Self-Regulatory Organizations; the NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 to Establish a New Service Called Nasdaq Regulation Reconnaissance Service (“Reg Recon”) To Assist Nasdaq Members in Their Efforts To Comply With Applicable Regulatory Requirements, 60922-60924 [E7-21180]
Download as PDF
<![CDATA[
60922
Federal Register / Vol. 72, No. 207 / Friday, October 26, 2007 / Notices
available for inspection and copying at
the principal office of FINRA. 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–FINRA–2007–013 and
should be submitted on or before
November 16, 2007.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to establish fees for
a new real-time surveillance alert and
report module to assist Nasdaq member
firms with their Regulation NMS (‘‘Reg
NMS’’) compliance. The text of the
proposed rule change is available at
https://www.nasdaq.complinet.com, the
Exchange, and the Commission’s Public
Reference Room.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–21166 Filed 10–25–07; 8:45 am]
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 received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56683; File No. SR–
NASDAQ–2007–081]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change and
Amendment No. 1 to Establish a New
Service Called Nasdaq Regulation
Reconnaissance Service (‘‘Reg
Recon’’) To Assist Nasdaq Members in
Their Efforts To Comply With
Applicable Regulatory Requirements
rmajette on PROD1PC64 with NOTICES
October 22, 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
September 26, 2007, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’ or
‘‘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 prepared
substantially by Nasdaq. On October 15,
2007 Nasdaq filed Amendment No. 1 to
the proposed rule change. Nasdaq filed
the proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
it effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
14 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).
1 15
VerDate Aug<31>2005
15:23 Oct 25, 2007
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to establish a new
service called Nasdaq Regulation
Reconnaissance Service (‘‘Reg Recon’’)
to assist Nasdaq members in their efforts
to comply with applicable regulatory
requirements. Specifically, Reg Recon
will provide Nasdaq members with
individualized real-time surveillance
alerts of possible violations of Reg NMS
under the Act. Members will also have
access to download those surveillance
alerts for use as part of their policies
and procedures to ensure compliance
with Reg NMS obligations. Reg Recon is
intended as only one source of
assistance for Nasdaq member firms
with their Reg NMS compliance and
does not purport in any way to ensure
or guarantee Reg NMS compliance.
Specifically, Reg Recon will be available
as an add-on to the Nasdaq Workstation
and Weblink ACT 2.0.
Section 12(f) of the Act 5 permits
exchanges to extend ‘‘unlisted trading
privileges’’ (‘‘UTP’’) to Nasdaq listed
securities. Through UTP, other U.S.
exchanges are able to quote and trade
issues listed on Nasdaq. In addition,
registered broker-dealers are permitted
to execute transactions in the over-thecounter market and to report those
trades to the Alternative Display Facility
5 15
Jkt 214001
PO 00000
U.S.C. 78l(f).
Frm 00127
Fmt 4703
Sfmt 4703
operated by the Financial Industry
Regulatory Authority (‘‘FINRA’’) or to
any of several Trade Reporting Facilities
(‘‘TRFs’’) operated jointly by FINRA and
one of several national securities
exchanges. Under the UTP Plan, all U.S.
exchanges that quote and trade Nasdaq
listed securities must provide their data
to a centralized securities information
processor (‘‘SIP’’) for data consolidation
and dissemination. Nasdaq, in its
current role as the SIP for the UTP Plan,
supports the UTP Quotation Data Feed
(‘‘UQDF’’). 6
Reg Recon will assist Nasdaq
members in two ways. First, it will
assist members with compliance with
Rule 611 of Reg NMS by providing realtime alerts that are trade reported by the
member to the FINRA/Nasdaq TRF and
represent potential trade-throughs.
Nasdaq will generate these alerts by
reading the UQDF data feed and
comparing it to the prices of trades
reported to the TRF. When that
comparison reveals that a potential
trade-through has occurred, the Reg
Recon functionality will send the
member a real-time surveillance alert.
Nasdaq expects that firms will use these
alerts as part of their compliance
procedures to verify that the TRF trade
was properly executed and trade
reported.
Second, Reg Recon will provide
subscribers with Nasdaq Self Help
Declarations/Revocations messages
(‘‘Notices’’). These Notices will alert
participants that Nasdaq is experiencing
communications issues with a particular
market center. It is intended to cause
members to perform an independent
review of their communications with
that market center and assess their
trading obligations with respect to that
market. Nasdaq has stated that these
Notices are not intended to relieve firms
of their obligations to conduct
independent self-help analysis and to
adopt policies and procedures designed
to achieve compliance with those
obligations.
Both real-time surveillance alerts and
the Notices will be available to
download each day to allow firms to
review their TRF trade reporting
activities. The product also provides
reports that give users the ability to
generate and download reports to view
all of their potential TRF trade-throughs
and sort by exempt versus non-exempt,
intermarket sweep order (‘‘ISO’’) versus
non-ISO, and Nasdaq Self Help
Declarations/Revocations. Additionally,
6 UQDF provides best bid and offer quotes from
the UTP participants, as well as the consolidated
national best bid and offer quotes (‘‘NBBOs’’) for
securities listed on Nasdaq.
E:\FR\FM\26OCN1.SGM
26OCN1
Federal Register / Vol. 72, No. 207 / Friday, October 26, 2007 / Notices
rmajette on PROD1PC64 with NOTICES
the product gives firms an ability to
view their TRF ISO and potential tradethrough violations relative to the rest of
the industry.
The fee for this product will be a
$1,000/market maker participant
identifier/month subscription fee,
which Nasdaq believes fairly reflects the
value of this product. Use of the Reg
Recon Service is voluntary and available
only to Nasdaq member firms and the
subscription fees will be imposed on all
purchasers equally. The proposed fees
will cover the costs associated with
establishing the service, responding to
customer requests, configuring Nasdaq’s
systems, programming to user
specifications, and administering the
service, among other things. Large firms’
order management systems are offering
this product at a much higher price, but
they have the ability to charge a
significant amount more than Nasdaq
since firms potentially will need to
route to other market centers to comply
with the rule and the order management
system will have all order information
for every market center, not just the TRF
data.
The Service is responsive to the
requests of market participants seeking
to augment their order management
systems’ solutions, as well as provide a
back-up to those solutions, and for
smaller firms with less sophisticated
trading systems/environments. Nasdaq
believes that the product is reasonably
priced in light of the amount of quote
data that must be processed coupled
with the support required to assist firms
in understanding the product and, in
turn, Reg NMS.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,7 in
general, and with Section 6(b)(5) of the
Act,8 in particular, in that it is designed
to promote just and equitable principles
of trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest. Use of the Reg Recon
Service is voluntary and is responsive to
the requests of market participants
seeking to augment their order
management systems’ solutions, as well
as provide a back-up to those solutions,
and for smaller firms with less
7 15
8 15
U.S.C. 78f.
U.S.C. 78f(b)(5).
VerDate Aug<31>2005
15:23 Oct 25, 2007
Jkt 214001
sophisticated trading systems/
environments.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
such shorter time as the Commission
may designate, if consistent with the
protection of investors and public
interest, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 9 and Rule 19b–4(f)(6) thereunder.10
Normally, a proposed rule change
filed under Rule 19b–4(f)(6) may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 11 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay set forth in Rule 19b–4(f)(6)(iii)
under the Act.12 The Commission
believes that the earlier operative date is
consistent with the protection of
investors and the public interest
because the proposed rule change
permits the Exchange to provide
without further delay a voluntary
service that responds to the requests of
market participants seeking to augment
their order management systems’
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires that a self-regulatory
organization submit to the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Commission notes that Nasdaq
has satisfied the five-day pre-filing notice
requirement.
12 17 CFR 240.19b–4(f)(6)(iii).
60923
solutions. For these reasons, the
Commission designates the proposal to
be operative upon filing with the
Commission.13
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.14
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 rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2007–081 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–NASDAQ–2007–081. 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
10 17
PO 00000
Frm 00128
Fmt 4703
Sfmt 4703
13 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
14 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on October 15, 2007, the
date on which Nasdaq filed Amendment No. 1. See
15 U.S.C. 78s(b)(3)(C).
E:\FR\FM\26OCN1.SGM
26OCN1
60924
Federal Register / Vol. 72, No. 207 / Friday, October 26, 2007 / Notices
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, 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 Nasdaq. 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–2007–081 and
should be submitted on or before
November 16, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–21180 Filed 10–25–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56688; File No. SR–NYSE–
2007–77]
Self-Regulatory Organizations; New
York Stock Exchange LLC.; Notice of
Filing of Proposed Rule Change, as
Modified by Amendment Nos. 1, 2, and
3 Thereto, To Amend Listing Fees for
Structured Products
rmajette on PROD1PC64 with NOTICES
October 23, 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 August
24, 2007, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 substantially prepared by the
Exchange. On October 3, 2007, the
Exchange filed Amendment No. 1 to the
proposed rule change. On October 12,
2007, the Exchange filed Amendment
No. 2 to the proposed rule change. On
October 22, 2007, the Exchange filed
Amendment No. 3 to the proposed rule
change. The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Aug<31>2005
15:23 Oct 25, 2007
Jkt 214001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
listing fees for structured products
included in its Listed Company Manual
(‘‘Manual’’). The Exchange seeks to
clarify when certain existing fees will
apply to specific structured products
and also proposes to create a new fee
section (Section 902.09) that will apply
a new lower fee schedule to securities
listed pursuant to Sections 703.15
(Foreign Currency Warrants and
Currency Index Warrants), 703.17 (Stock
Index Warrants Listing Standards), and
703.22 (Equity Index-Linked Securities,
Commodity-Linked Securities and
Currency-Linked Securities and
Currency-Linked Securities). Except as
described below, the proposed revisions
would apply retroactively as of October
3, 2007. The text of the proposed rule
change is available at the Commission’s
Public Reference Room, at the
Exchange, and at https://www.nyse.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, the
Exchange 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. The
Exchange 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
a. Listing Fee Schedule
The Exchange proposes to amend its
listing fees for structured products. The
Exchange seeks to clarify when certain
existing fees will apply to specific
structured products and also proposes
to create a new fee section (Section
902.09) that will apply a new lower fee
schedule to securities listed pursuant to
Sections 703.15 (Foreign Currency
Warrants and Currency Index Warrants),
703.17 (Stock Index Warrants Listing
Standards) and 703.22 (Equity IndexLinked Securities, Commodity-Linked
Securities and Currency-Linked
Securities) of the Manual. The listing
and annual fees set forth in Section
902.05 of the Manual relate to long-term
structured products (i.e., a term of more
PO 00000
Frm 00129
Fmt 4703
Sfmt 4703
than seven years) listed pursuant to
Section 703.18 (Contingent Value
Rights), the equity criteria set out in
Section 703.19 (Other Securities) and
Section 703.21 (Equity-Linked Debt
Securities), and traded on the equity
floor of the Exchange. The Exchange is
also amending Section 902.05 of the
Manual to correct two cross-references,
clarifying that: (i) Fees applicable to
structured products listed under the
debt criteria set out in Section 703.19
and traded on NYSE Bonds are set forth
in Section 902.08 (Listings Fees for Debt
Securities); and (ii) fees applicable to
short-term structured products are set
forth in Section 902.06. The proposed
revisions would apply retroactively as
of October 3, 2007, except as described
below.
Section 902.06 of the Manual sets
forth the listing fees for certain
securities with a term of less than seven
years, including, but not limited to,
warrants representing equity securities,
index warrants, foreign currency
warrants, contingent value rights and
structured products. The Exchange
proposes to revise Section 902.06 to
exclude from its coverage those
securities that will be subject to the fees
set forth in new Section 902.09. The
Exchange proposes to adopt new
Section 902.09 to establish a new fee
schedule for fees related to securities
listed pursuant to Sections 703.15
(Foreign Currency Warrants and
Currency Index Warrants), 703.17 (Stock
Index Warrants Listing Standards) and
703.22 (Equity Index-Linked Securities,
Commodity-Linked Securities and
Currency-Linked Securities) of the
Manual. The listing fees applicable to
securities subject to Section 902.09
Manual are as follows:
Shares outstanding
Up to 1 million ............................
1+ to 2 million .............................
2+ to 3 million .............................
3+ to 4 million .............................
4+ to 5 million .............................
5+ to 6 million .............................
6+ to 7 million .............................
7+ to 8 million .............................
8+ to 9 million .............................
9+ to 10 million ...........................
10+ to 15 million .........................
In excess of 15 million ................
Fee
$5,000
10,000
15,000
20,000
25,000
30,000
30,000
30,000
30,000
32,500
37,500
45,000
These fees will apply each time an
issuer lists a security of one of the
classes specified in Section 902.09 of
the Manual and also to subsequent
listings of additional shares of the same
security. The Exchange will treat each
series of the security as a separate issue.
E:\FR\FM\26OCN1.SGM
26OCN1
]]>Agencies
[Federal Register Volume 72, Number 207 (Friday, October 26, 2007)]
[Notices]
[Pages 60922-60924]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21180]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56683; File No. SR-NASDAQ-2007-081]
Self-Regulatory Organizations; the NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 to Establish a New Service Called Nasdaq Regulation
Reconnaissance Service (``Reg Recon'') To Assist Nasdaq Members in
Their Efforts To Comply With Applicable Regulatory Requirements
October 22, 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 September 26, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or
``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 prepared substantially by Nasdaq. On
October 15, 2007 Nasdaq filed Amendment No. 1 to the proposed rule
change. Nasdaq filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which
renders it effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, 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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to establish fees for a new real-time surveillance
alert and report module to assist Nasdaq member firms with their
Regulation NMS (``Reg NMS'') compliance. The text of the proposed rule
change is available at https://www.nasdaq.complinet.com, the Exchange,
and the Commission's Public Reference Room.
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 received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to establish a new service called Nasdaq Regulation
Reconnaissance Service (``Reg Recon'') to assist Nasdaq members in
their efforts to comply with applicable regulatory requirements.
Specifically, Reg Recon will provide Nasdaq members with individualized
real-time surveillance alerts of possible violations of Reg NMS under
the Act. Members will also have access to download those surveillance
alerts for use as part of their policies and procedures to ensure
compliance with Reg NMS obligations. Reg Recon is intended as only one
source of assistance for Nasdaq member firms with their Reg NMS
compliance and does not purport in any way to ensure or guarantee Reg
NMS compliance. Specifically, Reg Recon will be available as an add-on
to the Nasdaq Workstation and Weblink ACT 2.0.
Section 12(f) of the Act \5\ permits exchanges to extend ``unlisted
trading privileges'' (``UTP'') to Nasdaq listed securities. Through
UTP, other U.S. exchanges are able to quote and trade issues listed on
Nasdaq. In addition, registered broker-dealers are permitted to execute
transactions in the over-the-counter market and to report those trades
to the Alternative Display Facility operated by the Financial Industry
Regulatory Authority (``FINRA'') or to any of several Trade Reporting
Facilities (``TRFs'') operated jointly by FINRA and one of several
national securities exchanges. Under the UTP Plan, all U.S. exchanges
that quote and trade Nasdaq listed securities must provide their data
to a centralized securities information processor (``SIP'') for data
consolidation and dissemination. Nasdaq, in its current role as the SIP
for the UTP Plan, supports the UTP Quotation Data Feed (``UQDF''). \6\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78l(f).
\6\ UQDF provides best bid and offer quotes from the UTP
participants, as well as the consolidated national best bid and
offer quotes (``NBBOs'') for securities listed on Nasdaq.
---------------------------------------------------------------------------
Reg Recon will assist Nasdaq members in two ways. First, it will
assist members with compliance with Rule 611 of Reg NMS by providing
real-time alerts that are trade reported by the member to the FINRA/
Nasdaq TRF and represent potential trade-throughs. Nasdaq will generate
these alerts by reading the UQDF data feed and comparing it to the
prices of trades reported to the TRF. When that comparison reveals that
a potential trade-through has occurred, the Reg Recon functionality
will send the member a real-time surveillance alert. Nasdaq expects
that firms will use these alerts as part of their compliance procedures
to verify that the TRF trade was properly executed and trade reported.
Second, Reg Recon will provide subscribers with Nasdaq Self Help
Declarations/Revocations messages (``Notices''). These Notices will
alert participants that Nasdaq is experiencing communications issues
with a particular market center. It is intended to cause members to
perform an independent review of their communications with that market
center and assess their trading obligations with respect to that
market. Nasdaq has stated that these Notices are not intended to
relieve firms of their obligations to conduct independent self-help
analysis and to adopt policies and procedures designed to achieve
compliance with those obligations.
Both real-time surveillance alerts and the Notices will be
available to download each day to allow firms to review their TRF trade
reporting activities. The product also provides reports that give users
the ability to generate and download reports to view all of their
potential TRF trade-throughs and sort by exempt versus non-exempt,
intermarket sweep order (``ISO'') versus non-ISO, and Nasdaq Self Help
Declarations/Revocations. Additionally,
[[Page 60923]]
the product gives firms an ability to view their TRF ISO and potential
trade-through violations relative to the rest of the industry.
The fee for this product will be a $1,000/market maker participant
identifier/month subscription fee, which Nasdaq believes fairly
reflects the value of this product. Use of the Reg Recon Service is
voluntary and available only to Nasdaq member firms and the
subscription fees will be imposed on all purchasers equally. The
proposed fees will cover the costs associated with establishing the
service, responding to customer requests, configuring Nasdaq's systems,
programming to user specifications, and administering the service,
among other things. Large firms' order management systems are offering
this product at a much higher price, but they have the ability to
charge a significant amount more than Nasdaq since firms potentially
will need to route to other market centers to comply with the rule and
the order management system will have all order information for every
market center, not just the TRF data.
The Service is responsive to the requests of market participants
seeking to augment their order management systems' solutions, as well
as provide a back-up to those solutions, and for smaller firms with
less sophisticated trading systems/environments. Nasdaq believes that
the product is reasonably priced in light of the amount of quote data
that must be processed coupled with the support required to assist
firms in understanding the product and, in turn, Reg NMS.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\7\ in general, and with Section
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest. Use of the Reg Recon Service
is voluntary and is responsive to the requests of market participants
seeking to augment their order management systems' solutions, as well
as provide a back-up to those solutions, and for smaller firms with
less sophisticated trading systems/environments.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, if
consistent with the protection of investors and public interest, it has
become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and
Rule 19b-4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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Normally, a proposed rule change filed under Rule 19b-4(f)(6) may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay set forth in Rule 19b-
4(f)(6)(iii) under the Act.\12\ The Commission believes that the
earlier operative date is consistent with the protection of investors
and the public interest because the proposed rule change permits the
Exchange to provide without further delay a voluntary service that
responds to the requests of market participants seeking to augment
their order management systems' solutions. For these reasons, the
Commission designates the proposal to be operative upon filing with the
Commission.\13\
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\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires that a self-regulatory organization submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Commission notes that Nasdaq has satisfied the five-
day pre-filing notice requirement.
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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.\14\
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\14\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on October 15, 2007, the date on which Nasdaq filed
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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-NASDAQ-2007-081 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-NASDAQ-2007-081. 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
[[Page 60924]]
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, 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 Nasdaq. 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-2007-081 and should
be submitted on or before November 16, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-21180 Filed 10-25-07; 8:45 am]
BILLING CODE 8011-01-P
