[Federal Register Volume 64, Number 80 (Tuesday, April 27, 1999)]
[Notices]
[Pages 22664-22665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10517]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41314; File No. SR-NASD-99-17]
April 20, 1999


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

    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 March 24, 1999, 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'' or ``SEC'') the proposed rule 
change as described in Items I, II, and III below, which Items have 
been prepared by Nasdaq.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The NASD is submitting this proposed rule change to extend, through 
March 31, 2000, the fees currently charged under NASD Rule 7010(l) for 
the execution of transactions in Select Net as discussed below. If no 
further action is taken, SelectNet fees will revert to their original 
per-side level on April 1, 2000.\3\
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    \3\ Nasdaq notes that it recently filed with the Commission a 
rule proposal to, in part, return SelectNet to a pure order delivery 
and negotiation facility. See SR-NASD-99-11. Notwithstanding the one 
year extension of reduced fees contemplated here, Nasdaq reserves 
the right to adjust its SelectNet pricing by proposed rule change 
pending the approval of SR-NASD-99-11.
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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. 
Nasdaq 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

    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 1998.\4\ Since then, SelectNet usage has 
continued at significantly elevated levels. As such, Nasdaq believes 
that an extension of these reduced fees, through March 31, 2000, 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 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. 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, 2000.
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    \4\ 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 that the proposal was published in the Federal 
Register. The reduced fees were extended in May, September and 
November of 1998 and would expire on March 31, 1999, if not extended 
by this filing. See Securities Exchange Act Release No. 40783 
(December 11, 1998), 63 FR 70177 (December 18, 1998).
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    For the reason set forth above, Nasdaq believes that the proposed 
rule change is consistent with Section 15A(b)(5) of the Act,\5\ 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 which the NASD 
operates or controls.
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    \5\ 15 U.S.C. 78o-3(b)(5).
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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.

[[Page 22665]]

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 \6\ and 
subparagraph (f)(2) of Rule 19b-4 \7\ under the Act because the 
proposal is establishing or changing a due, fee or other charge.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \7\ 17 CFR 240.19b-4(f)(2).
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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. 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-
0609. 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-99-17 and should 
be submitted by May 18, 1999.
    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-10517 Filed 4-26-99; 8:45 am]
BILLING CODE 8010-01-M