03-10630. Self-Regulatory Organizations; Order Granting Approval to Proposed Rule Change and Amendment Nos. 1, 2, 3, and 4 Thereto by the National Association of Securities Dealers, Inc. to Retroactively Establish Maximum Execution Fees and ...

April 23, 2003.

On August 6, 2002, the National Association of Securities Dealers, Inc. (“NASD” or “Association”), through its subsidiary The Nasdaq Stock Market, Inc. (“Nasdaq”), filed with the Securities and Exchange Commission (“Commission”), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)^[1] and rule 19b-4 thereunder,^[2] a proposed rule change to retroactively establish maximum execution fees and liquidity provider rebates for SuperSoes transactions in low-priced securities.^[3] On August 19, 2002; August 30, 2002; October 9, 2002; and February 21, 2003, Nasdaq submitted Amendment Nos. 1, 2, 3, and 4, respectively, to the proposed rule change.^[4] The proposed rule change, as amended, was published for comment in the Federal Register on March 19, 2003.^[5] The Commission received no comments on the proposal.

The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association ^[6] and, in particular, the requirements of section 15A of the Act ^[7] and the rules and regulations thereunder. The Commission finds specifically that the proposal is consistent with the requirements of section 15A(b)(5) of the Act,^[8] because 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 NASD operates. The Commission believes that the proposed fee and rebate limits should balance the interests of lowering execution costs for market participants and providing reasonable rebates for transactions involving low-priced securities.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,^[9] that the proposed rule change, as amended, (File No. SR-NASD-2002-107) be, and it hereby is, approved.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.^[10]

J. Lynn Taylor,

Assistant Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(1).

2.  17 CFR 240.19b-4.

3.  The Commission notes that Nasdaq also submitted a separate proposed rule change that established these same fee and rebate limits on a going-forward basis. See Securities Exchange Act Release No. 47441 (March 4, 2003), 68 FR 11432 (March 10, 2003) (File No. SR-NASD-2002-106).

4.  See letters from Thomas P. Moran, Associate General Counsel, Nasdaq, to Katherine A. England, Assistant Director, Division of Market Regulation (“Division”), Commission, dated August 16, 2002, August 30, 2002, October 9, 2002, and February 20, 2003.

5.  See Securities Exchange Act Release No. 47488 (March 12, 2003), 68 FR 13356.

6.  In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

7.  15 U.S.C. 78 o-3.

8.  15 U.S.C. 78 o-3(b)(5).

9.  15 U.S.C. 78s(b)(2).

10.  17 CFR 200.30-3(a)(12).