Document ID: SEC-2007-0493-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2007-04-03T04:00Z

[Federal Register: April 3, 2007 (Volume 72, Number 63)]
[Notices]               
[Page 15924-15926]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03ap07-98]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55538; File No. SR-NASD-2007-018]

 
Self-Regulatory Organizations: National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Amend the NASD Rule 7000 Series To Delete References To 
Systems and Services That Will No Longer Be Provided by NASD

March 27, 2007.
    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, 2007, 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 has designated this proposal as ``establishing or changing a due, 
fee, or other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\ and 
Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective 
upon filing with the Commission. 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    NASD is proposing to amend the NASD Rule 7000 Series (Charges for 
Services and Equipment) to delete references to systems and services 
that will no longer be provided by NASD upon the operation of NASD's 
Alternative Display Facility (the ``ADF'') for non-Nasdaq exchange-
listed securities, which is anticipated to be March 5, 2007. The Rule 
7000 Series only will apply to NASD's OTC Bulletin Board Service, OTC 
Reporting Facility (``ORF'') and Trade Reporting and Compliance Engine 
(``TRACE''). In this proposed rule change, NASD also is providing 
notice relating to the calculation of fees under Rule 7010 for use of 
NASD's Intermarket Trading System/Computer Assisted Execution Service 
(the ``ITS/CAES System'') on March 1 and 2, 2007, which will apply if 
the changes proposed herein are implemented on March 5, 2007 as 
anticipated. The text of the proposed rule change is available at NASD, 
the Commission's Public Reference Room, and http://www.nasd.com.

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 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

1. Purpose
    On June 30, 2006, the Commission approved SR-NASD-2005-087, which, 
among other things, proposed an implementation strategy for the 
operation of the Nasdaq Stock Market LLC (the ``Nasdaq Exchange'') as a 
national securities exchange for Nasdaq-listed securities during a 
transitional period.\5\ On November 21, 2006, the Commission approved 
SR-NASD-2006-104, which, among other things, proposed amendments 
necessary to reflect the complete separation of The Nasdaq Stock Market 
Inc. (``Nasdaq'') from NASD upon the operation of the Nasdaq Exchange 
as a national securities exchange for non-Nasdaq exchange-listed 
securities.\6\ As described in SR-NASD-2006-135, for a transitional 
period, Nasdaq has continued to operate the SuperIntermarket (SiM) 
trading platform on NASD's behalf via the Transitional System and 
Regulatory Services Agreement, even upon commencement of the Nasdaq 
Exchange's operation as an exchange for non-Nasdaq exchange-listed 
securities on February 12, 2007.\7\ Upon the operation of the ADF for 
non-Nasdaq exchange-listed securities, SiM

[[Page 15925]]

will no longer be operated as a facility of NASD.
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    \5\ See Securities Exchange Act Release No. 54084 (June 30, 
2006), 71 FR 38935 (July 10, 2006) (order approving SR-NASD-2005-
087).
    \6\ See Securities Exchange Act Release No. 54798 (November 21, 
2006), 71 FR 69156 (November 29, 2006) (order approving SR-NASD-
2006-104).
    \7\ See Securities Exchange Act Release Nos. 54984 (December 20, 
2006), 71 FR 78245 (December 28, 2006) (notice of filing and 
immediate effectiveness of SR-NASD-2006-135) and 55274 (February 12, 
2007), 72 FR 7785 (February 20, 2007) (notice of filing and 
immediate effectiveness of SR-NASD-2007-012).
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    Currently, the NASD Rule 7000 Series addresses, among other things, 
the pricing schedule for the Consolidated Quotation Service and ITS/
CAES System, which operate as part of, or in conjunction with, the SiM 
platform. Once the ADF becomes operational for non-Nasdaq exchange-
listed securities, these systems will no longer be operated as NASD 
facilities and as such, the pricing schedule for use of these systems, 
as well as associated equipment and other fees, must be deleted from 
NASD's rules. Accordingly, NASD is proposing to rename the Rule 7000 
Series as ``Charges For OTC Reporting Facility, OTC Bulletin Board and 
Trade Reporting and Compliance Engine Services'' and delete from the 
Rule 7000 Series all fee provisions that are no longer applicable. The 
current pricing schedule for members' use of the OTC Bulletin Board 
Service, ORF and TRACE will be retained and renumbered. Specifically, 
current Rule 7010(g) will be renumbered as Rule 7010 (OTC Reporting 
Facility) and amended to apply only to the ORF; current Rule 7010(j) 
will be renumbered as Rule 7020 (OTC Bulletin Board Service); current 
Rule 7010(k) will be renumbered as Rule 7030 (Trade Reporting and 
Compliance Engine (TRACE)); and paragraphs (3) and (4) of current Rule 
7010(p) will be renumbered as paragraphs (a) and (b) of Rule 7040 
(Historical Research and Administrative Reports). NASD is not proposing 
to modify any of the fees relating to such services in this proposed 
rule change; it is only deleting those fee provisions that are no 
longer applicable.\8\
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    \8\ NASD notes that NASD members will continue to access the OTC 
Bulletin Board, which Nasdaq operates on NASD's behalf, via the 
Nasdaq Workstation. The Nasdaq Workstation also provides access to a 
variety of Nasdaq Exchange systems and services. Pursuant to the 
proposed rule change, the fees relating to access to and use of the 
Nasdaq Workstation will be deleted from NASD's rules as NASD does 
not charge for this service. However, NASD members are nonetheless 
required to pay all fees for access to and use of the Nasdaq 
Workstation pursuant to the applicable rules of the Nasdaq Exchange 
(see, e.g., Rules 7011 and 7015), which apply to members and non-
members of the Nasdaq Exchange.
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    NASD also notes that the fee schedule currently set forth in Rule 
7010 relating to the use of the ITS/CAES System varies based upon the 
member's monthly volume. Assuming implementation of the changes 
proposed herein on March 5, 2007, the fees in Rule 7010 will apply only 
to two trading dates in March. Thus, NASD is clarifying that the fees 
charged for use of the ITS/CAES System on March 1 and 2, 2007 will be 
based on the member's volume for February 2007. In other words, the fee 
rates charged to a member for March 1 and 2, 2007 will be the same 
rates charged to the member for February 2007.
    NASD has filed the proposed rule change for immediate 
effectiveness. The operative date of the proposed rule change will be 
the date upon which the ADF begins operating for non-Nasdaq exchange-
listed securities, currently scheduled for March 5, 2007.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A of the Act,\9\ in general, and with Section 
15A(b)(5) of the Act,\10\ 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. NASD is proposing to delete 
references to fees for systems and services that NASD will no longer 
provide and is not proposing to modify the fees for use of any of the 
systems and services that NASD will continue to provide.
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    \9\ 15 U.S.C. 78o-3.
    \10\ 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 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

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change establishes or changes a 
member due, fee, or other charge imposed by the Exchange, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and 
subparagraph (f)(2) of Rule 19b-4 \12\ thereunder. 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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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-2007-018 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-2007-018. 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-2007-018 and should be submitted on or before April 24, 2007.

[[Page 15926]]

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-6125 Filed 4-2-07; 8:45 am]

BILLING CODE 8010-01-P