[Federal Register Volume 64, Number 117 (Friday, June 18, 1999)]
[Notices]
[Pages 32910-32911]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15488]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41499; File No. SR-NASD-99-25]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the National
Association of Securities Dealers, Inc. Relating to Level 1 Market Data
Fees
June 9, 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 May 17, 1999,\3\ the National Association of Securities Dealers,
Inc. (``NASD'' or ``Association'') through its wholly owned subsidiary,
Nasdaq Stock Market, Inc. (``Nasdaq''), filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') the proposed rule
change as described in Items I and II below, which Items have been
prepared by Nasdaq. On May 28m, 1999 Nasdaq submitted Amendment No. 1
to the proposed rule change.\4\ The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons. For the reasons discussed below, the Commission is granting
accelerated approval of the proposed rule change, as amended.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ On May 3, 1999, Nasdaq filed a similar proposed rule change,
SR-NASD-99-24. On May 14, 1999, Nasdaq withdrew this filing because
of procedural issues. See letter to Katherine A. England, Assistant
Director, Division of Market Regulation, Commission, from Robert E.
Aber, Senior Vice President and General Counsel, Nasdaq, dated May
3, 1999.
\4\ In Amendment No. 1, Nasdaq amended the proposed rule change
to remove a provision conditioning participation in the pilot
program on a participant guaranteeing to pay, at a minimum, 75% of
that participant's fee assessment associated with its December 1998
per level query usage and non-professional population. See letter to
Katherine A. England, Assistant Director, Division of Market
Regulation, Commission, from Thomas P. Moran, Assistant General
Counsel, Office of General Counsel, Nasdaq, dated May 27, 1999.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Nasdaq filed a proposed rule change to amend Rule 7010 of the
National Association of Securities Dealers, Inc. Under the proposal,
Nasdaq will establish a 1 year pilot program, commencing with the April
1, 1999 billing period,, to reduce by 50% the fees for Nasdaq Level 1
market data delivered to non-professional users o9n either a per query
or monthly basis.\5\
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\5\ The pilot expires April 1, 2000. If, after assessing the
pilot's viability, the NASD decides to make those fees a permanent
part of its fee structure, the Commission expects that the NASD will
file the proposal for approval. See NASD Manual, charges for
services and equipment, Rule 7100(b).
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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 III 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 has consistently supported the broadest, most effective
dissemination of market information to public investors To that end,
Nasdaq is proposing a 1 year pilot program to reduce by 50% the fees
for Level 1 market data delivered to non-professional users on either a
per query or monthly basis. Under the proposed pilot, the per query fee
would be reduced from $.01 to $0.005 per query and the non-professional
per user fee would be reduced from $4 to $2 per month.
Reducing these market data fees unequivocally demonstrates Nasdaq's
commitment to individual investors and responds to the dramatic
increase in the demand for real-time market data by non-professional
market participants. In addition, reduced Nasdaq rates will lessen the
costs to NASD member firms of supplying real-time market data to their
customers through automated means and is also likely to encourage
current delayed-data vendors to offer increased access to real-time
Level 1 data to their subscribers.
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 15A(b)(5) \6\ of the Act in that the proposed
rule change 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.
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\6\ 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.
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. 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 in the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of Nasdaq.
All submissions should refer to File No. SR-NASD-99-25 and should be
submitted by July 9, 1999.
IV. Commission's Findings and Order Granting Accelerated Approval
of the Proposed Rule Change
The Commission finds that the proposed rule change is consistent
with the requirements of the Act \7\ and the rules and regulations
thereunder
[[Page 32911]]
applicable to the NASD.\8\ Specifically, the proposed rule change is
consistent with Section 15A(b)(5) \9\ in that the proposal should
provide 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.
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\7\ In reviewing this proposal, the Commission has considered
its impact on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
\8\ 15 U.S.C. 78o-3.
\9\ 15 U.S.C. 78o-3(b)(5).
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Recent technological developments have allowed vendors to provide
their customers with more efficient and cost effective methods of
executing securities transactions. The Commission expects that by
reducing market data access fees the investor will further benefit by a
reduction in costs of executing these transactions. For the investor to
make sound, financial decisions, efficient and inexpensive access to
market data information is vital. Thus, the Commission believes that
reducing the market data fees by 50% should enhance investor access and
may encourage increased investor participation in the securities
markets.
Pursuant to Section 19(b)(2),\10\ the Commission finds good cause
for approving the proposed rule change, as amended, prior to the 30th
day after the date of publication of notice thereof in the Federal
Register. The Commission believes that granting accelerated approval of
the proposal will allow the NASD to expeditiously implement the pilot
program to reduce market data fees without any unnecessary delay and
should confer a benefit upon those firms that provide real-time data to
their customers and subscribers.
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\10\ 15 U.S.C. 78s(b)(2).
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It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change, as amended, (SR-NASD-99-25) is hereby
approved on an accelerated basis, for the pilot period ending April 1,
2000.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-15488 Filed 6-17-99; 8:45 am]
BILLING CODE 8010-01-M
