[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Notices]
[Pages 43485-43487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3979]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52089; File No. SR-NASD-2005-071]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment Nos. 1 and 2 Thereto To Modify Pricing for 
NASD Members Using the Nasdaq Market Center and Nasdaq's Brut Facility

July 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 June 1, 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 this proposal pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ 
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. Nasdaq has designated this 
proposal as one establishing or changing a due, fee, or other charge 
imposed by the self-regulatory organization. On June 9, 2005, Nasdaq 
filed an amendment to the proposed rule change.\5\ On July 8, 2005, 
Nasdaq filed a second amendment to the proposed rule change.\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\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
    \5\ See Partial Amendment dated June 9, 2005 (``Amendment No. 
1). Amendment No. 1 made minor, technical corrections to the 
discussion section on page 4 of the original filing.
    \6\ See Partial Amendment dated July 8, 2005 (``Amendment No. 
2''). Amendment No. 2 made minor changes to the rule text quoted on 
pages 6 and 15 of the original filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify the pricing for NASD members using the 
Nasdaq Market Center and Nasdaq's Brut Facility. The proposal modifies 
the fee schedule applicable to orders in Nasdaq-listed stocks and 
exchange-traded funds listed on the American Stock Exchange that are 
entered into the

[[Page 43486]]

Nasdaq Market Center or Nasdaq's Brut Facility and routed to another 
market center for execution. The text of the proposed rule change is 
available on Nasdaq's Web site (http://www.nasdaq.com), at Nasdaq'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
    The purpose of this proposed rule change is to modify the fee 
schedule applicable to orders in Nasdaq-listed stocks and exchange-
traded funds listed on the American Stock Exchange that are entered 
into the Nasdaq Market Center or Nasdaq's Brut Facility and routed to 
another market center for execution. Routing charges are tiered, based 
upon the volume of shares on the Nasdaq Market Center and Brut books 
that are accessed during a month and the volumes of shares routed, and 
the volume of liquidity provided.
    The routing charges are currently as follows: (i) If a market 
participant provides a daily average of 2,000,000 or fewer shares of 
liquidity during a month, its routing charge is $0.003 per share 
executed; (ii) if a market participant provides a daily average of more 
than 2,000,000 but fewer than 10,000,001 shares of liquidity during a 
month, its routing charge is $0.0028 per share executed; (iii) if a 
market participant provides a daily average of more than 10,000,000 but 
fewer than 20,000,001 shares of liquidity during a month, or provides a 
daily average of more than 20,000,000 shares of liquidity during a 
month but accesses and/or routes a daily average of 50,000,000 or fewer 
shares during the month, its routing charge is $0.0027 per share 
routed; and (iv) if a market participant provides a daily average of 
more than 20,000,000 shares of liquidity during a month and accesses 
and/or routes a daily average of more than 50,000,000 shares during the 
month, its routing charge will be $0.0025 per share executed. In 
anticipation of the expected lower trading volumes at all market 
centers during the summer months, and in order to ensure that Nasdaq's 
pricing structure remains competitive, Nasdaq is lowering the 
50,000,000 share threshold for the $0.0027 and $0.0025 pricing tiers to 
40,000,000 shares. Thus, the most favorable routing fee would be 
available to any market participant that provides a daily average of 
more than 20,000,000 shares of liquidity during a month and access and/
or routes a daily average of more than 40,000,000 shares during a 
month.
2. Statutory Basis
    Nasdaq believes that its proposed rule change is consistent with 
Section 15A of the Act,\7\ in general, and furthers the objectives of 
Section 15A(b)(5) of the Act,\8\ in particular, in that it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members. According to Nasdaq, the proposed rule change in 
routing fees is a response to anticipated lower trading volumes during 
the summer months and will ensure that the Nasdaq's fee schedule 
continues to provide for an equitable allocation of fees consistent 
with the fee schedule applicable in the past.
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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 on the proposed rule change were neither solicited 
nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change has become immediately effective 
pursuant to Section 19(b)(3)(A)(ii) of the Act \9\ and subparagraph 
(f)(2) of Rule 19b-4 thereunder,\10\ in that it establishes or changes 
a due, fee or other charge imposed by the self-regulatory organization. 
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\ The effective date of the original proposed rule change is 
June 1, 2005. The effective date of Amendment No. 1 is June 9, 2005. 
The effective date of Amendment No. 2 is July 8, 2005. For purposes 
of calculating the 60-day period within which the Commission may 
summarily abrogate the proposed rule change, as amended, under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on July 8, 2005, the date on which Nasdaq submitted 
Amendment No. 2. See 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, as amended, 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-2005-071 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NASD-2005-071. 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 the 
filing also will be

[[Page 43487]]

available for inspection and copying at Nasdaq's Office of the 
Secretary. 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-2005-071 and should be submitted on or before August 17, 2005.

    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).

Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3979 Filed 7-26-05; 8:45 am]
BILLING CODE 8010-01-P