[Federal Register Volume 69, Number 90 (Monday, May 10, 2004)]
[Notices]
[Pages 25940-25941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10560]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49648; File No. SR-NASD-2004-067]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change by the National Association of 
Securities Dealers, Inc. to Amend NASD Rule 7010 to Modify the Charges 
Paid by Members Receiving Nasdaq's Service for Trading Exchange-Listed 
Securities

May 3, 2004.
    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 April 21, 2004, 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, II, 
and III below, which Items have been prepared by Nasdaq. Nasdaq has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by Nasdaq under section 19(b)(3)(A)(ii) of the 
Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes certain changes to Rule 7010 to modify the service 
charges paid by members for the Nasdaq service for trading exchange-
listed securities. The text of the proposed rule change is below. 
Proposed new language is in italics; proposed deletions are in 
[brackets].\5\
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    \5\ The proposed rule change is marked to show changes from the 
rule text in the NASD Manual available at http://www.nasd.com.
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* * * * *

7010. System Services

    (a) through (c) No change.
    (d) Computer Assisted Execution Service
    The charges to be paid by members receiving the Computer Assisted 
Execution Service (CAES) shall consist of a fixed service charge and a 
per transaction charge plus equipment related charges.
    (1) Service Charge[s]
    [$100 per month for each market maker terminal receiving CAES.] 
$200 per month per member receiving the service.
    (2) No change
    (e) through (u) No change.
* * * * *

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The proposed rule change seeks to modify the monthly service charge 
paid by members receiving Nasdaq's Computer Assisted Execution System 
(``CAES'') service \6\ for trading exchange-listed securities by 
replacing the monthly $100 per terminal charge with a flat monthly fee 
of $200 per member firm, regardless of the number of terminals used by 
such firm. Nasdaq believes that the proposed rule change will result in 
a more equitable allocation among members of the charges associated 
with this service. Nasdaq also believes that the overall decrease in 
fees for using this service should encourage greater use of Nasdaq in 
trading exchange-listed securities, and contribute to greater 
competition for executions of orders in New York Stock Exchange, Inc. 
and American Stock Exchange LLC-listed securities.
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    \6\ CAES is the computer order routing and execution facility 
for ITS securities. The CAES functionality is offered through the 
Nasdaq National Market Execution System (``NNMS'' or 
``SuperMontage''). Telephone conversation between Alex Kogan, Office 
of General Counsel, Nasdaq, and Lisa N. Jones, Special Counsel, 
Division of Market Regulation (``Division''), Commission, on April 
28, 2004.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\7\ in general, and Section 
15A(b)(5) of the Act,\8\ in particular, which requires that the rules 
of the NASD provide 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. By 
adopting a pricing structure that is responsive to market demands, 
Nasdaq believes that the proposed amendment supports the efficient use 
of existing systems and ensures that the charges associated with such 
use are allocated equitably.
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    \7\ 15 U.S.C. 78o-3.
    \8\ 15 U.S.C. 78o-3(b)(5).
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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, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The proposed rule change has become effective pursuant to section 
19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(2) of Rule 19b-4 
\10\

[[Page 25941]]

thereunder, because it establishes or changes a due, fee, or other 
charge imposed by the NASD. 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 the furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii)
    \10\ 17 CFR 240.19b-4(f)(2).
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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. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send e-mail to [email protected]. Please include File 
Number SR-NASD-2004-067 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-NASD-2004-067. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 also will be available for inspection and copying at the 
principal office of the NASD. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NASD-2004-067 and should be submitted on or before June 
1, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-10560 Filed 5-7-04; 8:45 am]
BILLING CODE 8010-01-P