Document ID: SEC-2006-0382-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2006-03-23T05:00Z

[Federal Register: March 23, 2006 (Volume 71, Number 56)]
[Notices]               
[Page 14758-14760]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23mr06-82]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53505; File No. SR-NASD-2006-032]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval 
of a Proposed Rule Change and Amendment No. 1 Thereto To Reduce Routing 
Charges for Non-NASD Members

March 16, 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 March 1, 2006, 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. On March 15, 2006, 
Nasdaq submitted Amendment No. 1 to the proposed rule change.\3\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons, and at the 
same time is granting accelerated approval of the proposed rule change, 
as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 adds a technical correction to the rule 
text.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to reduce routing charges for non-NASD members that 
use Nasdaq systems and to eliminate for those non-members a volume-
based port fee waiver for non-NASD members that use Nasdaq's INET 
facility. The filing would apply to these non-members a pricing 
schedule similar to the schedule that Nasdaq instituted for members.\4\ 
Nasdaq requests approval to implement these reduced non-member fees on 
an accelerated basis with a retroactive effective date of March 1, 
2006, the

[[Page 14759]]

same date these fee changes became applicable to members.
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    \4\ See File No. SR-NASD-2006-031 (March 1, 2006).
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    The text of the proposed rule change, as amended, is below. 
Proposed new language is in italics. Proposed deletions are in 
[brackets].
* * * * *

7010. System Services

    (a) through (h) No change.

(i) Nasdaq Market Center, Brut, and Inet Order Execution and Routing

    (1) through (6) No change.
    (7) The fees applicable to non-members using Nasdaq's Brut and Inet 
Facilities 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, SR-NASD-2005-071, SR-NASD-2005-125, SR-NASD-2005-137, SR-
NASD-2005-154, SR-NASD-2006-013, [and] SR-NASD-2006-023, and SR-NASD-
2006-031, and as applied to non-members by SR-NASD-2005-020, SR-NASD-
2005-038, SR-NASD-2005-049, SR-NASD-2005-072, SR-NASD-2005-126, SR-
NASD-2005-138, SR-NASD-2005-155, SR-NASD-2006-014, [and] SR-NASD-2006-
024, and SR-NASD-2006-032.
    (j) through (v) No change.
    (w) INET System Connectivity
    (1) No change.
    (2) The INET connectivity fees applicable to non-members shall be 
the fees established for members under Rule 7010(w), as established by 
SR-NASD-2005-128 and amended by SR-NASD-2005-147, [and] SR-NASD-2006-
013, and SR-NASD-2006-031, and as applied to non-members by SR-NASD-
2005-128, SR-NASD-2005-148, [and] SR-NASD-2006-014, and SR-NASD-2006-
032.
* * * * *

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, as 
amended, and discussed any comments it received on the proposed rule 
change, as amended. 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
    Nasdaq states that this filing would apply to non-members a pricing 
schedule similar to that Nasdaq is instituting for members.\5\ Nasdaq 
states that under that schedule, NASD members saw their routing charges 
reduced as follows:
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    \5\ See footnote 4, supra.
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    (1) From $0.0015 to $0.001, the fee per share executed for routing 
orders in New York Stock Exchange (``NYSE'') listed securities to 
venues other than the NYSE;
    (2) From $0.0035 to $0.003, the fee per share executed for routing 
orders in securities listed on a venue other than the NYSE and routed 
to venues other than the American Stock Exchange (``AMEX'');
    (3) From $0.0035 to $0.003, the fee per share executed for routing 
orders in Non-Nasdaq Exchange Traded Funds (``ETFs'') to venues other 
than the NYSE or AMEX.
    Finally, Nasdaq states that NASD members had eliminated the port 
fee waiver for Nasdaq's INET facility subscribers that for a calendar 
month average daily execution of orders in the INET system of in excess 
of 30 million shares of added liquidity.
    Nasdaq represents that this filing seeks to impose these exact 
changes on non-NASD members that use Nasdaq systems and seeks to do so 
on accelerated basis and retroactively to March 1, 2006, the same date 
these fee changes became applicable to members.
2. Statutory Basis
    Nasdaq believes that the proposed rule change, as amended, is 
consistent with the provisions of Section 15A of the Act,\6\ in 
general, and with Section 15A(b)(5) of the Act,\7\ in particular, in 
that the proposed rule change, as amended, 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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    \6\ 15 U.S.C. 78o-3.
    \7\ 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, as amended, 
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, as amended, 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-2006-032 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-2006-032. 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 the 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-2006-032 and should be submitted on or before April 
13, 2006.

[[Page 14760]]

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 organization.\8\ 
Specifically, the Commission believes that the proposed rule change, as 
amended, is consistent with Section 15A(b)(5) of the Act,\9\ 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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    \8\ The Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
    \9\ 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 Facilities that would 
permit the schedule for non-NASD members to mirror the schedule 
applicable to NASD members that became effective March 1, 2006, 
pursuant to SR-NASD-2006-031.
    The Commission finds good cause for approving the proposed rule 
change, as amended, 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-2006-031, which implemented those fees for NASD members and which 
became effective as of March 1, 2006. 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,\10\ 
to approve the proposed rule change, as amended, on an accelerated 
basis.
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    \10\ 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,\11\ that the proposed rule change, as amended, (File No. SR-NASD-
2006-032), is approved on an accelerated basis.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-4175 Filed 3-22-06; 8:45 am]

BILLING CODE 8010-01-P