[Federal Register Volume 65, Number 84 (Monday, May 1, 2000)]
[Notices]
[Pages 25411-25413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-10726]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42715; File No. SR-NASD-00-19]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the National 
Association of Securities Dealers, Inc. Relating to Level I Market Data 
Fees

April 24, 2000.
    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 April 13, 2000, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association''), through its wholly-owned subsidiary, 
Nasdaq Stock Market, Inc. (``Nasdaq''), filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') the proposed rule 
change as described in Items I and II below, which Items have been

[[Page 25412]]

prepared by Nasdaq. On April 18, 2000, Nasdaq submitted Amendment No. 1 
to the proposed rule change.\3\ The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons. For the reasons discussed below, the Commission is granting 
accelerated approval of the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from Jeffrey S. Davis, Assistant General Counsel, 
Nasdaq, to Katherine A. England, Assistant Director, Division of 
Market Regulation, Commission, dated April 18, 2000 (``Amendment No. 
1''). Amendment No. 1 clarifies that the pilot program will end on 
March 30, 2001.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq filed a proposed rule change to amend NASD Rule 7010. Under 
the proposal, Nasdaq will establish a one-year pilot program, 
commencing with the April 3, 2000 billing period, to reduce by 50% the 
users fees for Level 1 market data delivered to non-professional users 
on a monthly basis, and to maintain the already-reduced fees for Level 
1 market data delivered to non-professional users on a per query basis.

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 III 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 states that it has consistently supported the broadest, most 
effective dissemination of market information to public investors. 
Towards that end, in April of 1999, Nasdaq implemented a one-year pilot 
program that reduced by 50% the users fees for Level 1 market data 
delivered to non-professional users on a monthly basis (from $4 to $2), 
and also for Level 1 market data delivered to non-professional users on 
a per query basis (from $.01 to $.005).\4\ In support of that pilot 
program, Nasdaq cited increased usage of Level 1 market data, and the 
expectation that reduced fees would trigger a further expansion of 
usage \5\ Nasdaq has determined that the fee reduction has, in fact, 
led to increased usage of Level 1 market data.
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    \4\ See Exchange Act Release No. 41499 (June 9, 1999), 64 FR 
32910 (June 19, 1999).
    \5\ Id.
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    To reaffirm its commitment to the broad dissemination of this data, 
Nasdaq is proposing a new one-year pilot program to reduce by 50% the 
users fees for Level 1 market data delivered to non-professional users 
on a monthly basis, and to maintain the current fees for Level 1 market 
data delivered to non-professional users on a per query basis. Under 
the proposed pilot, the non-professional per user fee would be reduced 
from $2 to $1 per month (equating to a 75% reduction in fees in two 
years), and the per query fee would be maintained at $.005 per query. 
The non-professional user fees will be automatically billed to users at 
the reduced rate.
    Nasdaq believes that reducing these market data fees reaffirms its 
commitment to individual investors, and responds to the dramatic 
increase in the demand for real-time market data by non-professional 
market participants. In addition, Nasdaq believes that reduced Nasdaq 
rates will lessen the costs the NASD member firms of supplying real-
time market data to their customers through automated means, and may 
encourage current delayed-data vendors to offer increased access to 
real-time Level 1 data to their subscribers.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(5) \6\ of the Act in that the proposal 
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 association operates or controls.
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    \6\ 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.

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 written comments on the 
proposed rule change.

III. 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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-
0609. 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 will also be 
available for inspection and copying at the principal office of the 
NASD. All submissions should refer to File No. SR-NASD-00-19 and should 
be submitted by May 22, 2000.

IV. Commission's Findings and Order Granting Accelerated Approval 
of the Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act \7\ and the rules and regulations 
thereunder applicable to a national securities association. 
Specifically, the proposed rule change is consistent with Section 
15A(b)(5) \8\ in that the proposal should provide 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 
Association operates or controls.
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    \7\ In reviewing this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \8\ 15 U.S.C. 78o-3(b)(5).
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    Recent technological developments have allowed vendors to provide 
their customers with more efficient and cost effective methods of 
executing securities transactions. The Commission expects that by 
reducing market data access fees, the investor will further benefit by 
a reduction in costs of executing these transactions. For the investor 
to make sound financial decisions, efficient and inexpensive access to 
market data information is vital. Thus, the Commission believes that 
reducing the market data fees should enhance investor access, and may 
encourage

[[Page 25413]]

increased investor participation in the securities.
    Pursuant to Section 19(b)(2),\9\ the Commission finds good cause 
for approving the proposed rule change, as amended, prior to the 
thirtieth day after the date of publication of notice of the filing in 
the Federal Register. The Commission believes that granting accelerated 
approval of the proposal will allow Nasdaq to expeditiously implement 
the pilot program to reduce market data fees without any unnecessary 
delay and should confer a benefit upon those firms that provide real-
time data to their customers and subscribers. The Commission also notes 
that it did not receive any comments on the previous pilot program. 
Accordingly, the Commission does not believe that the current filing 
raises any regulatory issues not raised by the previous filing.
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    \9\ 15 U.S.C. 78s(b)(2).
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    It is Therefore Ordered, pursuant to Section 19(b)(2) \10\ of the 
Act, that the proposed rule change, as amended, (SR-NASD-00-19) is 
approved on an accelerated basis, for the pilot period ending March 30, 
2001.
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    \10\ Id.

    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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-10726 Filed 4-28-00; 8:45 am]
BILLING CODE 8010-01-M