[Federal Register Volume 66, Number 10 (Tuesday, January 16, 2001)]
[Notices]
[Pages 3630-3631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1195]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43814; File No. SR-NASD-00-79]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the National Association of Securities Dealers, Inc. Relating 
to EWN II Fees for NASD Members

January 8, 2001.
    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 December 21, 2000, 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. 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 this proposed rule to pass on costs associated 
with increasing the bandwidth of the Enterprise Wide Network II (``EWN 
II'') to NASD members for the period December 1-12, 2000. Nasdaq 
previously filed under Section 19(b)(3)(A)(ii) a proposed rule change 
to increase the fees beginning December 13, 2000, which was immediately 
effective upon filing.\3\ Nasdaq also filed a parallel rule filing to 
effect amendments to the EWN II fee structure to apply to non-NASD 
members.\4\ Below is the text of the proposed rule change. Proposed new 
language is in italics; proposed deletions are in brackets.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 43769 (December 22, 
2000), 66 FR 826 (January 4, 2001).
    \4\ Securities Exchange Act Release No. 43768 (December 22, 
2000), 66 FR 824 (January 4, 2001).
---------------------------------------------------------------------------

7010. System Services

    (a)-(e) No Change
    (f) Nasdaq Workstation Service
    (1) No Change
    (2) The following charges shall apply to the receipt of Level 2 or 
Level 3 Nasdaq Service via equipment and communications linkages 
prescribed for the Nasdaq Workstation II Service:

Service Charge                    $1.875/month per service delivery
                                   platform (``SDP'') from December [13]
                                   1, 2000 through February 28, 2001
                                  $2,035/month per SDP beginning March
                                   1, 2001
Display Charge                    $525/month per presentation device
                                   (``PD'')
Additional Circuit/SDP Charge     $3,075/month from December [13] 1,
                                   2000 through February 28, 2001, and
                                   3,225/month beginning March 1, 2001*
 

    A subscriber that accesses Nasdaq Workstation II Service via an 
application programming interface (``API'') shall be assessed the 
Service Charge for each of the subscriber's SDPs and shall be assessed 
the Display Charge for each of the subscriber's API linkages, including 
an NWII substitute or quote-update facility. API subscribers also shall 
be subject to the Additional Circuit/SDP Charge.
    * No change to footnotes
* * * * *

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 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. Nasdaq has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.

[[Page 3631]]

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

1. Purpose
    In the September/October 2000 issue of Nasdaq's Subscriber 
Bulletin,\5\ Nasdaq announced that it had increased the bandwidth of 
its Enterprise Wide Network II from 128 kilobits (``kb'') to 192 kb. 
This increased bandwidth provides Nasdaq with the ability to support 
increased share volume and net products and trading applications that 
will be introduced. A description of the history of EWN II and the 
recent bandwidth increase may be found in SR-NASD-00-73.\6\ Subscriber 
Bulletin also announced that the increased cost of the expanded 
bandwidth ($375 per month per circuit) would be passed on to Nasdaq 
subscribers beginning December 1, 2000. Nasdaq absorbed all of the 
increased costs for the month of November 2000.
---------------------------------------------------------------------------

    \5\ Subscriber Bulletins are mailed to Nasdaq Workstation II 
subscribers and also may be found at www.nasdaqtrader.com/trader/news/subscriberbulletins.
    \6\ Securities Exchange Act Release No. 43769 (December 22, 
2000).
---------------------------------------------------------------------------

    On December 13, 2000, the Commission received Nasdaq's proposed 
rule change to amend the subscriber fees for NASD members as described 
above.\7\ Because the filing was made under Section 19(b)(3)(A)(ii), 
which makes the rule change immediately effective upon filing with the 
Commission, the fee increase became effective as of December 13, 2000. 
In this filing, Nasdaq seeks to recover the costs associated with the 
expanded bandwidth for the period of December 1-12, 2000, as announced 
in the Subscriber Bulletin.
---------------------------------------------------------------------------

    \7\ Id.
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(5) of the Act \8\ 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 operate or 
controls. Nasdaq provided its subscribers with ample advance notice of 
the fee increase, and has limited the fee increase to the additional 
cost that it is incurring as a result of the expanded bandwidth. Nasdaq 
did not pass on the costs of the expanded bandwidth to subscribers that 
Nasdaq incurred in November 2000. As such, Nasdaq believes that it is 
equitably allocating charges among members for the use of EWN II during 
the period of December 1-12, 2000.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

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

    Nasdaq does not believe that the proposed rule change will impose 
any burden on competition that it 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

    Nasdaq has not solicited or received written comments on the 
proposed rule change.

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 NASD 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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 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 maybe 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 number SR-NASD-00-79 and 
should be submitted by February 6, 2001.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margarety H. McFarland,
Deputy Secretary.
[FR Doc. 01-1195 Filed 1-12-01; 8:45 am]
BILLING CODE 8010-01-M