[Federal Register Volume 70, Number 79 (Tuesday, April 26, 2005)]
[Notices]
[Pages 21481-21482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1970]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51583; File No. SR-NASD-2005-042]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Establish Fees for Non-Members Using the New Nasdaq 
Workstation

April 20, 2005.
    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 March 30, 2005, 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 
filed the proposal as a ``non-controversial'' rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders the proposed rule change effective immediately upon 
filing. 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\ 17 CFR 240.19b-4(f)(6).
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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 fees for non-members using the new 
Nasdaq Workstation. Nasdaq will begin making the Nasdaq Workstation 
available to users on or about May 2, 2005.
    The text of the proposed rule change is available on the NASD's Web 
site (http://www.nasd.com), at the NASD's Office of the Secretary, and 
at the Commission's Public Reference Room.

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
    As announced in recent Nasdaq Head Trader alerts,\5\ Nasdaq is 
replacing its current front-end workstation, the Nasdaq Workstation 
II[supreg] (the ``NWII''), with a new front-end offering. 
The new Nasdaq WorkstationSM will be available through a 
dedicated high-bandwidth circuit or an internet broadband connection, 
but in contrast to the NWII, the new Nasdaq Workstation will not 
require use of a service delivery platform (``SDP''), a hardware unit 
located at the subscriber's premises. Nasdaq believes the elimination 
of SDPs would result in substantial cost savings to users of the new 
Nasdaq Workstation in comparison with the NWII. The main version of the 
Nasdaq Workstation will be referred to as ``Nasdaq Workstation 
Trader,'' and can be used by members for order and quotation entry, 
trade reporting, and outbound order routing.\6\
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    \5\ See Nasdaq Head Trader Alert 2005-019 (March 1, 2005) and 
Nasdaq Head Trader Alert 2005-009 (January 25, 2005) (http://www.nasdaqtrader.com/dynamic/ newsindex/headtraderalerts--2005.stm) 
and Nasdaq Head Trader Alert 2004-105 (July 30, 2004).
    \6\ Nasdaq's current Weblink ACT product, which is used for 
trade reporting, is being renamed ``Nasdaq Workstation Post Trade.''
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    In SR-NASD-2005-041,\7\ which is being filed on an immediately 
effective basis, Nasdaq has proposed applying the fee schedule 
described below to members using the new Workstation. In this filing, 
Nasdaq is proposing applying the same fee schedule to non-members that 
subscribe to this service. The non-members that currently subscribe to 
the NWII are service bureaus that use the NWII to monitor information 
supplied over NWII terminals for purposes of comparison with data 
supplied through their own services. Non-members are not permitted to 
use the NWII, and will

[[Page 21482]]

not be permitted to use the new Nasdaq Workstation, for purposes of 
entering quotes or orders.\8\
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    \7\ Securities Exchange Act Release No. 51581 (April 20, 2005).
    \8\ In limited circumstances, non-members may report trades to 
Nasdaq. See NASD Rule 6120.
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    The new Nasdaq Workstation will include all of the same 
functionality as the NWII, however, with the exception of a little-used 
market statistic query function. Accordingly, member firms may continue 
to use the Workstation either as their primary trading medium or as a 
supplemental backup system. Nasdaq expects to discontinue support of 
the NWII by the end of October 2005. Firms that currently use the NWII 
will need to transition to the new Workstation or another front-end 
solution by that time. Nasdaq will contact all NWII customers to assist 
them in their transition. Customers will be provided with materials and 
training support for the transition.
    The fee for the new Nasdaq Workstation will be $435 per user per 
month, plus charges for any market data services received through the 
Workstation. The fee for the NWII is $525 per logon \9\ per month for 
the first 150 logons, but the NWII includes an entitlement to Total 
View data and UQDF/UTDF data, which otherwise cost $70 per user per 
month and $20 per user per month respectively. Thus, the fee for the 
new Workstation plus Total View data and UQDF/UTDF data is identical to 
the fee for Nasdaq's current NWII offering.
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    \9\ The term ``logon'' refers to an individual right of access, 
and therefore is equivalent to the term ``user'' in the new rule.
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    To ease the transition from NWII to the new Workstation, Nasdaq 
will allow current NWII users to use any form of the new Nasdaq 
Workstation without charge for a 60-day period commencing on the firm's 
scheduled first date of use of the new service, provided that users 
continue to pay charges for existing NWII service during that period.
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 Section 
15A(b)(5) \11\ of the Act, 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 the NASD operates or controls. Nasdaq also believes that the 
proposed rule change would result in non-members that receive the new 
Nasdaq Workstation paying the same fees for the service as will be paid 
by NASD members. Such fees, when added to the fees for the TotalView 
and UQDF/UTDF data feeds, are identical to the current fees for the 
NWII. Because the new Workstation will allow the elimination of SDPs 
supporting the NWII, however, Nasdaq believes that the proposed rule 
change would result in substantial cost savings for subscribers that 
opt to receive the new Workstation service.
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    \10\ 15 U.S.C. 78o-3.
    \11\ 15 U.S.C. 78o-3(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 proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule 19b-4 
thereunder,\13\ because Nasdaq has designated the proposed rule change 
as one that: (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 
from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest. Nasdaq provided the Commission with written 
notice of its intent to file this proposed rule change at least five 
business days prior to the date of filing the proposed rule change. At 
any time within 60 days of the filing of such 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 purpose 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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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-2005-042 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-2005-042. 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-2005-042 and should be 
submitted on or before May 17, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(13).
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 Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1970 Filed 4-25-05; 8:45 am]
BILLING CODE 8010-01-P