Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 15739 

17 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)(6). NASD gave the 

Commission written notice of its intent to file the 

proposed rule change on March 6, 2007. 

5See Securities Exchange Act Release No. 55325 

(February 21, 2007), 72 FR 8820 (February 27, 2007) 

(SR–NASD–2007–011). 

6NASD also notes that the proposed transaction 

credit program is substantially equivalent to the 

existing transaction credit program for the NASD/ 

Nasdaq Trade Reporting Facility (‘‘NASD/Nasdaq 

TRF’’) under Rule 7001B and the NASD/BSE TRF 

under Rule 7001D. However, under the transaction 

credit programs for the NASD/Nasdaq TRF and 

NASD/BSE TRF, members do not receive 50% of 

gross revenue; instead, members receive 50% of 

revenue after deducting the amount, if any, that the 

respective TRF pays to the Consolidated Tape 

Association or the Nasdaq Securities Information 

Processor for capacity usage. 

7 15 U.S.C. 78o–3. 

8 15 U.S.C. 78o–3(b)(5). 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5966 Filed 3–30–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55526; File No. SR–NASD–

2007–025] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt New NASD Rule 

7000E Series Relating to Fees and 

Credits for the NASD/NYSE Trade 

Reporting Facility 

March 26, 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 March 21, 

2007, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared substantially by NASD. 

NASD filed the proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders it 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 

NASD proposes to adopt a new NASD 

Rule 7000E Series relating to fees and 

credits for the NASD/NYSE Trade 

Reporting Facility (‘‘NASD/NYSE 

TRF’’). The text of the proposed rule 

change is available at http:// 

www.nasd.com, NASD, and 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, 

NASD 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. NASD 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 

On February 1, 2007, NASD filed for 

immediate effectiveness a proposed rule 

change relating to the establishment of 

the NASD/NYSE TRF.5 The NASD/ 

NYSE TRF will provide NASD members 

with another mechanism for reporting to 

NASD locked-in transactions in 

exchange-listed securities effected 

otherwise than on an exchange. The 

NASD/NYSE TRF will commence 

operation upon successful completion 

of system testing and certification, 

which is currently anticipated to be in 

April 2007. The instant proposed rule 

change would adopt a new NASD Rule 

7000E Series relating to fees and credits 

applicable to the NASD/NYSE TRF. 

NASD is proposing that under new 

Rule 7002E there will be no transaction 

fee for reporting locked-in trades to the 

NASD/NYSE TRF in securities listed on 

the New York Stock Exchange (‘‘Tape 

A’’), the American Stock Exchange 

(‘‘Tape B’’), and the Nasdaq Exchange 

(‘‘Tape C’’). Although NASD is not 

required to file a proposed rule change 

where no fees are to be assessed, for 

members’ convenience and to avoid 

potential confusion with the fee 

structures of other NASD facilities, 

NASD is proposing Rule 7002E to 

clarify that there will be no charge for 

use of the NASD/NYSE TRF to report 

locked-in transactions in exchangelisted securities effected otherwise than 

on an exchange. The text of proposed 

Rule 7002E is identical to the text of 

current Rule 7002C relating to the 

NASD/NSX Trade Reporting Facility 

(‘‘NASD/NSX TRF’’) and Rule 7002D 

relating to the NASD/BSE Trade 

Reporting Facility (‘‘NASD/BSE TRF’’). 

In addition, NASD is proposing a 

transaction credit program under new 

Rule 7001E that is identical to the 

existing transaction credit program for 

the NASD/NSX TRF under Rule 7001C. 

NASD members reporting trades in Tape 

A, Tape B and Tape C stocks to the 

NASD/NYSE TRF will receive a 50% 

pro rata credit on gross market data 

revenue earned by the NASD/NYSE TRF 

with respect to those trade reports. 

Credits will be paid on a quarterly basis. 

To the extent that market data revenue 

is subject to any adjustment, credits may 

be adjusted accordingly.6

Tape A and Tape B revenue is 

currently distributed to NASD and the 

exchanges based on number of trades 

reported, while Tape C revenue is 

distributed based on an average of the 

number of trades and number of shares 

reported. Thus, under the proposed 

program, the Tape A and Tape B 

revenue attributable to a member will be 

based on number of trades reported, 

while the Tape C revenue attributable to 

a member would be based on number of 

trades and number of shares reported. A 

member will receive 50% of the gross 

revenue attributable to it in each of the 

three tapes. ‘‘Gross revenue’’ is the 

revenue received by the NASD/NYSE 

TRF from the three tape associations 

after the tape associations deduct 

allocated support costs and 

unincorporated business costs. 

NASD filed the proposed rule change 

for immediate effectiveness. NASD 

proposes to implement the proposed 

rule change on the first day of operation 

of the NASD/NYSE TRF, which is 

currently anticipated to be in April 

2007. 

2. Statutory Basis 

NASD believes that the proposed rule 

change is consistent with the provisions 

of Section 15A of the Act,7 in general, 

and with Section 15A(b)(5) of the Act,8

in particular, which requires, among 

other things, that NASD rules provide 

for the equitable allocation of reasonable 

dues, fees and other charges among 

members and issuers and other persons 

using any facility or system that NASD 

operates or controls. NASD believes that 

the proposed rule change is a reasonable 

and equitable fee and credit structure in 

that there will be no fees charged for 

trade reporting to the NASD/NYSE TRF 

and the proposed transaction credit 

program is identical to existing credits 

for the NASD/NSX TRF. 


hsrobinson on PROD1PC76 with NOTICES
15740 Federal Register / Vol. 72, No. 62 / Monday, April 2, 2007 / Notices 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6)(iii). 

12For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 13 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(7). 

2 17 CFR 240.19b–7. 

3See Letter from Eileen Donovan, Acting 

Secretary, CFTC, to Thomas W. Sexton, General 

Counsel, NFA, dated March 12, 2007, confirming 

approval of the proposal. 

4 15 U.S.C. 78o–3(k). 

5 15 U.S.C. 78o(b)(11). 

6 17 CFR 30.1–30.12. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASD 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 

Because the foregoing proposed rule 

change does not: 

(i) Significantly affect the protection 

of investors or the public interest; 

(ii) Impose any significant burden on 

competition; and 

(iii) Become operative for 30 days 

from the date on which it was filed, or 

such shorter time as the Commission 

may designate, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 9 and Rule 19b–4(f)(6) thereunder.10

At any time within 60 days of the filing 

of the 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. 

NASD has asked that the Commission 

waive the 30-day operative delay set 

forth in Rule 19b–4(f)(6)(iii) under the 

Act 11 to allow the proposed rule change 

to be implemented on the first day of 

operation of the NASD/NYSE TRF, 

which is currently anticipated to be in 

April 2007. The Commission believes 

such waiver is consistent with the 

protection of investors and the public 

interest, for it will allow the proposed 

fees and credits to be in place at the 

time NASD begins operating the NASD/ 

NYSE TRF. For these reasons, the 

Commission designates the proposal to 

be operative upon filing with the 

Commission.12

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–NASD–2007–025 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–NASD–2007–025. 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 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–2007–025 and 

should be submitted on or before April 

23, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–5979 Filed 3–30–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55525; File No. SR–NFA–

2007–01] 

Self-Regulatory Organization; National 

Futures Association; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Amendment Relating to NFA 

Compliance Rule 2–10 

March 26, 2007. 

Pursuant to Section 19(b)(7) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–7 under the 

Act,2 notice is hereby given that on 

February 27, 2007, National Futures 

Association (‘‘NFA’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which Items have been 

substantially prepared by NFA. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. NFA 

also has filed the proposed rule change 

with the Commodity Futures Trading 

Commission (‘‘CFTC’’). 

NFA, on February 26, 2007, submitted 

the proposed rule change to the CFTC 

for approval. The CFTC approved the 

proposed rule change on March 12, 

2007.3

I. Self-Regulatory Organization’s 

Description of the Proposed Rule 

Change 

Section 15A(k) of the Act 4 makes 

NFA a national securities association for 

the limited purpose of regulating the 

activities of NFA members (‘‘Members’’) 

who are registered as brokers or dealers 

in security futures products under 

Section 15(b)(11) of the Act.5 NFA 

Compliance Rule 2–10(b) applies to all 

futures commission merchant (‘‘FCM’’) 

Members, including those who are 

registered as security futures brokers or 

dealers under Section 15(b)(11) of the 

Act. 

NFA Compliance Rule 2–10 currently 

requires FCM Members to maintain 

their books and records in an office 

located in either the U.S. or a 

jurisdiction that the CFTC has 

determined to have a comparable 

regulatory scheme for purposes of the 

CFTC’s Part 30 regulation.6 The 

amendment requires the U.S. or Part 30 


hsrobinson on PROD1PC76 with NOTICES