regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.,

[Federal Register: July 2, 2002 (Volume 67, Number 127)]

[Notices]

[Page 44488]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr02jy02-124]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46114; File No. SR-NASD-2002-45]

Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Order Granting Partial Approval to a Proposed Rule Change and Amendment Nos. 1 and 2 Thereto by the National Association of Securities Dealers, Inc. Establishing Listing Standards and Listing Fees for Portfolio Depository Receipts and Index Fund Shares

June 25, 2002.

On April 3, 2002, the National Association of Securities Dealers, Inc. (``NASD'' or ``Association''), through its subsidiary, the Nasdaq Stock Market, Inc. (``Nasdaq''), filedwith 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 establish listing standards and listing fees for Portfolio Depository Receipts (``PDRs'') and Index Fund Shares (``Fund Shares''). On May 6, 2002, Nasdaq filedAmendment No. 1 to the proposal.\3\ On May 13, 2002, Nasdaq filedAmendment No. 2 to the proposal.\4\ On May 20, 2002, the Commission published the proposed rule change for comment in the Federal Register and granted partial accelerated approval to the portion of the proposal relating to listing standards for PDRs and Fund Shares.\5\ In this same release, the Commission published for notice and comment, but did not accelerate approval of, the portion of the proposal that dealt with Nasdaq's proposed new listing fees. The Commission is now approving Nasdaq's proposed new listing fees.

\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4.

\3\ See letter from John D. Nachmann, Senior Attorney, Nasdaq, to Katherine A. England, Assistant Director, Division of Market Regulation (``Division''), Commission, dated May 3, 2002 (``Amendment No. 1''). In Amendment No. 1, Nasdaq did the following: (1) Made corrections to its proposed rule text and proposal; (2) added discussion and stated its statutory basis for the proposed listing fees; (3) clarified that its regular trading hours for PDRs and Fund Shares will be from 9:30 a.m. to 4:00 p.m. or 4:15 p.m., as designated by Nasdaq; and (4) requested accelerated approval for the portion of the proposal relating to the listing and trading standards for PDRs and Fund Shares, and not for the portion on the proposed listing fees.

\4\ See letter from John D. Nachmann, Senior Attorney, Nasdaq, to Katherine A. England, Assistant Director, Division, Commission, dated May 13, 2002 (``Amendment No. 2''). In Amendment No. 2, Nasdaq removed the term ``member organization'' throughout its proposed rule text and proposal.

\5\ See Securities Exchange Act Release No. 45920 (May 13, 2002), 67 FR 35605. Nasdaq requested accelerated approval of all portions of the proposal except those that deal with its proposed new listing fees.

The Commission finds that this proposed rule change, as amended, is consistent with the requirements of section 15A of the Act \6\ and the rules and regulations thereunder. Specifically, the Commission finds that this proposed rule change, as amended, is consistent with section 15(A)(b)(6),\7\ which provides that the rules of the association be designed to promote just and equitable principals of trade, to foster cooperation and coordination with person engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Commission further believes that this proposed rule change, as amended, is consistent with the provisions of section 15A(b)(5) of the Act \8\ in that it provides for the equitable allocation of reasonable dues, fees, and other charges among issuers using the Nasdaq system. Nasdaq represents that the proposed listing fees for PDRs and Fund Shares are less than the current fees for traditional domestic and foreign equity issues listed on The Nasdaq National Market, as the regulatory and client services costs associated with PDRs and Fund shares are lower than those for traditional equity issues. Furthermore, Nasdaq represents that the proposed listing fees for PDRs and Fund Shares are designed to cover costs and allow Nasdaq to compete for the listing of these securities with national securities exchanges.

\6\ 15 U.S.C. 78o-3.

\7\ 15 U.S.C. 78o-3(b)(6).

\8\ 15 U.S.C. 78o-3(b)(5).

For the foregoing reasons, the Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and rules and regulations thereunder.

It is therefore ordered, pursuant to section 19(b)(2) of the Act,\9\ that the portion of the proposed rule change (SR-NASD-2002-45) relating to the proposed listing fees, as amended, is approved.

\9\ 15 U.S.C. 78s(b)(2).

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\10\

\10\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland. Deputy Secretary.

[FR Doc. 02-16540Filed7-1-02; 8:45 am]

BILLING CODE 8010-01-P