Self-Regulatory Organizations; National Association of Securities Dealers, Inc. (n/k/a Financial Industry Regulatory Authority, Inc. (“FINRA”); Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend NASD Rule 7001C To Increase Percentage of Market Data Revenue Shared With NASD/NSX TRF Participants, 64099-64101 [E7-22162]

Download as PDF Federal Register / Vol. 72, No. 219 / Wednesday, November 14, 2007 / Notices mstockstill on PROD1PC66 with NOTICES 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, 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 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–2007–019 and should be submitted on or before December 5, 2007. IV. Commission Findings After careful consideration, the Commission finds that the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to a national securities association.9 Specifically, the Commission believes that the proposed rule change is consistent with section 15A(b)(6) of the Act 10 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The proposed rule change amends the version of NYSE Rule 2(b) that was incorporated into FINRA’s rulebook as part of the consolidation of the member firm regulatory consolidation between NASD and NYSE. The Commission notes that the proposed rule change would make FINRA’s NYSE Rule 2(b) identical to the version of NYSE Rule 2(b) in the NYSE rulebook that recently was amended and approved by the Commission.11 In addition, the 9 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78o–3(b)(6). 11 See Release No. 34–56654, supra note 5. VerDate Aug<31>2005 18:23 Nov 13, 2007 Jkt 214001 Commission believes that the proposed rule change comports with the provision of the 17d–2 Agreement, as approved by the Commission, in which FINRA and NYSE agreed to promptly propose conforming changes, absent a disagreement about the substance of a proposed rule change to one of the Common Rules, to ensure that such rules continue to be Common Rules under the Agreement. In this regard, the Commission believes that it is appropriate for the proposed rule to be effective retroactively as of October 12, 2007, which is the date NYSE’s amendment to NYSE Rule 2(b) was approved by the Commission.12 The Commission finds good cause to approve the proposal prior to the thirtieth day after the proposal was published for comment in the Federal Register. This approval allows the proposed rule change to take effect without delay. The NYSE’s proposed revision to NYSE Rule 2(b) was published for comment and approved by the Commission.13 Therefore, interested persons were provided the opportunity to submit comments on rule text that is identical to FINRA’s proposal. For this reason, the Commission finds good cause, consistent with section 19(b)(2) of the Act, to grant accelerated approval to the proposed rule change. V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act, that the proposed rule change (SR–FINRA– 2007–019) is hereby approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–22161 Filed 11–13–07; 8:45 am] 64099 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56752; File No. SR–NASD– 2007–043] Self-Regulatory Organizations; National Association of Securities Dealers, Inc. (n/k/a Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’); Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Amend NASD Rule 7001C To Increase Percentage of Market Data Revenue Shared With NASD/NSX TRF Participants November 6, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 29, 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 by NASD. On October 29, 2007, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments 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 FINRA proposes to amend NASD Rule 7001C (Securities Transaction Credit) to increase the percentage of New York Stock Exchange (‘‘Tape A’’), American Stock Exchange (‘‘Tape B’’) and Nasdaq Exchange (‘‘Tape C’’) revenue shared with FINRA members reporting trades to the NASD/NSX Trade Reporting Facility (‘‘NASD/NSX TRF’’). The text of the proposed rule change is available at FINRA, https://www.finra.org, and the Commission’s Public Reference Room. BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Effective July 30, 2007, FINRA was formed through the consolidation of NASD and the member regulatory functions of NYSE Regulation. See Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR 42190 (August 1, 2007). Accordingly, the NASD/NSX TRF is now doing business as the FINRA/NSX TRF. The formal name change of each of FINRA’s Trade Reporting Facilities is pending and once completed, FINRA will file a separate proposed rule change to reflect those changes in the Manual. In Amendment No. 1, FINRA made certain changes to the original proposed rule change of June 29, 2007, including to: (i) Propose to share 75%, rather than 100% as proposed in the original filing, of market data revenue with NASD/NSX TRF participants, and (ii) revise the Self-Regulatory Organization’s Statement on Burden on Competition. 2 17 12 Id. 13 Id. 14 17 PO 00000 CFR 200.30–3(a)(12). Frm 00062 Fmt 4703 Sfmt 4703 E:\FR\FM\14NON1.SGM 14NON1 64100 Federal Register / Vol. 72, No. 219 / Wednesday, November 14, 2007 / Notices II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA 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. FINRA 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 mstockstill on PROD1PC66 with NOTICES Background On November 6, 2006, the Commission approved the establishment of the NASD/NSX TRF,4 and the NASD/NSX TRF commenced operation on November 27, 2006. The NASD/NSX TRF provides FINRA members another mechanism for reporting locked-in transactions in exchange-listed securities effected otherwise than on an exchange. In connection with the establishment of the NASD/NSX TRF, FINRA and National Stock Exchange, Inc. (‘‘NSX’’) entered into the Limited Liability Company Agreement of NASD/NSX Trade Reporting Facility LLC (‘‘Agreement’’). Under the Agreement, FINRA, the ‘‘SRO Member,’’ has sole regulatory responsibility for the NASD/ NSX TRF. NSX, the ‘‘Business Member,’’ is primarily responsible for the management of the NASD/NSX TRF’s business affairs to the extent those activities are not inconsistent with the regulatory and oversight functions of FINRA. Additionally, the Business Member is obligated to pay the cost of regulation and is entitled to the profits and losses, if any, derived from the operation of the NASD/NSX TRF. Pursuant to NASD Rule 7001C, FINRA members reporting trades in Tape A, Tape B and Tape C securities to the NASD/NSX TRF currently receive a 50% pro rata credit on gross market data revenue earned by the NASD/NSX TRF. ‘‘Gross revenue’’ is the revenue received by the NASD/NSX TRF from the three tape associations after the tape associations deduct allocated support costs and unincorporated business costs. 4 See Securities Exchange Act Release No. 54715 (November 6, 2006), 71 FR 66354 (November 14, 2006) (SR–NASD–2006–108) (approval order). VerDate Aug<31>2005 18:23 Nov 13, 2007 Jkt 214001 Proposal To Increase Securities Transaction Credit FINRA proposes to amend Rule 7001C to increase from 50% to 75% the percentage of market data revenue shared with members under the securities transaction credit program. Thus, FINRA members reporting trades in Tape A, Tape B and Tape C stocks to the NASD/NSX TRF will receive a 75% pro rata credit on gross market data revenue earned by the NASD/NSX TRF. NSX, as the Business Member under the Agreement, has determined that the proposed increase in the percentage of market data revenue shared with NASD/ NSX TRF participants is necessary for competitive reasons. NSX believes that, particularly in light of the fact that FINRA has filed a proposed rule change whereby the NASD/NYSE Trade Reporting Facility (‘‘NASD/NYSE TRF’’) would share 100% of market data revenue with its participants,5 competitive pricing is crucial to the NASD/NSX TRF’s business. NSX has indicated that because there are currently no fees for reporting trades to the NASD/NSX TRF, NSX will fund regulatory costs associated with the NASD/NSX TRF from NSX general revenues. FINRA is proposing that the effective date of the proposed rule change shall be retroactive to April 1, 2007, the start of the second calendar quarter of 2007. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of section 15A of the Act,6 in general, and with section 15A(b)(5) of the Act,7 in particular, which requires, among other things, that FINRA rules provide for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system that FINRA operates or controls. FINRA believes that the proposed rule change is a reasonable and equitable credit structure in that it will be applied uniformly among members that participate in the NASD/NSX TRF and NSX has indicated that all regulatory costs owed by NSX as the Business Member related to the NASD/NSX TRF will be funded by NSX general revenues. 5 See SR–NASD–2007–031 at https:// www.finra.org/RulesRegulation/RuleFilings/ 2007RuleFilings/P019027. 6 15 U.S.C. 78o–3. 7 15 U.S.C. 78o–3(b)(5). PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA 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 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, or B. institute proceedings to determine whether the proposed rule change 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 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 No. SR–ASD–2007–043 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–NASD–2007–043. 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 E:\FR\FM\14NON1.SGM 14NON1 Federal Register / Vol. 72, No. 219 / Wednesday, November 14, 2007 / Notices 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 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–NASD– 2007–043 and should be submitted on or before December 5, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–22162 Filed 11–13–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56754; File No. SR–NASD– 2007–031] Self-Regulatory Organizations; National Association of Securities Dealers, Inc. (n/k/a Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’); Notice of Filing of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto To Amend NASD Rule 7001E To Increase Percentage of Market Data Revenue Shared With NASD/NYSE TRF Participants mstockstill on PROD1PC66 with NOTICES November 6, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 24, 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 by NASD. On June 1, 2007, NASD filed Amendment No. 1. On October 29, 2007, FINRA filed 8 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 18:23 Nov 13, 2007 Jkt 214001 Amendment No. 2 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 2 only, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA proposes to amend NASD Rule 7001E (Securities Transaction Credit) to increase to 100% the percentage of New York Stock Exchange (‘‘Tape A’’), American Stock Exchange (‘‘Tape B’’) and Nasdaq Exchange (‘‘Tape C’’) revenue shared with FINRA members reporting trades to the NASD/NYSE Trade Reporting Facility (‘‘NASD/NYSE TRF’’). The text of the proposed rule change is available at FINRA, www.finra.org, 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, FINRA 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. FINRA 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 Background On February 1, 2007, NASD filed for immediate effectiveness a proposed rule change relating to the establishment of the NASD/NYSE TRF.4 The NASD/ NYSE TRF provides NASD members another mechanism for reporting locked-in transactions in exchangelisted securities effected otherwise than on an exchange. In connection with the establishment of the NASD/NYSE TRF, NASD and 3 On July 26, 2007, the Commission approved a proposed rule change filed by NASD to amend NASD’s Certificate of Incorporation to reflect its name change to Financial Industry Regulatory Authority, Inc., or FINRA, in connection with the consolidation of the member firm regulatory functions of NASD and NYSE Regulation, Inc. See Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR 42190 (August 1, 2007). 4 See Securities Exchange Act Release No. 55325 (February 21, 2007), 72 FR 8820 (February 27, 2007) (SR–NASD–2007–011). The NASD/NYSE TRF commenced operation on April 18, 2007. PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 64101 NYSE Market, Inc. (‘‘NYSE’’) entered into the Limited Liability Company Agreement of NASD/NYSE Trade Reporting Facility LLC (‘‘NASD/NYSE TRF LLC Agreement’’), a copy of which appears in the NASD Manual. Under the NASD/NYSE TRF LLC Agreement, NASD, the ‘‘SRO Member,’’ has sole regulatory responsibility for the NASD/ NYSE TRF. NYSE, the ‘‘Business Member,’’ is primarily responsible for the management of the NASD/NYSE TRF’s business affairs to the extent those activities are not inconsistent with the regulatory and oversight functions of FINRA. Additionally, the Business Member is obligated to pay the cost of regulation and is entitled to the profits and losses, if any, derived from the operation of the NASD/NYSE TRF. On March 21, 2007, NASD filed a proposed rule change for immediate effectiveness to adopt a new NASD Rule 7000E Series relating to fees and credits applicable to the NASD/NYSE TRF.5 Pursuant to NASD Rule 7001E, FINRA members reporting trades in Tape A, Tape B and Tape C securities to the NASD/NYSE TRF currently receive a 50% pro rata credit on gross market data revenue earned by the NASD/NYSE TRF. ‘‘Gross revenue’’ is the revenue received by the NASD/NYSE TRF from the three tape associations after the tape associations deduct allocated support costs and unincorporated business costs. Proposal To Increase Securities Transaction Credit FINRA is proposing to amend Rule 7001E to increase from 50% to 100% the percentage of market data revenue shared with members under the securities transaction credit program. Thus, FINRA members reporting trades in Tape A, Tape B and Tape C stocks to the NASD/NYSE TRF will receive a 100% pro rata credit on gross market data revenue earned by the NASD/NYSE TRF. The NYSE, as the Business Member under the NASD/NYSE TRF LLC Agreement, has determined that the proposed increase in the percentage of market data revenue shared with NASD/ NYSE TRF participants is necessary for competitive reasons. The NYSE believes that, as a new and late entrant to the OTC trade reporting arena, competitive pricing can differentiate its product offering. Additionally, the proposed increase would be consistent with the position of the NYSE that the economic benefits of off-exchange trades should 5 See Securities Exchange Act Release No. 55526 (March 26, 2007), 72 FR 15739 (April 2, 2007) (SR– NASD–2007–025). E:\FR\FM\14NON1.SGM 14NON1

Agencies

[Federal Register Volume 72, Number 219 (Wednesday, November 14, 2007)]
[Notices]
[Pages 64099-64101]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-22162]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56752; File No. SR-NASD-2007-043]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc. (n/k/a Financial Industry Regulatory Authority, Inc. 
(``FINRA''); Notice of Filing of Proposed Rule Change and Amendment No. 
1 Thereto To Amend NASD Rule 7001C To Increase Percentage of Market 
Data Revenue Shared With NASD/NSX TRF Participants

November 6, 2007.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 29, 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 by NASD. On October 29, 
2007, Financial Industry Regulatory Authority, Inc. (``FINRA'') filed 
Amendment No. 1 to the proposed rule change.\3\ 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\ Effective July 30, 2007, FINRA was formed through the 
consolidation of NASD and the member regulatory functions of NYSE 
Regulation. See Securities Exchange Act Release No. 56146 (July 26, 
2007), 72 FR 42190 (August 1, 2007). Accordingly, the NASD/NSX TRF 
is now doing business as the FINRA/NSX TRF. The formal name change 
of each of FINRA's Trade Reporting Facilities is pending and once 
completed, FINRA will file a separate proposed rule change to 
reflect those changes in the Manual. In Amendment No. 1, FINRA made 
certain changes to the original proposed rule change of June 29, 
2007, including to: (i) Propose to share 75%, rather than 100% as 
proposed in the original filing, of market data revenue with NASD/
NSX TRF participants, and (ii) revise the Self-Regulatory 
Organization's Statement on Burden on Competition.
---------------------------------------------------------------------------

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

    FINRA proposes to amend NASD Rule 7001C (Securities Transaction 
Credit) to increase the percentage of New York Stock Exchange (``Tape 
A''), American Stock Exchange (``Tape B'') and Nasdaq Exchange (``Tape 
C'') revenue shared with FINRA members reporting trades to the NASD/NSX 
Trade Reporting Facility (``NASD/NSX TRF''). The text of the proposed 
rule change is available at FINRA, https://www.finra.org, and the 
Commission's Public Reference Room.

[[Page 64100]]

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

    In its filing with the Commission, FINRA 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. FINRA 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
Background
    On November 6, 2006, the Commission approved the establishment of 
the NASD/NSX TRF,\4\ and the NASD/NSX TRF commenced operation on 
November 27, 2006. The NASD/NSX TRF provides FINRA members another 
mechanism for reporting locked-in transactions in exchange-listed 
securities effected otherwise than on an exchange. In connection with 
the establishment of the NASD/NSX TRF, FINRA and National Stock 
Exchange, Inc. (``NSX'') entered into the Limited Liability Company 
Agreement of NASD/NSX Trade Reporting Facility LLC (``Agreement''). 
Under the Agreement, FINRA, the ``SRO Member,'' has sole regulatory 
responsibility for the NASD/NSX TRF. NSX, the ``Business Member,'' is 
primarily responsible for the management of the NASD/NSX TRF's business 
affairs to the extent those activities are not inconsistent with the 
regulatory and oversight functions of FINRA. Additionally, the Business 
Member is obligated to pay the cost of regulation and is entitled to 
the profits and losses, if any, derived from the operation of the NASD/
NSX TRF.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 54715 (November 6, 
2006), 71 FR 66354 (November 14, 2006) (SR-NASD-2006-108) (approval 
order).
---------------------------------------------------------------------------

    Pursuant to NASD Rule 7001C, FINRA members reporting trades in Tape 
A, Tape B and Tape C securities to the NASD/NSX TRF currently receive a 
50% pro rata credit on gross market data revenue earned by the NASD/NSX 
TRF. ``Gross revenue'' is the revenue received by the NASD/NSX TRF from 
the three tape associations after the tape associations deduct 
allocated support costs and unincorporated business costs.
Proposal To Increase Securities Transaction Credit
    FINRA proposes to amend Rule 7001C to increase from 50% to 75% the 
percentage of market data revenue shared with members under the 
securities transaction credit program. Thus, FINRA members reporting 
trades in Tape A, Tape B and Tape C stocks to the NASD/NSX TRF will 
receive a 75% pro rata credit on gross market data revenue earned by 
the NASD/NSX TRF.
    NSX, as the Business Member under the Agreement, has determined 
that the proposed increase in the percentage of market data revenue 
shared with NASD/NSX TRF participants is necessary for competitive 
reasons. NSX believes that, particularly in light of the fact that 
FINRA has filed a proposed rule change whereby the NASD/NYSE Trade 
Reporting Facility (``NASD/NYSE TRF'') would share 100% of market data 
revenue with its participants,\5\ competitive pricing is crucial to the 
NASD/NSX TRF's business. NSX has indicated that because there are 
currently no fees for reporting trades to the NASD/NSX TRF, NSX will 
fund regulatory costs associated with the NASD/NSX TRF from NSX general 
revenues.
---------------------------------------------------------------------------

    \5\ See SR-NASD-2007-031 at https://www.finra.org/
RulesRegulation/RuleFilings/2007RuleFilings/P019027.
---------------------------------------------------------------------------

    FINRA is proposing that the effective date of the proposed rule 
change shall be retroactive to April 1, 2007, the start of the second 
calendar quarter of 2007.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of section 15A of the Act,\6\ in general, and with section 
15A(b)(5) of the Act,\7\ in particular, which requires, among other 
things, that FINRA rules provide for the equitable allocation of 
reasonable dues, fees and other charges among members and issuers and 
other persons using any facility or system that FINRA operates or 
controls. FINRA believes that the proposed rule change is a reasonable 
and equitable credit structure in that it will be applied uniformly 
among members that participate in the NASD/NSX TRF and NSX has 
indicated that all regulatory costs owed by NSX as the Business Member 
related to the NASD/NSX TRF will be funded by NSX general revenues.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

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

    FINRA 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

    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, or
    B. institute proceedings to determine whether the proposed rule 
change 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 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 No. SR-ASD-2007-043 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-NASD-2007-043. 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

[[Page 64101]]

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 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-NASD-2007-043 and should be submitted on 
or before December 5, 2007.
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-22162 Filed 11-13-07; 8:45 am]
BILLING CODE 8011-01-P
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