[Federal Register Volume 64, Number 199 (Friday, October 15, 1999)]
[Notices]
[Pages 56004-56005]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26894]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41993; File No. SR-NASD-99-47]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. Relating to SelectNet Fees
October 8, 1999.
Pursuant 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 September 20, 1999, the National Association of Securities Dealers,
Inc. (``NASD''), through its wholly owned 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
September 29, 1999, Nasdaq filed with the Commission Amendment No. 1 to
the proposed rule change.\3\ Nasdaq has designated this proposed rule
change as establishing or changing a due, fee or other charge under
Section 19(b)(3)(A) of the Act,\4\ which renders the proposed rule
change effective upon receipt of the filing by the Commission.\5\ The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 makes several technical, non-substantive
changes to Nasdaq's proposal. See letter from Thomas Moran,
Assistant General Counsel, Nasdaq, to Mignon McLemore, Attorney,
Division of Market Regulation, Commission, dated September 28, 1999
(``Amendment No. 1'').
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ The proposed rule change is deemed filed as of the date
Amendment No. 1 was received by the Commission.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of
Substance of Proposed Rule Change
Nasdaq is proposing to make changes to NASD Rule 7010, which sets
forth the SelectNet fee schedule. Proposed new language is italicized;
proposed deletions are in brackets.
* * * * *
7000. CHARGES FOR SERVICES AND EQUIPMENT
7010. System Services
(a)-(h) No Change
(i) SelectNet Service
[Effective February 1, 1998, t] The following charges shall apply to
the use of SelectNet:
Transaction Charge--$2.50/Side
Directed Order Charge--$1.00 (per execution, entering party only)
Cancellation Fee--$.25/per order
For a pilot commencing October 1, 1999, and lasting until March 31,
2000 an NASD member who enters a directed SelectNet order that is
subsequently executed in whole or in part will have its monthly
Directed Order Charges assessed as follows:
$1.00 per order for the first 50,000 directed orders executed that
month
$0.70 per order for the next 50,000 directed orders executed that same
month
$0.20 per order for all remaining directed orders executed that same
month
Executions resulting from broadcast messages will continue to be
assessed at a $2.50 per side rate.
[[Page 56005]]
(j)-(n) 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
In a continuing effort to provide the most cost-effective trading
environment of NASD members, Nasdaq is proposing a pilot program to
reduce execution costs for any NASD member who engages in significant
trading activity using Nasdaq's SelectNet system. Under the pilot, NASD
members who send directed orders through SelectNet that are
subsequently executed in whole or in part will be assessed monthly
SelectNet directed orders fees as follows: Executions 0-50,000 that
month will be assessed at a $1.00 per execution rate; Executions
50,001-100,000 that same month will be assessed at a $0.70 per
execution rate; and Executions 100,001 or higher that same month will
be assessed at a $0.20 per execution rate. Executions resulting from
broadcast messages will continue to be assessed at a $2.50 per side
rate. The pilot, like previous Nasdaq SelectNet fee reductions,\6\
responds to dramatic increases in SelectNet execution rates and seeks
to synchronize Nasdaq's fee structure with current market activity to
achieve material reductions in market participants costs. This pilot
program shall run from October 1, 1999, through March 31, 1999, unless
further extended or modified by Nasdaq.
---------------------------------------------------------------------------
\6\ See Exchange Act Release No. 39248 (October 16, 1997); 62 FR
55296 (October 23, 1997).
---------------------------------------------------------------------------
2. Statutory Basis
Nasdaq believes the proposed rule change is consistent with Section
15A(b)(5) \7\ of the Act because it is designed to provide for the
equitable allocation of reasonable dues, fees, and other charges among
its members and issuers and other persons.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78o(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq 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
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
The foregoing rule change establishes or changes a due, fee, or
other charge imposed by Nasdaq and, therefore, has become effective
pursuant to Section 19(b)(3)(A)(ii) \8\ of the Act and subparagraph
(f)(2) of Rule 19b-4 thereunder.\9\ At any time within 60 days of the
filing of the proposed rule change,\10\ 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.\11\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
\10\ See supra, note 4.
\11\ In reviewing this proposal, the Commission has considered
the proposal's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549-
0609. 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 at 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 submissions should refer to File No. SR-NASD-99-47 and should
be submitted by November 5, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-26894 Filed 10-14-99; 8:45 am]
BILLING CODE 8010-01-M
