[Federal Register Volume 67, Number 132 (Wednesday, July 10, 2002)]
[Notices]
[Page 45775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-17249]


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SECURITIES AND EXCHANGE COMMISSION

[Securities Exchange Act of 1934 Release No. 46159/July 2, 2002]


In the Matter of: The National Association of Securities Dealers, 
Incorporated, (File Nos. SR-NASD-2002-61 and SR-NASD-2002-68); The 
Cincinnati Stock Exchange, Incorporated, (File No. SR-CSE-2002-06); and 
The Pacific Exchange, Incorporated, (File No. SR-PCX-2002-37); Order of 
Summary Abrogation

    Notice is hereby given that the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(3)(C) of the Securities 
Exchange Act of 1934 (``Act''),\1\ is summarily abrogating certain 
proposed rule changes of The National Association of Securities 
Dealers, Incorporated (``NASD''), The Cincinnati Stock Exchange, 
Incorporated (``CSE''), and The Pacific Exchange, Incorporated 
(``PCX'').
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    \1\ 15 U.S.C. 78s(b)(3)(C).
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    On May 3, 2002, the NASD, through its subsidiary, The Nasdaq Stock 
Market (``Nasdaq''), filed SR-NASD-2002-61.\2\ The proposed rule change 
(1) instituted a fee for the regulatory services provided in connection 
with the operation of The Nasdaq Stock Market; (2) expanded the market 
data revenue available for sharing with members under NASD Rule 
7010(a)(2) by eliminating the deduction for the cost of regulatory 
services provided by NASD Regulation, Incorporated and increased the 
percentage of eligible revenue that is shared; and (3) extended the 
pilot period with respect to which market data revenue sharing is 
available through December 31, 2002.\3\
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    \2\ See Securities Exchange Act Release No. 45916 (May 10, 
2002).
    \3\ This pilot, which was effective on filing, replaced the 
pilot filed in SR-NASD-2002-17.
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    On June 13, 2002, the NASD, through its subsidiary, Nasdaq, filed 
with the Commission SR-NASD-2002-68.\4\ The proposed rule change (1) 
modified the execution fees for Nasdaq InterMarket trades executed 
through the Intermarket Trading System and Nasdaq's Computer Assisted 
Execution System; and (2) modified and extended the transaction credit 
pilot program for InterMarket trades through December 31, 2002.
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    \4\ See Securities Exchange Act Release No. 46153 (July 1, 
2002).
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    On June 28, 2002, the CSE filed with the Commission SR-CSE-2002-06. 
The proposed rule change extended a pilot revenue sharing program for 
trading Nasdaq National Market securities through August 30, 2002.\5\
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    \5\ See Securities Exchange Act Release No. 46147 (June 28, 
2002).
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    On June 28, 2002, the PCX filed SR-PCX-2002-37, which extended a 
pilot program for sharing market data revenue with ETP Holders and 
Sponsored Participants on the Archipelago Exchange. The proposal 
extended the pilot through August 30, 2002.
    Each of these filings was immediately effective upon filing with 
the Commission pursuant to section 19(b)(3)(A) of the Act.\6\
    Pursuant to section 19(b)(3)(C) of the Act,\7\ at any time within 
60 days of the date of filing a proposed rule change pursuant to 
section 19(b)(1) of the Act,\8\ the Commission may summarily abrogate 
the change in the rules of the self-regulatory organization and require 
that the proposed rule change be re-filed in accordance with the 
provisions of section 19(b)(1) of the Act \9\ and reviewed in 
accordance with section 19(b)(2) of the Act,\10\ 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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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 15 U.S.C. 78s(b)(3)(C).
    \8\ 15 U.S.C. 78s(b)(1).
    \9\ Id.
    \10\ 15 U.S.C. 78s(b)(2).
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    The Commission believes that the above-referenced proposed rule 
changes raise serious questions as to whether they are consistent with 
the Act and with the protection of investors. These questions include, 
among other things, the effect of market data rebates on the accuracy 
of market data and on the regulatory functions of self-regulatory 
organizations.
    Accordingly, the Commission believes that the procedures provided 
by section 19(b)(2) of the Act \11\ will provide a more appropriate 
mechanism for determining whether the proposed rule changes are 
consistent with the Act. Therefore, the Commission finds that it is 
appropriate in the public interest, for the protection of investors, 
and otherwise in furtherance of the purposes of the Act, to abrogate 
the proposed rule changes.
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    \11\ Id.
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    It is therefore ordered, pursuant to section 19(b)(3)(C) of the 
Act,\12\ that File Nos. SR-NASD-2002-61, SR-NASD-2002-68, SR-CSE-2002-
06, and SR-PCX-2002-37 be, and they hereby are, summarily abrogated. If 
the self-regulatory organizations choose to re-file the proposed rule 
changes, they must do so pursuant to sections 19(b)(1)\13\ and 19(b)(2) 
of the Act.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(C).
    \13\ 15 U.S.C. 78s(b)(1).
    \14\ 15 U.S.C. 78s(b)(2).

    By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 02-17249 Filed 7-9-02; 8:45 am]
BILLING CODE 8010-01-P