11192 Federal Register / Vol. 66, No. 36 / Thursday, February 22, 2001 / Notices

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

2 17 CFR 240.19b–4.

3See SR–NASD–00–73 and SR–NASD–00–79.

4Securities Exchange Act Release No. 43768

(December 22, 2000), 66 FR 824 (January 4, 2001.)

5NWII provides a windows-based environment

and several data management facilities not

previously available in Nasdaq’s former (pre-1994)

workstation service.

6When Nasdaq installed EWN I, Nasdaq’s average

daily share volume (for 1994) was 295 million and

projections showed that the average daily share

volume for 1997 would be 520 million. In 1997,

however, average daily share volume was 650

million.

7Similar to any other private network, EWN I was

designed to have a maximum circuit capacity (i.e.,

2,100 circuits).

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43957; File No. SR–NASD–

01–11]

Self-Regulatory Organizations; Notice

and Order Granting Accelerated

Approval of Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to EWN II Fees

for Subscribers Who Are Not NASD

Members

February 13, 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 February

8, 2001, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its 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 and

II 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

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

Act, and Rule 19b–4 thereunder, the

National Association of Securities

Dealers, Inc. (‘‘NASD’’), through its

subsidiary, The Nasdaq Stock Market,

Inc. (‘‘Nasdaq’’) is herewith filing a

proposed rule change to increase the

fees associated with the Enterprise Wide

Network II (‘‘EWN II’’) for non-members.

Below is the text of the proposed rule

change. Proposed new language is in

italics; proposed deletion are in

brackets.

NASD Rule 7010. System Services

(a)–(e) No Change.

(f) Nasdaq Workstation Service.

(1) No Change.

(2) The following charges shall apply

to the receipt of Level 2 or Level 3

Nasdaq Service via equipment and

communications linkages prescribed for

the Nasdaq Workstation II Service:

Service Charge: [$1,500]$1,875/month

per service delivery platform

(‘‘SDP’’) from December 1, 2000

through February 28, 2001

$2,035/month per SDP beginning

March 1, 2001

Display Charge: $525/month per

presentation device (‘‘PD’’)

Additional Circuit/SDP Charge:

[$2,700]$3,075/month from

December 1, 2000 through February

28, 2001, and $3,235/month

beginning March 1, 2001

A subscriber that accesses Nasdaq

Workstation II Service via an

application programming interface

(‘‘API’’) shall be assessed the Service

Charge for each of the subscriber’s SDPs

and shall be assessed the Display Charge

for each of the subscriber’s API linkages,

including an NWII substitute or quoteupdate facility. API subscribers also

shall be subject to the Additional

Circuit/SDP Charge.

* * * * *

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 III below. Nasdaq has prepared

summaries, set forth below 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

The purpose of this filing is to obtain

approval for the fees applicable to

subscribers to Nasdaq Workstation II

(‘‘NWII’’) who are not NASD members.

On December 14, 2000, Nasdaq

submitted SR–NASD–00–74 under Rule

19b–4 to increase the fees for such nonmembers so that Nasdaq could recover

costs related to increasing network

capacity. The rationale for the fee

increase is set forth below. Nasdaq also

submitted rule filings to increase the

fees for NASD members.3 Nasdaq

requested accelerated approval of SR–

NASD–00–74.

On January 4, 2001, the Securities and

Exchange Commission published in the

Federal Register a notice of filing and

order granting accelerated approval of

SR–NASD–00–74 on a temporary basis

until January 31, 2001.4 The comment

period on the rule filing closed on

Janaury 25, 2001, and the Commission

received no comments. Nasdaq hereby

requests that the Commission issue an

order granting approval of the rule

change.

The following information provides

the background and rationale for the fee

increase that was described in SR–

NASD–00–74. In 1994, Nasdaq rolled

out the NWII service, which provided

many enhancements to the then-existing

Nasdaq Workstation service.5 As part of

the NWII rollout, Nasdaq installed a

network, known as the Enterprise Wide

Network (‘‘EWN I’’), to deliver NWII

functionality. To access NWII service,

each subscriber location has at least one

service delivery platform (‘‘SDP’’), or

server, that resides on the network and

connects to Nasdaq by a dedicated

circuit. The SDP functions as the

subscriber’s gateway from the NWII to

the enterprise wide network. Each SDP

currently is permitted to support up to

eight presentation devices (‘‘PD’’), or

Nasdaq Workstation IIs, although a firm

may elect to have fewer than eight PDs

on a single SDP. In addition, a

subscriber may obtain NWII service

through an application programming

interface (‘‘API’’), which essentially

allows a firm to obtain NWII service

using the firm’s own hardware (e.g.,

personal computer) and software

systems to access, display, interface

with, and operate NWII service.

Due to the ongoing growth in the

Nasdaq market and increases in daily

share volume after EWN I was

installed,6 Nasdaq became concerned in

1997 that its existing enterprise wide

network capacity was rapidly

approaching maximization. Specifically,

the network’s bandwidth—the amount

of data that can be transmitted through

a given communications circuit in a

fixed amount of time—could only

handle one and one-half billion shares

per day. EWN I was expected to reach

maximum circuit capacity during the

second quarter of 1999.7 To avoid the

potential for any disruption to the

Nasdaq market, Nasdaq contracted in

late 1997 with MCI Communications

Corporation (‘‘MCI’’) to build a new

network—EWN II—to accommodate

increased usage and provide increased

circuit capacity.

According to Nasdaq, EWN II is a

significant improvement over EWN I.

Federal Register / Vol. 66, No. 36 / Thursday, February 22, 2001 / Notices 11193

8See Securities Exchange Act Rel. Nos. 40434

(September 11, 1998), 63 FR 49937, and 40716

(December 2, 1998), 63 FR 66619.

9MCI and WorldCom merged in September 1998.

10As noted above, a T1 circuit supports up to six

SDPs, and an SDP supports up to eight PDs. A

subscriber will be subject to the additional circuit

charge when the subscriber has not maximized

capacity on its SDPs by placing eight PDs and/or

API servers on an SDP; in such case, the NASD/

Nasdaq will charge the additional circuit charge for

those ‘‘underutilized’’ SDPs (the difference between

the number of SDPs a subscriber has and the

number of SDPs the subcriber would need to

support its PDs and/or API servers, assuming an

eight-to-one ratio). A subscriber also will be subject

to the additional circuit charge when the subscriber

has not maximized capacity on its T1 circuits by

placing six SDPs on a T1 circuit. This pricing

structure encourages subscribers to maximize

circuit capacity and is aimed at preventing the

premature exhaustion of such capacity.

11 15 U.S.C. 78o–3(b)(5).

12 15 U.S.C. 78o–3.

13 15 U.S.C. 78o–3(b)(5).

Among other things, the system is fully

scaleable and twice as fast as EWN I.

The network was originally built with a

128 kilobit (‘‘kb’’) data stream feed

speed scaleable up to T1 speed (1544

kilobits) levels. Nasdaq began

converting subscribers to EWN II in

1998 and completed the conversion in

1999. In conjunction with the

conversion, the SEC approved fee

increases in 1998 relating to EWN II.8

Since that time, Nasdaq share volume

has continued to increase dramatically.

The highest average daily share volume

for a month in 2000 was 2.25 billion

shares, compared to 1.44 billion in

1999, and less than 1 billion in 1998.

The highest peak share volume day in

2000 was 2.88 billion shares, compared

to 1.78 billion in 1999, and 1.26 billion

in 1998. The highest actual cumulative

share volume for a month occurred

three times in 2000 at over 40 billion

shares, compared to over 30 billion in

1999, and almost 20 billion in 1998. In

March 2000, share volume increased by

over 103% compared to March 1999. In

April 2000, the peak share volume

increased by over 103% compared to

April 1999.

To accommodate these increases,

Nasdaq expanded the EWN II

bandwidth from 128 kb to 192 kb in

October 2000. The expended bandwidth

also gives Nasdaq the ability to support

new products as they are introduced

and future trading applications that will

be developed. As a result of expansion

to a 192 kb bandwidth, the fees that

WorldCom 9 charges Nasdaq have

increased by $375 per month per circuit.

Nasdaq proposes to pass on these costs

to subscribers for the billing period

covered by December 1, 2000 through

February 28, 2001.

In order to accommodate additional

increases in volume expected to

accompany decimalization, Nasdaq will

expand EWN II bandwidth to 256kb,

and consequently, the fees that

WorldCom charges Nasdaq will increase

by an additional $160 per month per

circuit. As of December 2000, Nasdaq

projects that decimalization in penny

increments will significantly increase

the number of quote updates, such that

on high volume days, a 192 kb

bandwidth would be inadequate to

support quote traffic. Therefore, Nasdaq

proposes to pass on the costs associated

with the increase to a 256 kb bandwidth

effective March 1, 2001.

Under the proposal, the fee charged to

a subscriber for an SDP could increase

from $1,500 per month for each server

to $1,875 per month for December 2000

through February 2001, and then to

$2,035 per month, beginning March 1,

2001. The charge for an additional

circuit would increase from $2,700 per

month to $3,075 per month from

December 2000 through February 2001,

and then increase again on March 1,

2001 to $3,235 per month.10

Although NASD Rule 7010(f)(2)

generally applies to both members and

non-member subscribers to NWII

service, this filing will only effect a

change to the fees charged to those

subscribers who are not NASD

members. As noted above, Nasdaq

submitted separate rule filings to

impose the proposed new fees on NASD

members.

1. Statutory Basis

Nasdaq believes that the proposed

rule change is consistent with the

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

Act,11 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. The proposed fees,

which will only apply to those who

utilize NWII service, simply pass on the

costs associated with increasing the

capacity of EWN II to keep pace with

volume increases. Ensuring adequate

capacity is absolutely essential to

protecting the integrity of the Nasdaq

market, maintaining the confidence of

the investing public, and preparing for

decimalization.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

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. 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 20549–0609. 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 Exchange. All

submissions should refer to File No.

SR–NASD–01–11 and should be

submitted by March 15, 2001.

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission has reviewed the

Nasdaq’s proposed rule change and

finds, for the reasons set forth below,

that the proposal is consistent with the

requirements of section 15A of the Act12

and the rules and regulations

thereunder applicable to a national

securities exchange. Specifically, the

Commission believes the proposal is

consistent with section 15A(b)(5) of the

Act.13 Section 15A(b)(5) requires that

the rules of a registered securities

association 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 association

operates or controls. The above fee

increases proposed by Nasdaq pass on

the costs associated with increasing the

capacity of EWN II to users of the NWII

service. The Commission believes that

such a fee increase, necessitated by

recent system volume increases is a

reasonable means by which Nasdaq

11194 Federal Register / Vol. 66, No. 36 / Thursday, February 22, 2001 / Notices

14 15 U.S.C. 78s(b)(2).

15 17 CFR 200.30–3(a)(12).

intends to ensure adequate capacity of

its EWN II system.

Nasdaq has requested that the

Commission approve this proposed rule

change on an accelerated basis. Nasdaq

believes that accelerated approval of

this proposal is necessary to ensure that

the costs associated with the expansion

of its network are allocated uniformly

among all NWII subscriber, regardless of

whether they are members or nonmembers. The Commission finds good

cause for approving the proposed rule

change (SR–NASD–01–11) prior to the

thirtieth day after the date of

publication of notice thereof in the

Federal Register in that non-members

have been on notice since October 2000

that Nasdaq was proposing to pass along

the additional costs as described above

and no comments were received by the

Commission on SR–NASD–00–74.

It is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,14 that the

proposed rule change (SR–NASD–01–

11) is hereby approved on an

accelerated basis.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.1

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–4355 Filed 2–21–01; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Declaration of Economic Injury Disaster

#9K78]

State of Florida

Citrus County and the contiguous

counties of Hernando, Levy, Marion and

Sumter in the State of Florida constitute

an economic injury disaster loan area as

a result of freezing temperatures

beginning in December 2000 and

continuing. Eligible small businesses

and small agricultural cooperatives

without credit available elsewhere may

file applications for economic injury

assistance as a result of this disaster

until the close of business on November

13, 2001 at the address listed below or

other locally announced locations: U.S.

Small Business Administration, Disaster

Area 2 Office, One Baltimore Place,

Suite 300, Atlanta, GA 30308.

The interest rate for eligible small

businesses and small agricultural

cooperatives is 4 percent.

(Catalog of Federal Domestic Assistance

Program No. 59002.)

Dated: February 13, 2001.

John Whitmore,

Acting Administrator.

[FR Doc. 01–4383 Filed 2–21–01; 8:45 am]

BILLING CODE 8025–01–P

DEPARTMENT OF STATE

[Public Notice 3578]

Language and Cultural Enhancement

Program; Request for Grant Proposals

AGENCY: Bureau of Educational and

Cultural Affairs; State.

SUMMARY: The Office of Citizen

Exchanges, Youth Programs Division of

the Bureau of Educational and Cultural

Affairs announces an open competition

for a Language and Cultural

Enhancement Program. Public and

private non-profit organizations meeting

the provisions described in IRS

regulation 26 CFR 1.501(c) may submit

proposals to conduct a four-week

homestay-based, English Language and

Cultural Enrichment program from midJuly to mid-August, 2001 for 50 students

from the New Independent States (NIS)

of the former Soviet Union selected for

the Freedom Support Act (FSA) Future

Leaders Exchange (FLEX) program.

Approximately 15 of the participants

will be students with physical

disabilities who were specially recruited

and selected. The remaining 35 students

will be from more isolated regions of the

NIS, where there is less opportunity for

quality English instruction. The purpose

of the program is to raise the English

capability of these students to the level

where they are able to attend regular

classes when their academic program

starts in the fall. Additionally, this

program will ease the acculturation

process when students transit to their

permanent host families and

communities. Only one grant will be

awarded. Funds requested for this

project may not exceed $100,000.

Program Information

Objectives: To prepare a select group

of students with special needs to attend

school in the fall and perform at a level

closer to that of those FSA/FLEX

students who make up the majority of

the program finalists. To provide

students with cultural tools and

strategies that will foster a successful

exchange experience.

Background: Academic year 2001/

2002 will be the ninth year of the FSA/

FLEX program, which now includes

over 8,000 alumni. This component of

the NIS Secondary School Initiative was

originally authorized under the

FREEDOM Support Act of 1992 and is

funded by annual allocations from the

Foreign Operations and Department of

State appropriations. The goals of the

program are to promote mutual

understanding and foster a relationship

between the people of the NIS and the

U.S.; assist the successor generation of

the NIS to develop the qualities it will

need to lead in the transformation of

those countries in the 21st century; and

to promote democratic values and civic

responsibility by giving NIS youth the

opportunity to live in American society

for an academic year.

During the program’s early years,

there was concern that students from

the more remote regions of the NIS

might be underrepresented because the

lack of English competence in those

regions could prevent applicants from

meeting the rigorous English language

requirements of the FLEX recruitment

process, including attaining a

reasonable score on the Secondary Level

English Proficiency (SLEP) examination.

To address this concern, a pre-academic

year English language enrichment

program was developed so that some

students from the remote areas could be

selected whose SLEP scores were

slightly lower than average. In 1996, the

FLEX program added a component

incorporating students with disabilities,

who do have a need for some special

language and cultural training before

initiating their academic year program.

The enhancement program for which

proposals are being solicited here is in

support of both groups of students.

The essential components of the

enhancement program are:

• A four-week course of study in

English, approximately 5.5 hours a day,

to build on the language skills that the

students already have.

• Programming that builds on

cultural issues that will have been

introduced at the pre-departure

orientation for all FSA FLEX students.

• Orientation programming that

addresses the special needs of the

students with disabilities and their

unique adjustment issues.

• Accommodation with volunteer

host families for the period of the

workshop.

• Preparing the students for the

transition to their permanent host

families and communities.

Other Components: Two

organizations have already been

awarded grants to perform the following

functions: recruitment and selection of

all FLEX students; preparation of crosscultural materials; pre-departure

orientation; international travel from

home to host community and return;

facilitation of ongoing communication

between the natural parents and