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Self-Regulatory Organizations; Order Approving Proposed Rule Change by the National Association of Securities Dealers, Inc. To Modify Application of Additional Circuit/SDP Charge Under Rule 7010(f) to Non-NASD Members

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Start Preamble December 6, 2002.

On September 12, 2002, 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”), 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 modify application of Additional Circuit/SDP Charge under NASD Rule 7010(f) to Non-NASD Members.[3] Specifically, Nasdaq proposes to impose the Additional Circuit/SDP Charge under NASD Rule 7010(f) on those subscribers who do not utilize existing T1 capacity efficiently Start Printed Page 76771by placing 18 service delivery platforms (“SDPs”) on each T1 circuit.[4]

The proposed rule change was published for comment in the Federal Register on October 28, 2002.[5] The Commission received no comments on the proposal.

The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association.[6] The Commission finds specifically that the proposed rule change promotes the objectives of Section 15A(b)(6) of the Act,[7] which requires, among other things, that the rules of the association be designed to facilitate transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, because the increased efficiency of Nasdaq's T1 circuits, which will expand the available capacity of Nasdaq's Enterprise Wide Network II (“EWN II”) should enhance Nasdaq's ability to keep pace with future growth in trading volumes.

In addition, the Commission finds that the proposed rule change is consistent with Section 15A(b)(5) of the Act [8] which requires that the rules of the association provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities.

The Commission notes that this fee applies to members and non-members equally.[9]

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[10] that the proposed rule change (File No. SR-NASD-2002-121) is hereby approved.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[11]

Start Signature

Jill M. Peterson,

Assistant Secretary.

End Signature End Preamble

Footnotes

3.  Nasdaq also submitted a proposed rule change to modify the conditions under which members pay the Additional Circuit/SDP Charge. See Securities Exchange Act Release No. 46695 (October 21, 2002), 67 FR 65819 (October 28, 2002) (SR-NASD-2002-120).

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4.  Currently, the Additional Circuit/SDP Charge only applies if a subscriber does not place 6 SDPs on each T1 circuit.

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5.  See Securities Exchange Act Release No. 46696 (October 21, 2002), 67 FR 65821 (October 28, 2002) (SR-NASD-2002-121).

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

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9.  See supra note 3.

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[FR Doc. 02-31402 Filed 12-12-02; 8:45 am]

BILLING CODE 8010-01-P