[Federal Register Volume 65, Number 168 (Tuesday, August 29, 2000)]
[Notices]
[Pages 52460-52462]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21961]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43190; File No. SR-NASD-00-47]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the National 
Association of Securities Dealers, Inc., Relating to a Reduction in 
National Quotation Data Service Market Data Fees for Non-Professionals

August 22, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 52461]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on August 9, 2000, the National Association of Securities Dealers, Inc. 
(``NASD or Association'', through its wholly-owned subsidiary, Nasdaq 
Stock Market, Inc. (``Nasdaq''), filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
Nasdaq. The Commission is publishing this notice to solicit comments on 
the proposed rule change from interested persons and to grant 
accelerated approval to the proposed rule change.
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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

    Nasdaq is proposing to amend NASD Rule 7010(h). Under the proposal, 
Nasdaq will establish a one-year pilot program, commencing on September 
1, 2000 and expiring on August 31, 2001, to reduce from $50 to $10 the 
monthly fee that non-professional users pay to receive National 
Quotation Data Service (''NQDS'') from authorized market data vendors. 
Proposed new language is in italics; proposed deletions are in 
brackets.
* * * * *

NASD Rule 7010. System Services.

(a)-(g) No Change

(h) National Quotation Data Service (NQDS)

    (1) Except as provided in subparagraph (2) of this section, [T]the 
charge to be paid for each interrogation or display device receiving 
all or any portion of the information disseminated through the NQDS 
shall be $50.00 per month. The NQDS information that will be provided 
through this service consists of individual market matter quotations, 
Nasdaq Level 1 Service and the Last Sale Information Service.
    (2) The charge to be paid by a non-professional for each 
interrogation or display device receiving all or any portion of the 
NQDS information disseminated through an authorized vendor shall be 
$10.00 per month.
    (3) A ''non-professional'' is a natural person who is neither:
    (A) registered or qualified in any capacity with the Commission, 
the Commodities Futures Trading Commission, any state securities 
agency, any securities exchange or association, or any commodities or 
futures contract market or association.
    (B) engaged as an ''investment adviser'' as that term is \3\ 
defined in Section 201(11) of the Investment Advisors Act of 1940 
(whether or not registered or qualified under the Act); nor
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    \3\ Nasdaq added ''is'' to the text of the proposed rule change. 
Telephone conversation between Jeffrey S. Davis, Assistant General 
Counsel, Office of General Counsel, Nasdaq, and Heather Traeger, 
Attorney, Division of Market Regulation, SEC, on August 17, 2000.
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    (C) employed or a bank or other organization exempt from 
registration under federal or state securities laws to perform 
functions that would require registration or qualification if such 
functions were performed for an organization not so exempt.
* * * * *

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 III 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
    The NQDS delivers market maker quotations, Nasdaq Level 1 service 
(including calculation and display of the inside market), and last sale 
information that is dynamically updated on a real-time basis. NQDS data 
is used not only by firms, associated persons, and other market 
professionals, but also by non-professionals who receive the service 
through authorized vendors, including, for example, on-line brokerage 
firms. Currently, NQDS data is available through authorized vendors at 
a monthly rate of $50 for professionals and non-professionals alike.
    Nasdaq states that it has consistently supported the broadest, most 
effective dissemination of market information to public investors. 
Towards that end, Nasdaq is proposing a one-year pilot program to 
reduce by 80% the fees currently paid by non-professional users for 
NQDS data. This fee reduction follows, and is commensurate with, 
several other fee reductions designed to increase the dissemination of 
market data and to decrease the costs of trading on Nasdaq. For 
example, the Commission recently approved a 50% reduction in the user's 
fees for Level 1 market data delivered to non-professional users on a 
monthly basis.\4\ This marked a 75% reduction in such fees over a two-
year period.\5\ In addition, Nasdaq extended a pilot program that had 
reduced by 50% the fees for Level 1 market data delivered to non-
professional users on a per query basis.\6\
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    \4\ See Securities Exchange Act Release No. 42715 (April 24, 
2000), 64 FR 25411 (May 1, 2000).
    \5\ Id.
    \6\ Id.
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    Nasdaq believes that reducing the NQDS market data fee from $50 to 
$10 per month for non-professional users unequivocally demonstrates its 
commitment to individual investors and responds to the dramatic 
increase in the demand for real-time market data by non-professional 
market participants. In addition, Nasdaq believes that reducing its 
rates will reduce the costs to NASD member firms of supplying real-time 
market data to their customers through automated means and is also 
likely to encourage vendors to offer increased access to NQDS data to 
their subscribers.
    Nasdaq proposes that the one-year pilot program for non-
professional use of NQDS begin on September 1, 2000 and that it 
continue through August 31, 2001. Nasdaq is currently developing the 
infrastructure necessary to administer the billing and collection 
activities related to this fee reduction, and it anticipates completing 
that infrastructure by September 1, 2000.
2. Statutory Basis
    The NASD believes the proposed rule change is consistent with 
sections 15A(b)(5) and 15A(b)(6)\7\ of the Act in that the proposal is 
designed to provide for the equitable allocation of reasonable fees 
among members and other persons using any facility or system that the 
Association operates or controls, and it does not unfairly discriminate 
between customers, issuers, brokers or dealers.
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    \7\ 15 U.S.C. 78o-(b)(5) and 15 U.S.C. 78o-3(b)(6).
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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.

[[Page 52462]]

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. 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 
statement 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 at 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-00-47 and should 
be submitted by September 19, 2000.

IV. Commission's Findings and Order Granting Accelerated Approval 
of Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with sections 15A(b)(5) and 15A(b)(6) of the Act,\8\ and the rules and 
regulations thereunder applicable to a national securities 
association.\9\ Specifically, the proposal should provide for the 
equitable allocation of reasonable fees among members and other persons 
using any facility or system that the Association operates or controls. 
In addition, the Commission believes the proposal does not unfairly 
discriminate between customers, issuers, brokers or dealers.
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    \8\ Id.
    \9\ In reviewing this proposal, the Commission has considered 
its potential impact on efficiency, competition and capital 
formation. 15 U.S.C. 78c(f).
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    The NASD's fee reduction is the latest in a series of reductions 
designed to lower the cost and concurrently increase the dissemination 
of real-time market data to individual investors. For the investor to 
make sound financial decisions, efficient and inexpensive access to 
this type of market data is vital. Thus, the Commission believes that 
reducing the NQDS market data fees should enhance investor access, and 
may encourage increased investor participation in the securities 
markets.
    Pursuant to section 19(b)(2) of the Act,\10\ the Commission finds 
good cause for approving the proposed rule change prior to the 30th day 
after the date of publication of notice of filing in the Federal 
Register. The Commission believes that granting accelerated approval of 
the proposal will allow Nasdaq to expeditiously implement the pilot 
program to reduce NQDS market data fees without any unnecessary delay 
and should confer a benefit upon those firms that provide real-time 
data to their customers and subscribers.
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    \10\ Id.
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    It is therefore Ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NASD-00-47), establishing a 
one-year pilot program from September 1,200 until August 31, 2001, is 
hereby approved on an accelerated basis.
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    \11\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Margaret H. McFarland,
Deputy Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 00-21961 Filed 8-29-00; 8:45 am]
BILLING CODE 8010-01-M