[Federal Register Volume 64, Number 22 (Wednesday, February 3, 1999)]
[Notices]
[Pages 5329-5331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2484]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40983; File No. SR-NASD-98-99]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. Relating to Establishment of a Fee to Provide
Proprietary Regulatory and Trading Data to NASD Members via
NasdaqTrader.com
January 27, 1999.
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 December 31, 1998,\3\ the National Association of Securities
Dealers, Inc. (``NASD'' or ``Association''), through its wholly-owned
subsidiary The Nasdaq Stock Market, Inc. (``Nasdaq''), filed with the
Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as describe in Items I, II, and III below, which
Items have been prepared by Nasdaq. Nasdaq has designated this proposal
as one establishing or changing a due, fee or other charge imposed by
the NASD under Section 19(b)(3)(A)(ii) of the Act,\4\ which renders the
proposal effective
[[Page 5330]]
upon filing by 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\ The Exchange filed Amendment No. 1 with the Commission on
January 21, 1999. The amendment corrects an inaccurate reference to
the Act. See Letter from Thomas P. Moran, Senior Attorney, The
Nasdaq Stock Market, Inc., to Mignon McLemore, Division of Market
Regulation, SEC, dated January 21, 1999.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Nasdaq is proposing to amend Rule 7010 of the NASD Rules, to
establish a fee for a compliance and trading data report distribution
facility accessible to NASD members through its ``NasdaqTrader.com''
website. Below is the text of the proposed rule change. Proposed new
language is italicized.
Rule 7010 System Services
(a)-(n) No Changes
(o) 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 $75 per month (monthly maximum of 25 Historical
Research Reports) or $100 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)
(2) Monthly Compliance Report Cards (Member Firm's information
only)
(3) Monthly Summaries
(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.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the 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. 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
Nasdaq is proposing to establish a fee for a trading and compliance
data distribution facility accessible to NASD members through its
``NasdaqTrader.com'' website. Under the proposal, NASD member firms
will be able 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. Use of this service will
be voluntary, and fees from NASD members who subscribe will be used to
offset the costs associated with the maintenance of the secured content
as well as the product's portion of the ongoing maintenance and
administration of the Nasdaq web-security infrastructure.
Specifically, NASD member firms who elect to receive Nasdaq's
Trading and Compliance Data Package (``Data Package'') will be able to
obtain the following: (1) Daily Share Volume Reports displaying the
firm's own T+1 daily trading volume for each issue in which the firm
reports volume; (2) Monthly Compliance Report Cards outlining the
firm's own compliance status in the areas of trade reporting, firm
quote compliance and best execution obligations; (3) Monthly Summaries,
which provide monthly trading volume statistics for the top 50 market
participants broken down by industry sector, security, or type of
trading (e.g., block or total); and (4) Historical Research Reports
consisting of Market Maker Price Movement Reports (``MMPMR''), which
show all of a Market Maker's quote updates (i.e., price, size and
inside quote at time of update) for a security on a specified date, and
Equity Trade Journals (``ETJs'') detailing all trades reported through
the Automated Confirmation Transaction Service by the NASD member firm
for a selected security and date. Due to capacity restrictions, Data
Package users seeking Historical Research Reports will be limited to
either 25 or 100 monthly reports depending on the subscription fee
paid.
Recognizing the proprietary and confidential nature of the data
contained in the Data Package, Nasdaq has established a secure
information display and retrieval environment through the combined use
of user IDs, passwords and digital certificates. To further protect
NASD member firms' proprietary data, the service is designed so that
firm-specific reports regarding compliance and trading activity will
only be made available to the member firm itself. Nasdaq believes that
the proposed rule change is consistent with the provisions of Section
15A(b)(5) \5\ of the Act in that the Data Package fee 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 association operates or controls.\6\
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\5\ 15 U.S.C. 78o-3(b)(5).
\6\ Initially, the proposal inaccurately referenced another
Section of the Act. Amendment No. 1 corrected this mistake. See
supra note 3.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The 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
The foregoing rule change has become effective immediately pursuant
to Section 19(b)(3)(A)(ii) \7\ of the Act and subparagraph (e) of Rule
19b-4 thereunder \8\ in that it establishes or changes a due, fee or
other charge.
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\7\ 15 U.S.C. 78s(b)(3)(A)(ii).
\8\ 17 CFR 240.19(b-4(e).
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At any time within 60 days of the filing of a rule change pursuant
to Section 19(b)(3)(A) of the Act, the Commission may summarily
abrogate the 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549. 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
[[Page 5331]]
available for inspection and copying in the Commission's Public
Reference Room. Copies of such filing will also be available for
inspection and copying at the principal office of the NASD. All
submissions should refer to the file number in the caption above and
should be submitted by February 24, 1999.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-2484 Filed 2-2-99; 8:45 am]
BILLING CODE 8010-01-M
