[Federal Register Volume 66, Number 182 (Wednesday, September 19, 2001)]
[Notices]
[Pages 48303-48304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23309]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44788; File No. SR-NASD-2001-56]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. To Extend a Pilot Program That Reduced Monthly 
Fees for Non-Professional Users Receiving the National Quotation Data 
Service

September 13, 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 September 5, 2001, the National Association of Securities Dealers, 
Inc. (``NASD'') or ``Association''), through its subsidiary, The Nasdaq 
Stock Market, Inc. (``Nasdaq''), filed with the Securities Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I, II and III below, which Items have been prepared by Nasdaq. 
Nasdaq filed the proposal pursuant to Section 19(b)(30(A) of the 
Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6). Nasdaq provided the Commission with 
written notice of its intent to file the proposal, along with a 
brief description and text of the proposed rule change on August 24, 
2001.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq proposes to extend a one-year pilot program under NASD Rule 
7010(h) that reduced from $50 to $10 the monthly fee that non-
professional users pay to receive the National Quotation Data Service 
(``NQDS'').\5\ Nasdaq proposes to extend the one-year fee reduction 
pilot program for non-professional users of NQDS for another year. The 
pilot, as extended, would continue uninterrupted through August 31, 
2002. Nasdaq has designated this proposal as non-controversial, 
rendering it effective upon filing with the Commission. Nasdaq asks 
that the Commission waive the 30-day operative waiting period pursuant 
to SEC Rule 19b-4(f)(6)(iii).\6\ to allow the pilot program to continue 
uninterrupted through August 31, 2002.
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    \5\ See Securities Exchange Act Release No. 43190 (August 22, 
2000), 65 FR 52460 (August 29, 2000) (SR-NASD-00-47). NQDS is 
sometimes referred to as the ``Nasdaq Quotation Dissemination 
Service.''
    \6\ 17 CFR 240.19b-4(f)(6)(iii)
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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 its proposal and discussed any 
comments it received regarding the proposal. 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.

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

1. Purpose
    Nasdaq is proposing to extend a one-year fee reduction pilot 
program that was established under NASD Rule 7010(h) on August 31, 
2000, and that reduced from $50 to $10 the monthly fee that non-
professional users pay to receive NQDS.\7\
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    \7\ See footnote 5 supra.
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    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

[[Page 48304]]

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. 
Prior to August 31, 2000, NQDS data was available through authorized 
vendors at a monthly rate of $50 for professional and non-professional 
users alike. In August 2000, the NASD through Nasdaq filed a rule 
change to reduce from $50 to $10 the monthly fee that non-professional 
users pay to receive NQDS data. The Commission approved the pilot on 
August 22, 2000, and the fee reduction commenced on August 31, 2000 on 
a one-year pilot basis (``one-year fee-reduction pilot'').
    Nasdaq has consistently supported broad, effective dissemination of 
market information to public investors. Thus, Nasdaq is proposing to 
extend the one-year fee-reduction pilot for another year. The pilot 
would cover twelve months, commencing with September 2001 and expiring 
on August 31, 2002. Nasdaq notes that the one-year fee-reduction pilot 
reduced by 80% the fees that non-professionals paid for NQDS data prior 
to August 31, 2000. Continuing the reduction of NQDS for non-
professional users demonstrates Nasdaq's continued 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, NASD member firms often supply real-time 
market data to their customers through automated means. Thus, NASD 
member firms' customers will benefit from the continued fee reduction.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with the provisions 
of Sections 15A(b)(5) and 15A(b)(6) of the Act \8\ 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 which the 
Association operates or controls, and it does not unfairly discriminate 
between customers, issuers, brokers or dealers. In addition, Nasdaq 
believes that the fee reduction enhances the public's access to market 
data that is relevant to investors when they make financial decisions. 
Nasdaq further believes that the public's enhanced access to this data 
may encourage increased public participation in the securities markets.
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    \8\ 15 U.S.C. 78o-3(b)(5) and (6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq believes that the proposed rule change will impose no 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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule changes does not:
    (i) significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) thereunder.\10\ At any time within 60 days of the 
filing of the 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    Nasdaq has requested that the Commission accelerate the operative 
date. The Commission finds good cause to waive the 30-day operative 
waiting period, because such designation is consistent with the 
protection of investors and the public interest. Acceleration of the 
operative date will allow the pilot to continue uninterrupted through 
August 31, 2002. For these reasons, the Commission finds good cause to 
waive the 30-day operative waiting period.\11\
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    \11\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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 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, 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 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 number SR-NASD-2001-56 and should be 
submitted by October 10, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-23309 Filed 9-18-01; 8:45 am]
BILLING CODE 8010-01-M