[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Notices]
[Pages 70177-70178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33559]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40783; File No. SR-NASD-98-84]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. Relating to SelectNet Fees
December 11, 1998.
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 on
November 9, 1998, the National Association of Securities Dealers, Inc.
(``NASD'' or ``Association''), through its wholly-owned subsidiary the
Nasdaq Stock Market, Inc. (``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 the NASD. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Nasdaq is filing a proposed rule to extend, through March 31, 1999,
the fees currently charged under NASD Rule 7010(1) for the execution of
transactions in SelectNet. Under the proposed extension, SelectNet fees
would continue to be assessed in the following manner: (1) $1.00 will
be charged for each SelectNet order entered and directed to one
particular market participant that is subsequently executed in whole or
in part; (2) no fee will be charged to a member who receives and
executes a directed SelectNet order; (3) the existing $2.50 fee will
remain in effect for both sides of executed SelectNet orders that
result from broadcast messages; and (4) a $0.25 fee will remain in
effect for any member who cancels a SelectNet order. If no further
action is taken, SelectNet fees will revert to their original $2.50
per-side level on April 1, 1998.
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. The
text of these statements may be examined at the places specified in
Item IV below. The NASD has prepared summaries, set forth below in
Sections A, B, and C, 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 is proposing to again extend its current reduced SelectNet
fees. The reasons for Nasdaq's prevailing SelectNet fee structure were
fully explained in its original fee structure proposal filed with the
Commission in February of this year.\3\ Since then, SelectNet usage has
continued at significantly elevated levels, averaging over 150,000
daily executions in September of 1998 and 180,000
[[Page 70178]]
executions each day in October of 1998. As such, Nasdaq believes that
an extension of these reduced fees, through March 31, 1999, is
warranted. Under the proposed extension, SelectNet fees would continue
to be assessed in the following manner: (1) $1.00 will be charged for
each SelectNet order entered and directed to one particular market
participant that is subsequently executed in whole or part; (2) no fee
will be charged to a member who receives and executes a directed
SelectNet order; (3) the existing $2.50 fee will remain in effect for
both sides of executed SelectNet orders that result from broadcast
messages; and (4) a $0.25 fee will remain in effect for any member who
cancels a SelectNet order. Nasdaq will continue to monitor and review
SelectNet activity to determine if further extensions of its reduced
SelectNet fee structure are appropriate. If no further action is taken,
SelectNet fees will revert to their original $2.50 per-side level on
April 1, 1999.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 39641 (February 10,
1998), 63 FR 8241 (February 18, 1998). Nasdaq's current reduced fee
structure was originally approved for a 90-day trial period,
commencing the day the proposal was published in the Federal
Register. The reduced fees were extended in May and September of
1998 and would have expired on November 30, 1998, if not extended by
this filing. See Securities Exchange Act Release No. 40427
(September 10, 1998); 63 FR 49724 (September 17, 1998).
---------------------------------------------------------------------------
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
Section 15A(b)(5) of the Act,\4\ which requires that the rules of the
NASD 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 the NASD operates or controls.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------
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 Organizations 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
This filing applies to the assessment of SelectNet fees to NASD
members, and thus the proposed rule change is effective immediately
upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act \5\ and
subparagraph (e)(2) of Rule 19b-4 under the Act \6\ because the
proposal is establishing or changing a due, fee or other charge. At any
time within 60 days of the filing of the proposed rule change, the
Commission may summarily abrogate such rule 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.\7\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b-4(e)(2).
\7\ In reviewing this proposal, the Commission has considered
the proposal's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposal is
consistent with the Act. Persons making written submissions should file
six copies thereof with the Secretary, Securities and Exchange
Commission, 450 Fifth Street, N.W., Washington, D.C. 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 File No. SR-NASD-98-84 and should be
submitted by January 8, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jonathan G. Katz,
Secretary.
[FR Doc. 98-33559 Filed 12-17-98; 8:45 am]
BILLING CODE 8010-01-M