[Federal Register Volume 63, Number 228 (Friday, November 27, 1998)]
[Notices]
[Page 65626]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31585]
[[Page 65626]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40689; File No. SR-NASD-98-73]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Order Granting Approval of Proposed Rule Change Relating
to Fees for Subscribers Who Receive Nasdaq Level 1 and Last Sale Data
Through Automated Voice Response Services
November 19, 1998.
On October 1, 1998, the National Association of Securities
Dealers,Inc. (``NASD''), through its wholly-owned subsidiary, the
Nasdaq Stock Market, Inc. (``Nasdaq'') submitted to 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 amend NASD Rule 7010 to make
permanent its current monthly pilot fee for subscribers who receive
Nasdaq Level 1 and Last Sale data through automated voice response
services.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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The proposed rule change appeared in the Federal Register on
October 20, 1998.\3\ The Commission received no comments concerning the
proposed rule change. This order approves the proposed rule change.
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\3\ Securities Exchange Act Rel. No. 40546 (October 13, 1998),
64 FR 56055. There was a misprint in the Federal Register version of
this release. The Federal Register contained the following sentence:
``Nasdaq believes that the charge for such services should not be
made a permanent part of its fee structure.'' Id. at p. 56056
(emphasis added). The correct text, as submitted to the Federal
Register by the Commission, with emphasis added, is as follows:
``Nasdaq believes that the charge for such services should now be
made a permanent part of its fee structure.'' This sentence is not
in the Federal Register release. The correction was published on
November 17, 1998, in Securities Exchange Act Rel. No. 40546, 63 FR
63967 (November 17, 1998).
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Nasdaq is proposing to make permanent its $21.25 monthly per port
fee for subscribers who receive Nasdaq Level 1 service through
automated voice response services.\4\ These services provide callers
with automated voice access to real-time Nasdaq pricing information.
The monthly $21.25 fee has been in effect as a pilot fee for over 11
years and was originally based on a formulation of a $5.00 premium
above the combined $16.25 Level 1/Last Sale rate in effect at that
time. This fee has not increased despite a subsequent increase of Level
1/Last Sale Rates to the current $20.00 per month level. Given the
continued usage of voice-based quote access services,\5\ Nasdaq
believes that the charge for such services should now be made a
permanent part of its fee structure.
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\4\ A vendor's voice port count is defined as the maximum number
of callers capable of accessing Nasdaq data at any given time. For
example, if a vendor's voice port count is 100 (i.e., capable of
handling a maximum of 100 callers at any given time) then the fee
accessed would be $2,125 ($21.25 x 100). Conference call on October
6, 1998, between Thomas P. Moran, Senior Attorney, Office of General
Counsel, Nasdaq, and Mignon McLemore, Attorney and Robert B. Long,
Attorney, Division of Market Regulation, Commission.
\5\ There are currently 7,629 voice ports in service.
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After careful review, the Commission finds that the proposed rule
change is consistent with the provisions of Sections 15A(b)(5) \6\ and
15A(b)(6) \7\ of the Act.\8\ The Commission believes the proposal is
consistent with these provisions of the Act because the fee is
reasonable and equitable and will apply in a non-discriminatory manner
to all member firms that use the Nasdaq Level 1 automated voice
response service.
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\6\ Section 15A(b)(5) requires that an association's rules
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. 15
U.S.C. 78o-3(b)(5).
\7\ Section 15A(b)(6) requires that an association's rules not
be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. 15 U.S.C. 78o-3(b)(6).
\8\ The Commission has considered the proposed rule's impact on
efficiency, competition and capital formation. The Commission
believes that disseminating real-time pricing information through
automated voice response systems enhances market efficiency and
promotes competition among the markets. 15 U.S.C. 78c(f).
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The proposed fee has been in effect since the pilot's inception 11
years ago.\9\ During this time members have paid this fee without
complaint. Moreover, the NASD has kept the per port fee constant
despite a $3.75 increase in Level 1/Last Sale rates. Thus, the
Commission supports this fee becoming a permanent part of the NASD's
fee structure. For the foregoing reasons, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder.
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\9\ The Commission notes that 11 years is a significant length
of time to determine a pilot's viability. The Commission believes
that gathering and analyzing market data to assess such factors as
market interest and profitability should be done within a
substantially shorter time frame.
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-NASD-98-73) is approved.
\10\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
\11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 98-31585 Filed 11-25-98; 8:45 am]
BILLING CODE 6717-01-M