Document ID: SEC-2007-0534-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NASDAQ Stock Market LLC
Posted Date: 2007-04-12T04:00Z

[Federal Register: April 12, 2007 (Volume 72, Number 70)]
[Notices]               
[Page 18499-18500]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ap07-91]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55588; File No. SR-NASDAQ-2007-038]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Nasdaq Market Center Fees

April 5, 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 April 3, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by Nasdaq. 
Nasdaq has designated the proposal as constituting a ``non-
controversial'' proposed rule change under Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) 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).
    \4\ 4 17 CFR 240.19b-4(f)(6).
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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 Nasdaq members using the 
Nasdaq Market Center. Nasdaq proposes to make the proposed rule change 
retroactively effective with respect to the Nasdaq Market Center's 
invoices for executions of non-Nasdaq securities priced under $1 during 
the period from March 5, 2007 to March 21, 2007.\5\ The text of the 
proposed rule change is available at Nasdaq, on the Exchange's Web site 
at http://www.nasdaq.com, and in the Commission's Public Reference 

Room.
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    \5\ Telephone conversation between John Yetter, Vice President 
and Deputy General Counsel, Nasdaq, and Sara Gillis, Attorney, 
Division of Market Regulation, Commission, on April 5, 2007.
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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 recently reduced its fee for executing orders in non-Nasdaq 
securities priced under $1 to 0.1% of the cost of the transaction, 
effective March 22, 2007, on an immediately effective basis; this is 
the same as the comparable fee for Nasdaq-listed securities that had 
previously been in effect.\6\ Prior to this change, the execution fee 
for non-Nasdaq securities priced under $1 had ranged from $0.0026 to 
$0.003 per share executed. Nasdaq notes, however, that Rule 610(c)(2) 
of Regulation NMS \7\ limits the fee on an execution of an order 
against a protected quotation, if the price of the protected quotation 
is less than $1, to 0.3% of the quotation's price per share. 
Accordingly, Nasdaq is proposing to reduce the execution fee for non-
Nasdaq securities to 0.25% of the transaction cost for the period from 
March 5, 2007 (the effective date of Rule 610) through March 21, 2007 
(the day before the effectiveness of SR-NASDAQ-2007-026). The change 
will result, in all circumstances, in a reduction of the execution fees 
previously payable with respect to orders in non-Nasdaq securities 
priced under $1. Nasdaq is not, however, proposing to modify the 
routing fees or liquidity provider rebates applicable to transactions 
in these securities during the same time period.
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    \6\ See Securities Exchange Act Release No. 55576 (April 3, 
2007) (SR-NASDAQ-2007-026).
    \7\ 17 CFR 242.610(c)(2).
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general, and with Section 
6(b)(4) 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 Nasdaq operates or controls. This change will reduce execution 
fees for trading non-Nasdaq securities at prices under $1 in a manner 
consistent with the requirements of Rule 610 of Regulation NMS.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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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

    Written comments were neither solicited nor received.

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

    Because the proposed rule change: (1) Does not significantly affect 
the protection of investors or the public interest; (2) does not impose 
any significant burden on competition; and (3) does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, the proposed rule change has 
become effective pursuant to Section

[[Page 18500]]

19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). As required by Rule 19b-
4(f)(6)(iii) under the Act, the Exchange also provided with the 
Commission with written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the date of the 
proposed rule change.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay and allow the proposed rule change to become operative 
immediately. The Commission hereby grants that request.\12\ The 
Commission believes that the Exchange's proposal raises no regulatory 
issues, as the Exchange represents that proposed rule change will 
result in a retroactive reduction in fees for all executions in non-
Nasdaq securities priced under $1 from March 5, 2007 to March 21, 2007. 
Furthermore, this rule change will allow the Exchange to immediately 
comply with the requirements of Rule 610(c)(2) of Regulation NMS, which 
limits the fee on an execution of an order against a protected 
quotation, if the price of the protected quotation is less than $1, to 
0.3% of the quotation's price per share.\13\ Therefore, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest.
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    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \13\ 17 CFR 242.610(c)(2).
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    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.

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-NASDAQ-2007-038 on the subject line.

Paper Comments

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

    All submissions should refer to File Number SR-NASDAQ-2007-038. 
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 Nasdaq. 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-NASDAQ-2007-038 and should be submitted on or before May 
3, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6879 Filed 4-11-07; 8:45 am]

BILLING CODE 8010-01-P