Document ID: SEC-2005-0251-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2005-11-17T05:00Z

[Federal Register: November 17, 2005 (Volume 70, Number 221)]
[Notices]               
[Page 69793-69795]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17no05-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52758; File No. SR-NASD-2005-126]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of Proposed Rule Change To Modify the Pricing for Non-Members Using 
Nasdaq's Brut Facility

November 9, 2005.
    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 October 26, 2005, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission'') 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, and at

[[Page 69794]]

the same time is granting accelerated approval of the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I.Self-Regulatory Organization's Statement of the Terms of Substance of 
the Proposed Rule Change

    Nasdaq proposes to modify the pricing for non-members using 
Nasdaq's Brut Facility (``Brut''). Nasdaq requests approval to 
implement the proposed rule change retroactively as of November 1, 
2005. The text of the proposed rule change is below. Proposed new 
language is in italics. Proposed deletions are in [brackets].
* * * * *

7010. System Services

    (a)-(h) No change.
    (i) Nasdaq Market Center and Brut Facility Order Execution
    (1)-(5) No change.
    (6) The fees applicable to non-members using Nasdaq's Brut Facility 
shall be the fees established for members under Rule 7010(i), as 
amended by SR-NASD-2005-019, SR-NASD-2005-035, SR-NASD-2005-048, [and 
]SR-NASD-2005-071, and SR-NASD-2005-125, and as applied to non-members 
by SR-NASD-2005-020, SR-NASD-2005-038, SR-NASD-2005-049, [and ]SR-NASD-
2005-072, and SR-NASD-2005-126.
    (j)-(v) No change.
* * * * *

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 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
    In SR-NASD-2005-125, which applies to NASD members, Nasdaq has 
modified the fee schedule applicable to execution and routing of orders 
in exchange-traded funds (``ETFs'') listed on exchanges other than the 
American Stock Exchange (``Amex''). In this filing, Nasdaq is proposing 
to apply the same modification to non-NASD members that use Nasdaq's 
Brut Facility.
    Nasdaq states that, prior to NASD-2005-125, execution and routing 
of Nasdaq-listed stocks and Amex-listed ETFs has been subject to the 
fee schedule in NASD Rule 7010(i)(1), whereas execution and routing of 
other exchange-listed securities, including other exchange-listed ETFs, 
had generally not been subject to per order routing and execution 
charges. Because an increasing number of ETFs are being listed on 
exchanges other than the Amex, however, Nasdaq states that it has 
concluded that it is necessary to apply the same fee schedule to all 
ETFs, to ensure that its fees are commensurate with the volumes of 
shares being routed and executed through its systems.
2.Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\3\ in general, and with 
Section 15A(b)(5) of the Act,\4\ in particular, in that the proposed 
rule change 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 the NASD operates or controls. The 
proposed rule change applies to non-members that use Nasdaq's Brut 
Facility a fee change that is being implemented for NASD members that 
use the Nasdaq Market Center and/or Nasdaq's Brut Facility. 
Accordingly, Nasdaq believes that the proposed rule change promotes an 
equitable allocation of fees between members and non-members using 
Nasdaq's order execution facilities. Nasdaq states that the proposed 
change reflects the increased extent to which ETFs are being listed on 
exchanges other than the Amex and would result in the application of 
the same fee schedule to all ETFs, regardless of where they are listed.
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    \3\ 15 U.S.C. 78o-3.
    \4\ 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Nasdaq states that 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. 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-2005-126 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NASD-2005-126. 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 Nasdaq's 
Office of the Secretary. 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-2005-126 and should be submitted on or before December 8, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a self-regulatory

[[Page 69795]]

organization.\5\ Specifically, the Commission believes that the 
proposed rule change is consistent with Section 15A(b)(5) of the 
Act,\6\ which requires that the rules of the self-regulatory 
organization provide for the equitable allocation of reasonable dues, 
fees, and other charges among members and issuers and other persons 
using any facilities or system which it operates or controls.
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    \5\ The Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78o-3(b)(5).
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    The Commission notes that this proposal would retroactively modify 
pricing for non-NASD members using the Nasdaq's Brut Facility to be 
implemented as of November 1, 2005. This proposal would permit the 
schedule for non-NASD members to mirror the schedule applicable to NASD 
members that became effective October 26, 2005, pursuant to SR-NASD-
2005-125 and that Nasdaq stated it would implement on November 1, 2005.
    The Commission finds good cause for approving the proposed rule 
change prior to the 30th day of the date of publication of the notice 
thereof in the Federal Register. The Commission notes that the proposed 
fees for non-NASD members are identical to those in SR-NASD-2005-125, 
which implemented those fees for NASD members and which became 
effective as of October 26, 2005. The Commission notes that this change 
will promote consistency in Nasdaq's fee schedule by applying the same 
pricing schedule with the same date of effectiveness for both NASD 
members and non-NASD members. Therefore, the Commission finds that 
there is good cause, consistent with Section 19(b)(2) of the Act,\7\ to 
approve the proposed change on an accelerated basis.
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    \7\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (File No. SR-NASD-2005-126), is 
approved on an accelerated basis.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-6356 Filed 11-16-05; 8:45 am]

BILLING CODE 8010-01-P