[Federal Register Volume 69, Number 216 (Tuesday, November 9, 2004)]
[Notices]
[Pages 65005-65006]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3079]



[[Page 65005]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50627; File No. SR-NASD-2004-163]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to Extension of Pilot for Bond Trade 
Dissemination Service (``BTDS'') Professional Delayed-Time Data Display 
Fee

November 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 October 27, 2004, the National Association of Securities Dealers, 
Inc. (``NASD''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by NASD. The NASD 
has filed the proposal as a ``non-controversial'' rule change pursuant 
to Section 19(b)(3)(A)(iii) 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The NASD asked the Commission to waive the 30-day operative 
delay. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD is proposing to amend Rule 7010(k)(3)(A)(ii) to extend the 
pilot program for the Bond Trade Dissemination Service (``BTDS'') 
Professional Delayed-Time Data Display Fee for the Trade Reporting and 
Compliance Engine (``TRACE''), prior to its expiration on October 31, 
2004, for nine months through July 31, 2005. Below is the text of the 
proposed rule change. Proposed new language is in italics; proposed 
deletions are in brackets.
* * * * *

7010. System Services

    (a) through (j) No change.
    (k) Trade Reporting and Compliance Engine
    The following charges shall be paid by participants for the use of 
the Trade Reporting and Compliance Engine (``TRACE''):

------------------------------------------------------------------------
                                      Transaction
           System fees              reporting fees     Market data fees
------------------------------------------------------------------------
Level I Trade Report Only Web     Trades up to and    BTDS Professional
 Browser Access--$20/month per     including           Delayed-Time Data
 user ID.                          $200,000 par        Display--$15/
Level II Full Service Web          value--$0.475/      month per
 Browser Access--$80/month per     trade; Trades       terminal.
 user ID.                          between $201,000   BTDS Internal
                                   and $999,999 par    Usage
                                   value--$0.002375    Authorization--$5
                                   times the number    00/month per
                                   of bonds traded/    application/
                                   trade; Trades of    service for Real-
                                   $1,000,000 par      Time and Delayed-
                                   value or more--     Time Data.
                                   $2.375/tradeBTDS   BTDS External
                                   Professional Real-  Usage
                                   Time Data           Authorization--$1
                                   Display--$60/       ,000/month per
                                   month per           application/
                                   terminal, exempt.   service for Real-
                                                       Time and Delayed-
                                                       Time Data.
CTCI/Third Party--$25/month/per   Cancel/Correct--    BTDS Non-
 firm.                             $1.50/trade.        Professional Real-
                                  ``As of'' Trade      Time Data
                                   Late--$3/trade.     Display--$1/month
                                                       per terminal.
------------------------------------------------------------------------

    (1) through (2) No change.
    (3) Market Data Fees
    Professionals and non-professionals may subscribe to receive Real-
Time and Delayed-Time TRACE data disseminated by NASD in one or more of 
the following ways for the charges specified. Members, vendors and 
other redistributors shall be required to execute appropriate 
agreements with NASD.
    (A) Professional Fees.
    Professionals may subscribe for the following:
    (i) No change.
    (ii) For a pilot period commencing February 1, 2004, and lasting 
[until October 31, 2004,] through July 31, 2005, BTDS Professional 
Delayed-Time Data Display Fee of $15 per month, per terminal charge for 
each interrogation or display device receiving Delayed-Time TRACE 
transaction data; provided, that subscribers to the BTDS Professional 
Real-Time Data Display Fee described above shall not be charged this 
additional fee. Subject to the execution of appropriate agreements with 
NASD, certain summary market information of Delayed-Time TRACE 
transaction data may be published or distributed by newspapers, press 
associations, newsletters, or similar media sources without charge.
    (iii) through (iv) No change.
    (B) through (D) No change.
    (l) through (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, NASD 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. NASD 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
    Currently, NASD charges a BTDS Professional Delayed-Time Data 
Display Fee of $15.00 per month, per terminal, for each interrogation 
or display device receiving Delayed-Time TRACE transaction data under 
Rule 7010(k)(3)(A)(ii). The fee was established for a pilot period, 
which will expire on October 31, 2004. NASD is proposing to extend the 
pilot program and the $15.00 fee for the BTDS Professional Delayed-Time 
Data Display through July 31, 2005. NASD is not proposing to revise the 
fee during the extended pilot period.
    NASD is proposing to extend the pilot program because it intends to 
undertake a comprehensive review of TRACE fees and wants to evaluate 
the BTDS Professional Delayed-Time Data Display Fee as part of this 
review.
    As discussed below, NASD is filing the proposed rule change for 
immediate

[[Page 65006]]

effectiveness, with an implementation date of October 29, 2004.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(5) of the Act,\6\ which requires, among 
other things, that NASD rules provide for the equitable allocation of 
reasonable dues, fees and other charges among members and issuers and 
other persons using any facility or system that NASD operates or 
controls. NASD is proposing to extend the pilot program for the BTDS 
Professional Delayed-Time Data Display Fee through July 31, 2005, 
because NASD intends to undertake a comprehensive review of TRACE fees 
and wants to evaluate the BTDS Professional Delayed-Time Data Display 
Fee as part of this review.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD 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 proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days (or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest) from the date on which it was filed, the proposed rule change 
has become effective pursuant to Section 19(b)(3)(A) of the Act \7\ and 
Rule 19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. NASD has asked the Commission to 
waive the 30-day operative delay. The Commission hereby grants this 
request. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because the nine-month extension of the pilot program for the 
BTDS Professional Delayed-Time Data Display Fee allows professional 
market participants to continue to access TRACE data at a discounted 
rate during a transitional period during which more TRACE data will 
become available.\9\ NASD has also requested that the Commission waive 
the pre-filing notice requirement of at least five business days (or 
such shorter time as designated by the Commission).\10\ The Commission 
hereby grants NASD's request to waive the pre-filing requirement.
---------------------------------------------------------------------------

    \9\ 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).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    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.\11\
---------------------------------------------------------------------------

    \11\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-2004-163 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-2004-163. 
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 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-2004-163 and should be submitted on or before November 30, 
2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E4-3079 Filed 11-8-04; 8:45 am]
BILLING CODE 8010-01-P