[Federal Register Volume 67, Number 127 (Tuesday, July 2, 2002)]
[Notices]
[Page 44488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16540]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46114; File No. SR-NASD-2002-45]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Granting Partial Approval to a Proposed Rule 
Change and Amendment Nos. 1 and 2 Thereto by the National Association 
of Securities Dealers, Inc. Establishing Listing Standards and Listing 
Fees for Portfolio Depository Receipts and Index Fund Shares

June 25, 2002.
    On April 3, 2002, the National Association of Securities Dealers, 
Inc. (``NASD'' or ``Association''), through its subsidiary, the Nasdaq 
Stock Market, Inc. (``Nasdaq''), filed with the Securities and Exchange 
Commission (``Commission''), pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to establish listing standards 
and listing fees for Portfolio Depository Receipts (``PDRs'') and Index 
Fund Shares (``Fund Shares''). On May 6, 2002, Nasdaq filed Amendment 
No. 1 to the proposal.\3\ On May 13, 2002, Nasdaq filed Amendment No. 2 
to the proposal.\4\ On May 20, 2002, the Commission published the 
proposed rule change for comment in the Federal Register and granted 
partial accelerated approval to the portion of the proposal relating to 
listing standards for PDRs and Fund Shares.\5\ In this same release, 
the Commission published for notice and comment, but did not accelerate 
approval of, the portion of the proposal that dealt with Nasdaq's 
proposed new listing fees. The Commission is now approving Nasdaq's 
proposed new listing fees.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from John D. Nachmann, Senior Attorney, Nasdaq, 
to Katherine A. England, Assistant Director, Division of Market 
Regulation (``Division''), Commission, dated May 3, 2002 
(``Amendment No. 1''). In Amendment No. 1, Nasdaq did the following: 
(1) Made corrections to its proposed rule text and proposal; (2) 
added discussion and stated its statutory basis for the proposed 
listing fees; (3) clarified that its regular trading hours for PDRs 
and Fund Shares will be from 9:30 a.m. to 4:00 p.m. or 4:15 p.m., as 
designated by Nasdaq; and (4) requested accelerated approval for the 
portion of the proposal relating to the listing and trading 
standards for PDRs and Fund Shares, and not for the portion on the 
proposed listing fees.
    \4\ See letter from John D. Nachmann, Senior Attorney, Nasdaq, 
to Katherine A. England, Assistant Director, Division, Commission, 
dated May 13, 2002 (``Amendment No. 2''). In Amendment No. 2, Nasdaq 
removed the term ``member organization'' throughout its proposed 
rule text and proposal.
    \5\ See Securities Exchange Act Release No. 45920 (May 13, 
2002), 67 FR 35605. Nasdaq requested accelerated approval of all 
portions of the proposal except those that deal with its proposed 
new listing fees.
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    The Commission finds that this proposed rule change, as amended, is 
consistent with the requirements of section 15A of the Act \6\ and the 
rules and regulations thereunder. Specifically, the Commission finds 
that this proposed rule change, as amended, is consistent with section 
15(A)(b)(6),\7\ which provides that the rules of the association be 
designed to promote just and equitable principals of trade, to foster 
cooperation and coordination with person engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
The Commission further believes that this proposed rule change, as 
amended, is consistent with the provisions of section 15A(b)(5) of the 
Act \8\ in that it provides for the equitable allocation of reasonable 
dues, fees, and other charges among issuers using the Nasdaq system. 
Nasdaq represents that the proposed listing fees for PDRs and Fund 
Shares are less than the current fees for traditional domestic and 
foreign equity issues listed on The Nasdaq National Market, as the 
regulatory and client services costs associated with PDRs and Fund 
shares are lower than those for traditional equity issues. Furthermore, 
Nasdaq represents that the proposed listing fees for PDRs and Fund 
Shares are designed to cover costs and allow Nasdaq to compete for the 
listing of these securities with national securities exchanges.
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    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(6).
    \8\ 15 U.S.C. 78o-3(b)(5).
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    For the foregoing reasons, the Commission finds that the proposed 
rule change, as amended, is consistent with the requirements of the Act 
and rules and regulations thereunder.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\9\ that the portion of the proposed rule change (SR-NASD-2002-45) 
relating to the proposed listing fees, as amended, is approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland.
Deputy Secretary.
[FR Doc. 02-16540 Filed 7-1-02; 8:45 am]
BILLING CODE 8010-01-P