 7018 are applicable, Nasdaq believes that it is unnecessary to cross-reference them in a separate rule. Accordingly, the rule is being deleted in its entirety. Second, Nasdaq proposes to correct an oversight with regard to the text of Rule 7013 that arose when Nasdaq began to operate as an exchange for trading non-Nasdaq securities on February 12, 2007. Prior to that time, and until March 5, 2007, Nasdaq Inc. shared market data revenue with NASD members trading non-Nasdaq stocks pursuant to former NASD Rule 7010(c)(2). For the period from February 1, 2006 through March 5, 2007, the text of that rule read as follows: NASD members that trade securities listed on the NYSE (‘‘Tape A’’) and Amex (‘‘Tape PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 45849 B’’) in over-the-counter transactions may receive from the NASD transaction credits based on the number of transactions attributed to them. A transaction is attributed to a member if (i) For Tape B securities, the transaction is executed through CAES, ITS, or Nasdaq’s Brut or Inet Facilities, and the member acts as liquidity provider (i.e., the member sells in response to a buy order or buys in response to a sell order) or (ii) for Tape A and Tape B securities, the transaction is not executed through CAES, ITS, or Nasdaq’s Brut or Inet Facilities, and the member is identified as the executing party in a trade report submitted to the NASD that the NASD submits to the Consolidated Tape Association. An NASD member may earn credits from one or both pools maintained by the NASD, each pool representing 50% of the revenue paid by the Consolidated Tape Association to the NASD for each of Tape A and Tape B transactions after deducting the amount that the NASD pays to the Consolidated Tape Association for capacity usage. An NASD member may earn credits from the pools according to the member’s pro rata share of all over-the-counter transactions attributed to NASD members in each of Tape A and Tape B for each calendar quarter. The rule text reflected the fact that Nasdaq Inc. provided both electronic transaction execution systems similar to those currently provided by Nasdaq, and over-the-counter trade reporting services similar to those now provided by the NASD/NASDAQ Trade Reporting Facility (‘‘TRF’’) and TRFs operated by other exchanges. For both Tape A and Tape B securities, the rule provided for sharing of revenues associated with over-the-counter trade reports,4 but the rule provided for sharing of revenues associated with electronic system trades for Tape B securities only.5 The rule was amended effective February 1, 2006 to eliminate sharing of revenues associated with electronic system trades for Tape A securities.6 Following transition to exchange operation on February 12, 2007, Nasdaq intended to maintain the status quo with respect to revenue sharing. Thus, NASD Rule 7001B, which applies to the NASD/NASDAQ TRF, continues to provide for sharing of revenues associated with over-the-counter trade reports, on terms comparable to those provided under former NASD Rule 7010(c)(2). By contrast, the text of Nasdaq Rule 7013, which was originally adopted through Nasdaq’s Form 1 4 ‘‘[F]or Tape A and Tape B securities, the transaction is not executed through CAES, ITS, or Nasdaq’s Brut or Inet Facilities. * * *.’’ ITS/CAES, Brut and Inet were electronic trading systems operated by Nasdaq Inc. 5 ‘‘[F]or Tape B securities, the transaction is executed through CAES, ITS, or Nasdaq’s Brut or Inet Facilities. * * *’’ 6 Securities Exchange Act Release No. 53256 (February 8, 2006), 71 FR 8020 (February 15, 2006) (SR–NASD–2006–013). E:\FR\FM\15AUN1.SGM 15AUN1 45850 Federal Register / Vol. 72, No. 157 / Wednesday, August 15, 2007 / Notices application for registration as a national securities exchange,7 was not amended to reflect the elimination of Tape A sharing prior to the time when Nasdaq began to trade non-Nasdaq securities as an exchange on February 12, 2007. The proposed rule change will rectify this oversight, and thereby allow Nasdaq to maintain the status quo with respect to market data revenue sharing, as had been Nasdaq’s intent. Nasdaq has not distributed any Tape A revenues for system trades. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,8 in general, and with Section 6(b)(4) of the Act,9 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 Nasdaq operates or controls. Nasdaq believes that the change will eliminate an unnecessary charge with respect to trading of non-Nasdaq securities and thereby make Nasdaq’s fees for trading these securities more reasonable. Nasdaq further believes that the change with respect to revenue sharing will allow Nasdaq to maintain the status quo with respect to Tape A revenue sharing that had existed prior to Nasdaq beginning to operate as a national securities exchange for trading nonNasdaq securities. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. ebenthall on PROD1PC69 with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments on the proposed rule change were neither solicited nor 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 7 Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10–131). 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 15:00 Aug 14, 2007 Jkt 211001 publishes its reasons for so finding or (ii) as to which the self-regulatory organization 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, as amended, should be disapproved. NASDAQ–2007–056 and should be submitted on or before August 30, 2007. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: BILLING CODE 8010–01–P Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2007–056 on the subject line. Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To List and Trade Shares of the streetTRACKS Gold Trust Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASDAQ–2007–056. 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 on official business days between the hours of 10 a.m. and 3 p.m. 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 available publicly. All submissions should refer to File Number SR– PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–15965 Filed 8–14–07; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56224; File No. SR– NYSEArca–2007–76] August 8, 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 July 27, 2007, NYSE Arca, Inc. (the ‘‘Exchange’’), through its wholly owned subsidiary, NYSE Arca Equities, Inc. (‘‘NYSE Arca Equities’’), 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. On August 7, 2007, the Exchange submitted Amendment No. 1 to the proposal rule change. This order provides notice of the proposed rule change and approves the proposed rule change, as amended, on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares (‘‘Shares’’) of the streetTRACKS Gold Trust (‘‘Trust’’) 3 pursuant to NYSE Arca Equities Rule 5.2(j)(5). The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and https://www.nyse.com. 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 streetTRACKS is a registered service mark of State Street Corporation, an affiliate of State Street Global Markets, LLC, the marketing agent of the Trust. 1 15 E:\FR\FM\15AUN1.SGM 15AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 157 (Wednesday, August 15, 2007)]
[Notices]
[Pages 45848-45850]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15965]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56228; File No. SR-NASDAQ-2007-056]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 2 Thereto, 
To Modify Pricing for Nasdaq Members Using the Nasdaq Market Center

August 8, 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 June 1, 2007, The NASDAQ Stock Market LLC (``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 July 27, 2007, Nasdaq filed Amendment No. 
1. On August 6, 2007, Nasdaq withdrew Amendment No. 1 and filed 
Amendment No. 2, which replaced the text of the original filing in its 
entirety. The Commission is publishing this notice to solicit comment 
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \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 pricing for the Nasdaq Market Center. 
Nasdaq will make the proposed rule change effective retroactively as of 
February 12, 2007.
    The text of the proposed rule change appears below. Proposed new 
language is italicized and proposed deletions are in brackets.\3\
---------------------------------------------------------------------------

    \3\ Changes are marked to the rule text that appears in the 
electronic Nasdaq Manual found at https://nasdaq.complinet.com.
---------------------------------------------------------------------------

* * * * *


7013.  Consolidated Quotation Service and Exchange-Listed Securities 
Transaction Credit

    (a) No change.
    (b) Nasdaq members that trade securities listed on [the NYSE 
(``Tape A'') and] Amex (``Tape B'') through Nasdaq may receive from 
Nasdaq transaction credits based on the number

[[Page 45849]]

of transactions attributed to them. A transaction is attributed to a 
member if the transaction is executed through the Nasdaq Market Center, 
and the member acts as liquidity provider (i.e., the member sells in 
response to a buy order or buys in response to a sell order). A Nasdaq 
member may earn credits from [one or both] a pool[s] maintained by 
Nasdaq[, each pool] representing 50% of the revenue paid by the 
Consolidated Tape Association to Nasdaq for [each of Tape A and] Tape B 
transactions after deducting the amount that Nasdaq pays to the 
Consolidated Tape Association for capacity usage. A Nasdaq member may 
earn credits from the pool[s] according to the member's pro rata share 
of transactions attributed to Nasdaq members in [each of Tape A and] 
Tape B for each calendar quarter. Liquidity providers executing 
transactions in Tape B securities through the Nasdaq Market Center will 
receive credits with respect to such transactions on an estimated 
monthly basis[; all other credits under this rule will be paid on a 
quarterly basis].


7014.  [Nasdaq Market Center for Non-Nasdaq Securities] Reserved.

    [The charges to be paid by members using the Nasdaq Market Center 
for trading non-Nasdaq exchange-listed securities through the Nasdaq 
Market Center shall consist of a fixed service charge of $200 per 
member per month, transaction charges as provided in Nasdaq Rule 7018 
and equipment-related charges as provided elsewhere in the Rule 7000 
Series.]
* * * * *

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

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III below, and is set forth in Sections A, B, and C below.

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

1. Purpose
    Nasdaq proposes two retroactive changes to its fee schedule to 
address transition issues arising from its commencing operations as a 
national securities exchange for trading non-Nasdaq securities on 
February 12, 2007. First, Nasdaq proposes to eliminate a monthly fixed 
fee for trading non-Nasdaq securities through the Nasdaq Market Center, 
as provided in Rule 7014. That rule states that members trading such 
securities will pay a fixed service charge of $200 per member per 
month, transaction charges as provided in Nasdaq Rule 7018, and 
equipment-related charges as provided elsewhere in the Rule 7000 
Series. Prior to February 12, 2007, Nasdaq's parent corporation, The 
Nasdaq Stock Market, Inc. (``Nasdaq Inc.''), operated multiple 
platforms for trading non-Nasdaq securities, and charged a $200 monthly 
service fee under NASD rules. On February 12, 2007, Nasdaq began to 
trade non-Nasdaq securities as an exchange on a single platform, but 
Nasdaq Inc. continued to operate a separate platform for trading non-
Nasdaq securities under NASD rules until March 5, 2007. Accordingly, 
the charge under NASD rules remained in place until March 5, 2007.
    Because trading all securities on a single platform governed by a 
common set of trading rules reduces Nasdaq's costs, and because 
Nasdaq's pricing now makes few distinctions between the trading of 
Nasdaq-listed and non-Nasdaq securities, Nasdaq believes that it is 
appropriate to eliminate the $200 monthly service charge. Nasdaq seeks 
to make the change retroactive to February 12, 2007, the date when 
Nasdaq began trading these securities as an exchange. Making the change 
retroactive to February 12, 2007 will also ensure that members are not 
charged duplicative fees (a fee under NASD rules and a fee under Nasdaq 
rules) for the period from February 12, 2007 to March 5, 2007.
    The rule's reference to equipment related charges is now obsolete, 
since trading through Nasdaq is no longer reliant on equipment provided 
by Nasdaq for use on the premises of its market participants. Finally, 
although transaction charges under Rule 7018 are applicable, Nasdaq 
believes that it is unnecessary to cross-reference them in a separate 
rule. Accordingly, the rule is being deleted in its entirety.
    Second, Nasdaq proposes to correct an oversight with regard to the 
text of Rule 7013 that arose when Nasdaq began to operate as an 
exchange for trading non-Nasdaq securities on February 12, 2007. Prior 
to that time, and until March 5, 2007, Nasdaq Inc. shared market data 
revenue with NASD members trading non-Nasdaq stocks pursuant to former 
NASD Rule 7010(c)(2). For the period from February 1, 2006 through 
March 5, 2007, the text of that rule read as follows:

    NASD members that trade securities listed on the NYSE (``Tape 
A'') and Amex (``Tape B'') in over-the-counter transactions may 
receive from the NASD transaction credits based on the number of 
transactions attributed to them. A transaction is attributed to a 
member if (i) For Tape B securities, the transaction is executed 
through CAES, ITS, or Nasdaq's Brut or Inet Facilities, and the 
member acts as liquidity provider (i.e., the member sells in 
response to a buy order or buys in response to a sell order) or (ii) 
for Tape A and Tape B securities, the transaction is not executed 
through CAES, ITS, or Nasdaq's Brut or Inet Facilities, and the 
member is identified as the executing party in a trade report 
submitted to the NASD that the NASD submits to the Consolidated Tape 
Association. An NASD member may earn credits from one or both pools 
maintained by the NASD, each pool representing 50% of the revenue 
paid by the Consolidated Tape Association to the NASD for each of 
Tape A and Tape B transactions after deducting the amount that the 
NASD pays to the Consolidated Tape Association for capacity usage. 
An NASD member may earn credits from the pools according to the 
member's pro rata share of all over-the-counter transactions 
attributed to NASD members in each of Tape A and Tape B for each 
calendar quarter.

    The rule text reflected the fact that Nasdaq Inc. provided both 
electronic transaction execution systems similar to those currently 
provided by Nasdaq, and over-the-counter trade reporting services 
similar to those now provided by the NASD/NASDAQ Trade Reporting 
Facility (``TRF'') and TRFs operated by other exchanges. For both Tape 
A and Tape B securities, the rule provided for sharing of revenues 
associated with over-the-counter trade reports,\4\ but the rule 
provided for sharing of revenues associated with electronic system 
trades for Tape B securities only.\5\ The rule was amended effective 
February 1, 2006 to eliminate sharing of revenues associated with 
electronic system trades for Tape A securities.\6\
---------------------------------------------------------------------------

    \4\ ``[F]or Tape A and Tape B securities, the transaction is not 
executed through CAES, ITS, or Nasdaq's Brut or Inet Facilities. * * 
*.'' ITS/CAES, Brut and Inet were electronic trading systems 
operated by Nasdaq Inc.
    \5\ ``[F]or Tape B securities, the transaction is executed 
through CAES, ITS, or Nasdaq's Brut or Inet Facilities. * * *''
    \6\ Securities Exchange Act Release No. 53256 (February 8, 
2006), 71 FR 8020 (February 15, 2006) (SR-NASD-2006-013).
---------------------------------------------------------------------------

    Following transition to exchange operation on February 12, 2007, 
Nasdaq intended to maintain the status quo with respect to revenue 
sharing. Thus, NASD Rule 7001B, which applies to the NASD/NASDAQ TRF, 
continues to provide for sharing of revenues associated with over-the-
counter trade reports, on terms comparable to those provided under 
former NASD Rule 7010(c)(2). By contrast, the text of Nasdaq Rule 7013, 
which was originally adopted through Nasdaq's Form 1

[[Page 45850]]

application for registration as a national securities exchange,\7\ was 
not amended to reflect the elimination of Tape A sharing prior to the 
time when Nasdaq began to trade non-Nasdaq securities as an exchange on 
February 12, 2007. The proposed rule change will rectify this 
oversight, and thereby allow Nasdaq to maintain the status quo with 
respect to market data revenue sharing, as had been Nasdaq's intent. 
Nasdaq has not distributed any Tape A revenues for system trades.
---------------------------------------------------------------------------

    \7\ Securities Exchange Act Release No. 53128 (January 13, 
2006), 71 FR 3550 (January 23, 2006) (File No. 10-131).
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general, and with Section 
6(b)(4) of the Act,\9\ 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 Nasdaq operates or controls. Nasdaq believes that the change will 
eliminate an unnecessary charge with respect to trading of non-Nasdaq 
securities and thereby make Nasdaq's fees for trading these securities 
more reasonable. Nasdaq further believes that the change with respect 
to revenue sharing will allow Nasdaq to maintain the status quo with 
respect to Tape A revenue sharing that had existed prior to Nasdaq 
beginning to operate as a national securities exchange for trading non-
Nasdaq securities.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will impose 
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 on the proposed rule change were neither solicited 
nor 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 self-regulatory organization 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, as amended, should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2007-056 on the subject line.

Paper Comments

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


All submissions should refer to File Number SR-NASDAQ-2007-056. 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 on official 
business days between the hours of 10 a.m. and 3 p.m. 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 available publicly. All submissions should refer to 
File Number SR-NASDAQ-2007-056 and should be submitted on or before 
August 30, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-15965 Filed 8-14-07; 8:45 am]
BILLING CODE 8010-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.