[Federal Register Volume 59, Number 94 (Tuesday, May 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11925]


[[Page Unknown]]

[Federal Register: May 17, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34029; File No. SR-NASD-94-18]

 

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to the Elimination of Certain Data 
Stream Subscriber Fees

May 9, 1994.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on March 
24, 1994, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association'') filed with the Securities and Exchange 
Commission (``Commission'' or ``SEC'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the NASD. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.

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

    Pursuant to section 19(b)(1) of the Act, the NASD is submitting 
this proposed rule change to eliminate the existing subscriber fees for 
receipt of data streams of selected market data. These fees are 
currently contained in Section C., Part VIII of Schedule D to the NASD 
By-Laws. The text of the proposed rule change is set forth below. (New 
language is in italics and deletions are in brackets.)

C. Special Options                                                                                              
                                                                                                                
                                                  * * * * * * *                                                 
[4. Level 1 Data Stream]................  [Permits Subscriber to process Level 1 data directly  [$500/month].   
                                           into its computer system for its own analysis.                       
                                           Subscriber is responsible for line and modem                         
                                           charges and separate charges for any terminal                        
                                           display.]                                                            
[5. Last Sale Data Stream]..............  [Permits subscriber to process NASDAQ/NMS last sale   [$500/month].   
                                           data directly into its own computer system for                       
                                           analytic purposes. Subscriber is responsible for                     
                                           line and modem charges, and separate charges for                     
                                           any terminal display.]                                               
[6. NQDS Data Stream]...................  [Permits subscriber to process NQDS quotation data    [$500/month].   
                                           directly into its own computer system for analytic                   
                                           purposes. Subscriber is responsible for line and                     
                                           modem charges, and separate charges for any                          
                                           terminal display.]                                                   
4. [7.] Nasdaq Market Indices...........  Permits vendor to process Nasdaq Level 1 and Last     $500/month.     
                                           Sale data feeds solely for the purpose of supplying                  
                                           subscribers with real-time calculations of Nasdaq                    
                                           market indices.                                                      
                                                                                                                

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 NASD included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The NASD has prepared summaries, set forth in sections 
(A), (B), and (C) below, of the most significant aspects of such 
statements.

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

1. Purpose
    The NASD is proposing to eliminate three categories of subscriber 
fees for the receipt of data streams consisting of Nasdaq Level 1 
quotation information, Nasdaq Last Sale information, and the National 
Quotation Data Service (``NQDS'') information. Each of these services 
enables a subscriber to receive and process data in its own computer 
system in order to generate market analytics. The current subscriber 
charge for each of these services is $500/month regardless of the 
number of analytic applications performed. The NASD effectuated removal 
of these data stream fees on April 1, 1994.
    The Association's determination on this matter was driven by three 
factors: (1) technological changes in the use of market information; 
(2) growth in software packages offered by vendors specializing in 
market analytics; and (3) practical difficulties in administering the 
existing fees in light of the increasing sophistication of broker-
dealers' internal automation facilities. From a revenue standpoint, 
elimination of the data stream fees will have no appreciable impact on 
the level of revenues needed to recover the costs associated with 
collecting, processing, and distributing quotation/last sale 
information via the Level 1, Last Sale, and NQDS services.
2. Statutory Basis
    The NASD believes that the proposed rule change is consistent with 
and in furtherance of Section 15A(b)(5) of the Act. Section 15A(b)(5) 
requires that the rules of a national securities association provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among members, issuers and other persons using any facility or 
system which the association operates or controls. The NASD believes 
that revenue lost by eliminating the data stream fees will be offset by 
continued growth in the terminal populations receiving Level 1, Last 
Sale, and NQDS services. Hence, it is anticipated that total revenues 
will remain at levels sufficient to ensure satisfaction of the 
statutory mandate that established fees be reasonable and equitably 
allocated.

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

    The NASD believes that the proposed rule change will not 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

    Comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    The foregoing rule change establishes or changes a due, fee, or 
other charge imposed by the Association and therefore has become 
effective pursuant to section 19(b)(3)(A) of the Act and subparagraph 
(e) of Rule 19b-4 thereunder. At any time within 60 days of the filing 
of such 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, DC. 20549. 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for inspection and copying in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NASD. All submissions should refer to the file number in the caption 
above and should be submitted by June 7, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-11925 Filed 5-16-94; 8:45 am]
BILLING CODE 8010-01-M