[Federal Register Volume 63, Number 109 (Monday, June 8, 1998)]
[Notices]
[Pages 31254-31255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15078]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40050; File No. SR-NASD-98-37]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to SelectNet Fees

June 1, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 14, 1998, the National 
Association of Securities Dealers, Inc. (``NASD'' or ``Association'') 
through its wholly owned subsidiary, the Nasdaq Stock Market, Inc. 
(``Nasdaq'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the NASD. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq is herewith filing a proposed rule change to extend, through 
August 31, 1998, the fees currently charged under NASD Rule 7010(1) for 
the execution of transactions in SelectNet. Under the proposed 
extension, SelectNet fees would continue to be assessed in the 
following manner: (1) $1.00 will be charged for each SelectNet order 
entered and directed to one particular market participant that is 
subsequently executed in whole or in part; (2) no fee will be charged 
to a member who receives and executes a directed SlectNet order; (3) 
the existing $2.50 fee will remain in effect for both sides of executed 
SelectNet orders that result from broadcast messages; and (4) a $.025 
fee will remain in effect for any member who cancels a SelectNet order. 
If no further action is taken, SelectNet fees will revert to their 
original $2.50 per-side level on September 1, 1998.

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 NASD included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at places specified in Item IV 
below. The self-

[[Page 31255]]

regulatory organization 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 extend its current SelectNet fees. The 
reasons for Nasdaq's prevailing SelectNet fee structure were fully 
explained in its original fee structure proposal filed with the 
Commission in February of this year.\2\ Since then, SelectNet usage has 
continued at significantly elevated levels, averaging over 100,000 
daily executions in both February and March of 1998. As such, Nasdaq 
believes that an extension of these reduced fees, through August 31, 
1998, is warranted. Under the proposed extension, SelectNet fees would 
continue to be assessed in the following manner: (1) $1.00 will be 
charged for each SelectNet order entered and directed to one particular 
market participant that is subsequently executed in whole or in part; 
(2) no fee will be charged to a member who receives and executes a 
directed SelectNet order; (3) the existing $2.50 fee will remain in 
effect for both sides of executed SelectNet orders that result from 
broadcast messages; and (4) a $0.25 fee will remain in effect for any 
member who cancels a SelectNet order. Nasdaq will continue to monitor 
and review SelectNet activity to determine if future changes to its 
SelectNet fee structure are appropriate. If no further action is taken, 
SelectNet fees will revert to their original $2.50 per-side level on 
September 1, 1998.
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    \2\ Securities and Exchange Act Release No. 39641 (February 10, 
1998), 63 FR 8241 (February 18, 1998). Nasdaq's current reduced fee 
structure was approved for a 90-day trial period, commencing the day 
that proposal was published in the Federal Register and would lapse 
on May 18, 1998, if not extended by this filing.
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    For the reason set forth above, Nasdaq believes that the proposed 
rule change is consistent with Section 15A(b)(5) of the Act,\3\ which 
requires that the rules of the NASD 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 NASD 
operates or controls.
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    \3\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The NASD believes that the proposed rule change will not 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

    Comments were neither solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    This filing applies to the assessment of SelectNet fees to NASD 
members, and thus the proposed rule change is effective immediately 
upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act and 
subparagraph (e)(2) of Rule 19b-4 thereunder \4\ because the proposal 
is establishing or changing a due, fee or other charge. At any time 
within 60 days 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.\5\
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    \4\ 15 U.S.C. 78s(b)(3)(A) and 17 CFR 240.19b-4(e)(2).
    \5\ In reviewing the proposal, the Commission has considered the 
proposal's impact on efficiency, competition, and capital formation. 
see 15 U.S.C. 78c(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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 No. SR-NASD-98-37 and should be 
submitted by June 29, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-15078 Filed 6-5-98; 8:45 am]
BILLING CODE 8010-01-M