[Federal Register Volume 69, Number 175 (Friday, September 10, 2004)]
[Notices]
[Pages 54821-54822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2160]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50318; File No. SR-NASD-2004-127]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Extend the National Quotation Data Service Fee Pilot

September 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 August 23, 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 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\ 7 CFR 240.19b-(f)(6).
    \5\ Nasdaq asked the Commission to waive both 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 for one year a pilot program under NASD 
Rule 7010(h) (``Pilot''), which reduced from $50 to $10 the monthly fee 
that non-professional users pay to receive National Quotation Data 
Service (``NQDS'').\6\ Nasdaq proposes no substantive changes to the 
Pilot, other than to extend its operation through August 31, 2005. 
There is no new proposed rule language.
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    \6\ See Securities Exchange Act Release No. 43190 (August 22, 
2000), 65 FR 52460 (August 29, 2000) (SR-NASD-2000-47).
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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
    Nasdaq proposes to extend the Pilot that reduced from $50 to $10 
the monthly fee that non-professional users pay to receive NQDS, which 
is set forth in NASD Rule 7010(h), through August 31, 2005. NQDS 
delivers market maker quotations, Nasdaq Level 1 \7\ service (including 
calculation and display of the inside market), and last sale 
information that is dynamically updated on a real-time basis. NQDS data 
is used

[[Page 54822]]

not only by firms, associated persons, and other market professionals, 
but also by non-professionals who receive the service through 
authorized vendors, including, for example, on-line brokerage firms. 
Before August 31, 2000, NQDS data was available through authorized 
vendors at a monthly rate of $50 for professionals and non-professional 
users alike. In August 2000, NASD, through Nasdaq, filed a proposed 
rule change to reduce from $50 to $10 the monthly fee that non-
professional users pay to receive NQDS data. The Commission approved 
the pilot on August 22, 2000, and the fee reduction began on August 31, 
2000 on a pilot basis.\8\ On September 4, 2001, August 29, 2002, and 
August 15, 2003, Nasdaq filed proposed rule changes to extend the pilot 
for additional one-year periods.\9\
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    \7\ Pursuant to NASD Rule 7010(e), Nasdaq separately distributes 
Level 1 data to non-professionals for a monthly fee of $1.00.
    \8\ See footnote 6, supra.
    \9\ See Securities Exchange Act Release Nos. 44788 (September 
13, 2001), 66 FR 48303 (September 23, 2001) (SR-NASD-2001-56); 46446 
(August 30, 2002), 67 FR 57260 (September 7, 2002) (SR-NASD-2002-
117); and 48386 (August 21, 2003), 68 FR 51618 (August 27, 2003) 
(SR-NASD-2003-132).
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    Nasdaq proposes to extend the Pilot for another year, beginning 
September 1, 2004 and running through August 31, 2005. Nasdaq proposes 
no other changes to the Pilot at this time.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\10\ in general, and with 
Section 15A(b)(5) of the Act,\11\ in particular, in that it 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 Nasdaq operates or controls, and it does not unfairly 
discriminate between customers, issuers, brokers or dealers.
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    \10\ 15 U.S.C. 78o-3.
    \11\ 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

    Written comments were neither solicited nor received.

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 \12\ and 
Rule 19b-4(f)(6) thereunder.\13\ 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    Nasdaq has asked that the Commission waive the five-day pre-filing 
notice requirement and the 30-day operative delay contained in Rule 
19b-4(f)(6)(iii) under the Act.\14\ The Commission believes such 
waivers are consistent with the protection of investors and the public 
interest, for they will allow the Pilot to operate without interruption 
through August 31, 2005. For these reasons, the Commission designates 
the proposal to be effective and operative upon filing with the 
Commission.\15\
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    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \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 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 Number SR-NASD-2004-127 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-2004-127. 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 20549-0609. 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 Number SR-
NASD-2004-127 and should be submitted on or before October 1, 2004.

    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).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-2160 Filed 9-9-04; 8:45 am]
BILLING CODE 8010-01-P