Federal Register / Vol. 66, No. 10 / Tuesday, January 16, 2001 / Notices 3627

6 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3On December 26, 2000, Nasdaq filed

Amendment No. 1 with the Commission.

Amendment No. 1 noted that Nasdaq’s Board of

Directors approved the proposed rule change at its

meeting on October 4, 2000, and the NASD Board

of Governors reviewed the proposal at its meeting

on October 5, 2000.

4Nasdaq has filed a separate proposal to impose

these same fees on non-members who interact with

Nasdaq through a CTCI. See Securities Exchange

Act Release No. 43815 (January 8, 2001).

operates over new more powerful 56kb

and T1 data lines and transmits

electronic information using the

industry-standard TCP/IP transmission

protocol. Once the transition to EWNII

is completed, Nasdaq will terminate its

current X.25/bisynch network. This

upgrade will require all current X.25/

19.2kb users to install either 56kb or T1

lines. Nasdaq believes that, in return,

these lines will provide a minimum data

transmission capability of almost three

times that of the current 19kb-based

interface. Moreover, running a TCP/IP

protocol over these faster 56Kb and T1

lines will allow Nasdaq to provide CTCI

subscribers with linkages that are more

robust, customizable, and efficient in

the use of available network bandwidth.

2. Statutory Basis

Nasdaq believes that the proposed

rule changes are consistent with Section

15A(b)(5) of the Act, 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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq does not believe that the

proposed rule change will impose 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

Nasdaq did not solicit or receive

written comments on the proposed rule

change.

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 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, as amended, 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–

0609. 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 at

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 File No.

SR–NASD–00–81 and should be

submitted by February 6, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–1150 Filed 1–12–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43821; File No. SR–NASD–

80]

Self Regulatory Organization; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change by the National

Association of Securities Dealers, Inc.

Relating to Computer to Computer

Interface Fees for NASD Members

January 8, 2001.

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

26, 2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’)

through its wholly owned subsidiary,

The Nasdaq Stock Market, Inc.

(‘‘Nasdaq’’) filed with the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by Nasdaq.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 is proposing to amend NASD

Rule 7010 to change the manner in

which fees are assessed on NASD

members who use a Computer-toComputer Interface (‘‘CTCI’’) to access

Nasdaq services. This new fee structure

has been created to reflect Nasdaq’s

adoption of a new Transmission Control

Protocol/Internet Protocol (‘‘TCP/IP’’)

standard for CTCI linkages that will

allow transmission of CTCI data using

Nasdaq’s Enterprise Wide Network II

(‘‘EWNII’’). Nasdaq intends to impose

these fees on a rolling basis on members

as they are converted to the new

protocol and T1 or 56kb lines.4

Proposed new language is in italics;

proposed deletions are in brackets.

* * * * *

7000 Charges for Services and

Equipment

7010. System Services

(a) through (e) No Change.

(f) Nasdaq WorkstationTM Service

(1) through (2) No Change.

(3) The following charges shall apply

for each CTCT subscriber:

[Service Charge $200/month per

CTCI circuit]

3628 Federal Register / Vol. 66, No. 10 / Tuesday, January 16, 2001 / Notices

5 Given the age of the current CTCI X.25 network,

Nasdaq also anticipates difficulty in obtaining

sufficient hardware to meet future CTCI needs using

the X.25 infrastructure.

6 15 U.S.C. 78s(b)(3)(A)(ii).

7 17 CFR 240.19b–4(f)(2).

Options Price

Option 1: $1275/month

Dual 56kb lines (one for redundancy) and single hub and router:

Option 2: $1600/month

Dual 56kb lines (one for redundancy), dual hubs (one for redundancy), and dual routers (one for redundancy).

Option 3: $8000/month

Dual T1 lines (one for redundancy), dual hubs (one for redundancy),

and dual routers (one for redundancy). Includes base bandwidth

of 128kb

Disaster Recovery Option: $975/month

Single 56kb line with single hub and router. (For remote disaster recovery sites only

Bandwidth Enhancement Fee (for T1 subscribers only) $4000/month per 64kb increase above 128kb T1 base.

Installation Fee $2000 per site for dual hubs and routers

$1000 per site for single hub and router

Relocation Fee (for the movement of TCP/IP-capable lines within a

single location)

$1700 per relocation

* * * * *

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its fling 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

Nasdaq is proposing to amend NASD

Rule 7010 to change the manner in

which fees are assessed on NASD

members who use a CTCI to access

Nasdaq services. This new fee structure

has been created to reflect Nasdaq’s

adoption of a new TCP/IP standard for

CTCI linkages that will allow

transmission of CTCI data using

Nasdaq’s EWNII. The CTCI network is a

point-to-point dedicated circuit

connection from the premises of

brokerages and service providers to

Nasdaq’s processing facilities in

Trumbull, Connecticut. Through CTCI,

firms are able to enter trade reports to

Nasdaq’s Automated Confirmation

Transaction Service (‘‘ACT’’) and orders

to Nasdaq ACES and Small Order

Execution (‘‘SOES’’) systems. CTCI also

processes SelectNet transaction

confirmation reports.

In response to numerous requests

from market participants that Nasdaq

upgrade the speed and reliability of its

current CTCI data transmission

environment, Nasdaq has determined to

sunset its existing CTCI X.25/bisynch

network.5 This network currently

operates using an X.25 transmission

protocol over 19.2 kilo bits per second

(‘‘kb’’) transmission lines. This X.25

system will be replaced by linking

current CTCI subscribers to Nasdaq’s

faster and more reliable EWNII. EWNII

operates over new more powerful 56kb

and T1 data lines and transmits

electronic information using the

industry-standard TCP/IP transmission

protocol. Once the transition to EWNII

is completed, Nasdaq will terminate its

current X.25/bisynch network. This

upgrade will require all current X.25/

19.2kb users to install either 56kb or T1

lines. Nasdaq believes that, in return,

these lines will provide a minimum data

transmission capability of almost three

times that of the current 19kb-based

interface. Moreover, running a TCP/IP

protocol over these faster 56Kb and T1

lines will allow Nasdaq to provide CTCI

subscribers with linkages that are more

robust, customizable, and efficient in

the use of available network bandwidth.

2. Statutory Basis

Nasdaq believes that the proposed

rule changes are inconsistent with

Section 15A(b)(5) of the Act, 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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq does not believe that the

proposed rule change will impose 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

Nasdaq did not solicit or receive

written comments on the proposed rule

change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) of the Act,6 and Rule

19b–4(f)(2) thereunder,7 in that it

establishes or changes a due, fee, or

other charge. At any time within 60

days of the filing of such 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.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change, as amended, 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–

0609. 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

Federal Register / Vol. 66, No. 10 / Tuesday, January 16, 2001 / Notices 3629

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See letter to Katherine A. England, Assistant

Director, Division of Market Regulation,

Commission, from Laura Leedy Gansler, Counsel,

NASD Dispute Resolution, dated January 3, 2001

(‘‘Amendment No. 1’’).

4On January 12, 2000, NASD Regulation, Inc.

filed a proposed rule filing, SR–NASD–00–02 to

amend rule 10335 and to make it a permanent part

of the Code. See Securities Exchange Act Release

No. 42606 (April 3, 2000), 65 FR 18405 (April 7,

2000) (File No. NASD–00–02). Simultaneously with

this rule filing, the NASD Dispute Resolution has

filed a response to Comments and Amendment No.

3 to SR–NASD–00–02.

5 15 U.S.C. 780o–(b)(6).

6 In reviewing this proposal, the Commission has

considered its impact on efficiency, competition,

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

provisions of 5 U.S.C. 552, will be

available for inspection and copying at

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 File No.

SR–NASD–00–80 and should be

submitted by February 6, 2001.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–1151 Filed 1–12–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43813; File No. SR–NASD–

00–75]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of a Proposed

Rule Change and Amendment No. 1 by

the National Association of Securities

Dealers, Inc. to Extend the

Effectiveness of the Pilot Injunctive

Relief Rule

January 5, 2001.

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

19, 2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its whollyowned subsidiary NASD Dispute

Resolution, Inc. (‘‘NASD Dispute

Resolution’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) a proposed rule change

as described in Items I and II below,

which Items have been prepared by

NASD Dispute Resolution. On January

4, 2001, NASD Dispute Resolution

submitted Amendment No. 1 to the

proposed rule change.3 For the reasons

discussed below, the Commission is

publishing this notice to solicit

comments on the proposed rule change

and Amendment No. 1 and to approve

the proposal and Amendment No. 1 on

an accelerated basis.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

NASD Dispute Resolution is

proposing to amend Rule 10335 of the

Code of Arbitration (‘‘Code’’) of the

NASD, to extend the pilot injunctive

relief rule for one year, pending

Commission action on a pending rule

filing, SR–NASD–00–02, to amend Rule

19335 and make it a permanent part of

the code. Below is the text of the

proposed rule change. Proposed new

language is in italics; proposed

delections are in brackets.

10335. Injunctions

(i) Effective Date. This Rule shall

apply to arbitration claims filed on or

after January 3, 1996. Except as

otherwise provided in this Rule, the

remaining provisions of the Code shall

apply to proceedings instituted under

this Rule. This rule shall expire on

[January 5, 2000] January 4, 2002,

unless extended by the Association’s

Board of Governors.

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 Dispute Resolution 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 III below.

NASD Dispute Resolution 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

Rule 10335, the NASD’s pilot

injunctive relief rule, provides

procedures for obtaining interim

injunctive relief in controversies

involving member firms and associated

persons in arbitration. The rule has

primarily been used in ‘‘raiding cases,’’

or cases involving the transfer of an

employee from one firm to another firm.

Rule 10335 took effect on January 3,

1996, for a one-year pilot period. The

SEC has periodically extended the

initial pilot period in order to permit the

NASD to assess the effectiveness of the

rule. The pilot rule is currently due to

expire on January 5, 2001.4

NASD Dispute Resolution believes

that it is in the interest of members and

associated persons that the effectiveness

of the pilot rule remain uninterrupted

pending final Commission action on

SR–NASD–00–02. Therefore, NASD

Dispute Resolution believes that the

pilot rule should be extended to January

4, 2002, or such earlier time as

permitted by Commission action on the

permanent rule filing, which makes

clear that, if approved, the amended

rule would supersede the pilot rule in

its entirety.

2. Statutory Basis

NASD Dispute Resolution believes

that the proposed rule change is

consistent with the provisions of

Section 15A(b)(6) of the Act,5 which

requires, among other things, that the

Association’s rules be designed to

prevent fraudulent and manipulative

acts and practices, to promote just and

equitable principles of trade, and, in

general, to protect investors and the

public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

NASD Dispute Resolution 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

No written comments were solicited

or received with respect to the proposed

rule change.

III. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing,

including whether the proposed rule

change, as amended, is consistent with

the Act.6 Persons making written

submissions should file six copies

thereof with the Secretary, Securities

and Exchange Commission, 450 Fifth