Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Definition of “Non-Professional” and Use of TRACE Transaction Data, 38992-38994 [E5-3544]
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38992
Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Notices
protect investors and the public interest.
NASD believes that the proposed rule
change is designed to accomplish these
ends by requiring members to conduct
periodic tests of their AML compliance
programs, preserve the independence of
their testing personnel, and ensure the
accuracy of their AML compliance
person information.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD 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
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. 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. The
Commission particularly urges
commenters to consider the proposed
rule change in light of a similar but not
identical proposed rule change by the
NYSE.8
Specifically, the NASD and NYSE
proposals differ in who would be
permitted to serve as a firm’s designated
AML compliance contact person (‘‘AML
Officer’’). The NYSE proposal would,
subject to certain restrictions, permit the
AML Officer to be an employee of a
parent, affiliate, or subsidiary of a
member. As discussed above, the NASD
proposal, however, would require the
8 The text of the proposed rule change is available
on the NYSE’s Web site (www.NYSE.com), at the
NYSE’s principal office, and at the Commission’s
Public Reference Room.
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Jkt 205001
AML Officer to be an ‘‘associated person
of the member,’’ as that term is defined
in Article I(dd) of the NASD By-Laws.
Serving as an AML Officer, by itself,
would not make a person an associated
person of an NASD member. What
issues, if any, would arise from the
application of both standards regarding
who can serve as an AML Officer at
firms that are dual members of the
NASD and NYSE?
The NASD and NYSE proposals also
differ in who would be permitted to
perform the independent testing
function for AML compliance. Primarily
to accommodate smaller firms, the
NASD proposal would permit an
employee who reports to a person who
performs the functions being tested and/
or reports to the AML Officer to perform
the independent testing, if, among other
requirements, the member has no other
qualified internal personnel to conduct
the test and the member creates a
written policy to address conflicts. The
NYSE proposal, however, would not
permit an employee who reports to a
person who performs the functions
being tested or reports to the AML
Officer to perform the independent
testing. How would these standards, if
adopted, affect the AML program of
dual members of the NASD and NYSE?
Firms are invited to discuss how this
would affect their specific operations.
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–2005–066 on the
subject line.
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, 100 F Street, NE, Washington, DC
20549. Copies of such filing will also be
available for inspection and copying at
the principal office of 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 the File
Number SR–NASD–2005–066 and
should be submitted on or before July
27, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–3543 Filed 7–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51929; File No. SR–NASD–
2005–083]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to the Definition
of ‘‘Non-Professional’’ and Use of
TRACE Transaction Data
June 28, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
Paper Comments
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate
notice is hereby given that on June 23,
to Jonathan G. Katz, Secretary,
2005, the National Association of
Securities and Exchange Commission,
Securities Dealers, Inc. (‘‘NASD’’) filed
100 F Street, NE., Washington, DC
with the Securities and Exchange
20549–9303.
Commission (‘‘Commission’’) the
All submissions should refer to File
proposed rule change as described in
Number SR–NASD–2005–066. This file
Items I and II below, which Items have
number should be included on the
been prepared by NASD. NASD filed the
subject line if e-mail is used. To help the proposal as a ‘‘non-controversial’’ rule
Commission process and review your
change pursuant to Section 19(b)(3)(A)
comments more efficiently, please use
of the Act 3 and Rule 19b–4(f)(6)
only one method. The Commission will thereunder,4 which renders the proposal
post all comments on the Commission’s effective upon filing with the
Internet Web site (https://www.sec.gov/
Commission. The Commission is
rules/sro.shtml). Copies of the
publishing this notice to solicit
submission, all subsequent
amendments, all written statements
9 17 CFR 200.30–3(a)(12).
with respect to the proposed rule
1 15 U.S.C. 78s(b)(1).
change that are filed with the
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
Commission, and all written
4 17 CFR 240.19b–4(f)(6).
communications relating to the
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Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Notices
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
NASD is proposing to amend the
definition of ‘‘Non-Professional’’ in
NASD Rule 7010(k)(3)(C)(i), relating to
Transaction Reporting and Compliance
Engine (‘‘TRACE’’) transaction data and
fees, and add new NASD Rule
7010(k)(3)(A)(iv) to clarify that a natural
person who receives and uses TRACE
transaction data for his or her personal,
non-commercial use will not be charged
a TRACE market data professional fee
for such use. The text of the proposed
rule change is available on NASD’s Web
site (https://www.nasd.com), at NASD’s
principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD 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. NASD 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
NASD seeks to make minor clarifying
changes to the definition of ‘‘NonProfessional’’ in NASD Rule
7010(k)(3)(C)(i) and to add new NASD
Rule 7010(k)(3)(A)(iv). The purpose of
the proposed rule change is to
restructure NASD Rule 7010(k) to reflect
more clearly a recently approved rule
change to permit natural persons
actively engaged in providing financial
services or employed in the financial
services industry who do not fall within
the definition of ‘‘Non-Professional’’ to
access TRACE transaction data solely
for personal, non-commercial purposes
and not be liable for professional
TRACE transaction data fees.
Background. NASD recently made
minor clarifying amendments to the
defined term ‘‘Non-Professional’’ in
NASD Rule 7010(k)(C)(3)(i) to make
explicit in the rule that persons who are
otherwise excluded from the definition
of ‘‘Non-Professional,’’ such as
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16:35 Jul 05, 2005
Jkt 205001
registered persons employed by a
broker-dealer or an investment adviser,
should not be liable for professional fees
for TRACE market data when such
persons access the TRACE data solely
for their personal, non-commercial use.5
The amendments became effective June
1, 2005.
Proposal. The definition of ‘‘NonProfessional’’ is used in various NASD
rules. NASD is concerned that defining
the same term differently among NASD
Rules will create confusion and
inefficiencies both for the industry and
NASD. For the purpose of maintaining
uniformity among definitions,
eliminating confusion among industry
professionals who must apply the
multiple provisions, and creating
efficiencies for regulatory data searches
and data retrieval, NASD is proposing to
amend the defined term ‘‘NonProfessional’’ in NASD Rule
7010(k)(3)(C)(i). This amendment would
reverse some of the minor clarifying
amendments previously made but
would conform it to other NASD
provisions also defining ‘‘NonProfessional’’ and preserve the
previously approved rule change
providing natural persons who are
affiliated with or employed by the
securities or commodities industry or
other parts of the financial services
industry 6 access to TRACE transaction
data without paying professional
TRACE data fees when using the data
solely for personal, non-commercial use.
To effect the restructuring rule
change, NASD proposes specific minor
clarifying changes to NASD Rule
7010(k)(3)(C)(i) that are set forth in the
proposed rule text. The proposed
amendments reverse some but not all of
the minor clarifying changes recently
incorporated in the Rule.7 NASD also
5 See Securities Exchange Act Release No. 51611
(April 26, 2005), 70 FR 22735 (May 2, 2005) (order
approving File No. SR–NASD–2005–026); NASD
Notice to Members 05–37 (May 2005). For example,
a registered representative of a broker-dealer is not
liable for fees charged professionals in those
instances where the registered representative
accesses the TRACE transaction data solely for
personal, non-commercial use, such as when the
registered representative accesses TRACE data at
home to obtain information about bonds held in his
or her personal account.
6 Such financial services industry affiliations are
described fully in NASD Rule 7010(k)(3)(C)(i) in
current subparagraphs (a) through (d), to be
renumbered as subparagraphs (a) through (c).
7 NASD is not revising recently adopted
amendments to NASD Rule 7010(k)(3)(C)(i)(d) (to be
renumbered as NASD Rule 7010(k)(3)(C)(i)(c)). Prior
to amendment, NASD Rule 7010(k)(3)(C)(i)(d)
excluded from ‘‘Non-Professional’’ persons
employed by a bank, insurance company, or other
organization exempt from registration under federal
or state securities laws to perform functions that
would require registration or qualification if such
functions were performed for an organization not so
exempt if such persons used TRACE transaction
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38993
proposes to amend NASD Rule
7010(k)(3)(A) to add subparagraph (iv),
providing:
A natural person otherwise subject to
market data fees under Rule 7010(k)(3)(A) is
not subject to such fees when he or she
accesses TRACE transaction data solely for
his or her personal, noncommercial use.
Together, the proposed amendments
continue to make clear that a natural
person who is registered in one of
several capacities as a securities or
commodities professional, or performs
similar functions but is not required to
be registered due to an exemption, or is
an employee of certain financial
services businesses, may access TRACE
transaction data free of professional
TRACE data charges if the natural
person uses such data solely for
personal, non-commercial uses. These
changes also would maintain
conformity among various NASD
provisions in which the term ‘‘NonProfessional’’ is defined.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,8 which
requires, among other things, that NASD
rules must be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest,
and Section 15A(b)(5) of the Act,9
which requires, among other things, that
NASD rules provide for the equitable
allocation of reasonable dues, fees, and
other charges among members and
issuers and other persons using any
facility or system that NASD operates or
controls.
NASD believes that continuing to
provide access to TRACE data to
persons who are using TRACE market
data solely for personal, noncommercial use is consistent with the
NASD’s goals to promote corporate
bond market transparency, and would
not adversely affect the use and
distribution of TRACE data for the
protection of investors and in
furtherance of the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD does not believe that the
proposed rule change would result in
any burden on competition that is not
data for other than personal, noncommercial use.
The revisions added that ‘‘other employees’’ of such
organizations who use TRACE transaction data for
other than personal, non-commercial use also are
not ‘‘Non-Professionals.’’
8 15 U.S.C. 78o–3(b)(6).
9 15 U.S.C. 78o–3(b)(5).
E:\FR\FM\06JYN1.SGM
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38994
Federal Register / Vol. 70, No. 128 / Wednesday, July 6, 2005 / Notices
necessary or appropriate in furtherance
of the purposes of the Act.
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
Because the foregoing proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, and NASD provided the
Commission with written notice of its
intent to file the proposed rule change
at least five days prior to the filing date,
the proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 10 and Rule 19b–4(f)(6)
thereunder.11 NASD complied with this
pre-filing requirement.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, Rule
19b–4(f)(6)(iii) permits the Commission
to designate a shorter time if such action
is consistent with the protection of
investors and the public interest. NASD
has asked the Commission to waive the
30-day operative delay to clarify an
existing policy regarding TRACE market
data fees applicable to professionals and
to reverse expeditiously recent rule
amendments to the definition of ‘‘NonProfessional’’ in Rule 7010(k)(3)
regarding the TRACE policy to avoid
industry confusion. The Commission
hereby grants this request and
designates the proposal to be operative
upon filing with the Commission.12 The
Commission believes that maintaining
conformity among definitions in
NASD’s rules and reducing fees for nonprofessional use of TRACE transaction
data are consistent with the protection
of investors and the public interest.
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
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
11 17
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16:35 Jul 05, 2005
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necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.13
IV. 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.
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
No. SR–NASD–2005–083 on the subject
line.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–3544 Filed 7–5–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51934; File No. SR–NYSE–
2005–36]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing of Proposed Rule Change To
Amend Rule 445
June 29, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’) 1 and Rule 19b–4 2
thereunder, notice is hereby given that
Paper Comments
on May 23, 2005, the New York Stock
Exchange, Inc. (‘‘NYSE’’ or the
• Send paper comments in triplicate
‘‘Exchange’’) filed with the Securities
to Jonathan G. Katz, Secretary,
and Exchange Commission (‘‘SEC’’ or
Securities and Exchange Commission,
the ‘‘Commission’’) the proposed rule
Station Place, 100 F Street, NE.,
changes as described in Items I, II, and
Washington, DC 20549–9303.
III below, which items have been
All submissions should refer to File
prepared by the Exchange. The
No. SR–NASD–2005–083. This file
Commission is publishing this notice to
number should be included on the
subject line if e-mail is used. To help the solicit comments on the proposed rule
changes from interested persons.
Commission process and review your
comments more efficiently, please use
I. Self-Regulatory Organization’s
only one method. The Commission will Statement of the Terms of Substance of
post all comments on the Commission’s the Proposed Rule Changes
Internet Web site (https://www.sec.gov/
The Exchange proposes to amend
rules/sro.shtml). Copies of the
Rule 445 (‘‘Anti-Money Laundering
submission, all subsequent
Compliance Program’’) to establish: (1)
amendments, all written statements
Timeframes within which the required
with respect to the proposed rule
independent testing function must be
change that are filed with the
performed; (2) qualification and
Commission, and all written
independence standards for those who
communications relating to the
conduct such testing function; and (3)
proposed rule change between the
jurisdictional requirements pertaining to
Commission and any person, other than
AML Officers (as defined below). The
those that may be withheld from the
text of the proposed rule change is
public in accordance with the
available on the NYSE’s Web site
provisions of 5 U.S.C. 552, will be
(https://www.NYSE.com), at the NYSE’s
available for inspection and copying in
principal office, and at the
the Commission’s Public Reference
Commission’s Public Reference Room.
Room, 100 F Street, NE., Washington,
DC 20549. Copies of such filing will also II. Self-Regulatory Organization’s
Statement of the Purpose of, and
be available for inspection and copying
Statutory Basis for, the Proposed Rule
at the principal office of NASD. All
Changes
comments received will be posted
without change; the Commission does
In its filing with the Commission, the
not edit personal identifying
Exchange included statements
information from submissions. You
concerning the purpose of, and basis for,
should submit only information that
the proposed rule changes. The text of
you wish to make available publicly. All these statements may be examined at
submissions should refer to File No.
the places specified in Item IV below.
SR–NASD–2005–083 and should be
submitted on or before July 27, 2005.
14 17 CFR 200.30–3(a)(12).
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1 15
13 See
15 U.S.C. 78s(b)(3)(C).
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2 17
E:\FR\FM\06JYN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
06JYN1
]]>Agencies
[Federal Register Volume 70, Number 128 (Wednesday, July 6, 2005)]
[Notices]
[Pages 38992-38994]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-3544]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51929; File No. SR-NASD-2005-083]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to the Definition of ``Non-Professional'' and Use
of TRACE Transaction Data
June 28, 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 June 23, 2005, the National Association of Securities Dealers, Inc.
(``NASD'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by NASD. NASD filed the
proposal as a ``non-controversial'' rule change pursuant to Section
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which
renders the proposal effective upon filing with the Commission. The
Commission is publishing this notice to solicit
[[Page 38993]]
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to amend the definition of ``Non-Professional''
in NASD Rule 7010(k)(3)(C)(i), relating to Transaction Reporting and
Compliance Engine (``TRACE'') transaction data and fees, and add new
NASD Rule 7010(k)(3)(A)(iv) to clarify that a natural person who
receives and uses TRACE transaction data for his or her personal, non-
commercial use will not be charged a TRACE market data professional fee
for such use. The text of the proposed rule change is available on
NASD's Web site (https://www.nasd.com), at NASD's principal office, and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD 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. NASD 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
NASD seeks to make minor clarifying changes to the definition of
``Non-Professional'' in NASD Rule 7010(k)(3)(C)(i) and to add new NASD
Rule 7010(k)(3)(A)(iv). The purpose of the proposed rule change is to
restructure NASD Rule 7010(k) to reflect more clearly a recently
approved rule change to permit natural persons actively engaged in
providing financial services or employed in the financial services
industry who do not fall within the definition of ``Non-Professional''
to access TRACE transaction data solely for personal, non-commercial
purposes and not be liable for professional TRACE transaction data
fees.
Background. NASD recently made minor clarifying amendments to the
defined term ``Non-Professional'' in NASD Rule 7010(k)(C)(3)(i) to make
explicit in the rule that persons who are otherwise excluded from the
definition of ``Non-Professional,'' such as registered persons employed
by a broker-dealer or an investment adviser, should not be liable for
professional fees for TRACE market data when such persons access the
TRACE data solely for their personal, non-commercial use.\5\ The
amendments became effective June 1, 2005.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51611 (April 26,
2005), 70 FR 22735 (May 2, 2005) (order approving File No. SR-NASD-
2005-026); NASD Notice to Members 05-37 (May 2005). For example, a
registered representative of a broker-dealer is not liable for fees
charged professionals in those instances where the registered
representative accesses the TRACE transaction data solely for
personal, non-commercial use, such as when the registered
representative accesses TRACE data at home to obtain information
about bonds held in his or her personal account.
---------------------------------------------------------------------------
Proposal. The definition of ``Non-Professional'' is used in various
NASD rules. NASD is concerned that defining the same term differently
among NASD Rules will create confusion and inefficiencies both for the
industry and NASD. For the purpose of maintaining uniformity among
definitions, eliminating confusion among industry professionals who
must apply the multiple provisions, and creating efficiencies for
regulatory data searches and data retrieval, NASD is proposing to amend
the defined term ``Non-Professional'' in NASD Rule 7010(k)(3)(C)(i).
This amendment would reverse some of the minor clarifying amendments
previously made but would conform it to other NASD provisions also
defining ``Non-Professional'' and preserve the previously approved rule
change providing natural persons who are affiliated with or employed by
the securities or commodities industry or other parts of the financial
services industry \6\ access to TRACE transaction data without paying
professional TRACE data fees when using the data solely for personal,
non-commercial use.
---------------------------------------------------------------------------
\6\ Such financial services industry affiliations are described
fully in NASD Rule 7010(k)(3)(C)(i) in current subparagraphs (a)
through (d), to be renumbered as subparagraphs (a) through (c).
---------------------------------------------------------------------------
To effect the restructuring rule change, NASD proposes specific
minor clarifying changes to NASD Rule 7010(k)(3)(C)(i) that are set
forth in the proposed rule text. The proposed amendments reverse some
but not all of the minor clarifying changes recently incorporated in
the Rule.\7\ NASD also proposes to amend NASD Rule 7010(k)(3)(A) to add
subparagraph (iv), providing:
---------------------------------------------------------------------------
\7\ NASD is not revising recently adopted amendments to NASD
Rule 7010(k)(3)(C)(i)(d) (to be renumbered as NASD Rule
7010(k)(3)(C)(i)(c)). Prior to amendment, NASD Rule
7010(k)(3)(C)(i)(d) excluded from ``Non-Professional'' persons
employed by a bank, insurance company, or other organization exempt
from registration under federal or state securities laws to perform
functions that would require registration or qualification if such
functions were performed for an organization not so exempt if such
persons used TRACE transaction data for other than personal,
noncommercial use. The revisions added that ``other employees'' of
such organizations who use TRACE transaction data for other than
personal, non-commercial use also are not ``Non-Professionals.''
A natural person otherwise subject to market data fees under
Rule 7010(k)(3)(A) is not subject to such fees when he or she
accesses TRACE transaction data solely for his or her personal,
---------------------------------------------------------------------------
noncommercial use.
Together, the proposed amendments continue to make clear that a
natural person who is registered in one of several capacities as a
securities or commodities professional, or performs similar functions
but is not required to be registered due to an exemption, or is an
employee of certain financial services businesses, may access TRACE
transaction data free of professional TRACE data charges if the natural
person uses such data solely for personal, non-commercial uses. These
changes also would maintain conformity among various NASD provisions in
which the term ``Non-Professional'' is defined.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\8\ which requires, among
other things, that NASD rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest, and Section 15A(b)(5) of the Act,\9\ which requires,
among other things, that NASD rules provide for the equitable
allocation of reasonable dues, fees, and other charges among members
and issuers and other persons using any facility or system that NASD
operates or controls.
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\8\ 15 U.S.C. 78o-3(b)(6).
\9\ 15 U.S.C. 78o-3(b)(5).
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NASD believes that continuing to provide access to TRACE data to
persons who are using TRACE market data solely for personal, non-
commercial use is consistent with the NASD's goals to promote corporate
bond market transparency, and would not adversely affect the use and
distribution of TRACE data for the protection of investors and in
furtherance of the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change would result in
any burden on competition that is not
[[Page 38994]]
necessary or appropriate in furtherance of the purposes of the Act.
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
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, and NASD provided the Commission with written notice of its
intent to file the proposed rule change at least five days prior to the
filing date, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6)
thereunder.\11\ NASD complied with this pre-filing requirement.
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. NASD has asked the Commission to
waive the 30-day operative delay to clarify an existing policy
regarding TRACE market data fees applicable to professionals and to
reverse expeditiously recent rule amendments to the definition of
``Non-Professional'' in Rule 7010(k)(3) regarding the TRACE policy to
avoid industry confusion. The Commission hereby grants this request and
designates the proposal to be operative upon filing with the
Commission.\12\ The Commission believes that maintaining conformity
among definitions in NASD's rules and reducing fees for non-
professional use of TRACE transaction data are consistent with the
protection of investors and the public interest.
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\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.\13\
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\13\ See 15 U.S.C. 78s(b)(3)(C).
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IV. 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. 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 No. SR-NASD-2005-083 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 No. SR-NASD-2005-083. 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, 100 F Street,
NE., Washington, DC 20549. Copies of such filing will also be available
for inspection and copying at the principal office of 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 No. SR-NASD-2005-083 and should be
submitted on or before July 27, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-3544 Filed 7-5-05; 8:45 am]
BILLING CODE 8010-01-P
