[Federal Register Volume 70, Number 247 (Tuesday, December 27, 2005)]
[Notices]
[Pages 76482-76483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-7860]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52978; File No. SR-NASD-2005-141]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 Thereto To Modify the Execution Fees 
for Quotes and Orders Executed in the Nasdaq Opening Cross

December 19, 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 December 5, 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. On December 9, 
2005, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\ 
Nasdaq has designated this proposal as establishing or changing a due, 
fee, or other charge imposed by a self-regulatory organization pursuant 
to Section 19(b)(3)(A) of the Act,\4\ and Rule 19b-4(f)(2) 
thereunder,\5\ which renders the proposal effective upon filing with 
the Commission. 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\ In Amendment No. 1, Nasdaq made non-substantive changes to 
the text of the proposed rule change.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 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 modify the execution fees for quotes and orders 
in the Nasdaq Opening Cross. Nasdaq will implement the proposed rule 
change on January 3, 2006. Additions are italicized, and deletions are 
in brackets.
* * * * *

7010. System Services

    (a)-(h) No change
    (i) Nasdaq Market Center and Brut Facility Order Execution
    (1)-(3) No change.
    (4) Opening Cross

[For a period of three months commencing on the date Nasdaq implements 
its Opening Cross (as described in Rule 4704(d)), members shall not be 
charged Nasdaq Market Center execution fees, or receive Nasdaq Market 
Center liquidity provider credits, for those quotes and orders executed 
in the Nasdaq Opening Cross.]

    Commencing on January 1, 2006, members shall be assessed the 
following Nasdaq Market Center execution fees for quotes and orders 
executed in the Nasdaq Opening Cross:
    Market-on-Open, Limit-on-Open and Day orders executed in the Nasdaq 
Opening Cross--$0.0005 per share executed for the net number of buy and 
sell shares up to a maximum of $10,000 per firm per month
    All other quotes and orders executed in the Nasdaq Opening Cross--
No charge for execution
    (5) and (6) No change.
    (j)-(w) 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, 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 has determined to establish the following pricing for the 
Nasdaq Opening Cross beginning January 3, 2006. Nasdaq will assess a 
fee of $0.0005 per share executed during the Nasdaq Opening Cross for 
all Market-on-Open, Limit-on-Open, and Day orders that are executed in 
the Opening Cross. That fee will be assessed on the difference between 
the total number of shares of buy (sell) interest minus the total 
number of shares of sell (buy) interest executed by that firm for all 
stocks.
    The fee will be capped at $10,000 per firm per month for all stocks 
combined. At this time, Nasdaq will assess no fees and offer no rebates 
for quotations and other orders executed during the Nasdaq Opening 
Cross. Nasdaq will monitor the effectiveness of the proposed pricing 
schedule in preserving and enhancing the success of the Nasdaq Opening 
Cross to date.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
Section 15A of the Act,\6\ in general, and Section 15A(b)(5) \7\ 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.
    The proposed fees for Market-on-Open, Limit-on-Open, and Day orders 
are consistent with the statute in that they are designed to result in 
an execution charge approximating the execution charge for quotes and 
orders entered and executed in the Nasdaq Market Center throughout the 
trading day. Assessing no fee and offering no rebate for quotations and 
other orders executed during the Nasdaq Opening Cross is consistent 
with the statute because it is designed to encourage the entry of 
Imbalance Only orders to minimize imbalances resulting from the Opening 
Cross algorithm, and to preserve the Opening Cross liquidity provided 
by quotations and orders from the continuous market.

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

    Nasdaq does not believe that the proposed rule change will impose 
any

[[Page 76483]]

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

    Nasdaq has neither solicited nor received comments on the proposed 
rule change.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder.\9\ 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.\10\ Nasdaq will 
implement the proposed rule change on January 3, 2006.
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    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(5).
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ The effective date of the original proposed rule change is 
December 5, 2005, and the effective date of Amendment No. 1 is 
December 9, 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 December 9, 2005, the 
date on which Nasdaq submitted Amendment No. 1. 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 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-2005-141 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-2005-141. 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 available for inspection and copying at the 
principal offices 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-2005-141 and should be submitted on or before 
January 17, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7860 Filed 12-23-05; 8:45 am]
BILLING CODE 8010-01-P