30276 Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices

State. Barr Devlin subsequently delivered a

‘‘fairness’’ opinion to the Bay State board of

directors to the effect that, based on certain

assumptions stated therein, the consideration

offered in connection with the Transaction is fair,

from a financial point of view, to the holders of Bay

State Shares. Applicant notes that a pro forma

analysis prepared by Barr Devlin indicates that the

Transaction would result in accretion to Bay State’s

shareholders in terms of earnings per share and that

NIPSCO’s shareholders would also realize accretion

in earnings per share (assuming NIPSCO’s shares

continue to trade at current levels).

14Post-merger, the NIPSCO System will provide

gas distribution service to approximately 1,036,400

residential, commercial and industrial customers in

a 14,152-square mile area in four states, as well as

electric service to approximately 416,300

customers, all in Indiana. On a pro forma basis, the

combined net utility plant (gas and electric) of

NIPSCO and Bay State as of December 31, 1997

would have totaled approximately $3,61 billion and

combined gross utility revenues for the twelve

months then ended would have totaled

approximately $2.3 billion.

1The NASD initially submitted this proposal on

March 16, 1998. However, a substantive

amendment was requested to clarify the

applicability of the proposed fee. The NASD filed

Amendment No. 1 on April 28, 1998. See letter

from Thomas P. Moran, Senior Attorney, Office of

General Counsel, The Nasdaq Stock Market, Inc., to

Mignon McLemore, Esq., Division of Market

Regulation, SEC, dated April 28, 1998.

On May 14, 1998, the Board filed another

substantive amendment modifying the proposed

rule language. See letter from Thomas P. Moran,

Senior Attorney, Office of General Counsel, The

Nasdaq Stock Market, Inc., to Katherine A. England,

Division of Market Regulation, SEC, dated May 14,

1998 (‘‘Amendment No. 2’’).

2 15 U.S.C. 78s(b)(1).

3 17 CFR 240.19b–4.

Following the Merger, the board of

directors of ‘‘new’’ Bay State will

consist of ten members, of whom three

will be officers of NIPSCO, three will be

officers of ‘‘old’’ Bay State, and four will

be current outside directors of ‘‘old’’

Bay State. The current officers of ‘‘old’’

Bay State will continue to serve in

similar capacities in ‘‘new’’ Bay State.

The Merger Agreement also provides

that NIPSCO shall nominate and

recommend for election to the NIPSCO

board of director one ‘‘new’’ Bay State

directors to be mutually determined by

NIPSCO and Bay State. ‘‘New’’ Bay State

will continue to maintain its principal

executive offices in Westborough,

Massachusetts.

Applicant states that, upon

consummation of the Merger, NIPSCO

will own an integrated gas utility system

comprised of its gas distribution system

in Indiana and Bay State’s gas

distribution system in Massachusetts,

Maine and New Hampshire, as well as

an integrated electric utility system in

Indiana.14

Applicant also states that the Merger

is expected to produce various benefits

to the public, investors and consumers

and will satisfy all of the applicable

standards under section 10 of the Act.

Among other things, applicant states

that, following the Merger, the

combined companies will be better

positioned to take advantage of

operating economies and efficiencies

through, among other measures, joint

management optimization of their

respective portfolios of gas supply,

transportation and storage assets.

Applicant also notes that the Merger is

expected to provide benefits in the form

of greater flexibility and capacity in

financing the operations of the

combining companies and an enhanced

ability to take advantage of future

strategic opportunities in the

competitive marketplace for energy and

energy services that is rapidly evolving

in New England.

Applicant contends that, after the

Merger, NIPSCO will remain

predominantly an intrastate (i.e.,

Indiana) holding company that will not

derive any material part of its income

from any out-of-state utility subsidiary

and has requested an order under

section 3(a)(1) declaring NIPSCO, after

consummation of the Merger, to be

exempt from all sections of the Act

except section 9(a)(2).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–14623 Filed 6–2–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40035; File No. SR–NASD–

98–25]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to Fees for

Nasdaq Market Data Distributors or

Vendors

May 27, 1998.

On May 14, 1998,1 the Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’ or SEC’’) a proposed

rule, pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),2 and Rule 19b–4 thereunder.3

The proposed rule change is 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 is proposing to amend NASD

Rule 7010 to establish an annual, scaled

administrative fee, payable by Nasdaq

market data distributors or vendors, for

data usage monitoring costs and other

administrative expenses incurred by

Nasdaq. Once effective, Nasdaq will

suspend indefinitely is current

contractual requirement that Nasdaq

real-time data distributors or vendors

provide an annual accountant-certified

list of its subscribers who receive

Nasdaq data. Below is the text of the

proposed rule change. Proposed new

language is italicized.

7010. System Services

(a)–(n) No change

(o) Market Data Distributor or Vendor

Annual Administrative Fee

Nasdaq Market Data Distributors or

Vendors shall be assessed the following

annual administrative fee:

Delayed distributor ..............................$250.00

0–999 real-time terminals....................$500.00

1,000–4,999 real-time terminals.......$1,250.00

5,000–9,999 real-time terminals.....$2,250.000

10,000 + real-time terminals ............$3,750.00

* * * * *

II. Self-Regulatory Organizations

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 statenents

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

Nasdaq is proposing to establish an

annual, scaled fee for the Nasdaq realtime market data distributors or vendors

to cover the expenses Nasdaq incurs to

administer and monitor market data

usage. Currently, Nasdaq real-time

market data distributors or vendors are

annually required to submit a list,

certified by a public accountant paid for

by the distributor or vendor, of all

subscribers receiving real-time Nasdaq

data. Alternatively, a Nasdaq real-time

market data distributor or vendor may

elect to pay a generally lower fee and

have its service usage verified by an on-
Federal Register / Vol. 63, No. 106 /Wednesday, June 3, 1998 / Notices 30277

4 Distributors using per-quote and usage based

reporting will have their monitoring fees

determined by having their monthly payment totals

divided by the professional subscriber fee rate,

resulting in a terminal equivalent. For example, a

distributor or vendor that is being charged $1,000

a month for its per-quote usage of Nasdaq Level 1

Service will have that $1,000 fee divided by the

existing $20 monthly Level 1 per-terminal fee

which results in a terminal equivalent of 50 with

an annual monitoring fee of $500.

For 1998 billing purposes only, Nasdaq will not

impose these administrative fees on any firm that

incurs costs and submits a certified usage report in

1998 prior to the effective date of Nasdaq’s new fee

schedule. See Amendment No 2, supra note 1.

5Similarly, the submission of an unrequested,

accountant-certified usage list will not preclude

Nasdaq from conducting its own OSR nor will it

exempt a distributor or vendor from payment of the

administrative fee.

6Nasdaq notes that it does not currently require

delayed distributors to meet audit requirements or

pay an OSR fee. Nasdaq believes that the imposition

of new minimal charges on delayed distributors is

justified to reimburses Nasdaq for the cost of

application processing and product monitoring.

Nasdaq also advises that those vendors who receive

both delayed and real-time data, will not be billed

separately for each type of data but will only pay

for the highest level of service received. This

practice will continue for Nasdaq’s proposed

administrative fees as well. See Amendment No. 1,

supra note 1.

7 17 CFR 200.30–3(a)(12).

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

site review (‘‘OSR’’) conducted by

Nasdaq staff. The purpose of both the

accountant certification and the OSR is

to provide Nasdaq with independent

confirmation of Nasdaq data

consumption. Nasdaq proposes to

eliminate the certified-list requirement

and OSR alternative, and thus their

attendant costs, and replace them with

the annual scaled administrative fees

proposed in this filing.4 Nasdaq will

retain the right to demand a certified

usage report, paid for by the distributor

or vendor, in cases involving

discrepancies in distributor or vendor

reporting.5

Nasdaq believes that a scaled, annual

administrative fee will more closely

align data usage monitoring costs with

Nasdaq expenditures. In addition, the

new structure, will allow Nasdaq staff to

directly and uniformly apply its

expertise in data usage monitoring as

well as provide a more efficient means

of fee collection than its current

practices. Moreover, a scaled fee based

on the scope of a distributor or vendor’s

dissemination of Nasdaq data will also

permit those date distributors or

vendors to estimate their costs more

effectively. Once the proposed

administrative fee is approved, Nasdaq

will suspend indefinitely its costly and

burdensome annual certification

requirement and instead use the new

administrative fee revenue to conduct

Nasdaq-initiated OSRs, manage

distributor applications, monitor vendor

services, and perform other compliance

activities.

Finally, Nasdaq notes that its

proposed fee structure is priced at levels

similar to its current OSR fees which,

being consistently less expensive than

the cost of obtaining an independent

verification of data usage from a

certified public accountant, are used by

the majority of Nasdq realtime market

data distributors or vendors. As such

Nasdaq believes its proposal will not

result in a material increase in overall

monitoring fee burdens on most Nasdaq

data distributors or vendors.6

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(5) of the

Act which requires that the rules of the

NASD provide for the equitable

allocations 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.

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 purpose 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 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 NASD 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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549. 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 the file

number in the caption above and should

be submitted by June 24, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.7

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–14622 Filed 6–2–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–40034; File No. SR–NSCC–

98–3)

Self-Regulatory Organizations;

National Securities Clearing

Corporation; Notice of Filing and Order

Granting Temporary Accelerated

Approval of a Proposed Rule Change

That Establishes Additional

Procedures for Class A Surveillance of

Certain Settling Members and Permits

the Collection of Clearing Fund and

Other Collateral Deposits From These

Settling Members

May 27, 1998.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

April 23, 1998, the National Securities

Clearing Corporation (‘‘NSCC’’) filed

with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change (File No. SR–

NSCC–98–3) as described in Items I and

II below, which items have been

prepared primarily by NSCC. The

Commission is publishing this notice

and order to solicit comments from

interested persons and to extend on an

accelerated basis temporary approval of

the proposed rule change through May

31, 1998.