13328 Federal Register / Vol. 72, No. 54 / Wednesday, March 21, 2007 / Notices 

6 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. 15 U.S.C. 78c(f). 

7 15 U.S.C. 78f(b)(5). 

8See Nasdaq Rule 4200(a)(15) and IM–4200—

‘‘Definition of Independence.’’ See also Notice, 

supra note 3, at note 8. 

9See Amendment No. 1. 

10 15 U.S.C. 78s(b)(2). 

11 Id. 

12 Id. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Amendment No. 2 replaced and superseded the 

original filing and Amendment No. 1 in their 

entirety. 

III. Discussion and Commission 

Findings 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to Nasdaq,6 and, in 

particular, with Section 6(b)(5) of the 

Act.7

The Commission believes that the 

proposed rule change is reasonable and 

would align Nasdaq’s ‘‘bright line’’ test 

with respect to a director’s receipt of 

compensation from the issuer more 

closely with the equivalent rule of the 

NYSE. The Commission notes that, 

under the proposed rule change, a 

Nasdaq listed issuer’s board would still 

have the responsibility to make an 

affirmative determination that an 

independent director has no 

relationship whatsoever with the issuer 

that would impair his or her 

independence, even when the director 

has passed the ‘‘bright line’’ test of the 

rule and has not accepted (and has no 

family member who has accepted) more 

than $100,000 in compensation from the 

issuer during the relevant period.8

IV. Solicitation of Comments 

Concerning the Proposed Rule Change 

Interested persons are invited to 

submit written data, views and 

arguments concerning the proposed rule 

change, 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 

Number SR–NASDAQ–2006–041 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2006–041. 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 the Exchange. 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–2006–041 and 

should be submitted on or before April 

11, 2007. 

V. Accelerated Approval of the 

Proposed Rule Change 

Nasdaq has requested that the 

Commission approve the proposed rule 

change as modified by Amendment No. 

1 on an accelerated basis.9 Pursuant to 

Section 19(b)(2) of the Act,10 the 

Commission may not approve any 

proposed rule change, or amendment 

thereto, prior to the 30th day after the 

date of publication of notice of the filing 

thereof, unless the Commission finds 

good cause for so doing and publishes 

its reasons for so finding. 

The Commission hereby finds good 

cause to approve the proposed rule 

change as amended by Amendment No. 

1 on an accelerated basis. The proposed 

rule change as published in the Notice 

would have raised the amount of 

compensation that precludes a director 

from being an ‘‘independent director’’

from $60,000 to $120,000. Amendment 

No. 1 established the compensation 

threshold at $100,000. The Commission 

believes that this change raises no new 

regulatory issues and aligns Nasdaq’s 

rule with the equivalent rule of the 

NYSE. The Commission believes that no 

reasonable purpose would be served by 

delaying implementation of the 

proposal. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,11 the Commission 

finds good cause to approve the 

proposed rule change as modified by 

Amendment No. 1 prior to the 30th day 

after notice in the Federal Register. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,12 that the 

proposed rule change (File No. SR–

NASDAQ–2006–041), as modified by 

Amendment No. 1, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5084 Filed 3–20–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55457; File No. SR–

NASDAQ–2006–064] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change and 

Amendments No. 1 and 2 Thereto To 

Modify the Fee for Connecting to a 

Nasdaq Data Center Over the Internet 

March 13, 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 December 

22, 2006, 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 

substantially prepared by Nasdaq. On 

January 19, 2007, Nasdaq submitted 

Amendment No. 1 to the proposed rule 

change. On February 22, 2007, Nasdaq 

submitted Amendment No. 2 to the 

proposed rule change.3 The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to amend Rule 7034 

to modify the fee for connecting to a 

Nasdaq data center over the Internet. 

The text of the proposed rule change is 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 54 / Wednesday, March 21, 2007 / Notices 13329 

4 15 U.S.C. 78f. 

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

available at Nasdaq, the Commission’s 

Public Reference Room, and http:// 

www.nasdaq.com. 

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 had 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 filing is to change 

the fee that Nasdaq charges for an 

Internet port used in the delivery of 

market data (Internet ports are currently 

available to connect to Nasdaq systems 

via the INET protocols) and to make 

certain conforming and clerical changes 

in the text of Nasdaq Rule 7034, which 

sets out charges for Nasdaq connectivity 

via the INET protocols. 

Following the recently completed 

consolidation of Nasdaq’s three order 

books and corresponding matching 

engines—INET, Brut, and 

SuperMontage—into a single book 

(‘‘SingleBook’’) within the Nasdaq 

Market Center (‘‘NMC’’), Nasdaq users 

have retained the ability to connect with 

the NMC using the legacy access 

protocols of all three systems. Access to 

the NMC via secure Internet 

connectivity is one of several options 

available to INET protocol users both for 

entering orders and for receiving market 

data. (The number of customers 

currently using an Internet port to 

receive market data is relatively small. 

Legacy SuperMontage and Brut 

protocols do not currently include 

Internet access.) Other NMC 

connectivity options include extranet 

connectivity, where a user contracts 

directly with a third-party extranet 

provider, and private line connectivity, 

where a user leases a circuit directly 

from a third-party provider. 

Today, Nasdaq charges INET protocol 

users an additional $200 (in addition to 

the established charges for port pairs) 

for each port used to connect to a 

Nasdaq data center over the Internet 

because making such ports available 

requires Nasdaq to procure and 

maintain appropriate 

telecommunications circuits connecting 

its data centers to the points-of-presence 

of an Internet service provider. By 

contrast, in the case of extranet and 

private circuit connections, Nasdaq is 

not responsible for the outside 

telecommunications circuits. 

Since the introduction of Nasdaq’s 

SingleBook, the volume of market data 

being delivered from Nasdaq to 

subscribers has increased from a peak of 

approximately 5Mbs at the end of 

October of 2006 to a peak of 

approximately 25Mbs as of the date of 

this filing. Consequently, in order to 

continue to adequately support Internet 

market data connections, Nasdaq 

expanded its available Internet 

bandwidth. In light of the expanded 

Internet bandwidth requirements, 

Nasdaq proposes to increase its Internet 

port fee from $200 to $600 per Internet 

port that is used to deliver market data. 

The additional Internet port fee with 

respect to Internet ports used for order 

entry will remain unchanged at the 

current $200 level. 

The proposed rule change also 

eliminates from the rule text references 

to the locations of data centers (because 

the relevant fees will not vary based on 

data center location) and it eliminates 

the reference to and pricing for Instinet 

Portal (a product now available from 

INET’s former owner, Instinet, which 

INET was supporting on a transitional 

basis). Finally, the proposed rule change 

makes a clerical correction to the 

currently incomplete reference to SR–

NASDAQ–2006–024 in the existing rule 

text. 

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 Sections 6(b)(4) of the 

Act,5 in particular, in that the proposal 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using any facility or 

system which Nasdaq operates or 

controls. 

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 

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 Nasdaq 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 

Number SR–NASDAQ–2006–064 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–2006–064. 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 


jlentini on PROD1PC65 with NOTICES
13330 Federal Register / Vol. 72, No. 54 / Wednesday, March 21, 2007 / Notices 

6 17 CFR 200.30–3(a)(12). 

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)(2). 

5See File No. SR–NYSE–2007–18 (February 22, 

2007). 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4). 

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 publicly available. All 

submissions should refer to File 

Number SR–NASDAQ–2006–064 and 

should be submitted on or before April 

11, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5088 Filed 3–20–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55461; File No. SR–

NASDAQ–2007–017] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Pricing for Nasdaq Members Using the 

Nasdaq Market Center 

March 13, 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 

28, 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 

substantially prepared by Nasdaq. 

Nasdaq has filed the proposal pursuant 

to Section 19(b)(3)(A) of the Act 3 and 

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. 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 modify the 

pricing for Nasdaq members using the 

Nasdaq Market Center. Nasdaq will 

implement this rule change on March 1, 

2007. The text of the proposed rule 

change is available at Nasdaq, the 

Commission’s Public Reference Room, 

and http://www.nasdaq.com. 

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 

This filing modifies the pricing 

schedule for trading securities through 

the Nasdaq Market Center. The changes 

reflect (i) The increase in volumes 

traded through the Nasdaq Market 

Center as a result of Nasdaq beginning 

to trade non-Nasdaq exchange-listed 

securities through the Nasdaq Market 

Center as of February 12, 2007, and (ii) 

responses to the competitive 

environment in which Nasdaq operates. 

Specifically, because much of the 

volume in non-Nasdaq securities that 

had formerly traded through the NASD 

ITS/CAES System has moved to the 

Nasdaq Market Center, the proposed 

rule change deletes language under 

which Nasdaq considered a member’s 

volume in ITS/CAES in determining its 

fees for using the Nasdaq Market Center. 

Similarly, Nasdaq is modifying its 

existing charge for reporting 

transactions executed through the 

Nasdaq Market Center to reflect the 

increase in the volume of the Nasdaq 

Market Center occasioned by its 

beginning to trade non-Nasdaq 

securities. Currently, the $0.029 per side 

fee applies to members with an average 

daily volume during a month of less 

than 10,000 transaction reports; the 

threshold is being raised to 15,000 

transaction reports. 

Nasdaq is also modifying its fees for 

routing to the New York Stock Exchange 

LLC (‘‘NYSE’’) to reflect an NYSE 

proposal to charge $0.0025 per share for 

routing orders to other markets.5 When 

Nasdaq routes an order to NYSE and is 

charged this fee by NYSE, Nasdaq 

proposes to pass the fee on to its 

members on a direct basis. Finally, in 

order to ensure that Nasdaq’s overall 

fees remain competitive, Nasdaq is 

lowering its lowest fee for removing 

liquidity and/or routing from $0.0027 

per share executed to $0.0026. The fee 

is charged to members with an average 

daily volume through the Nasdaq 

Market Center in all securities during 

the month of (i) More than 35 million 

shares of liquidity provided, and (ii) 

more than 55 million shares of liquidity 

accessed and/or routed; or members 

with an average daily volume through 

the Nasdaq Market Center in all 

securities during the month of (i) More 

than 25 million shares of liquidity 

provided, and (ii) more than 65 million 

shares of liquidity accessed and/or 

routed. Members with lower volumes 

pay $0.0028 or $0.003 per share 

executed, depending on their volume 

levels. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,6 in 

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

Act,7 in particular, in that the proposal 

provides for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using any facility or 

system which Nasdaq operates or 

controls. Nasdaq believes that the fees 

reflect the fact that Nasdaq has begun to 

trade non-Nasdaq exchange-listed 

securities through the Nasdaq Market 

Center, and also reflect fee changes by 

Nasdaq’s competitors and the overall 

competitive environment in which 

Nasdaq operates. 

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. 


jlentini on PROD1PC65 with NOTICES