[Federal Register Volume 67, Number 236 (Monday, December 9, 2002)]
[Notices]
[Page 72993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30965]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46938; File No. SR-NASD-2002-149]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change by the National Association of Securities Dealers, 
Inc. to Make Permanent Nasdaq's Transaction Credit Pilot Program for 
Exchange-Listed Securities, and To Increase the Percentage of Revenue 
Available for Distribution From 40% to 50%

December 3, 2002.
    On October 18, 2002, the National Association of Securities 
Dealers, Inc. (``NASD''), 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 codify on a permanent basis 
Nasdaq's InterMarket Transaction Credit Pilot Program (``Program''), 
and to raise the percentage of revenue available for distribution under 
the Program from 40% to 50%. The proposed rule change was published for 
notice and comment in the Federal Register on October 29, 2002.\3\ The 
Commission received no comments on the proposal. This order approves 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 46712 (October 23, 
2002), 67 FR 66031.
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    Nasdaq proposes to make the Program permanent, and to raise the 
percentage of revenue available for distribution under the Program from 
40% to 50%. As set forth in its July 2, 2002 Order of Summary 
Abrogation (``Abrogation Order''),\4\ the Commission will continue to 
examine the issues surrounding market data fees, the distribution of 
market data rebates, and the impact of market data revenue sharing 
programs on both the accuracy of market data and on the regulatory 
functions of self-regulatory organizations. In the interim, the 
Commission believes it is reasonable to allow Nasdaq to make its 
Program permanent, and increase the revenue available for distribution, 
because these changes to the Program leave Nasdaq on substantially 
similar footing as other self-regulatory organizations.\5\
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    \4\ Securities Exchange Act Release No. 46159 (July 2, 2002), 67 
FR 45775 (July 10, 2002)(File Nos. SR-NASD-2002-61, SR-NASD-2002-68, 
SR-CSE-2002-06, and SR-PCX-2002-37)(Order of Summary Abrogation).
    \5\ See e.g., Securities Exchange Act Release No. 41238 (March 
31, 1999), 64 FR 17204 (April 8, 1999) (SR-CSE-99-03).
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    Thus, the Commission finds that the proposed rule change is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities association 
\6\ and, in particular, the requirements of Section 15A of the Act \7\ 
and the rules and regulations thereunder. The Commission finds 
specifically that the proposed rule change is consistent with Section 
15A(b)(5) of the Act,\8\ in that it is designed to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating securities transactions, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \6\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78o-3.
    \8\ 15 U.S.C. 78o-3(b)(5).
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    The decision to allow Nasdaq to make permanent its Program, and to 
increase the percentage of revenue available for distribution, however, 
is narrowly drawn, and should not be construed as resolving the issues 
raised in the Abrogation Order, and does not suggest what, if any, 
future actions the Commission may take with regard to market data 
revenue sharing programs.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\9\, that the proposed rule change (SR-NASD-2002-149) be, and it hereby 
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. 02-30965 Filed 12-6-02; 8:45 am]
BILLING CODE 8010-01-P