Document ID: SEC-2006-0804-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2006-06-23T04:00Z

[Federal Register: June 23, 2006 (Volume 71, Number 121)]
[Notices]               
[Page 36143-36145]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jn06-74]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54002; File No. SR-NASD-2006-072]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by National Association of 
Securities Dealers, Inc. To Modify the Fees for Trading and Compliance 
Data and the Data Package Available to NASD Member Firms via 
NasdaqTrader.com

June 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 June 5, 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, II, 
and III below, which Items have been prepared by Nasdaq. Pursuant to 
section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) 
thereunder,\4\ Nasdaq has designated this proposal as establishing or 
changing a 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 
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

    Nasdaq proposes to modify the fees for trading and compliance data 
available to NASD member firms via NasdaqTrader.com, as well as to 
update the information that the Nasdaq Trading and Compliance Data 
Package (``Data Package'') includes.\5\ Nasdaq will implement the new 
fees on July 1, 2006.
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    \5\ March 31, 2005 was the last day that customers had access to 
the Daily Share Volume Report. Nasdaq notified customers via email 
on March 14, 2005, and posted a notice simultaneously on the 
NasdaqTrader.com Web site, regarding the removal of the Daily Share 
Volume Report from the Data Package. In addition to having no 
customer demand for the Daily Share Volume Report, Nasdaq received 
no complaints nor any customer inquiries before or after its removal 
from the Data Package. E-mail from Jonathan F. Cayne, Associate 
General Counsel, Nasdaq, to Joseph Morra, Special Counsel, 
Commission, dated June 14, 2006. The Commission notes that Nasdaq 
should have filed a proposed rule change at the time it decided to 
remove the Daily Share Volume Report from the Data Package.
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    The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in brackets.\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. Prior to the 

date when The NASDAQ Stock Market LLC (``NASDAQ LLC'') commences 
operations, NASDAQ LLC will file a conforming change to the rules of 
NASDAQ LLC approved in Securities Exchange Act Release No. 53128 
(January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131).
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Rule 7010. System Services
(a)-(m) No Change
(n) NasdaqTrader.com Trading and Compliance Data Package Fee
    The charge to be paid by an NASD Member Firm for each entitled user 
receiving Nasdaq Trading and Compliance Data Package via 
NasdaqTrader.com is $130 [$100] per month (monthly maximum of 25

[[Page 36144]]

Historical Research Reports) or $160 [$130] per month (monthly maximum 
of 100 Historical Research Reports). The Nasdaq Trading and Compliance 
Data Package includes:

[(1) Daily Share Volume Report for a Broker/Dealer (Member Firm's 
information only)]
    (1) [(2)] Monthly Compliance Report Cards (Member Firm's 
information only).
    (2) [(3)] Monthly Summaries.
    (3) [(4)] Historical Research Reports.
    [(i) Market Maker Price Movement Report].
    [(ii) Equity Trade Journal (Member Firm's information only)].
    The Association may modify the contents of the Nasdaq Trading and 
Compliance Data Package from time to time based on subscriber interest.
    (o)-(w) 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 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 proposes to modify the fees for trading and compliance data 
available to NASD member firms via NasdaqTrader.com, as well as to 
update the information that is included in the Data Package. 
NasdaqTrader.com allows NASD member firms to obtain data regarding 
their own trading volume in securities in which they report volume, as 
well as information concerning their compliance with NASD rules.
    Specifically, NASD member firms that subscribe to the Data Package 
can obtain the following reports: (1) Monthly Compliance Report Cards, 
which outline the firm's own compliance with various NASD rules; (2) 
Monthly Summaries, which provide monthly trading volume statistics for 
the top 50 market participants broken down by industry sector, security 
or type of trading; and (3) Historical Research Reports, which provide 
a variety of historical trading data such as a market maker's quote 
updates for a security on a specified date. Due to the lack of customer 
demand, Nasdaq removed the Daily Share Volume Report from the Data 
Package in March 2005.\7\
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    \7\ See footnote 5 supra.
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    Use of this service is voluntary and NASD member firms have the 
option of subscribing to two different levels of the Data Package. The 
``basic'' level, which currently has a fee of $100 per month, allows 
access to a maximum of 25 Historical Research Reports per month. The 
``premium'' level, which currently has a fee of $130 per month, allows 
access to a maximum of 100 Historical Research Reports per month. These 
fees have not increased since October 2003, even though several 
enhancements have been made since that time. Some of these enhancements 
include: (1) New OATS Compliance Report Cards; and (2) new historical 
research reports (e.g., Time and Sales with Inside Quotes and NASDAQ 
Market Center Activity Reports for Other Exchange-Listed Securities).
    In order to help cover the costs associated with the maintenance of 
the Data Package service, as well as the implementation of additional 
enhancements to the service in the near future, Nasdaq proposes to 
increase the subscription fee for the service. Specifically, Nasdaq 
proposes to increase the subscription fee for the ``basic'' level from 
$100 to $130 per month, and increase the fee for the ``premium'' level 
from $130 to $160 per month. These fee increases will commence on July 
1, 2006.
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 
section 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 the NASD operates or controls. Specifically, use of the 
Data Package service is voluntary and the subscription fees will be 
imposed on all member firms equally based on the level of service 
selected. In addition, the increase in fees will help cover the costs 
associated with maintaining and enhancing the Data Package service.
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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.

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.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 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-2006-072 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 NASD-2006-072. 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

[[Page 36145]]

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 the 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 NASD-2006-072 and should be 
submitted on or before July 14, 2006.

    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. E6-9936 Filed 6-22-06; 8:45 am]

BILLING CODE 8010-01-P