Document ID: SEC-2006-1269-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2006-10-02T04:00Z

[Federal Register: October 2, 2006 (Volume 71, Number 190)]
[Notices]               
[Page 58030-58032]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02oc06-139]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54499; File No. SR-NASD-2006-094]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change and Amendment No. 1 Thereto Regarding Fees for the New 
Nasdaq Workstation and Weblink ACT

September 25, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 1, 2006, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed

[[Page 58031]]

with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been prepared by Nasdaq. Nasdaq amended the proposed rule 
change on September 20, 2006.\3\ Pursuant to Section 19(b)(3)(A)(ii) of 
the Act \4\ and Rule 19b-4(f)(2) thereunder,\5\ Nasdaq has designated 
this proposal as establishing or changing a member due, fee or other 
charge, which renders the proposed rule change effective upon filing 
with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Amendment No. 1. The effective date of the original 
proposed rule change is August 1, 2006 and the effective date of the 
amendment is September 20, 2006. For purposes of calculating the 60-
day abrogation period, the Commission considers the period to have 
commenced on September 20, 2006, the date Nasdaq filed Amendment No. 
1. See Section 19(b)(3)(A) of the Act, 15 U.S.C. 78s(b)(3)(A).
    \4\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify fees for the New Nasdaq Workstation 
(``NNW'') and Weblink ACT. Nasdaq will implement the proposed rule 
change on August 1, 2006. The text of the proposed rule change is 
available at the Commission's Public Reference Room, at NASD, and at 
http://www.nasd.com.\6\

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    \6\ Changes are marked to the rule text that appears in the 
electronic NASD Manual found at http://www.nasd.com. Nasdaq is 

filing this proposed rule change because the NNW and Weblink ACT are 
used with respect to the quotation, execution, and trade reporting 
system operated by Nasdaq with respect to non-Nasdaq securities. The 
NASDAQ Stock Market LLC (``Nasdaq Exchange'') is also filing a 
comparable modification to Nasdaq Exchange Rule 7015.
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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 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 amending Rule 7010 to change fees associated with its 
Web-based NNW and Weblink ACT products. Since the NNW's inception as a 
replacement for the Nasdaq Workstation II (``NWII'') last year, the fee 
for the NNW has been $435 per user per month, plus $90 per month for 
data feeds included with the NNW, for a total cost of $525 per user per 
month. Nasdaq is now reducing the fee to $475 per user per month, 
including the cost of the data feeds provided with the NNW. The change 
is designed to enhance the competitiveness of the NNW in contrast to 
front-end applications provided by broker-dealers and service bureaus, 
and, as discussed below, also reflects decreasing demand for the 
product.
    Weblink ACT, also referred to as Nasdaq Workstation Post Trade, is 
a Web-based application used for submission of trade reports. As such, 
as the Nasdaq Exchange begins to operate as a national securities 
exchange, Weblink ACT provides basic front-end access to the Trade 
Reporting Facility (``TRF'') operated by Nasdaq and NASD,\7\ as well as 
access to ACT functionality still offered by Nasdaq under authority 
delegated by NASD.
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    \7\ Nasdaq expects that, consistent with current practice, most 
NASD members seeking access to the TRF would use a proprietary 
front-end system developed by the broker-dealer or a product offered 
by a service bureau. Weblink ACT is designed as a basic front-end 
system for low volume users.
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    Since the introduction of NNW and Weblink ACT, a number of former 
NWII users have opted to move to Weblink ACT rather than NNW, 
reflecting a desire to use these Web-based products exclusively for 
trade reporting, rather than active trading. Accordingly, Nasdaq is 
proposing to increase the comparatively low fees for Weblink ACT to 
ensure that, as between NNW and Weblink ACT, fees are allocated 
appropriately to allow recovery of Nasdaq's costs. Specifically, the 
current $150 fee for Weblink ACT users that report a daily average of 
20 or fewer trades during a month is being raised to $200, while the 
$300 fee for higher volume users is being increased to $375.
    Nasdaq is also amending Rule 7010(g), which has historically 
contained the fees for the trade reporting services of Nasdaq, to 
reflect the Nasdaq Exchange's commencing operations for trading of 
securities listed on the Nasdaq Exchange, the TRF's commencing 
operations for reporting of Nasdaq-listed securities, and Nasdaq's 
continued operation, for a transitional period, as the quotation and 
trade reporting facility of NASD for non-Nasdaq securities. Nasdaq is 
amending Rule 7010(g) to remove fees and credits associated with 
reporting of Nasdaq-listed stocks, which are now contained in the NASD 
Rule 7000B Series, as well as fees for risk management services now 
provided by the Nasdaq Exchange. During the transitional period before 
the Nasdaq Exchange begins to trade non-Nasdaq stocks, Rule 7010(g) 
continues to govern fees and credits for reporting of non-Nasdaq listed 
securities to the ACT system operated by Nasdaq. Accordingly, Nasdaq is 
amending the rule to eliminate fees for services that are no longer 
offered by Nasdaq, as well as removing references to the Nasdaq Market 
Center, a term that is no longer used to describe trade reporting 
services.
    Several other portions of the NASD Rule 7000 Series reference fees 
for services that, following the Nasdaq Exchange's operational date, 
will no longer be offered by NASD or Nasdaq. These provisions become 
inactive after August 1, 2005. NASD will file a cleanup proposed rule 
change to remove fees no longer charged by NASD at a later date.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\8\ in general, and with 
Sections 15A(b)(5) of the Act,\9\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility or 
system which NASD operates or controls. The proposed rule change 
reflects demand patterns for NNW and Weblink ACT and is designed to 
ensure that as between the products, fees are allocated appropriately 
to allow recovery of costs.
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    \8\ 15 U.S.C. 78o-3.
    \9\ 15 U.S.C. 78o-3(b)(5).
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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 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

    Written comments were neither solicited nor received.

[[Page 58032]]

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 \10\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\11\ because it establishes or changes a member due, fee, or 
other charge imposed by NASD. 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.\12\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
    \12\ See footnote 3, supra.
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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 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 rule-comments@sec.gov. Please include 

File Number SR-NASD-2006-094 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASD-2006-094. 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-2006-094 and should be submitted on or before October 23, 2006.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
Nancy M. Morris,
Secretary.
[FR Doc. E6-16168 Filed 9-29-06; 8:45 am]

BILLING CODE 8010-01-P