[Federal Register Volume 68, Number 51 (Monday, March 17, 2003)]
[Notices]
[Pages 12724-12726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6243]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47478; File No. SR-NASD-2003-28]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Establishing a Thirty-Day Waiver of Certain ViewSuite Data 
Services Fees Assessed Under NASD Rule 7010(q)

March 10, 2003.
    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 March 3, 2003, 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to waive for thirty calendar days certain fees 
assessed under NASD Rule 7010(q) upon distributors for each new 
subscriber to Nasdaq ViewSuite products. Proposed new language is in 
italics; proposed deletions are in brackets.\3\
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    \3\ Simultaneous with this proposed rule change, Nasdaq has 
submitted SR-NASD-2003-27 which proposes the addition of NASD Rule 
7010(q)(3) and (q)(4), two pilot pricing initiatives for the 
ViewSuite products. These two filings are completely independent and 
the approval or rejection of one has no affect on the rule language 
proposed in the other.
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* * * * *
Rule 7010. Charges for Services and Equipment
    (a)-(p) No Change.
    (q) Nasdaq Data Entitlement Packages:
    (1) Depth View and Power View--
    (A) No Change.
    (B) No Change.
    (C) No Change.
    (D) Thirty-Day Free-Trial Offer. Nasdaq will offer all new 
individual subscribers and potential new individual subscribers a 30-
day waiver of the fees for any ViewSuite service (Depth View or Power 
View) that such subscriber or potential subscriber chooses to try for 
the 30-day period. This waiver does not include fees assessed for the 
NQDS service.\4\ This fee waiver period will be applied on a rolling 
basis, determined by the date on which a new individual subscriber or 
potential individual subscriber is first entitled by a distributor to 
receive access to Depth View or Power View. A distributor may only 
provide this waiver to a specific individual subscriber once.
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    \4\ The NQDS-only fees (incremental to the Level 1 charges) are 
$30 for professional users and $9 for non-professional users.
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    (i) Depth View. For the period of the offer, the DepthView fee of 
$50 per professional user and $25 per non-professional user will be 
waived.
    (ii) PowerView. For the period of the offer, the PowerView fee of 
$45 per professional user and $20 per non-professional user will be 
waived.
    (2) Total View--
    (A) No Change.
    (B) No Change.
    (C) 30-Day Free-Trial Offer. Nasdaq will offer all new individual 
subscribers and potential new individual subscribers a 30-day waiver of 
the fees for TotalView. This waiver does not include fees assessed for 
the NQDS service.\5\ This fee waiver period will be applied on a 
rolling basis, determined by the date on which a new individual 
subscriber or potential individual subscriber is first entitled by a 
distributor to receive access to TotalView. A distributor may only 
provide this waiver to a specific individual subscriber once.
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    \5\ The NQDS-only fees (incremental to the Level 1 charges) are 
$30 for professional issuers and $9 for non-professional users.
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    (i) For the period of the offer, the TotalView fee of $120 per 
professional user and $141 per non-professional user will be waived.
* * * * *

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 the proposed rule change and 
discussed 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 below in sections A, B, 
and C, 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
    The launch of SuperMontage, Nasdaq's integrated quotation and 
execution system, vastly expanded Nasdaq's ability to offer market data 
to market participants that choose to display trading interest on 
Nasdaq that goes beyond the best bid and offer: Nasdaq DepthView, 
PowerView, and TotalView, collectively referred to as the ``ViewSuite'' 
products, offer a wide array of quotation information to market data 
vendors and broker/dealer distributors. DepthView shows the aggregate 
size, by price level, of all Nasdaq market participants' attributed and 
unattributed quotations/orders that are in the top five price levels in 
SuperMontage. PowerView bundles the Nasdaq Quotation Dissemination 
Service or ``NQDS'' and DepthView. TotalView offers the PowerView 
services plus all Nasdaq market participants' attributed quotations/
orders that are in the top five price levels in SuperMontage, in 
addition to the aggregate size of all unattributed quotes/orders at 
each of the top five price levels.
    On November 18, 2002, the Commission approved a rule proposal that 
established fees assessed for the ViewSuite products, which are offered 
exclusively through distributors.\6\ DepthView is offered through 
distributors to professional subscribers for $50 per month per 
controlled

[[Page 12725]]

device \7\ and to non-professional subscribers for $25 per month per 
controlled device, plus $1,000 per distributor per month. PowerView is 
offered through distributors to professional subscribers for $75 per 
month per controlled device and to non-professional subscribers for $29 
per month per controlled device, plus $1,000 per month per distributor. 
TotalView is offered through distributors to professional subscribers 
for $150 per month per controlled device and to non-professional 
subscribers for $150 per month per controlled device, plus $7,500 per 
month per distributor.\8\
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    \6\ See Securities Exchange Act Release No. 46843 (Nov. 18, 
2002), 67 FR 70471 (Nov. 22, 2002).
    \7\ A ``controlled device'' is defined, in footnote one of Rule 
7010(q), as any device that a distributor of the Nasdaq Data 
Entitlement Package(s) permits to: (a) access the information in the 
Nasdaq Data Entitlement Package(s); or (b) communicate with the 
distributor so as to cause the distributor to access the information 
in the Nasdaq Data Entitlement Package(s).
    \8\ To comply with the SEC Vendor Display Rule, distributors 
must also provide their controlled devices with the Level 1 service, 
separately priced at $20 per professional user and capped at $1 per 
non-professional user. The Level 1 charges are not included in the 
fees discussed in this filing.
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    In order to increase the availability of the ViewSuite Products 
within the securities industry, Nasdaq proposes to waive all fees that 
are incremental to the NQDS fees assessed upon distributors for new 
individual subscribers to each ViewSuite product for a period of up to 
30 days. Nasdaq has repeatedly been asked to offer a free trial period 
so that potential subscribers can test the ViewSuite products before 
committing to subscribe. Based upon these requests, Nasdaq believes 
that offering a free trial period will make this data more widely 
available and enable ViewSuite to reach viability sooner. This fee 
waiver period would be applied on a rolling basis, determined by the 
date on which a new individual subscriber or potential individual 
subscriber contacts a distributor to receive access to a ViewSuite 
product. A new individual subscriber who has already signed a Level 1 
or NQDS agreement would not be obligated to sign any additional 
agreement or addendum regarding the ViewSuite product(s) until and 
unless he or she decided to continue to subscribe to such product(s) 
after the expiration of the free trial period. Nasdaq believes that 
this waiver is fair and non-discriminatory because it applies to all 
potential subscribers to ViewSuite products.
    The fee waiver only covers the fees assessed for the ViewSuite 
product(s) over and above the NQDS charges because NQDS is currently a 
product covered and shareable under the UTP Plan. All fees (including 
fee waivers) for data services covered under the UTP Plan are subject 
to review and approval by the UTP Plan Participants, and therefore are 
not solely governed by Nasdaq. Therefore, Nasdaq chooses to offer a 
waiver only to those fees assessed for the portion of the ViewSuite 
data services that are solely governed by Nasdaq.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 15A of the Act,\9\ in general, and with 
section 15A(b)(5) of the Act,\10\ in particular, in that it provides 
for the equitable allocation of reasonable fees, dues, and other 
charges among members and issuers and other persons using any facility 
or system which the NASD operates or controls.
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    \9\ 15 U.S.C. 78o-3.
    \10\ 15 U.S.C. 78o-3(b)(5).
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    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 15A(b)(5)\11\ and 15A(b)(6)\12\ of the Act. 
Section 15A(b)(5) requires the equitable allocation of reasonable fees 
and charges among members and other users of facilities operated or 
controlled by a national securities association. Section 15A(b)(6) 
requires rules that foster cooperation and coordination with persons 
engaged in facilitating transactions in securities and that are not 
designed to permit unfair discrimination between customers, issuers, 
brokers or dealers. Nasdaq believes that this program involves a 
reasonable fee assessed only to users and other persons utilizing the 
system and will provide useful information to all direct and indirect 
subscribers on a non-discriminatory basis.
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    \11\ Id.
    \12\ 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 not result in 
any 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 on the 
proposed rule change contained in this filing.

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 \13\ and Rule 19b-4(f)(6) \14\ thereunder 
because the proposal: (i) Does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on competition; and (iii) does not become operative 
prior to 30 days after the date of filing or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest. Nasdaq gave the Commission notice of its 
intent to file the proposed rule change, along with a brief description 
and text of the proposed rule change, at least five business days prior 
to the date of filing of the proposed rule change. 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
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    Nasdaq has requested that the Commission waive the 30-day operative 
delay. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
The Commission notes that the rule filing will establish a voluntary 
program available to all Nasdaq distributors that may increase the 
availability and distribution of market data. The voluntary program 
applies to market data that Nasdaq offers exclusively to distributors 
and not directly to individual investors. In addition, acceleration of 
the operative date will permit Nasdaq to establish the fee waiver 
program immediately. For these reasons, the Commission designates the 
proposal to be effective and operative upon filing with the 
Commission.\15\
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    \15\ 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 proposed rule 
change is consistent with the Act. Persons making written submissions

[[Page 12726]]

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 the 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-2003-28 and 
should be submitted by April 7, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-6243 Filed 3-14-03; 8:45 am]
BILLING CODE 8010-01-P