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 I Market Data Fees

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, notice is hereby given that on April 13, 2000, 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 April 18, 2000, Nasdaq submitted Amendment No. 1 to the proposed rule change. 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.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

Nasdaq filed a proposed rule change to amend NASD Rule 7010. Under the proposal, Nasdaq will establish a one-year pilot program, commencing with the April 3, 2000 billing period, to reduce by 50% the users fees for Level 1 market data delivered to non-professional users on a monthly basis, and to maintain the already-reduced fees for Level 1 market data delivered to non-professional users on a per query basis.

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

1. Purpose

Nasdaq states that it has consistently supported the broadest, most effective dissemination of market information to public investors. Towards that end, in April of 1999, Nasdaq implemented a one-year pilot program that reduced by 50% the users fees for Level 1 market data delivered to non-professional users on a monthly basis (from $4 to $2), and also for Level 1 market data delivered to non-professional users on a per query basis (from $.01 to $.005). In support of that pilot program, Nasdaq cited increased usage of Level 1 market data, and the expectation that reduced fees would trigger a further expansion of usage Nasdaq has determined that the fee reduction has, in fact, led to increased usage of Level 1 market data.

To reaffirm its commitment to the broad dissemination of this data, Nasdaq is proposing a new one-year pilot program to reduce by 50% the users fees for Level 1 market data delivered to non-professional users on a monthly basis, and to maintain the current fees for Level 1 market data delivered to non-professional users on a per query basis. Under the proposed pilot, the non-professional per user fee would be reduced from $2 to $1 per month (equating to a 75% reduction in fees in two years), and the per query fee would be maintained at $.005 per query. The non-professional user fees will be automatically billed to users at the reduced rate.

Nasdaq believes that reducing these market data fees reaffirms its 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, Nasdaq believes that reduced Nasdaq rates will lessen the costs the NASD member firms of supplying real-time market data to their customers through automated means, and may encourage current delayed-data vendors to offer increased access to real-time Level 1 data to their subscribers.

2. Statutory Basis

Nasdaq believes that the proposed rule change is consistent with the provisions of Section 15A(b)(5) of the Act in that the proposal 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.

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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others

Nasdaq has neither solicited nor received written comments on the proposed rule change.

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 the NASD. All submissions should refer to File No. SR-NASD-00-19 and should be submitted by May 22, 2000.

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 and the rules and regulations thereunder applicable to a national securities association. Specifically, the proposed rule change is consistent with Section 15A(b)(5) 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.

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 should enhance investor access, and may encourage increased investor participation in the securities.

Pursuant to Section 19(b)(2), the Commission finds good cause for approving the proposed rule change, as amended, prior to the thirtieth day after the date of publication of notice of the filing in the Federal Register. The Commission believes that granting accelerated approval of the proposal will allow Nasdaq 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. The Commission also notes that it did not receive any comments on the previous pilot program. Accordingly, the Commission does not believe that the current filing raises any regulatory issues not raised by the previous filing.

It is Therefore Ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change, as amended, (SR-NASD-00-19) is approved on an accelerated basis, for the pilot period ending March 30, 2001.