[Federal Register Volume 68, Number 194 (Tuesday, October 7, 2003)]
[Notices]
[Pages 57946-57947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-25342]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48576; File No. SR-NASD-2003-142]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. To Extend a Pilot Amendment to NASD Rule 
7010(s) Regarding Nasdaq PostData and the Associated Fees Assessed

September 30, 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 September 24, 2003, 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'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by Nasdaq. Nasdaq filed this 
proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposal effective upon filing 
with the Commission.\5\ 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.
    \3\15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-(f)(6).
    \5\ Nasdaq asked the Commission to waive the five-day pre-filing 
notice requirement and the 30-day operative delay. See Rule 19b-
4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to extend a pilot amendment to NASD Rule 7010(s) 
regarding Nasdaq PostData and the associated fees assessed. The purpose 
of this filing is to extend the pilot through March 31, 2004. Nasdaq is 
making no substantive changes to the pilot, other than to extend its 
operation through March 31, 2004. There is no new proposed rule 
language.

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 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
    On January 11, 2002, the Commission approved, as a 12-month pilot, 
the creation of Nasdaq PostData, a voluntary trading data distribution 
facility, accessible to NASD members, buy-side institutions and market 
data vendors through the NasdaqTrader.com Web site.\6\ Nasdaq extended 
that pilot through February 28, 2003,\7\ then through March 31, 
2003,\8\ and, finally, through September 30, 2003.\9\ Nasdaq hereby 
proposes to extend the pilot period for PostData through March 31, 
2004.
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    \6\ See Securities Exchange Act Release No. 45270 (January 11, 
2002), 67 FR 2712 (January 18, 2002) (SR-NASD-99-12).
    \7\ See Securities Exchange Act Release No. 47210 (January 17, 
2003), 68 FR 3912 (January 27, 2003)(SR-NASD-2003-02).
    \8\ See Securities Exchange Act Release No. 47503 (March 14, 
2003), 68 F.R. 13745 (March 20, 2003)(SR-NASD-2003-35).
    \9\ See Securities Exchange Act Release No. 47634 (April 4, 
2003), 68 FR 17714 (April 10, 2003)(SR-NASD-2003-60).
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    Background. PostData originally consisted of three reports provided 
in a single package: (1) Daily Share Volume Report, which provide 
subscribers with T+1 daily share volume in each Nasdaq security, 
listing the volume by any NASD member firm that voluntarily permits the 
dissemination of this information; (2) Daily Issue Data, which contains 
a summary of the previous day's activity for every Nasdaq issue; and 
(3) Monthly Summaries, which provide monthly trading volume statistics 
for the top 50 market participants sorted by industry sector, security, 
or type of trading (e.g. block or

[[Page 57947]]

total). Nasdaq launched PostData on March 18, 2002.
    On August 5, 2002, Nasdaq expanded the information made available 
to PostData subscribers to include four additional reports: Buy Volume 
Report, Sell Volume Report, Crossed Volume Report, and Consolidated 
Activity Volume Report.\10\ Each report offers information regarding 
total Nasdaq reported buy (or sell, or cross, or consolidated) volume 
in the security, as well as rankings of registered market makers based 
upon various aspects of their activity in Nasdaq. The reports also 
provide recipients with information about the number and character of 
each market maker's trades. Finally, the reports provide the 
information described above with respect to block volume, be it buy, 
sell, cross or consolidated interest.
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    \10\ See Securities Exchange Act Release No. 46316 (August 6, 
2002), 67 FR 52504 (August 12, 2002)(SR-NASD-2002-90).
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    Extension of the Pilot. The PostData pilot program is scheduled to 
expire on September 30, 2003. Nasdaq plans to request permanent 
approval of PostData in the coming months. Additional time is needed, 
however, to finalize the details of PostData as a permanent product and 
to fully analyze PostData fees. Nasdaq is therefore requesting an 
extension of the PostData pilot through March 31, 2004.
2. Statutory Basis
    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\ 15 U.S.C. 78o-3(b)(5).
    \12\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will 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 
RuleChange Received From Members, Participants or Others

    Nasdaq neither solicited nor received written comments with respect 
to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to section 19(b)(3)(A) of the Act \13\ and 
rule 19b-4(f)(6) thereunder.\14\ At any time within 60 days of the 
filing of the 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 asked the Commission to waive the five-day pre-filing 
notice requirement and the 30-day operative delay. The Commission 
believes waiving the five-day pre-filing notice requirement and the 30-
day operative delay is consistent with the protection of investors and 
the public interest. Such waivers will allow the pilot to operate 
without interruption through March 31, 2004. 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 proposal 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 NASD. All 
submissions should refer to file number SR-NASD-2003-142 and should be 
submitted by October 28, 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).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-25342 Filed 10-6-03; 8:45 am]
BILLING CODE 8010-01-P