Document ID: SEC-2007-0132-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2007-01-26T05:00Z

[Federal Register: January 26, 2007 (Volume 72, Number 17)]
[Notices]               
[Page 3894-3896]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ja07-159]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55129; File No. SR-NASD-2006-137]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Modify Pricing for NASD Members Using ITS/CAES System 
and Inet Facility

January 18, 2006.
    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 29, 2006, the National Association of Securities Dealers, 
Inc. (``NASD'') filed 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 substantially by NASD. 
NASD submitted the proposed rule change under Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission.\5\ 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).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(2).
    \5\ NASD stipulated the implementation date to be January 2, 
2007.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD proposes to amend NASD Rule 7010 to modify the pricing for its 
members using the ITS/CAES System and the Inet facility (the ``Nasdaq 
Facilities''), which are currently operated by The Nasdaq Stock Market, 
Inc. and its subsidiaries (``Nasdaq'') as facilities of NASD. The text 
of the proposed rule change is available on the NASD's Web site at 
http://www.nasd.com, at NASD and at the Commission's Public Reference 

Room.

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 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

[[Page 3895]]

in Item IV below. NASD 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

Purpose
    This proposed rule change adopts a simplified pricing schedule for 
the systems for trading non-Nasdaq exchange-listed securities that are 
currently operated as NASD facilities by Nasdaq. The fees apply to the 
Nasdaq Facilities, but as is currently the case with respect to fees 
for these systems, the fee schedule reflects the volume of a member's 
use of ITS/CAES, Inet, and the Nasdaq Market Center (a facility of The 
NASDAQ Stock Market LLC (the ``Nasdaq Exchange'')) in determining 
applicable fees.\6\ The order execution fees in the Nasdaq Facilities, 
fees for routing to venues other than the New York Stock Exchange (the 
``NYSE''), and fees for routing orders in exchange-traded funds to the 
NYSE will be as follows:
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    \6\ The consideration of volumes through the Nasdaq Exchange is 
a function of the phased transition of Nasdaq from an operator of 
NASD facilities to a separate national securities exchange. As such, 
NASD fee schedules will be amended to remove all references to 
Nasdaq at or shortly after the time when the Nasdaq Exchange begins 
to trade non-Nasdaq exchange-listed securities. The Nasdaq Exchange 
has submitted a comparable filing to establish the same fees for 
Nasdaq-listed securities, which likewise considers trading volumes 
through ITS/CAES and Inet. See SR-NASDAQ-2006-068.
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     $0.0027 per share executed for market participants that 
(i) add more than 30 million shares of liquidity per day during the 
month and route or remove more than 50 million shares of liquidity per 
day during the month, or (ii) add more than 20 million shares of 
liquidity per day during the month and route or remove more than 60 
million shares of liquidity per day during the month;
     $0.0028 per share executed for market participants that 
add more than 20 million shares of liquidity per day during the month 
and route or remove more than 35 million shares of liquidity during the 
month;
     $0.003 per share executed for other market participants.
    The order execution fee for routed orders that do not attempt to 
execute in the Nasdaq Facilities prior to routing will be $0.003 per 
share executed and the credits to members providing liquidity through 
the Nasdaq Facilities will be as follows:
     $0.0025 per share executed for market participants adding 
more than 30 million shares of liquidity per day during the month;
     $0.002 for other market participants.
    As is currently the case, for orders in securities other than 
exchange-traded funds routed to the NYSE, the fee will be $0.000225 per 
share executed if the order attempts to execute in the Nasdaq 
Facilities prior to routing and $0.000275 per share executed if the 
order does not attempt to execute prior to routing. The new fee 
schedule will also retain the current surcharge of $0.01 per share 
executed for orders charged a fee by an American Stock Exchange 
specialist.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with 
Section 15A of the Act,\7\ in general, and furthers the objectives of 
Section 15A(b)(5) of the Act,\8\ 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 the NASD operates or controls.
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    \7\ 15 U.S.C. 78o-3.
    \8\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD 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

    NASD has neither solicited nor received 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 \9\ and paragraph (f)(2) of Rule 19b-4 
thereunder,\10\ because it establishes or changes a due, fee, or other 
charge imposed by the 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.
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    \9\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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-2006-137 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASD-2006-137. 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 offices 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-2006-137 
and should be submitted on or before February 16, 2007.

[[Page 3896]]

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1229 Filed 1-25-07; 8:45 am]

BILLING CODE 8011-01-P