[Federal Register Volume 69, Number 174 (Thursday, September 9, 2004)]
[Notices]
[Pages 54714-54716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20375]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50304; File No. SR-NASD-2004-114]


Self-Regulatory Organizations; Notice of Filing of a Proposed 
Rule Change and Amendment No. 1 Thereto by the National Association of 
Securities Dealers, Inc. Relating to Fees for Depth of Book Data in 
Exchange-Listed Securities in the Nasdaq Market Center

September 1, 2004.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 26, 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. On August 24, 
2004, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Letter from Mary M. Dunbar, Vice President and Deputy 
General Counsel, Nasdaq, to Katherine A. England, Assistant 
Director, Division of Market Regulation, Commission, dated August 
23, 2004 (``Amendment No. 1''). Amendment No. 1 replaces the 
original proposed rule change in its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    Nasdaq proposes to establish a monthly per-controlled device fee 
for depth of book information for exchange-listed securities in the 
Nasdaq Market Center. Nasdaq intends to implement the fee on October 1, 
2004. The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in brackets.
* * * * *

4707. Entry and Display of Quotes/Orders

    (a) through (e) No Change.
    (f) [IM Prime--``IM Prime''] Open View--``Open View'' is a separate 
data feed that Nasdaq will make available for a fee that is approved by 
the Securities and Exchange Commission. This separate data feed will 
display with attribution to ITS/CAES Market Makers' MPIDs all 
Attributable Quotes/Orders on both the bid and offer side of the market 
for the price levels that are

[[Page 54715]]

disseminated in the Nasdaq Order Display Facility for ITS Securities.
* * * * *

7010. Charges for Services and Equipment

    (a)-(p) No change.
    (q) Nasdaq Data Entitlement Packages
    (1) through (7) No Change.
    (8) Open View
    The Open View entitlement package consists of all individual Nasdaq 
Market Center participant orders and quotes in exchange-listed 
securities in the system. There shall be a charge of $6 per month per 
controlled device of Open View.
    (r)-(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 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
    With the introduction of the Nasdaq Market Center as a platform to 
trade exchange-listed securities, Nasdaq will have the ability to 
collect and disseminate multiple levels of firm quotes/orders in those 
securities to market participants. This data includes all exchange-
listed securities quoted through the Nasdaq Market Center. Nasdaq's 
proposal establishes a $6 monthly per-controlled device \4\ fee for 
such real-time ``depth of book'' information, which is known as ``Open 
View.'' \5\ In addition, Nasdaq proposes to amend NASD Rule 4707(f) to 
change the name of the ``IM Prime'' data feed to ``Open View.''
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    \4\ Controlled device is defined in NASD Rule 7010(q)(6)(A).
    \5\ ``Open View'' is part of the ViewSuite package of data 
entitlements provided under NASD Rule 7010(q).
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    Nasdaq states that it chose the initial $6 monthly fee amount based 
on anticipated message traffic through the new data feed in relation to 
the message traffic levels and prices for similar data services already 
in operation.\6\ As noted above, Nasdaq intends to implement the fee on 
October 1, 2004. The $6 fee will apply to vendors and subscribers that 
access the data through either a market data vendor or any internal 
data dissemination system operated by a broker-dealer.
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    \6\ See e.g., Securities Exchange Act Release No. 46534 
(September 23, 2002), 67 FR 61368 (September 30, 2002) (approving 
SR-NASD 2002-86 and establishing a $6 fee for similar listed 
quotation data in the event Nasdaq becomes a national securities 
exchange).
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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, 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. As previously 
noted, Nasdaq chose the initial $6 monthly fee amount based on 
anticipated message traffic through the new data feed in relation to 
the message traffic amounts and prices for similar data services 
available to market participants that are already in operation.
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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.

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.

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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic comments

     Use the Commission's Internet comments form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-NASD-2004-114 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-2004-114. 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-2004-114 and should be submitted on or before 
September 30, 2004.


[[Page 54716]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-20375 Filed 9-8-04; 8:45 am]
BILLING CODE 8010-01-M