[Federal Register Volume 63, Number 109 (Monday, June 8, 1998)]
[Notices]
[Pages 31254-31255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15078]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40050; File No. SR-NASD-98-37]
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
June 1, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 14, 1998, 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
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the NASD.
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).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Nasdaq is herewith filing a proposed rule change to extend, through
August 31, 1998, the fees currently charged under NASD Rule 7010(1) for
the execution of transactions in SelectNet. Under the proposed
extension, SelectNet fees would continue to be assessed in the
following manner: (1) $1.00 will be charged for each SelectNet order
entered and directed to one particular market participant that is
subsequently executed in whole or in part; (2) no fee will be charged
to a member who receives and executes a directed SlectNet order; (3)
the existing $2.50 fee will remain in effect for both sides of executed
SelectNet orders that result from broadcast messages; and (4) a $.025
fee will remain in effect for any member who cancels a SelectNet order.
If no further action is taken, SelectNet fees will revert to their
original $2.50 per-side level on September 1, 1998.
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. The
text of these statements may be examined at places specified in Item IV
below. The self-
[[Page 31255]]
regulatory organization 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 extend its current SelectNet fees. The
reasons for Nasdaq's prevailing SelectNet fee structure were fully
explained in its original fee structure proposal filed with the
Commission in February of this year.\2\ Since then, SelectNet usage has
continued at significantly elevated levels, averaging over 100,000
daily executions in both February and March of 1998. As such, Nasdaq
believes that an extension of these reduced fees, through August 31,
1998, is warranted. Under the proposed extension, SelectNet fees would
continue to be assessed in the following manner: (1) $1.00 will be
charged for each SelectNet order entered and directed to one particular
market participant that is subsequently executed in whole or in part;
(2) no fee will be charged to a member who receives and executes a
directed SelectNet order; (3) the existing $2.50 fee will remain in
effect for both sides of executed SelectNet orders that result from
broadcast messages; and (4) a $0.25 fee will remain in effect for any
member who cancels a SelectNet order. Nasdaq will continue to monitor
and review SelectNet activity to determine if future changes to its
SelectNet fee structure are appropriate. If no further action is taken,
SelectNet fees will revert to their original $2.50 per-side level on
September 1, 1998.
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\2\ Securities and Exchange Act Release No. 39641 (February 10,
1998), 63 FR 8241 (February 18, 1998). Nasdaq's current reduced fee
structure was approved for a 90-day trial period, commencing the day
that proposal was published in the Federal Register and would lapse
on May 18, 1998, if not extended by this filing.
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For the reason set forth above, Nasdaq believes that the proposed
rule change is consistent with Section 15A(b)(5) of the Act,\3\ which
requires that the rules of the NASD 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 NASD
operates or controls.
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\3\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The NASD believes that the proposed rule change will not 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
Comments were neither solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
This filing applies to the assessment of SelectNet fees to NASD
members, and thus the proposed rule change is effective immediately
upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act and
subparagraph (e)(2) of Rule 19b-4 thereunder \4\ because the proposal
is establishing or changing a due, fee or other charge. At any time
within 60 days 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.\5\
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\4\ 15 U.S.C. 78s(b)(3)(A) and 17 CFR 240.19b-4(e)(2).
\5\ In reviewing the proposal, the Commission has considered the
proposal's impact on efficiency, competition, and capital formation.
see 15 U.S.C. 78c(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposal 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 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 No. SR-NASD-98-37 and should be
submitted by June 29, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-15078 Filed 6-5-98; 8:45 am]
BILLING CODE 8010-01-M
