[Federal Register Volume 69, Number 199 (Friday, October 15, 2004)]
[Notices]
[Pages 61275-61276]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2655]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50502; File No. SR-NASD-2004-49]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. To Establish Access Fees for Nasdaq's Brut 
Facility

October 7, 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 October 4, 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 the self-regulatory organization under Section 
19(b)(3)(A)(ii) \3\ of the Act 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 to establish access fees for its Brut trading 
facility. The text of the proposed rule change is available at the 
Office of the Secretary, Nasdaq, and at the Commission.

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 represents that, on September 7, 2004, Nasdaq completed its 
purchase of the Brut ECN (``Brut''). Once purchased by Nasdaq, Brut 
became a ``facility'' of a national securities association,\5\ thereby 
making the pricing for Brut's services subject to Section 15A(b)(5) of 
the Act, which requires that the fees of a national securities 
association be equitably allocated among members and issuers and other 
persons using the facility.\6\ In this filing, Nasdaq proposes to 
establish such a fee structure for members who access orders residing 
in Brut's system. Under the proposal, Nasdaq will create a tiered fee 
structure in which the per share fee charged to a member to access 
liquidity in Brut will vary based on the amount of liquidity added to 
Brut by that member. Members that provide an average daily volume of 
50,000 shares or less over a calendar month will be charged $0.003 per 
share when accessing liquidity in the Brut system for that same month. 
Members that provide an average daily volume of 50,001 shares or more 
over a calendar month will be charged $0.0027 per share when accessing 
liquidity in the Brut system for that same month.
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    \5\ See Section 3(a)(2) of the Act, 15 U.S.C. 78c(a)(2).
    \6\ 15 U.S.C. 78o-3(b)(5). Nasdaq currently operates Brut 
pursuant to a Temporary Conditional Exemption (``Exemption'') issued 
by the Commission pursuant to Section 36(a) of the Act. See 
Securities Exchange Act Release No. 50311 (September 3, 2004), 69 FR 
54818 (September 10, 2004). The Exemption requires Nasdaq to file 
proposed rule changes under Section 19(b) of the Act if it seeks to 
modify Brut's fee schedule.
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    Nasdaq believes that the above approach provides a uniform and 
objective method to impose fees for accessing liquidity in the Brut 
system that also encourages the provision of liquidity beneficial to 
all members.
2. Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\7\ in general, and with 
Section 15A(b)(5) of

[[Page 61276]]

the Act,\8\ in particular, in that the proposed rule change provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among members.
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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

    The forgoing rule change is subject to Section 19(b)(3)(A)(ii) of 
the Act \9\ and subparagraph (f)(2) of Rule 19b-4 \10\ thereunder 
because it establishes or changes a due, fee, or other charge imposed 
by the self-regulatory organization. Accordingly, the proposal is 
effective upon Commission receipt of the filing. 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 furtherance of the 
purposes of the Act.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
    \11\ 15 U.S.C. 78s(b)(3)(C).
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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-2004-149 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-2004-149. 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 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-2004-149 and should be 
submitted on or before November 5, 2004.

    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. E4-2655 Filed 10-14-04; 8:45 am]
BILLING CODE 8010-01-P