[Federal Register Volume 69, Number 15 (Friday, January 23, 2004)]
[Notices]
[Pages 3413-3414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1464]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49088; File No. SR-NASD-2003-162]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change and Amendment No. 1 Thereto by the National 
Association of Securities Dealers, Inc. Relating to Prime and ADAP Data 
Feeds in NASD Rule 7010(q)

January 16, 2004.
    On October 29, 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 (``Commission'') a proposed rule change 
pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'')\1\ and Rule 19b-4 thereunder,\2\ to rename the Nasdaq Prime 
data feed as the TotalView Data Feed, to expand it to include quotes 
and orders at all price levels associated with an individual issue 
traded on Nasdaq, and to discontinue the Nasdaq Aggregated Depth at 
Price (``ADAP'') data feed. On December 5, 2003, Nasdaq submitted 
Amendment No. 1 to the proposed rule change.\3\ The proposed rule 
change, as amended, was published for comment in the Federal Register 
on December 17, 2003.\4\ The Commission received no comments on the 
proposal. This order approves the proposed rule change, as amended.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from Mary M. Dunbar, Vice President and Deputy 
General Counsel, Nasdaq, to Katherine A. England, Assistant 
Director, Division of Market Regulation, Commission, dated December 
4, 2003.
    \4\ See Securities Exchange Act Release No. 48902 (December 10, 
2003), 68 FR 70324.
    \5\ Nasdaq intends to expand the TotalView Data Feed on or after 
April 1, 2004 and to discontinue the ADAP data feed on or after 
February 16, 2004. In each case, Nasdaq will issue a vendor alert 
announcing the actual date of the change at least three days before 
it is implemented. Nasdaq has represented that if it eliminates the 
ADAP data feed prior to the expansion of the TotalView Data Feed, 
distributors that wish to continue to distribute only the aggregate 
data (i.e., the aggregate size of attributable and non-attributable 
quotes and orders at five price levels) may do so by using the 
aggregate data available from the current Nasdaq Prime data feed.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities 
association,\6\ and, in particular, with the requirements of section 
15A of the Act.\7\ Specifically, the Commission finds that the proposal 
is consistent with sections 15A(b)(5)\8\ and 15A(b)(6)\9\ of the Act in 
that the proposal provides for the equitable allocation of reasonable 
dues, fees, and other charges among members and issuers and other 
persons using any facility or system which the NASD operates or 
controls, promotes just and equitable principles of trade, fosters 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, removes impediments to and 
perfects the mechanism of a free and open market and a national market

[[Page 3414]]

system, and protects investors and the public interest.
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    \6\ In approving this proposed rule change, the Commission notes 
that it 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).
    \9\ 15 U.S.C. 78o-3(b)(6).
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    The Commission believes that expanding the Nasdaq Prime data feed 
to cover all price levels, rather than just the top five price levels, 
may enhance the transparency of the Nasdaq market. The Commission notes 
that the fees charged by Nasdaq for the data feeds will not be changed. 
Therefore, distributors and subscribers would receive more data for the 
same price. Further, distributors that would like to distribute only 
the aggregate data (i.e., the aggregate size of attributable and non-
attributable quotes and orders at five price levels), formerly the ADAP 
feed, may continue to do so by using the aggregate data from the Nasdaq 
TotalView Data Feed for the same distributor fee Nasdaq charges 
today.\10\
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    \10\ When the TotalView Data Feed is expanded to cover all price 
levels, a distributor that would like to distribute only the 
aggregate data would distribute the aggregate size of attributable 
and non-attributable quotes and orders at all price levels.
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NASD-2003-162), as amended, 
is approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    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. 04-1464 Filed 1-22-04; 8:45 am]
BILLING CODE 8010-01-P