[Federal Register Volume 67, Number 174 (Monday, September 9, 2002)]
[Notices]
[Pages 57260-57262]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22773]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46446; File No. SR-NASD-2002-117]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to the Extension of the Fee Pilot for 
the National (Nasdaq) Quotation Data Service

August 30, 2002.
    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 August 30, 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 (``SEC'' or ``Commission'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

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[[Page 57261]]

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), which reduced from $50 to $10 the monthly fee that non-
professional users pay to receive National Quotation Data Service 
(``NQDS'').\3\ The purpose of this filing is to extend the one-year fee 
reduction pilot program for non-professional users of NQDS. 
Accordingly, there is no new proposed rule language. Pursuant to Rule 
19b-4(f) under the Act, Nasdaq has designated this proposal as non-
controversial and requests that the Commission waive the 30-day pre-
operative requirement contained in Rule 19b-4(f)(6)(iii).\4\ If the 
Commission grants the waiver, Nasdaq will implement this rule change 
immediately.
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    \3\ See Securities Exchange Act Release Nos. 43190 (August 22, 
2000), 65 FR 52460 (August 29, 2000); 44788 (September 13, 2001), 66 
FR 48303 (September 19, 2001).
    \4\ 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 the 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.

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 extended on September 4, 2001, that reduced from $50 to $10 the 
monthly fee that non-professional users pay to receive NQDS.\5\
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    \5\ See note 3.
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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 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 professionals and non-
professionals 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. On September 4, 2001, Nasdaq filed 
a proposed rule change to extend the one-year pilot for another one-
year period through August 31, 2002.
    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 on September 1, 2002 and expiring 
on August 31, 2003. Nasdaq notes that the existing 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 proposed rule change is consistent with 
the provisions of sections 15A(b)(5) and 15A(b)(6) of the Act \6\ 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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    \6\ 15 U.S.C. 78o-3(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

    Nasdaq believes that the proposed rule change will impose no burden 
on competition that is not necessary or appropriate in furtherance 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

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) \8\ thereunder because 
the proposal: (1) Does not significantly affect the protection of 
investors or the public interest; (2) does not impose any significant 
burden on competition; and (3) does not become operative for 30 days 
from the date of filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest; provided that the Exchange has given the Commission written 
notice of its intent to file the proposed rule change at least five 
business days prior to the filing date of the proposed rule change.\9\ 
At any time within 60 days of the filing of such 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.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ As required under Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii), Nasdaq provided the Commission with written notice of 
its intent to file the proposed rule change at least five business 
days prior to the filing date. See letter from Mary M. Dunbar, Vice 
President and Deputy General Counsel, Nasdaq, to Katherine A. 
England, Assistant Director, Division, Commission, dated August 14, 
2002.
    \10\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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    Nasdaq has requested that the Commission waive the 30-day operative 
delay. The Commission believes waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Acceleration of the operative date should prevent the lapsing of a 
pilot that provides non-professional users with a valuable source of 
market data at a significantly discounted rate. Among other benefits, 
the Commission believes that providing non-professional users

[[Page 57262]]

with such data at a discounted rate should assist individual investors 
in their analysis of the financial markets. For these reasons, the 
Commission designates the proposal to be effective and operative upon 
filing with the Commission.\11\
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    \11\ For the 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 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 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 
Exchange. All submissions should refer to File No. SR-NASD-2002-117 and 
should be submitted by September 30, 2002.

    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. 02-22773 Filed 9-6-02; 8:45 am]
BILLING CODE 8010-01-P