Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto to Modify the Text of NASD Trade Reporting Rules to Reflect the Implementation of SR-NASD-2003-159, 35747-35752 [E5-3192]
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Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51837; File No. SR–NASD–
2005–062]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto to Modify the Text of NASD
Trade Reporting Rules to Reflect the
Implementation of SR-NASD-2003-159
June 13, 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 May 12,
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 June
9, 2005, Nasdaq filed Amendment No. 1
to the proposed rule change.3 Nasdaq
has designated this proposal as
concerned solely with the
administration of a self-regulatory
organization, pursuant to Section
19(b)(3)(A)(iii) of the Act 4 and Rule
19b–4(f)(3) thereunder,5 which renders
the proposed rule change effective upon
filing. The Commission is publishing
this notice to solicit comments on the
proposed rule change, as amended, from
interested persons.
I.Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq is modifying the text of trade
reporting rules in order to reflect the
implementation of provisions of SR–
NASD–2003–1596 that had a delayed
implementation date.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
2 Amendment No. 1 made minor technical
changes to the proposed rule change. The effective
date of the original proposed rule change is May 12,
2005, and the effective date of Amendment No. 1
is June 9, 2005. For purposes of calculating the 60day period within which the Commission may
summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission
considers the period to commence on June 9, 2005,
the date on which Nasdaq filed Amendment No. 1.
See 15 U.S.C. 78s(b)(3)(C).
4 15 U.S.C. 78s(b)(3)(A)(iii).
5 17 CFR 240.19b–4(f)(3).
6 See Securities Exchange Act Release Nos. 49404
(March 11, 2004), 69 FR 12727 (March 17, 2004)
(SR–NASD–2003–159) (proposing release) and
49581 (April 19, 2004), 69 FR 22578 (April 26,
2004) (SR–NASD–2003–159) (approval order).
2 17
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The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
[brackets].7
4630. Reporting Transactions in Nasdaq
National Market Securities
*
*
*
*
*
4632. Transaction Reporting
(a)–(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the
following information:
(1)–(4) No change.
(5) The time of execution expressed in
hours, minutes, and seconds based on
Eastern Time, unless another provision
of the Association’s rules requires that
a different time must be included on the
report [if the trade is reported more than
90 seconds after execution].
(6) For any transaction in an order for
which a member has recording and
reporting obligations under Rules 6954
and 6955, the trade report must
include [:
(A) A] an order identifier, meeting
such parameters as may be prescribed
by the Association, assigned to the order
that uniquely identifies the order for the
date it was received (see Rule
6954(b)(1)).
[(B) The time of the execution
expressed in hours, minutes, and
seconds. This information must be
reported regardless of the period of time
between execution of the trade and the
report to the Nasdaq Market Center. All
times reported to the Nasdaq Market
Center shall be in Eastern Time.]
(d)–(g) No change.
*
*
*
*
*
[IM–4632–2. Delayed Effective Date of
Obligation to Include Time of Execution
on All Reports Submitted to the Nasdaq
Market Center
On April 19, 2004, the Securities and
Exchange Commission (‘‘SEC’’)
approved a proposed rule change filed
by the Association (SR–NASD–2003–
159) requiring members to include the
time of execution on all reports
submitted to the Nasdaq Market Center
reporting service (formerly known as the
Automated Confirmation Transaction
Service, or ‘‘ACT’’). In response to
comments from the Association’s Small
Firm Advisory Board, Nasdaq agreed to
delay the effective date of this
requirement until one year after the date
of SEC approval. Therefore, the effective
date of this requirement is April 25,
2005.
7 Changes are marked to the rule text that appears
in the electronic NASD Manual found at https://
www.nasd.com.
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35747
Until April 25, 2005, members remain
obligated to provide the time of
execution only in those circumstances
specifically articulated in the
Association’s rules. To prevent
confusion, Nasdaq has not modified the
Association’s rules to reflect the
obligation to provide the time of
execution in all circumstances. These
language modifications will be made at
a time closer to the actual effective date
of the obligation.]
4640. Reporting Transactions in Nasdaq
SmallCapSM Market Securities
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*
*
*
4642. Transaction Reporting
(a)–(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the
following information:
(1)–(4) No change.
(5) The time of execution expressed in
hours, minutes, and seconds based on
Eastern Time, unless another provision
of the Association’s rules requires that
a different time must be included on the
report [if the trade is reported more than
90 seconds after execution].
(6) For any transaction in an order for
which a member has recording and
reporting obligations under Rules 6954
and 6955, the trade report must include
[:
(A) A] an order identifier, meeting
such parameters as may be prescribed
by the Association, assigned to the order
that uniquely identifies the order for the
date it was received (see Rule
6954(b)(1)).
[(B) The time of execution expressed
in hours, minutes, and seconds. This
information must be reported regardless
of the period of time between execution
of the trade and the report to the Nasdaq
Market Center. All times reported to the
Nasdaq Market Center system shall be in
Eastern Time.]
(d)–(g) No change.
[IM–4642. Delayed Effective Date of
Obligation to Include Time of Execution
on All Reports Submitted to the Nasdaq
Market Center
On April 19, 2004, the Securities and
Exchange Commission (‘‘SEC’’)
approved a proposed rule change filed
by the Association (SR–NASD–2003–
159) requiring members to include the
time of execution on all reports
submitted to the Nasdaq Market Center
reporting service (formerly known as the
Automated Confirmation Transaction
Service, or ‘‘ACT’’). In response to
comments from the Association’s Small
Firm Advisory Board, Nasdaq agreed to
delay the effective date of this
requirement until one year after the date
of SEC approval. Therefore, the effective
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date of this requirement is April 25,
2005.
Until April 25, 2005, members remain
obligated to provide the time of
execution only in those circumstances
specifically articulated in the
Association’s rules. To prevent
confusion, Nasdaq has not modified the
Association’s rules to reflect the
obligation to provide the time of
execution in all circumstances. These
language modifications will be made at
a time closer to the actual effective date
of the obligation.]
*
*
*
*
*
4650. Reporting Transactions in Nasdaq
Convertible Debt Securities
*
*
*
*
*
4652. Transaction Reporting
(a)–(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the
following information:
(1)–(4) No change.
(5) The time of execution expressed in
hours, minutes, and seconds based on
Eastern Time, unless another provision
of the Association’s rules requires that
a different time must be include on the
report [if the trade is reported more than
90 seconds after execution].
(6) For any transaction in an order for
which a member has recording and
reporting obligations under Rules 6954
and 6955, the trade report must
include[:
(A) A] an order identifier, meeting
such parameters as may be prescribed
by the Association, assigned to the order
that uniquely identifies the order for the
date it was received (see Rule
6954(b)(1)).
[(B) The time of the execution
expressed in hours, minutes, and
seconds. This information must be
reported regardless of the period of time
between execution of the trade and the
report to the Nasdaq Market Center. All
times reported to the Nasdaq Market
Center system shall be in Eastern Time.]
(d)–(g) No change.
[IM–4652. Delayed Effective Date of
Obligation to Include Time of Execution
on All Reports Submitted to the Nasdaq
Market Center
On April 19, 2004, the Securities and
Exchange Commission (‘‘SEC’’)
approved a proposed rule change filed
by the Association (SR–NASD–2003–
159) requiring members to include the
time of execution on all reports
submitted to the Nasdaq Market Center
reporting service (formerly known as the
Automated Confirmation Transaction
Service, or ‘‘ACT’’). In response to
comments from the Association’s Small
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Firm Advisory Board, Nasdaq agreed to
delay the effective date of this
requirement until one year after the date
of SEC approval. Therefore, the effective
date of this requirement is April 25,
2005.
Until April 25, 2005, members remain
obligated to provide the time of
execution only in those circumstances
specifically articulated in the
Association’s rules. To prevent
confusion, Nasdaq has not modified the
Association’s rules to reflect the
obligation to provide the time of
execution in all circumstances. These
language modifications will be made at
a time closer to the actual effective date
of the obligation.]
*
*
*
*
*
5400. Nasdaq Stock Market and
Alternative Display Facility Trade
Reporting
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*
*
*
5430. Transaction Reporting
(a) When and How Transactions are
Reported
(1)–(3) No change.
(4) Transaction Reporting to the
Nasdaq Market Center Outside Normal
Market Hours
(A) Last sale reports of transactions in
designated securities executed between
8 a.m. and 9:30 a.m. Eastern Time shall
be reported within 90 seconds after
execution and shall be designated as
‘‘.T’’ trades to denote their execution
outside normal market hours.
Transactions not reported within 90
seconds shall also be designated as .T
trades[, and include the time of
execution]. Transactions not reported
before 9:30 a.m. shall be reported after
4 p.m. and before 6:30 p.m. as .T trades[,
and include the time of execution].[1]
(B) Last sale reports of transactions in
designated securities executed between
the hours of 4 p.m. and 6:30 p.m.
Eastern Time shall be reported within
90 seconds after execution and be
designated as ‘‘.T’’ trades to denote their
execution outside normal market hours.
Transactions not reported within 90
seconds shall also be designated as .T
trades[, and include the time of
execution]. Transactions not reported
before 6:30 p.m. shall be reported on an
‘‘as of’’ basis the following day between
8 a.m. and 6 p.m.
(C) Last sale reports of transactions
executed between midnight and 8 a.m.
Eastern Time shall be reported between
8 a.m. and 9:30 a.m. Eastern Time on
trade date as ‘‘.T’’ trades[, and include
the time of execution]. Transactions not
reported before 9:30 a.m. shall be
reported after 4 p.m. and before 6:30
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Sfmt 4703
p.m. as .T trades[, and include the time
of execution].[2]
(D) Last sale reports of transactions
executed between 6:30 p.m. and
midnight Eastern Time shall be reported
on the next business day (T+1) between
8 a.m. and 6:30 p.m. Eastern Time and
be designated ‘‘as/of’’ trades[and
include the time of execution].
(5)–(6) No change.
(7) All members shall append the .W
trade report modifier to transaction
reports occurring at prices based on
average-weighting, or other special
pricing formulae. [Members reporting
transactions to the Nasdaq Market
Center with the .W modifier shall also
include the time of execution on the
transaction report.]
(8)–(12) No change.
(13) To identify pre-opening and afterhours trades reported late, Nasdaq will
convert the .T modifier to .ST for any
report submitted to the Nasdaq Market
Center more than 90 seconds after
execution.[3]
(b) No change.
[1 Until Nasdaq implements the use of
the .ST modifier, which denotes the late
reporting of a pre-opening or after-hours
trade, members shall report on the
following day on an ‘‘as/of basis,’’ and
include the time of execution, last sale
reports of transactions in designated
securities executed between 8 a.m. and
9:30 a.m. Eastern Time that are not
reported to the Nasdaq Market Center
prior to 9:30 a.m. These reports shall
include the time of execution.]
[2 Until Nasdaq implements the use of
the .ST modifier, which denotes the late
reporting of a pre-opening or after-hours
trade, members shall report on the
following day on an ‘‘as/of basis’’ last
sale reports of transactions in
designated securities executed between
midnight and 8 a.m. Eastern Time that
are not reported to the Nasdaq Market
Center prior to 9:30 a.m. These reports
shall include the time of execution.]
[3 Nasdaq expects to implement use of
the .ST modifier for Nasdaq listed
securities in the fourth quarter of 2004,
and will issue a notice of the exact
implementation date.]
*
*
*
*
*
6100. Trade Reporting Service
*
*
*
*
*
6130. Trade Report Input
(a)–(c) No change.
(d) Trade Information To Be Input
Each report to the Nasdaq Market
Center shall contain the following
information:
(1)–(3) No change.
(4) The time of [E]execution expressed
in hours, minutes, and seconds based
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on Eastern Time, unless another
provision of the Association’s rules
requires that a different time must be
included on the report[time for any
transaction in Nasdaq or CQS securities
not reported within 90 seconds of
execution];
(5)–(12) No change.
(13) For any transaction in an order
for which a member has recording and
reporting obligations under Rules 6954
and 6955, the trade report must
include[:
(A) A] an order identifier, meeting
such parameters as may be prescribed
by the Association, assigned to the order
that uniquely identifies the order for the
date it was received (see Rule
6954(b)(1)).
[(B) The time of the execution
expressed in hours, minutes, and
seconds. This information must be
reported regardless of the period of time
between execution of the trade and the
report to the Nasdaq Market Center. All
times reported to the Nasdaq Market
Center system shall be in Eastern Time.]
(e)–(f) No change.
*
*
*
*
*
6400. Reporting Transactions in Listed
Securities
*
*
*
*
*
6420. Transaction Reporting
(a) When and How Transactions are
Reported
(1)(A) Registered Reporting Members
shall transmit to the Nasdaq Market
Center, within 90 seconds after
execution, last sale reports of
transactions in eligible securities
executed between 9:30 a.m. and 4 p.m.
Eastern Time otherwise than on a
national securities exchange.
Transactions not reported within 90
seconds after execution shall be
designated as late[, and such trade
reports must include the time of
execution].
(B) Registered Reporting Members
shall transmit to the Nasdaq Market
Center, within 90 seconds after
execution, last sale reports of
transactions in eligible securities
executed in the United States otherwise
than on a national securities exchange
between 4 p.m. and 6:30 p.m. Eastern
Time; trades executed and reported after
4 p.m. Eastern Time shall be designated
as ‘‘.T’’ trades to denote their execution
outside normal market hours.
Transactions not reported within 90
seconds after execution must be
designated as .T trades[, and include the
time of execution on the trade report].
Transactions not reported by 6:30 p.m.
shall be reported on an ‘‘as of’’ basis the
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following day between 8 a.m. and 6:30
p.m. Eastern Time.
(2)(A) Non-Registered Reporting
Members shall, within 90 seconds after
execution, transmit to the Nasdaq
Market Center, or by telephone to the
Nasdaq Market Center Operations
Department if the Nasdaq Market Center
reporting service is unavailable due to
system or transmission failure, last sale
reports of transactions in eligible
securities executed between 9:30 a.m.
and 4 p.m. Eastern Time otherwise than
on a national securities exchange.
Transactions not reported within 90
seconds after execution shall be
designated as late[, and include the time
of execution].
(B) Non-registered Reporting Members
shall, within 90 seconds after execution,
transmit to the Nasdaq Market Center, or
by telephone to the Nasdaq Market
Center Operations Department if the
Nasdaq Market Center reporting service
is unavailable due to system or
transmission failure, last sale reports of
transactions in eligible securities
executed in the United States otherwise
than on a national securities exchange
between the hours of 4 p.m. and 6:30
p.m. Eastern Time; trades executed and
reported after 4 p.m. Eastern Time shall
be designated as ‘‘.T’’ trades to denote
their execution outside normal market
hours. Transactions not reported within
90 seconds after execution must be
designated as .T trades[, and include the
time of execution on the trade report].
Transactions not reported by 6:30 p.m.
shall be reported on an ‘‘as of’’ basis the
following day between 8 a.m. and 6:30
p.m.
(3)–(5) No change.
(6) All members shall report to
Nasdaq using the .W modifier
transactions at prices based on averageweighting or other special pricing
formulae unrelated to the current or
closing price of the security on the
primary market. [Members shall also
include the time of execution on the
transaction report.]
(7) No change.
(8) All members shall append the
.PRP trade report modifier to transaction
reports that reflect a price different from
the current market when the execution
price is based on a prior reference point
in time. The transaction report shall
include the prior reference time in lieu
of the actual time the trade was
executed. The .PRP modifier shall not
be appended to a report of a transaction
whose price is based on a prior
reference point in time if the trade is
executed and reported within 90
seconds from the prior reference point
in time.1
(9) No change.
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35749
(10) To identify pre-opening and afterhours trades reported late, Nasdaq shall
convert the .T modifier to .ST for any
report submitted to the Nasdaq Market
Center more than 90 seconds after
execution.[2]
(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the
following information:
(1)–(4) No change.
(5) The time of execution expressed in
hours, minutes, and seconds based
upon Eastern Time, unless another
provision of the Association’s rules
requires that a different time must be
included on the report [if the trade is
reported more than 90 seconds after
execution].
(d)–(f) No change.
1 Implementation of the .PRP modifier
for listed securities is delayed until June
6, 2005. [such time that the
Consolidated Tape Association
approves use of the modifier and makes
the necessary system changes to
accommodate the modifier.]
[2 Implementation of the .ST modifier
for listed securities is delayed until such
time that the Consolidated Tape
Association approves use of the
modifier and makes the necessary
system changes to accommodate the
modifier.]
*
*
*
*
*
[IM–6420–2. Delayed Effective Date of
Obligation to Include Time of Execution
on All Reports Submitted to the Nasdaq
Market Center
On April 19, 2004, the Securities and
Exchange Commission (‘‘SEC’’)
approved a proposed rule change filed
by the Association (SR–NASD–2003–
159) requiring members to include the
time of execution on all reports
submitted to the Nasdaq Market Center
reporting service (formerly known as the
Automated Confirmation Transaction
Service, or ‘‘ACT’’). In response to
comments from the Association’s Small
Firm Advisory Board, Nasdaq agreed to
delay the effective date of this
requirement until one year after the date
of SEC approval. Therefore, the effective
date of this requirement is April 25,
2005.
Until April 5, 2005, members remain
obligated to provide the time of
execution only in those circumstances
specifically articulated in the
Association’s rules. To prevent
confusion, Nasdaq has not modified the
Association’s rules to reflect the
obligation to provide the time of
execution in all circumstances. These
language modifications will be made at
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Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Notices
the hours of 8 a.m. and 6:30 p.m.
Eastern Time shall be reported as
follows:
(i) Last sale reports of transactions in
6600. Over-the-Counter Equity
American Depositary Receipts (ADRs),
Securities
Canadian issues, or domestic OTC
Equity Securities that are executed
*
*
*
*
*
between midnight and 8 a.m. Eastern
6620. Transaction Reporting
Time shall be transmitted to the Nasdaq
(a) When and How Transactions are
Market Center between 8 a.m. and 9:30
Reported
a.m. Eastern Time on trade date[,] and
(1) OTC Market Makers shall, within
be designated as ‘‘.T’’ trades to denote
90 seconds after execution, transmit to
their execution outside normal market
the Nasdaq Market Center last sale
hours[, and be accompanied by the time
reports of transactions in OTC Equity
of execution]. Transactions not reported
Securities executed between the hours
before 9:30 a.m. shall be reported after
of 9:30 a.m. and 4 p.m. Eastern Time.
4 p.m. and before 6:30 p.m. as .T trades[,
Transactions not reported within 90
and include the time of execution].[2]
seconds after execution shall be
The party responsible for reporting on
designated as late[and include the time
trade date, the trade details to be
of execution].
reported, and the applicable procedures
(2) Non-Market Makers shall, within
shall be governed, respectively, by
90 seconds after execution, transmit to
paragraphs (b), (c), and (d) below;
the Nasdaq Market Center, or by
(ii) Last sale reports of transactions in
telephone to the Nasdaq Market
ADRs, Canadian issues, or domestic
Operations Department if the Nasdaq
OTC Equity Securities that are executed
Market Center is unavailable due to
between 6:30 p.m. and midnight Eastern
system or transmission failure, last sale
Time shall be transmitted to the Nasdaq
reports of transactions in OTC Equity
Market Center on the next business day
Securities executed between the hours
(T+1) between 8 a.m. and 6:30 p.m.
of 9:30 a.m. and 4 p.m. Transactions not Eastern Time[,] and be designated ‘‘as/
reported within 90 seconds after
of’’ trades to denote their execution on
execution shall be designated as late[
a prior day[, and be accompanied by the
and include the time of execution].
time of execution]. The party
(3) Transaction Reporting Outside
responsible for reporting on T+1, the
Normal Market Hours
trade details to be reported, and the
(A) Last sale reports of transactions in applicable procedures shall be
OTC Equity Securities executed
governed, respectively, by paragraphs
between 8 a.m. and 9:30 a.m. Eastern
(b), (c), and (d) below; and
Time shall be transmitted to the Nasdaq
(iii) Last sale reports of transactions in
Market Center within 90 seconds after
foreign securities (excluding ADRs and
execution and shall be designated as
Canadian issues) shall be transmitted to
‘‘.T’’ trades to denote their execution
the Nasdaq Market Center on T+1
outside normal market hours.
regardless of time of execution.[3] 1 Such
Transactions not reported within 90
reports shall be made between 8 a.m.
seconds must be designated as .T
and 1:30 p.m. Eastern Time in the same
trades[, and include the time of
manner as described in subparagraph
execution]. Transactions not reported
(3)([B]C)(ii) above.
before 9:30 a.m. shall be reported after
(4)–(7) No change.
(8) All members shall append the .W
4 p.m. and before 6:30 p.m. as .T trades[,
trade report modifier to reports of Stop
and include the time of execution].[1]
(B) Last sale reports of transactions in Stock Transactions, as such term is
defined in Rule 6610, and include the
OTC Equity Securities executed
time at which the member and the other
between the hours of 4 p.m. and 6:30
party agreed to the Stop Stock Price, as
p.m. Eastern Time shall be transmitted
such term is defined in Rule 6610, in
to the Nasdaq Market Center within 90
seconds after execution; trades executed lieu of including the time of execution
on the trade report. The .W modifier
and reported after 4 p.m. Eastern Time
shall not be appended to a report of a
shall be designated as ‘‘.T’’ to denote
Stop Stock Transaction if the Stop Stock
their execution outside normal market
hours. Transactions not reported within Transaction is executed and reported
within 90 seconds of the time the
90 seconds must be designated as .T trades[
and include the time of execution on the member and the other party agree to the
Stop Price.[4]2
trade report]. Transactions not reported
(9) To identify late pre-opening and
before 6:30 p.m. shall be reported on an
‘‘as of’’ basis the following day between after-hours trades reported late, Nasdaq
will convert the .T modifier to .ST for
8 a.m. and 6:30 p.m.
(C) Last sale reports of transactions in any report submitted to ACT more than
OTC Equity Securities executed outside 90 seconds after execution.[5]
a time closer to the actual effective date
of the obligation.]
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*
*
*
*
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(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the
following information:
(1)–(4) No change.
(5) The time of execution expressed in
hours, minutes, and seconds based on
Eastern Time, unless another provision
of the Association’s rules requires that
a different time must be included on the
report.
(d)–(f) No change.
[1 Until Nasdaq implements the use of
the .ST modifier, which denotes the late
reporting of a pre-opening or after-hours
trade, members shall report on the
following day on an ‘‘as/of basis’’ last
sale reports of transactions in
designated securities executed between
8 a.m. and 9:30 a.m. Eastern Time that
are not reported to the Nasdaq Market
Center prior to 9:30 a.m. These reports
shall include the time of execution.]
[2 Until Nasdaq implements the use of
the .ST modifier, which denotes the late
reporting of a pre-opening or after-hours
trade, members shall report on the
following day on an ‘‘as/of basis’’ last
sale reports of transactions in
designated securities executed between
midnight and 8 a.m. Eastern Time that
are not reported to the Nasdaq Market
Center prior to 9:30 a.m. These reports
shall include the time of execution.]
[3]1 Member firms that have the
operational capability to report
transactions in foreign securities
(excluding ADRs and Canadian issues)
within 90 seconds of execution,
between the hours of 8 a.m. and 5:15
p.m. Eastern time, may do so at their
option. If a firm chooses this option, it
need not report the same transaction(s)
on T+1 as prescribed by subparagraph
(3)(C)(ii)[(c)].
[4]2 Use of the .W modifier for Stop
Stock Transactions for OTC Equity
Securities is delayed until the necessary
system changes can be made to
accommodate the modifier. Nasdaq
[expects these system changes to be
completed in the fourth quarter of 2004,
and] will issue a notice of the exact
implementation date.
[5 Nasdaq expects to implement use of
the .ST modifier for Nasdaq listed
securities in the fourth quarter of 2004,
and will issue a notice of the exact
implementation date.] [IM–6620.
Delayed Effective Date of Obligation to
Include Time of Execution on All
Reports Submitted to the Nasdaq Market
Center
On April 19, 2004, the Securities and
Exchange Commission (‘‘SEC’’)
approved a proposed rule change filed
by the Association (SR–NASD–2003–
159) requiring members to include the
time of execution on all reports
E:\FR\FM\21JNN1.SGM
21JNN1
Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Notices
submitted to the Nasdaq Market Center
reporting service (formerly known as the
Automated Confirmation Transaction
Service, or ‘‘ACT’’). In response to
comments from the Association’s Small
Firm Advisory Board, Nasdaq agreed to
delay the effective date of this
requirement until one year after the date
of SEC approval. Therefore, the effective
date of this requirement is April 25,
2005.
Until April 25, 2005, members remain
obligated to provide the time of
execution only in those circumstances
specifically articulated in the
Association’s rules. To prevent
confusion, Nasdaq has not modified the
Association’s rules to reflect the
obligation to provide the time of
execution in all circumstances. These
language modifications will be made at
a time closer to the actual effective date
of the obligation.]
*
*
*
*
*
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 IV 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
In April 2004, the Commission
approved a proposed rule change that
contained numerous modifications to
the trade reporting rules for the Nasdaq
Market Center.8 The original version of
SR–NASD–2003–159 contained rule
language that would have immediately
required firms to include the time of
execution on all trade reports submitted
to Nasdaq, rather than in the handful of
special circumstances previously
required by the rules. In response to
comments from the NASD’s Small Firm
Advisory Board, however, Nasdaq
amended the filing to delay
implementation of this generalized
requirement until April 25, 2005.
8 See Securities Exchange Act Release Nos. 49404
(March 11, 2004), 69 FR 12727 (March 17, 2004)
(SR–NASD–2003–159) (proposing release) and
49581 (April 19, 2004), 69 FR 22578 (April 26,
2004) (SR–NASD–2003–159) (approval order).
VerDate jul<14>2003
22:07 Jun 20, 2005
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Accordingly, the amended filing
approved by the Commission contained
Interpretive Material appended to each
trade reporting rule that informed firms
of the delayed effective date and stated
Nasdaq’s intention to avoid confusion
by maintaining the trade reporting rule
language regarding time of execution in
its current state until the time of
implementation, at which point Nasdaq
would submit an additional
implementing filing.
In accordance with the full
implementation of the reporting
obligation approved by the Commission
in SR–NASD–2003–159, Nasdaq now
proposes to remove the Interpretive
Material and to replace rule language
reflecting an obligation to report time of
execution in specified circumstances
with clear language reflecting an
obligation to do so in all circumstances.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 15A of the Act,9 in
general, and with Section 15A(b)(6) of
the Act,10 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
foster cooperation and coordination
with persons engaging in regulating,
clearing, settling, processing
information with respect to, and
facilitating transactions in securities,
and to protect investors and the public
interest. Nasdaq believes the proposed
rule change will improve the regulation
of the Nasdaq market by increasing the
information made available to NASD’s
automated surveillance systems.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants or Others
Written comments were neither
solicited nor received.
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)(iii) of the Act 11 and
subparagraph (f)(3) of Rule 19b–4
PO 00000
9 15
U.S.C. 78o–3.
U.S.C. 78o–3(b)(6).
11 15 U.S.C. 78s(b)(3)(A)(iii).
thereunder.12 At any time within 60
days of the filing of the 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.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–062 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303. All
submissions should refer to File
Number SR–NASD–2005–062. This file
number should be included on the
subject line if e-mail 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 (https://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 such filing also will be
available for inspection and copying at
the principal office 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
10 15
Frm 00137
Fmt 4703
Sfmt 4703
35751
12 17
E:\FR\FM\21JNN1.SGM
CFR 240.19b–4(f)(3).
21JNN1
35752
Federal Register / Vol. 70, No. 118 / Tuesday, June 21, 2005 / Notices
Number SR–NASD–2005–062 and
should be submitted on or before July
12, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–3192 Filed 6–20–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51851; File No. SR–NASD–
2005–060]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change to Create the
ModelView Entitlement
June 14, 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 May 10,
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. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to modify NASD
Rule 7010(q) to establish the ModelView
entitlement, an historical data product
containing delayed, aggregated
information about displayed and
reserve-size orders in Nasdaq securities.
The text of the proposed rule change is
below. Proposed new language is
italicized.3
*
*
*
*
*
7010. System Services
(a)–(p) No change
(q) Nasdaq TotalView
(1)–(4) No change
(5) Historical TotalView
Information—ModelView
Nasdaq will make historical
TotalView information, under the
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The proposed changes are marked from NASD
Rule 7010 as it appears in the NASD Manual
available at https://www.nasd.com.
1 15
VerDate jul<14>2003
22:07 Jun 20, 2005
Jkt 205001
ModelView entitlement package,
available via NasdaqTrader.com.
ModelView shall contain historical
TotalView information regarding
aggregate displayed and reserve
liquidity at each price level in the
Nasdaq Market Center. ModelView shall
be available for a subscription fee of
$2,000 per month.
(r)–(v) No Change.
*
*
*
*
*
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 IV 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 is proposing to create
ModelView, an historical data product
designed to provide more
comprehensive historical information
regarding the data disseminated via the
Nasdaq TotalView data. ModelView is
designed to facilitate more efficient
trading activity in the Nasdaq Market
Center in an environment where trading
and order-routing become increasingly
automated, and broker-dealers,
institutional traders and technology
providers are constantly seeking to
improve the quality of information upon
which trading and order-routing
decisions are made. Firms are frequently
turning to algorithms and other
computer-based means by which to
execute proprietary trading strategies
and process customer order flow. As a
result, the information used to create
these automated trading models
determines trading efficacy. Incremental
data that could improve the execution
quality of these models is considered
valuable.
To respond to this demand, Nasdaq
proposes to establish ModelView, a new
near-historical product derived from
TotalView data, that Nasdaq believes
would provide greater insight than ever
before into the liquidity typically
available in the Nasdaq Market Center.
Specifically, ModelView would provide
the aggregate amount of both displayed
PO 00000
Frm 00138
Fmt 4703
Sfmt 4703
and reserve size liquidity in the Nasdaq
Market Center at each price level. With
this information, Nasdaq believes
developers of automated trading and
order-routing models will improve their
Nasdaq trading efficiency, and the
providers of liquidity to the Nasdaq
Market Center should find greater fill
rates and execution quality.
Nasdaq has designed ModelView to
protect the anonymity of the trading
strategies of Nasdaq Market Center
participants while improving the
execution quality of their orders.
ModelView will be a near-historical
product only. No information will be
available regarding Nasdaq Market
Center liquidity until T+10 (e.g.,
information about a day’s liquidity will
not be available until ten business days
later). In addition, by providing
aggregate liquidity information
ModelView will not contain explicit or
implicit information regarding the
identity of market participants trading
in Nasdaq at the relevant time. With the
integration of Brut facility liquidity into
the Nasdaq Market Center, there is
significant non-attributed liquidity in
the Nasdaq Market Center; thus, Nasdaq
believes ModelView will preserve the
anonymity of information presented in
aggregate form.
Nasdaq will offer ModelView on a
subscription basis via secure File
Transfer Protocol over
NasdaqTrader.com. ModelView will be
available for $2,000 without any
limitation on distribution of the data
either internally or externally. This
pricing is consistent with the general
pricing structure of Nasdaq’s proposed
Distributor Fee.4
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 15A of the Act,5 in
general, and with Section 15A(B)(5) of
the Act,6 in particular, in that it
provides for the equitable allocation of
reasonable charges among the persons
distributing and purchasing this
information. Nasdaq believes that this
proposed rule change will encourage the
broader redistribution of the Nasdaq
Market Center depth of book order
information, thus improving
transparency and thereby benefiting the
investing public.
4 See Securities Exchange Act Release No. 51598
(April 21, 2005), 70 FR 22162 (April 28, 2005)
(Notice of Filing of SR–NASD–2004–185).
5 15 U.S.C. 78o–3.
6 15 U.S.C. 78o–3(b)(5).
E:\FR\FM\21JNN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 118 (Tuesday, June 21, 2005)]
[Notices]
[Pages 35747-35752]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3192]
[[Page 35747]]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51837; File No. SR-NASD-2005-062]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1 Thereto to Modify the Text of NASD
Trade Reporting Rules to Reflect the Implementation of SR-NASD-2003-159
June 13, 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 May 12, 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 June 9,
2005, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\
Nasdaq has designated this proposal as concerned solely with the
administration of a self-regulatory organization, pursuant to Section
19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(3) thereunder,\5\
which renders the proposed rule change effective upon filing. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\2\ Amendment No. 1 made minor technical changes to the proposed
rule change. The effective date of the original proposed rule change
is May 12, 2005, and the effective date of Amendment No. 1 is June
9, 2005. For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on June 9, 2005, the date on which Nasdaq filed
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(3).
---------------------------------------------------------------------------
I.Self-Regulatory Organization's Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq is modifying the text of trade reporting rules in order to
reflect the implementation of provisions of SR-NASD-2003-159\6\ that
had a delayed implementation date.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 49404 (March 11,
2004), 69 FR 12727 (March 17, 2004) (SR-NASD-2003-159) (proposing
release) and 49581 (April 19, 2004), 69 FR 22578 (April 26, 2004)
(SR-NASD-2003-159) (approval order).
---------------------------------------------------------------------------
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in [brackets].\7\
---------------------------------------------------------------------------
\7\ Changes are marked to the rule text that appears in the
electronic NASD Manual found at https://www.nasd.com.
---------------------------------------------------------------------------
4630. Reporting Transactions in Nasdaq National Market Securities
* * * * *
4632. Transaction Reporting
(a)-(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1)-(4) No change.
(5) The time of execution expressed in hours, minutes, and seconds
based on Eastern Time, unless another provision of the Association's
rules requires that a different time must be included on the report [if
the trade is reported more than 90 seconds after execution].
(6) For any transaction in an order for which a member has
recording and reporting obligations under Rules 6954 and 6955, the
trade report must include [:
(A) A] an order identifier, meeting such parameters as may be
prescribed by the Association, assigned to the order that uniquely
identifies the order for the date it was received (see Rule
6954(b)(1)).
[(B) The time of the execution expressed in hours, minutes, and
seconds. This information must be reported regardless of the period of
time between execution of the trade and the report to the Nasdaq Market
Center. All times reported to the Nasdaq Market Center shall be in
Eastern Time.]
(d)-(g) No change.
* * * * *
[IM-4632-2. Delayed Effective Date of Obligation to Include Time of
Execution on All Reports Submitted to the Nasdaq Market Center
On April 19, 2004, the Securities and Exchange Commission (``SEC'')
approved a proposed rule change filed by the Association (SR-NASD-2003-
159) requiring members to include the time of execution on all reports
submitted to the Nasdaq Market Center reporting service (formerly known
as the Automated Confirmation Transaction Service, or ``ACT''). In
response to comments from the Association's Small Firm Advisory Board,
Nasdaq agreed to delay the effective date of this requirement until one
year after the date of SEC approval. Therefore, the effective date of
this requirement is April 25, 2005.
Until April 25, 2005, members remain obligated to provide the time
of execution only in those circumstances specifically articulated in
the Association's rules. To prevent confusion, Nasdaq has not modified
the Association's rules to reflect the obligation to provide the time
of execution in all circumstances. These language modifications will be
made at a time closer to the actual effective date of the obligation.]
4640. Reporting Transactions in Nasdaq SmallCapSM Market Securities
* * * * *
4642. Transaction Reporting
(a)-(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1)-(4) No change.
(5) The time of execution expressed in hours, minutes, and seconds
based on Eastern Time, unless another provision of the Association's
rules requires that a different time must be included on the report [if
the trade is reported more than 90 seconds after execution].
(6) For any transaction in an order for which a member has
recording and reporting obligations under Rules 6954 and 6955, the
trade report must include [:
(A) A] an order identifier, meeting such parameters as may be
prescribed by the Association, assigned to the order that uniquely
identifies the order for the date it was received (see Rule
6954(b)(1)).
[(B) The time of execution expressed in hours, minutes, and
seconds. This information must be reported regardless of the period of
time between execution of the trade and the report to the Nasdaq Market
Center. All times reported to the Nasdaq Market Center system shall be
in Eastern Time.]
(d)-(g) No change.
[IM-4642. Delayed Effective Date of Obligation to Include Time of
Execution on All Reports Submitted to the Nasdaq Market Center
On April 19, 2004, the Securities and Exchange Commission (``SEC'')
approved a proposed rule change filed by the Association (SR-NASD-2003-
159) requiring members to include the time of execution on all reports
submitted to the Nasdaq Market Center reporting service (formerly known
as the Automated Confirmation Transaction Service, or ``ACT''). In
response to comments from the Association's Small Firm Advisory Board,
Nasdaq agreed to delay the effective date of this requirement until one
year after the date of SEC approval. Therefore, the effective
[[Page 35748]]
date of this requirement is April 25, 2005.
Until April 25, 2005, members remain obligated to provide the time
of execution only in those circumstances specifically articulated in
the Association's rules. To prevent confusion, Nasdaq has not modified
the Association's rules to reflect the obligation to provide the time
of execution in all circumstances. These language modifications will be
made at a time closer to the actual effective date of the obligation.]
* * * * *
4650. Reporting Transactions in Nasdaq Convertible Debt Securities
* * * * *
4652. Transaction Reporting
(a)-(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1)-(4) No change.
(5) The time of execution expressed in hours, minutes, and seconds
based on Eastern Time, unless another provision of the Association's
rules requires that a different time must be include on the report [if
the trade is reported more than 90 seconds after execution].
(6) For any transaction in an order for which a member has
recording and reporting obligations under Rules 6954 and 6955, the
trade report must include[:
(A) A] an order identifier, meeting such parameters as may be
prescribed by the Association, assigned to the order that uniquely
identifies the order for the date it was received (see Rule
6954(b)(1)).
[(B) The time of the execution expressed in hours, minutes, and
seconds. This information must be reported regardless of the period of
time between execution of the trade and the report to the Nasdaq Market
Center. All times reported to the Nasdaq Market Center system shall be
in Eastern Time.]
(d)-(g) No change.
[IM-4652. Delayed Effective Date of Obligation to Include Time of
Execution on All Reports Submitted to the Nasdaq Market Center
On April 19, 2004, the Securities and Exchange Commission (``SEC'')
approved a proposed rule change filed by the Association (SR-NASD-2003-
159) requiring members to include the time of execution on all reports
submitted to the Nasdaq Market Center reporting service (formerly known
as the Automated Confirmation Transaction Service, or ``ACT''). In
response to comments from the Association's Small Firm Advisory Board,
Nasdaq agreed to delay the effective date of this requirement until one
year after the date of SEC approval. Therefore, the effective date of
this requirement is April 25, 2005.
Until April 25, 2005, members remain obligated to provide the time
of execution only in those circumstances specifically articulated in
the Association's rules. To prevent confusion, Nasdaq has not modified
the Association's rules to reflect the obligation to provide the time
of execution in all circumstances. These language modifications will be
made at a time closer to the actual effective date of the obligation.]
* * * * *
5400. Nasdaq Stock Market and Alternative Display Facility Trade
Reporting
* * * * *
5430. Transaction Reporting
(a) When and How Transactions are Reported
(1)-(3) No change.
(4) Transaction Reporting to the Nasdaq Market Center Outside
Normal Market Hours
(A) Last sale reports of transactions in designated securities
executed between 8 a.m. and 9:30 a.m. Eastern Time shall be reported
within 90 seconds after execution and shall be designated as ``.T''
trades to denote their execution outside normal market hours.
Transactions not reported within 90 seconds shall also be designated as
.T trades[, and include the time of execution]. Transactions not
reported before 9:30 a.m. shall be reported after 4 p.m. and before
6:30 p.m. as .T trades[, and include the time of execution].[\1\]
(B) Last sale reports of transactions in designated securities
executed between the hours of 4 p.m. and 6:30 p.m. Eastern Time shall
be reported within 90 seconds after execution and be designated as
``.T'' trades to denote their execution outside normal market hours.
Transactions not reported within 90 seconds shall also be designated as
.T trades[, and include the time of execution]. Transactions not
reported before 6:30 p.m. shall be reported on an ``as of'' basis the
following day between 8 a.m. and 6 p.m.
(C) Last sale reports of transactions executed between midnight and
8 a.m. Eastern Time shall be reported between 8 a.m. and 9:30 a.m.
Eastern Time on trade date as ``.T'' trades[, and include the time of
execution]. Transactions not reported before 9:30 a.m. shall be
reported after 4 p.m. and before 6:30 p.m. as .T trades[, and include
the time of execution].[\2\]
(D) Last sale reports of transactions executed between 6:30 p.m.
and midnight Eastern Time shall be reported on the next business day
(T+1) between 8 a.m. and 6:30 p.m. Eastern Time and be designated ``as/
of'' trades[and include the time of execution].
(5)-(6) No change.
(7) All members shall append the .W trade report modifier to
transaction reports occurring at prices based on average-weighting, or
other special pricing formulae. [Members reporting transactions to the
Nasdaq Market Center with the .W modifier shall also include the time
of execution on the transaction report.]
(8)-(12) No change.
(13) To identify pre-opening and after-hours trades reported late,
Nasdaq will convert the .T modifier to .ST for any report submitted to
the Nasdaq Market Center more than 90 seconds after execution.[\3\]
(b) No change.
[\1\ Until Nasdaq implements the use of the .ST modifier, which
denotes the late reporting of a pre-opening or after-hours trade,
members shall report on the following day on an ``as/of basis,'' and
include the time of execution, last sale reports of transactions in
designated securities executed between 8 a.m. and 9:30 a.m. Eastern
Time that are not reported to the Nasdaq Market Center prior to 9:30
a.m. These reports shall include the time of execution.]
[\2\ Until Nasdaq implements the use of the .ST modifier, which
denotes the late reporting of a pre-opening or after-hours trade,
members shall report on the following day on an ``as/of basis'' last
sale reports of transactions in designated securities executed between
midnight and 8 a.m. Eastern Time that are not reported to the Nasdaq
Market Center prior to 9:30 a.m. These reports shall include the time
of execution.]
[\3\ Nasdaq expects to implement use of the .ST modifier for Nasdaq
listed securities in the fourth quarter of 2004, and will issue a
notice of the exact implementation date.]
* * * * *
6100. Trade Reporting Service
* * * * *
6130. Trade Report Input
(a)-(c) No change.
(d) Trade Information To Be Input
Each report to the Nasdaq Market Center shall contain the following
information:
(1)-(3) No change.
(4) The time of [E]execution expressed in hours, minutes, and
seconds based
[[Page 35749]]
on Eastern Time, unless another provision of the Association's rules
requires that a different time must be included on the report[time for
any transaction in Nasdaq or CQS securities not reported within 90
seconds of execution];
(5)-(12) No change.
(13) For any transaction in an order for which a member has
recording and reporting obligations under Rules 6954 and 6955, the
trade report must include[:
(A) A] an order identifier, meeting such parameters as may be
prescribed by the Association, assigned to the order that uniquely
identifies the order for the date it was received (see Rule
6954(b)(1)).
[(B) The time of the execution expressed in hours, minutes, and
seconds. This information must be reported regardless of the period of
time between execution of the trade and the report to the Nasdaq Market
Center. All times reported to the Nasdaq Market Center system shall be
in Eastern Time.]
(e)-(f) No change.
* * * * *
6400. Reporting Transactions in Listed Securities
* * * * *
6420. Transaction Reporting
(a) When and How Transactions are Reported
(1)(A) Registered Reporting Members shall transmit to the Nasdaq
Market Center, within 90 seconds after execution, last sale reports of
transactions in eligible securities executed between 9:30 a.m. and 4
p.m. Eastern Time otherwise than on a national securities exchange.
Transactions not reported within 90 seconds after execution shall be
designated as late[, and such trade reports must include the time of
execution].
(B) Registered Reporting Members shall transmit to the Nasdaq
Market Center, within 90 seconds after execution, last sale reports of
transactions in eligible securities executed in the United States
otherwise than on a national securities exchange between 4 p.m. and
6:30 p.m. Eastern Time; trades executed and reported after 4 p.m.
Eastern Time shall be designated as ``.T'' trades to denote their
execution outside normal market hours. Transactions not reported within
90 seconds after execution must be designated as .T trades[, and
include the time of execution on the trade report]. Transactions not
reported by 6:30 p.m. shall be reported on an ``as of'' basis the
following day between 8 a.m. and 6:30 p.m. Eastern Time.
(2)(A) Non-Registered Reporting Members shall, within 90 seconds
after execution, transmit to the Nasdaq Market Center, or by telephone
to the Nasdaq Market Center Operations Department if the Nasdaq Market
Center reporting service is unavailable due to system or transmission
failure, last sale reports of transactions in eligible securities
executed between 9:30 a.m. and 4 p.m. Eastern Time otherwise than on a
national securities exchange. Transactions not reported within 90
seconds after execution shall be designated as late[, and include the
time of execution].
(B) Non-registered Reporting Members shall, within 90 seconds after
execution, transmit to the Nasdaq Market Center, or by telephone to the
Nasdaq Market Center Operations Department if the Nasdaq Market Center
reporting service is unavailable due to system or transmission failure,
last sale reports of transactions in eligible securities executed in
the United States otherwise than on a national securities exchange
between the hours of 4 p.m. and 6:30 p.m. Eastern Time; trades executed
and reported after 4 p.m. Eastern Time shall be designated as ``.T''
trades to denote their execution outside normal market hours.
Transactions not reported within 90 seconds after execution must be
designated as .T trades[, and include the time of execution on the
trade report]. Transactions not reported by 6:30 p.m. shall be reported
on an ``as of'' basis the following day between 8 a.m. and 6:30 p.m.
(3)-(5) No change.
(6) All members shall report to Nasdaq using the .W modifier
transactions at prices based on average-weighting or other special
pricing formulae unrelated to the current or closing price of the
security on the primary market. [Members shall also include the time of
execution on the transaction report.]
(7) No change.
(8) All members shall append the .PRP trade report modifier to
transaction reports that reflect a price different from the current
market when the execution price is based on a prior reference point in
time. The transaction report shall include the prior reference time in
lieu of the actual time the trade was executed. The .PRP modifier shall
not be appended to a report of a transaction whose price is based on a
prior reference point in time if the trade is executed and reported
within 90 seconds from the prior reference point in time.\1\
(9) No change.
(10) To identify pre-opening and after-hours trades reported late,
Nasdaq shall convert the .T modifier to .ST for any report submitted to
the Nasdaq Market Center more than 90 seconds after execution.[\2\]
(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1)-(4) No change.
(5) The time of execution expressed in hours, minutes, and seconds
based upon Eastern Time, unless another provision of the Association's
rules requires that a different time must be included on the report [if
the trade is reported more than 90 seconds after execution].
(d)-(f) No change.
\1\ Implementation of the .PRP modifier for listed securities is
delayed until June 6, 2005. [such time that the Consolidated Tape
Association approves use of the modifier and makes the necessary system
changes to accommodate the modifier.]
[\2\ Implementation of the .ST modifier for listed securities is
delayed until such time that the Consolidated Tape Association approves
use of the modifier and makes the necessary system changes to
accommodate the modifier.]
* * * * *
[IM-6420-2. Delayed Effective Date of Obligation to Include Time of
Execution on All Reports Submitted to the Nasdaq Market Center
On April 19, 2004, the Securities and Exchange Commission (``SEC'')
approved a proposed rule change filed by the Association (SR-NASD-2003-
159) requiring members to include the time of execution on all reports
submitted to the Nasdaq Market Center reporting service (formerly known
as the Automated Confirmation Transaction Service, or ``ACT''). In
response to comments from the Association's Small Firm Advisory Board,
Nasdaq agreed to delay the effective date of this requirement until one
year after the date of SEC approval. Therefore, the effective date of
this requirement is April 25, 2005.
Until April 5, 2005, members remain obligated to provide the time
of execution only in those circumstances specifically articulated in
the Association's rules. To prevent confusion, Nasdaq has not modified
the Association's rules to reflect the obligation to provide the time
of execution in all circumstances. These language modifications will be
made at
[[Page 35750]]
a time closer to the actual effective date of the obligation.]
* * * * *
6600. Over-the-Counter Equity Securities
* * * * *
6620. Transaction Reporting
(a) When and How Transactions are Reported
(1) OTC Market Makers shall, within 90 seconds after execution,
transmit to the Nasdaq Market Center last sale reports of transactions
in OTC Equity Securities executed between the hours of 9:30 a.m. and 4
p.m. Eastern Time. Transactions not reported within 90 seconds after
execution shall be designated as late[ and include the time of
execution].
(2) Non-Market Makers shall, within 90 seconds after execution,
transmit to the Nasdaq Market Center, or by telephone to the Nasdaq
Market Operations Department if the Nasdaq Market Center is unavailable
due to system or transmission failure, last sale reports of
transactions in OTC Equity Securities executed between the hours of
9:30 a.m. and 4 p.m. Transactions not reported within 90 seconds after
execution shall be designated as late[ and include the time of
execution].
(3) Transaction Reporting Outside Normal Market Hours
(A) Last sale reports of transactions in OTC Equity Securities
executed between 8 a.m. and 9:30 a.m. Eastern Time shall be transmitted
to the Nasdaq Market Center within 90 seconds after execution and shall
be designated as ``.T'' trades to denote their execution outside normal
market hours. Transactions not reported within 90 seconds must be
designated as .T trades[, and include the time of execution].
Transactions not reported before 9:30 a.m. shall be reported after 4
p.m. and before 6:30 p.m. as .T trades[, and include the time of
execution].[\1\]
(B) Last sale reports of transactions in OTC Equity Securities
executed between the hours of 4 p.m. and 6:30 p.m. Eastern Time shall
be transmitted to the Nasdaq Market Center within 90 seconds after
execution; trades executed and reported after 4 p.m. Eastern Time shall
be designated as ``.T'' to denote their execution outside normal market
hours. Transactions not reported within 90 seconds must be designated
as .T trades[ and include the time of execution on the trade report].
Transactions not reported before 6:30 p.m. shall be reported on an ``as
of'' basis the following day between 8 a.m. and 6:30 p.m.
(C) Last sale reports of transactions in OTC Equity Securities
executed outside the hours of 8 a.m. and 6:30 p.m. Eastern Time shall
be reported as follows:
(i) Last sale reports of transactions in American Depositary
Receipts (ADRs), Canadian issues, or domestic OTC Equity Securities
that are executed between midnight and 8 a.m. Eastern Time shall be
transmitted to the Nasdaq Market Center between 8 a.m. and 9:30 a.m.
Eastern Time on trade date[,] and be designated as ``.T'' trades to
denote their execution outside normal market hours[, and be accompanied
by the time of execution]. Transactions not reported before 9:30 a.m.
shall be reported after 4 p.m. and before 6:30 p.m. as .T trades[, and
include the time of execution].[\2\] The party responsible for
reporting on trade date, the trade details to be reported, and the
applicable procedures shall be governed, respectively, by paragraphs
(b), (c), and (d) below;
(ii) Last sale reports of transactions in ADRs, Canadian issues, or
domestic OTC Equity Securities that are executed between 6:30 p.m. and
midnight Eastern Time shall be transmitted to the Nasdaq Market Center
on the next business day (T+1) between 8 a.m. and 6:30 p.m. Eastern
Time[,] and be designated ``as/of'' trades to denote their execution on
a prior day[, and be accompanied by the time of execution]. The party
responsible for reporting on T+1, the trade details to be reported, and
the applicable procedures shall be governed, respectively, by
paragraphs (b), (c), and (d) below; and
(iii) Last sale reports of transactions in foreign securities
(excluding ADRs and Canadian issues) shall be transmitted to the Nasdaq
Market Center on T+1 regardless of time of execution.[\3\] 1 Such
reports shall be made between 8 a.m. and 1:30 p.m. Eastern Time in the
same manner as described in subparagraph (3)([B]C)(ii) above.
(4)-(7) No change.
(8) All members shall append the .W trade report modifier to
reports of Stop Stock Transactions, as such term is defined in Rule
6610, and include the time at which the member and the other party
agreed to the Stop Stock Price, as such term is defined in Rule 6610,
in lieu of including the time of execution on the trade report. The .W
modifier shall not be appended to a report of a Stop Stock Transaction
if the Stop Stock Transaction is executed and reported within 90
seconds of the time the member and the other party agree to the Stop
Price.[\4\]2
(9) To identify late pre-opening and after-hours trades reported
late, Nasdaq will convert the .T modifier to .ST for any report
submitted to ACT more than 90 seconds after execution.[\5\]
(b) No change.
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1)-(4) No change.
(5) The time of execution expressed in hours, minutes, and seconds
based on Eastern Time, unless another provision of the Association's
rules requires that a different time must be included on the report.
(d)-(f) No change.
[\1\ Until Nasdaq implements the use of the .ST modifier, which
denotes the late reporting of a pre-opening or after-hours trade,
members shall report on the following day on an ``as/of basis'' last
sale reports of transactions in designated securities executed between
8 a.m. and 9:30 a.m. Eastern Time that are not reported to the Nasdaq
Market Center prior to 9:30 a.m. These reports shall include the time
of execution.]
[\2\ Until Nasdaq implements the use of the .ST modifier, which
denotes the late reporting of a pre-opening or after-hours trade,
members shall report on the following day on an ``as/of basis'' last
sale reports of transactions in designated securities executed between
midnight and 8 a.m. Eastern Time that are not reported to the Nasdaq
Market Center prior to 9:30 a.m. These reports shall include the time
of execution.]
[\3\]1 Member firms that have the operational capability to report
transactions in foreign securities (excluding ADRs and Canadian issues)
within 90 seconds of execution, between the hours of 8 a.m. and 5:15
p.m. Eastern time, may do so at their option. If a firm chooses this
option, it need not report the same transaction(s) on T+1 as prescribed
by subparagraph (3)(C)(ii)[(c)].
[\4\]2 Use of the .W modifier for Stop Stock Transactions for OTC
Equity Securities is delayed until the necessary system changes can be
made to accommodate the modifier. Nasdaq [expects these system changes
to be completed in the fourth quarter of 2004, and] will issue a notice
of the exact implementation date.
[\5\ Nasdaq expects to implement use of the .ST modifier for Nasdaq
listed securities in the fourth quarter of 2004, and will issue a
notice of the exact implementation date.] [IM-6620. Delayed Effective
Date of Obligation to Include Time of Execution on All Reports
Submitted to the Nasdaq Market Center
On April 19, 2004, the Securities and Exchange Commission (``SEC'')
approved a proposed rule change filed by the Association (SR-NASD-2003-
159) requiring members to include the time of execution on all reports
[[Page 35751]]
submitted to the Nasdaq Market Center reporting service (formerly known
as the Automated Confirmation Transaction Service, or ``ACT''). In
response to comments from the Association's Small Firm Advisory Board,
Nasdaq agreed to delay the effective date of this requirement until one
year after the date of SEC approval. Therefore, the effective date of
this requirement is April 25, 2005.
Until April 25, 2005, members remain obligated to provide the time
of execution only in those circumstances specifically articulated in
the Association's rules. To prevent confusion, Nasdaq has not modified
the Association's rules to reflect the obligation to provide the time
of execution in all circumstances. These language modifications will be
made at a time closer to the actual effective date of the obligation.]
* * * * *
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 IV 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
In April 2004, the Commission approved a proposed rule change that
contained numerous modifications to the trade reporting rules for the
Nasdaq Market Center.\8\ The original version of SR-NASD-2003-159
contained rule language that would have immediately required firms to
include the time of execution on all trade reports submitted to Nasdaq,
rather than in the handful of special circumstances previously required
by the rules. In response to comments from the NASD's Small Firm
Advisory Board, however, Nasdaq amended the filing to delay
implementation of this generalized requirement until April 25, 2005.
Accordingly, the amended filing approved by the Commission contained
Interpretive Material appended to each trade reporting rule that
informed firms of the delayed effective date and stated Nasdaq's
intention to avoid confusion by maintaining the trade reporting rule
language regarding time of execution in its current state until the
time of implementation, at which point Nasdaq would submit an
additional implementing filing.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release Nos. 49404 (March 11,
2004), 69 FR 12727 (March 17, 2004) (SR-NASD-2003-159) (proposing
release) and 49581 (April 19, 2004), 69 FR 22578 (April 26, 2004)
(SR-NASD-2003-159) (approval order).
---------------------------------------------------------------------------
In accordance with the full implementation of the reporting
obligation approved by the Commission in SR-NASD-2003-159, Nasdaq now
proposes to remove the Interpretive Material and to replace rule
language reflecting an obligation to report time of execution in
specified circumstances with clear language reflecting an obligation to
do so in all circumstances.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 15A of the Act,\9\ in general, and with
Section 15A(b)(6) of the Act,\10\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to foster
cooperation and coordination with persons engaging in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, and to protect investors and
the public interest. Nasdaq believes the proposed rule change will
improve the regulation of the Nasdaq market by increasing the
information made available to NASD's automated surveillance systems.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78o-3.
\10\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
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 that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants or Others
Written comments were neither solicited nor received.
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)(iii) of the Act \11\ and subparagraph (f)(3) of Rule 19b-4
thereunder.\12\ At any time within 60 days of the filing of the
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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(3).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2005-062 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-9303. All submissions should refer to
File Number SR-NASD-2005-062. This file number should be included on
the subject line if e-mail 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
(https://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 such filing also will be available for
inspection and copying at the principal office 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
[[Page 35752]]
Number SR-NASD-2005-062 and should be submitted on or before July 12,
2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-3192 Filed 6-20-05; 8:45 am]
BILLING CODE 8010-01-P
