[Federal Register Volume 69, Number 145 (Thursday, July 29, 2004)]
[Notices]
[Pages 45358-45360]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17290]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50068; File No. SR-NASD-2004-101]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the National Association of Securities Dealers, Inc. To 
Provide a Monthly Flat Fee for the Internal Distribution of PostData as 
an Alternative to the Monthly Per-Subscriber Fees Presently Available 
Under NASD Rule 7010(s)

July 23, 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 June 28, 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. 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 provide a monthly flat fee for the internal 
distribution of PostData as an alternative to the monthly per-
subscriber fees presently available under NASD Rule 7010(s). The text 
of the proposed rule change is below.\3\ Proposed new language is in 
italics.
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    \3\ The proposed rule change is marked to show changes from the 
rule as it appears in the electronic NASD Manual available at http://www.nasd.com.
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7010 System Services

    (a)-(r) No change

[[Page 45359]]

(s) NasdaqTrader.com Volume and Issue Data Package Fee
    The charge to be paid by the subscriber for each entitled user 
receiving the Nasdaq Volume and Issue Data Package via NasdaqTrader.com 
shall be $70 per month. The charge to be paid by market data 
distributors for this information shall be $35 per month for each end 
user receiving the information through the data vendor. A distributor, 
as defined in Rule 7010(q)(6)(B), may distribute and use the data 
internally for a flat monthly fee of $2000 (rather than paying the $35 
end user fee for each user). Internal distribution means providing the 
data to those persons covered by the distributor agreement with Nasdaq 
signed by the distributor taking the data. The availability of this 
service through NasdaqTrader.com shall be limited to NASD members, 
Qualified Institutional Buyers (as defined in Rule 144A of the 
Securities Act of 1933) and data vendors. The Volume and Issue Data 
package includes:
    (1) Daily Share Volume reports
    (2) Daily Issue Data
    (3) Monthly Volume Summaries
    (4) Buy Volume Report
    (5) Sell Volume Report
    (6) Crossed Volume Report
    (7) Consolidated Activity Volume Report
    All fees assessed under this subsection will be waived for a period 
of up to two months for all new subscribers and potential new 
subscribers. This fee waiver period would be applied on a rolling 
basis, determined by the date on which a new subscriber or potential 
subscriber contacts Nasdaq to receive access to PostData.
    (t)-(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. 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
    Nasdaq proposes to provide a monthly flat fee for the internal 
distribution of PostData as an alternative to the monthly per-
subscriber fees presently available under NASD Rule 7010(s).
    PostData is a voluntary trading data distribution facility, 
accessible to NASD members, buy-side institutions, and market data 
vendors through the NasdaqTrader.com Web site.\4\ PostData consists of 
seven reports provided in a single package: (1) Daily Share Volume 
Report provides subscribers with T+1 daily share volume in each Nasdaq 
security, listing the volume by any NASD member that permits the 
dissemination of this information; (2) Daily Issue Data summarizes the 
previous day's activity for every Nasdaq issue; (3) Monthly Summaries 
provide monthly trading volume statistics for the top 50 market 
participants sorted by industry sector, security, or type of trading 
(e.g., block or total); (4) Buy Volume Report; (5) Sell Volume Report; 
(6) Crossed Volume Report; and (7) Consolidated Activity Volume 
Report.\5\ Each of the final four reports offers information regarding 
total Nasdaq reported buy (or sell, or cross, or consolidated) volume 
in the security, and rankings of registered market makers based upon 
various aspects of their activity in Nasdaq. The reports also provide 
information about the number and character of each market maker's 
trades with respect to block volume, be it buy, sell, cross, or 
consolidated interest.
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    \4\ See Securities Exchange Act Release No. 45270 (January 11, 
2002), 67 FR 2712 (January 18, 2002).
    \5\ See Securities Exchange Act Release No. 46316 (August 6, 
2002), 67 FR 52504 (August 12, 2002).
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    PostData is currently available through the NasdaqTrader.com Web 
site. Information is provided directly to subscribers for a fee of $70 
per month. The information is also provided to market data distributors 
to be redistributed to their retail customers for whom the data 
distributor pays a $35 per month fee to Nasdaq for each end user 
obtaining this information.
    Nasdaq proposes to establish a third method of availability for 
PostData, specifically, a $2000 monthly fee for internal distribution 
by distributors, as defined in NASD Rule 7010(q)(6)(B). This would 
allow customers to pay a $2000 flat monthly fee, rather than the $35 
monthly fee for each end user. Both sell-side and buy-side firms that 
use PostData information for non-display purposes, such as for 
analytics or graphics, have indicated their interest in such a fee 
schedule because it relieves them of the administrative burden of 
tracking the end users that are entitled to receive the information and 
of reporting the number of such individuals to Nasdaq.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 15A of the Act,\6\ in general, and with 
section 15A(b)(5) of the Act,\7\ in particular, 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 association operates or controls. Nasdaq 
believes the internal distribution fee is equitable in that it provides 
a potentially more economical option to distributors that primarily use 
PostData information on an internal basis, and reduces such 
distributors' administrative burdens.
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    \6\ 15 U.S.C. 78o-3.
    \7\ 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

[[Page 45360]]

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 an e-mail to [email protected]. Please include 
File No. SR-NASD-2004-101 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-2004-101. 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of 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 No. SR-NASD-2004-101 and 
should be submitted on or before August 19, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-17290 Filed 7-28-04; 8:45 am]
BILLING CODE 8010-01-P