12648 Federal Register / Vol. 72, No. 51 / Friday, March 16, 2007 / Notices 

10Securities Exchange Act Release No. 43863 

(January 19, 2001), 66 FR 8020 (January 26, 2001) 

(SR–NASD–99–53). 

11Securities Exchange Act Release No. 54155 

(July 14, 2006), 71 FR 41291, 41298 (July 20, 2006) 

(SR–NASDAQ–2006–001). 

12 Id. 

13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

data. Nasdaq believes that this proposed 

rule change will encourage the broader 

redistribution of the Nasdaq depth of 

book information, thus improving 

transparency and thereby benefiting the 

investing public. 

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, as amended. 

As a general matter, the Commission has 

long held the view that ‘‘competition 

and innovation are essential to the 

health of the securities markets. Indeed, 

competition is one of the hallmarks of 

the national market system.’’ 10 The 

Commission has also stated ‘‘that the 

notion of competition is inextricably 

tied with the notion of economic 

efficiency, and the Act seeks to 

encourage market behavior that 

promotes such efficiency, lower costs, 

and better service in the interest of 

investors and the general public. 11

The Commission goes on to state its 

belief ‘‘that the appropriate analysis to 

determine a proposal’s competitive 

impact is to weigh the proposal’s overall 

benefits and costs to competition based 

on the particular facts involved, such as 

examining whether the proposal would 

promote economically efficient 

execution of securities and fair 

competition between and among 

exchange markets and other market 

centers, as well as fair competition 

between the participants of a particular 

market.12

The proposed rule change is designed 

to increase transparency and the 

efficiency of executions by enabling 

vendors to provide additional market 

data in a cost efficient manner. There is 

significant competition for the provision 

of market data to broker-dealers and 

other market data consumers, as well as 

competition for the orders that generate 

the data. Nasdaq fully expects its 

competitors to quickly respond to this 

proposal as they have responded to 

other Nasdaq data products in the past. 

Moreover, market forces have shaped 

the market data fees that Nasdaq has 

charged for this product in the past and 

will continue to shape those fees in the 

future. As noted above, the Commission 

originally approved a fee of $150 for 

TotalView. Nasdaq lowered that fee to 

$70 and $14 in response to the lack of 

demand by vendors and users. Vendors 

simply will only utilize the service 

unless and until they conclude that it is 

economically beneficial to them and to 

their users. 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

A. By order approve such proposed 

rule change, or 

B. Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rulecomments@sec.gov. Please include File 

No. SR–NASDAQ–2006–049 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2006–049. 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 Nasdaq. 

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–NASDAQ–2006–049 and 

should be submitted on or before April 

6, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4811 Filed 3–15–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55444; File No. SR–

NASDAQ–2007–006] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Establish Daily Share Volume Service 

and Fees for the Service 

March 12, 2007. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

7, 2007, The NASDAQ Stock Market 

LLC (‘‘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. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to establish fees to 

make Nasdaq Daily Share Volume 


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Federal Register / Vol. 72, No. 51 / Friday, March 16, 2007 / Notices 12649 

3Changes are marked to the rule text that appears 

in the electronic NASDAQ Manual found at 

http://www.nasdaqtrader.com. 

4 15 U.S.C. 78f. 

5 15 U.S.C. 78f(b)(4). 

information available via a Web-based 

data product that will provide daily 

traded share volume by issue for 

participating market participants on a 

T+1 basis. The text of the proposed rule 

change is available at Nasdaq, http:// 

www.nasdaq.com, and the 

Commission’s Public Reference Room.3

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. 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 proposes to establish the 

Nasdaq Daily Share Volume Service 

(‘‘Service’’) and to establish fees for the 

Service, to make information available 

via a Web-based data product that will 

provide daily traded share volume by 

issue for participating market 

participants on a T+1 basis. Currently, 

Nasdaq provides a share volume 

product on a monthly basis called the 

NASDAQ Monthly Market Maker Share 

Volume Report. Nasdaq has received 

numerous requests for a comparable 

daily product based on trades executed 

by, or reported to, Nasdaq systems. 

Vendors and other exchanges also 

currently make daily broker volume 

reports available. Specifically, the New 

York Stock Exchange (‘‘NYSE’’) 

provides a daily NYSE Broker Volume 

Report based on trades reported to the 

NYSE. Access to the NYSE reports via 

the web costs $300/month. Access to the 

full dataset via FTP costs $3,000/month. 

In response to this demand, Nasdaq 

proposes to establish the Service. The 

Service will provide subscribers with 

the ability to view volume reports on a 

T+1 basis. One level of service (‘‘web 

subscribers’’) will enable users to access 

the product through a web service that 

will allow a single subscriber to 

construct a variety of custom queries 

and view and print the results. Another 

level of service (‘‘FTP subscribers’’) will 

have FTP access to the full underlying 

data set to create custom reports and 

enable redistribution, but a distributor 

agreement will also be required. 

The volume data will include trades 

from the Nasdaq Execution System and 

internalized prints from the Nasdaq/ 

NASD Trade Report Facility. Nasdaq 

proposes to charge: 

• Web subscribers $240/month for 

individual access to view and print the 

reports; or 

• FTP subscribers $2,500/month for 

FTP access to the underlying data for 

redistribution. 

These prices fairly reflect the value of 

this data. The Service is responsive to 

the requests of market participants 

seeking an alternative to the NYSE 

product and other commercial products. 

However, Nasdaq believes that the 

Service is aggressively priced and that 

the prices of the Service are designed to 

respond to customer demand, while 

recognizing the challenge of establishing 

a new product in the marketplace. 

Nasdaq will provide eligible market 

participants with the opportunity to 

choose whether to advertise their trade 

volume by market participant ID code 

and issue. Participation by eligible 

market participants will be completely 

voluntary. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,4 in 

general, and with Section 6(b)(4) of the 

Act,5 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 

Nasdaq operates or controls, and it does 

not unfairly discriminate between 

customers, issuers, brokers or dealers. 

Use of the Service is voluntary and the 

subscription fees will be imposed on all 

purchasers equally based on the level of 

service selected. The proposed fees will 

cover the costs associated with 

establishing the Service, responding to 

customer requests, configuring Nasdaq’s 

systems, programming to user 

specifications, and administering the 

Service, among other things. 

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, 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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

A. By order approve such proposed 

rule change, or 

B. Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 rulecomments@sec.gov. Please include File 

No. SR–NASDAQ–2007–006 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2007–006. 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 


sroberts on PROD1PC70 with NOTICES
12650 Federal Register / Vol. 72, No. 51 / Friday, March 16, 2007 / Notices 

617 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The term ‘‘individual investor’’ is defined to 

parallel the concept of ‘‘natural person’’ contained 

in Section 11(a)(1)(E) of the Act, 15 U.S.C. 

78k(a)(1)(E), including the interpretations made by 

the Commission pursuant to that section. 

4CMS is the central communications hub 

between member organizations and the NYSE. CMS 

receives, validates, and passes orders and 

administrative inquiries from member organizations 

to other NYSE systems, including SuperDOT. In 

addition, CMS sends execution reports, responses 

to administrative inquiries, and status messages 

back to member organizations. 

5The Hybrid Market initiative was proposed in 

SR–NYSE–2004–05 and Amendments No. 1, 2, 3, 5, 

6, 7, and 8 thereto, approved on March 22, 2006. 

See Securities Exchange Act Release No. 53539 

(March 22, 2006), 71 FR 16353 (March 31, 2006). 

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 Nasdaq. 

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–NASDAQ–2007–006 and 

should be submitted on or before April 

6, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4814 Filed 3–15–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55439; File No. SR–NYSE–

2007–16] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Eliminate 

the Individual Investor Express 

Delivery Service 

March 9, 2007. 

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 February 

14, 2007, the New York Stock Exchange 

LLC (‘‘Exchange’’ or ‘‘NYSE’’) 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 substantially prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comment on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is proposing to amend 

Exchange Rule 123B, ‘‘Exchange 

Automated Order Routing Systems,’’ by 

eliminating the functionality of the 

Individual Investor Express Delivery 

Service (‘‘IIEDS’’). The text of the 

proposed rule change is available on the 

Exchange’s Web site (http:// 

www.nyse.com), at the Exchange’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, the 

NYSE included statements concerning 

the purpose of and basis for the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

NYSE 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 

IIEDS is an order processing service 

that, in certain situations, provides 

priority delivery to the specialist’s post 

through SuperDOT for simple roundlot market orders and market GTC 

(‘‘good ’til canceled’’) orders that are for 

an amount up to 2,099 shares and are 

for the account of an individual 

investor 3 as identified by the member 

organization or its customer, if enabled 

by the member organization, entering 

the order. Market orders to buy minus, 

sell plus, sell short, buy or sell stop, as 

well as limit orders are not eligible for 

IIEDS. In addition, a limit order that is 

cancelled and replaced with a market 

order when entered as a single cancel/ 

replacement order is not eligible for 

IIEDS. IIEDS was adopted in the wake 

of the 1987 market correction to enable 

retail-sized orders to avoid being 

negatively impacted by a sudden and 

significant influx of non-retail orders 

such as what generally happens when 

automated program trading benchmarks 

are reached. 

IIEDS provides eligible orders with 

priority systematized delivery, ahead of 

other orders, to the specialist’s post only 

when a queue of orders, which is caused 

by extraordinarily high levels of 

message traffic, exists in the Common 

Message Switch (‘‘CMS’’).4 Where no 

queue exists in CMS, IIEDS-eligible 

orders received by the Exchange are 

routed to the specialist’s post through 

SuperDOT, along with all other orders 

received by CMS, in the normal 

sequence in which they are received. 

Once an IIEDS order reaches the 

specialist’s post, whether it received 

priority delivery or not in arriving there, 

all normal Exchange market procedures, 

including rules related to priority and 

parity, are applied in executing the 

order. 

The NYSE is proposing to eliminate 

the functionality of IIEDS because it is 

no longer necessary due to systems 

capacity upgrades made to CMS that the 

Exchange has implemented over time. 

In addition, IIEDS is infrequently used, 

and orders eligible for the service 

represent a very small percentage of 

order flow received on the Exchange. 

Finally, the service is no longer needed 

in light of the increased speed and 

efficiency of order executions that will 

occur as a result of the NYSE HYBRID 

MARKETSM initiative.5

Due to capacity increases made to 

CMS on an annual basis over the years, 

the Exchange rarely experiences order 

queues, a condition precedent for an 

IIEDS order to be sent to the specialist’s 

post ahead of another order. 

Historically, the Exchange has 

maintained ‘‘message per second’’

system capacity for CMS equaling 

approximately two times the highest 

Floor-wide five-minute average message 

per second rate experienced during the 

year. Thus, for example, during 2005, 

the Exchange experienced a peak fiveminute average message per second rate 

of 6,043, while the actual CMS system 

capacity for year end 2005 was 

increased to handle approximately 

13,000 messages per second. Year-toyear evaluation of actual message per 

second rate coupled with attendant 

proportional increases in CMS capacity 

has enabled the Exchange to experience 

a statistically insignificant number of 

order queues, thereby obviating the 

need for IIEDS. 

The Exchange is also proposing to 

eliminate IIEDS because the service is 

seldom used by its customers; less than 

two-tenths of 1% (approximately .18%) 

of order flow received by the Exchange 

is eligible for IIEDS processing. The 

average number of IIEDS-eligible orders 

is approximately 64,000 orders per day, 

out of approximately 35.36 million 


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