Federal Register: December 27, 2005 (Volume 70, Number 247)
DOCID: FR Doc E5-7860
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-52978; File No. SR-NASD-2005-141]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
December 19, 2005. 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 5, 2005, the National Association of Securities Dealers, Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. (``Nasdaq''), filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II and III below, which Items have been prepared by Nasdaq. On December 9, 2005, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\ Nasdaq has designated this proposal as establishing or changing a due, fee, or other charge imposed by a self-regulatory organization pursuant to Section 19(b)(3)(A) of the Act,\4\ and Rule 19b-4(f)(2) thereunder,\5\ which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.
DOCUMENT SUMMARY:
--------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ In Amendment No. 1, Nasdaq made nonsubstantive changes to the text of the proposed rule change.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b4(f)(2).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Nasdaq proposes to modify the execution fees for quotes and orders
in the Nasdaq Opening Cross. Nasdaq will implement the proposed rule
change on January 3, 2006. Additions are italicized, and deletions are in brackets.
* * * * *
7010. System Services
(a)(h) No change
(i) Nasdaq Market Center and Brut Facility Order Execution (1)(3) No change.
(4) Opening Cross
[For a period of three months commencing on the date Nasdaq implements
its Opening Cross (as described in Rule 4704(d)), members shall not be
charged Nasdaq Market Center execution fees, or receive Nasdaq Market
Center liquidity provider credits, for those quotes and orders executed in the Nasdaq Opening Cross.]
Commencing on January 1, 2006, members shall be assessed the following Nasdaq Market Center execution fees for quotes and orders executed in the Nasdaq Opening Cross:
MarketonOpen, LimitonOpen and Day orders executed in the Nasdaq Opening Cross$0.0005 per share executed for the net number of buy and sell shares up to a maximum of $10,000 per firm per month
All other quotes and orders executed in the Nasdaq Opening Cross No charge for execution
(5) and (6) No change.
(j)(w) No change.
* * * * *
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq has determined to establish the following pricing for the Nasdaq Opening Cross beginning January 3, 2006. Nasdaq will assess a fee of $0.0005 per share executed during the Nasdaq Opening Cross for all MarketonOpen, LimitonOpen, and Day orders that are executed in the Opening Cross. That fee will be assessed on the difference between the total number of shares of buy (sell) interest minus the total number of shares of sell (buy) interest executed by that firm for all stocks.
The fee will be capped at $10,000 per firm per month for all stocks combined. At this time, Nasdaq will assess no fees and offer no rebates for quotations and other orders executed during the Nasdaq Opening Cross. Nasdaq will monitor the effectiveness of the proposed pricing schedule in preserving and enhancing the success of the Nasdaq Opening Cross to date.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with Section 15A of the Act,\6\ in general, and Section 15A(b)(5) \7\ of the Act, in particular, in that 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 the NASD operates or controls.
The proposed fees for MarketonOpen, LimitonOpen, and Day orders
are consistent with the statute in that they are designed to result in
an execution charge approximating the execution charge for quotes and
orders entered and executed in the Nasdaq Market Center throughout the
trading day. Assessing no fee and offering no rebate for quotations and
other orders executed during the Nasdaq Opening Cross is consistent
with the statute because it is designed to encourage the entry of
Imbalance Only orders to minimize imbalances resulting from the Opening
Cross algorithm, and to preserve the Opening Cross liquidity provided by quotations and orders from the continuous market.
B. SelfRegulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will impose any
[[Page 76483]]
burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
Nasdaq has neither solicited nor received comments on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and subparagraph (f)(2) of Rule 19b4
thereunder.\9\ At any time within 60 days of the filing of such
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.\10\ Nasdaq will implement the proposed rule change on January 3, 2006.
\6\ 15 U.S.C. 78o3.
\7\ 15 U.S.C. 78o3(b)(5).
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b4(f)(2).
\10\ The effective date of the original proposed rule change is
December 5, 2005, and the effective date of Amendment No. 1 is
December 9, 2005. For purposes of calculating the 60day period
within which the Commission may summarily abrogate the proposed rule
change, as amended, under Section 19(b)(3)(C) of the Act, the
Commission considers the period to commence on December 9, 2005, the
date on which Nasdaq submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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. Comments may be submitted by any of the following methods:
Electronic Comments
Paper Comments
All submissions should refer to File Number SRNASD2005141. This
file number should be included on the subject line if email is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml ). 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 the
filing also will be available for inspection and copying at the
principal offices of the NASD. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SRNASD2005141 and should be submitted on or before January 17, 2006.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\11\
\11\ 17 CFR 200.303(a)(12).
Jonathan G. Katz,
Secretary.
[FR Doc. E57860 Filed 122305; 8:45 am]
BILLING CODE 801001P
SUMMARY:
National Association of Securities Dealers, Inc.,
DOCUMENT BODY 2:
--------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ In Amendment No. 1, Nasdaq made nonsubstantive changes to the text of the proposed rule change.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b4(f)(2).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Nasdaq proposes to modify the execution fees for quotes and orders
in the Nasdaq Opening Cross. Nasdaq will implement the proposed rule
change on January 3, 2006. Additions are italicized, and deletions are in brackets.
* * * * *
7010. System Services
(a)(h) No change
(i) Nasdaq Market Center and Brut Facility Order Execution (1)(3) No change.
(4) Opening Cross
[For a period of three months commencing on the date Nasdaq implements
its Opening Cross (as described in Rule 4704(d)), members shall not be
charged Nasdaq Market Center execution fees, or receive Nasdaq Market
Center liquidity provider credits, for those quotes and orders executed in the Nasdaq Opening Cross.]
Commencing on January 1, 2006, members shall be assessed the following Nasdaq Market Center execution fees for quotes and orders executed in the Nasdaq Opening Cross:
MarketonOpen, LimitonOpen and Day orders executed in the Nasdaq Opening Cross$0.0005 per share executed for the net number of buy and sell shares up to a maximum of $10,000 per firm per month
All other quotes and orders executed in the Nasdaq Opening Cross No charge for execution
(5) and (6) No change.
(j)(w) No change.
* * * * *
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq has determined to establish the following pricing for the Nasdaq Opening Cross beginning January 3, 2006. Nasdaq will assess a fee of $0.0005 per share executed during the Nasdaq Opening Cross for all MarketonOpen, LimitonOpen, and Day orders that are executed in the Opening Cross. That fee will be assessed on the difference between the total number of shares of buy (sell) interest minus the total number of shares of sell (buy) interest executed by that firm for all stocks.
The fee will be capped at $10,000 per firm per month for all stocks combined. At this time, Nasdaq will assess no fees and offer no rebates for quotations and other orders executed during the Nasdaq Opening Cross. Nasdaq will monitor the effectiveness of the proposed pricing schedule in preserving and enhancing the success of the Nasdaq Opening Cross to date.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with Section 15A of the Act,\6\ in general, and Section 15A(b)(5) \7\ of the Act, in particular, in that 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 the NASD operates or controls.
The proposed fees for MarketonOpen, LimitonOpen, and Day orders
are consistent with the statute in that they are designed to result in
an execution charge approximating the execution charge for quotes and
orders entered and executed in the Nasdaq Market Center throughout the
trading day. Assessing no fee and offering no rebate for quotations and
other orders executed during the Nasdaq Opening Cross is consistent
with the statute because it is designed to encourage the entry of
Imbalance Only orders to minimize imbalances resulting from the Opening
Cross algorithm, and to preserve the Opening Cross liquidity provided by quotations and orders from the continuous market.
B. SelfRegulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will impose any
[[Page 76483]]
burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
Nasdaq has neither solicited nor received comments on the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and subparagraph (f)(2) of Rule 19b4
thereunder.\9\ At any time within 60 days of the filing of such
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.\10\ Nasdaq will implement the proposed rule change on January 3, 2006.
\6\ 15 U.S.C. 78o3.
\7\ 15 U.S.C. 78o3(b)(5).
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b4(f)(2).
\10\ The effective date of the original proposed rule change is
December 5, 2005, and the effective date of Amendment No. 1 is
December 9, 2005. For purposes of calculating the 60day period
within which the Commission may summarily abrogate the proposed rule
change, as amended, under Section 19(b)(3)(C) of the Act, the
Commission considers the period to commence on December 9, 2005, the
date on which Nasdaq submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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. Comments may be submitted by any of the following methods:
Electronic Comments
Paper Comments
All submissions should refer to File Number SRNASD2005141. This
file number should be included on the subject line if email is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml ). 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 the
filing also will be available for inspection and copying at the
principal offices of the NASD. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SRNASD2005141 and should be submitted on or before January 17, 2006.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\11\
\11\ 17 CFR 200.303(a)(12).
Jonathan G. Katz,
Secretary.
[FR Doc. E57860 Filed 122305; 8:45 am]
BILLING CODE 801001P