[Federal Register Volume 69, Number 207 (Wednesday, October 27, 2004)]
[Notices]
[Pages 62730-62731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2867]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50571; File No. SR-NASD-2004-146]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 to Permanently Adopt Fees for TotalView 
Product

October 20, 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 September 30, 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. On October 12, 
2004, Nasdaq filed an amendment to the proposal.\3\ Nasdaq filed the 
proposed rule change pursuant to section 19(b)(3)(A) of the Act \4\ and 
Rule 19b-4(f)(6) thereunder,\5\ which renders it effective upon filing 
with the Commission.\6\ 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\ See October 8, 2004 letter from Jeffrey S. Davis, Associate 
General Counsel, Nasdaq, to Katherine A. England, Assistant 
Director, Division of Market Regulation (``Division''), Commission 
(``Amendment No. 1''). The original proposed rule change contained 
conflicting language about Nasdaq's intent to make permanent the 
existing TotalView pilot program. In Amendment No. 1, Nasdaq 
clarified that the purpose of the proposed rule change is to make 
permanent the fees associated with TotalView that previously had 
been implemented on a pilot basis. The Commission also notes that 
the original proposed rule change was filed with a blank page 
between pages 13 and 14. Nasdaq confirmed that this was an error, 
and that no text is missing from the original proposed rule change. 
Telephone conversation between Jeffrey S. Davis, Nasdaq, and Joseph 
P. Morra, Commission, September 30, 2004.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
    \6\ Nasdaq provided the Commission with written notice of its 
intent to file the proposed rule change on September 21, 2004. See 
September 21, 2004 letter from Jeffrey S. Davis, Nasdaq, to 
Katherine A. England, Commission. Nasdaq asked the Commission to 
waive the 30-day operative delay. For purposes of calculating the 
60-day abrogation period, the Commission considers the period to 
have commenced on October 12, 2004, the date that Nasdaq filed 
Amendment No. 1. See Section 19(b)(3)(A) of the Act, and Rule 19b-
4(f)(6)(iii) thereunder. 15 U.S.C. 78s(b)(1), 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 adopt permanently the TotalView data package and 
reduced fees assessed for those feeds. The proposed rule change will 
make permanent the pilot program that was in effect without making any 
substantive changes to the way the pilot has been operating. The text 
of the proposed rule change is available at NASD 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
    In November 2002, the Commission approved a proposed rule change 
that established fees assessed for several products known as 
``ViewSuite,'' which contain data from Nasdaq's integrated quotation 
and execution system.\7\ To encourage the broadest possible display of 
the Nasdaq market center data contained in the ViewSuite products, 
Nasdaq then proposed an optional pilot program to offer an enterprise-
wide license to distributors.\8\ This pilot allowed each distributor to 
provide a ViewSuite product to large numbers of subscribers for a fixed 
rate based upon a multiple of the incremental cost of the ViewSuite 
product and the size of that distributor's reported subscriber base.
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    \7\ Securities Exchange Act Release No. 46843 (November 18, 
2002), 67 FR 70471 (November 22, 2002)(SR-NASD-2002-33).
    \8\ Securities Exchange Act Release No. 47477 (March 10, 2003), 
68 FR 13747 (March 20, 2003)(SR-NASD-2003-27).
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    To support broad dissemination of the data and understanding by its 
customers, Nasdaq subsequently simplified and reduced the pricing for 
ViewSuite on a pilot basis.\9\ For the one-year pilot, Nasdaq offered 
subscribers a

[[Page 62731]]

single ViewSuite entitlement, described in Rule 7010(q)(5), offering 
professional, non-professional and distributor fees. Finally, Nasdaq 
later eliminated one data feed that had been contained in the ViewSuite 
entitlement, renamed another and expanded the data contained in the 
renamed feed to cover all price levels associated with an individual 
issue traded on Nasdaq.\10\ As a result, the current pilot provides 
purchasers and distributors with all quotes and orders of individual 
participants displayed within the Nasdaq market center, as well as the 
aggregate size of such orders at all price levels within the execution 
functionality of the Nasdaq market center.
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    \9\ Securities Exchange Act Release No. 48581 (October 1, 2003), 
68 FR 57945 (October 7, 2003)(SR-NASD-2003-111).
    \10\ Securities Exchange Act Release No. 49088 (January 16, 
2004), 69 FR 3413 (January 23, 2004)(SR-NASD-2003-162).
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    Nasdaq has determined that the structure and pricing of the 
ViewSuite entitlement as currently set forth in Rule 7010(q) offer many 
benefits to investors and market data vendors and should be continued. 
To accomplish that outcome in its rule manual, Nasdaq will delete 
subsections (1) through (4) of paragraph (q). Subsection (5) will be 
retained and renumbered as subsection (1) containing the current 
pricing for professional and non-professional subscribers, as well as 
pricing for distributors of aggregated and detailed information 
(currently at (q)(1)(C) and (q)(2)(A)) and a 30-day free-trial period 
(currently at (q)(2)(C)). Subparagraphs (6) and (7) will be renumbered 
as subparagraphs (2) and (3) and extraneous definitions will be 
eliminated.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 15A of the Act,\11\ in general, and with 
section 15A(b)(5) of the Act,\12\ 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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    \11\ 15 U.S.C. 78o-3.
    \12\ 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 \13\ and 
Rule 19b-4(f)(6) thereunder.\14\ 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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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
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    Nasdaq has asked that the Commission waive the 30-day operative 
delay contained in Rule 19b-4(f)(6)(iii) under the Act.\15\ The 
Commission believes such waiver is consistent with the protection of 
investors and the public interest, for it will allow for a seamless 
transition from pilot to permanent status for Nasdaq's TotalView 
product. For these reasons, the Commission designates the proposal to 
be effective and operative upon filing with the Commission.\16\
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    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ 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-2004-146 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-2004-146. 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 Number 
SR-NASD-2004-146 and should be submitted on or before November 17, 
2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E4-2867 Filed 10-26-04; 8:45 am]
BILLING CODE 8010-01-P