Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend on a Pilot Basis Rules Concerning Bond Mutual Fund Volatility Ratings, 53405-53407 [E5-4874]
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Federal Register / Vol. 70, No. 173 / Thursday, September 8, 2005 / Notices
public interest. The Exchange believes
that the additional functionality will
increase the ability for Electronic Access
Members to participate in the PIM on
behalf of Public Customers.
Accordingly, the proposed rule change
could result in greater participation in
PIM executions by Public Customers
and greater opportunity for price
improvement for the orders being
executed through the PIM.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The ISE does not believe that the
proposed rule change will impose any
inappropriate burden on competition
not 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
The ISE neither solicited nor received
written comments on the proposed rule
change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change: (i)
Does not significantly affect the
protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) by its terms, does not become
operative for 30 days after the date of
filing (or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest), the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 6 and
subparagraph (f)(6) of Rule 19b–4
thereunder.7 As required under Rule
19b–4(f)(6)(iii),8 the Exchange provided
the Commission with written notice of
its intent to file the proposed rule
change, along with a brief description
and text of the proposed rule change, at
least five business days prior to the date
of the filing of the proposed rule change.
A proposed rule change filed under
Rule 19b–4(f)(6)(iii) normally may not
become operative prior to 30 days after
the date of filing.9 However, Rule 19b–
4(f)(6)(iii) 10 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
6 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
8 17 CFR 240.19b–4(f)(6)(iii).
9 Id.
10 Id.
7 17
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delay and render the proposed rule
change to become operative
immediately. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest. Waiver
of the 30-day operative delay would
enable the Exchange to implement the
proposal as quickly as possible. In
addition, the Commission notes that the
BSE uses an order type that is
substantially similar to the ISE’s
proposed CPO.11 The Commission does
not believe that the proposed rule
change raises new regulatory issues. For
the reasons stated above, the
Commission designates the proposal to
become operative immediately.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 the furtherance of the
purposes of the Act.
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
Section. Copies of such filing also will
be available for inspection and copying
at the principal office of the ISE. 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
Number SR–ISE–2005–41 and should be
submitted on or before September 29,
2005.
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:
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jonathan G. Katz,
Secretary.
[FR Doc. E5–4873 Filed 9–7–05; 8:45 am]
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–ISE–2005–41 on the subject
line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303. All submissions should
refer to File Number SR–ISE–2005–41.
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://
11 See Chapter V, Section 18(g) of the BOX Rules
(describing the Price Improvement Period (‘‘PIP’’)
and the operation of the BOX Customer PIP Order).
See also Securities Exchange Act Release No. 51651
(May 3, 2005), 70 FR 24848 (May 11, 2005) (order
approving SR–BSE–2005–01).
12 For purposes of waiving the operative date of
this proposal only, the Commission has considered
the impact of the proposed rule on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
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BILLING CODE 8010–01–P
[Release No. 34–52372; File No. SR–NASD–
2005–104]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend on a Pilot
Basis Rules Concerning Bond Mutual
Fund Volatility Ratings
August 31, 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 August
29, 2005, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by NASD. NASD
has filed the proposal as a ‘‘noncontroversial’’ rule change pursuant to
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\08SEN1.SGM
08SEN1
53406
Federal Register / Vol. 70, No. 173 / Thursday, September 8, 2005 / Notices
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
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 extend on a
pilot basis the provisions of NASD Rule
2210(c)(3) and Interpretive Material
2210–5 concerning bond mutual fund
volatility ratings (collectively, the
‘‘Rules’’) until December 29, 2005,
unless the Rules are extended or
approved on a permanent basis before
that date. Below is the text of the
proposed rule change. Proposed new
language is in italics; proposed
deletions are in brackets.
*
*
*
*
*
IM–2210–5. Requirements for the Use of
Bond Mutual Fund Volatility Ratings
(This rule and Rule 2210(c)(3) will
expire on [August 31] December 29,
2005, unless extended or permanently
approved by NASD at or before such
date.)
(a) through (c) 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,
NASD included statements concerning
the purpose of and basis for 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
Background and Description of the
NASD’s Rules on Bond Mutual Fund
Volatility Ratings. On February 29,
2000, the SEC approved the adoption of
NASD Interpretive Material 2210–5,
which permits members and their
associated persons to include bond fund
volatility ratings in supplemental sales
literature (mutual fund sales material
that is accompanied or preceded by a
3 15
4 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
VerDate Aug<18>2005
15:25 Sep 07, 2005
Jkt 205001
fund prospectus).5 At that time, the SEC
also approved NASD Rule 2210(c)(3),
which sets forth the filing requirements
and review procedures applicable to
sales literature containing bond mutual
fund volatility ratings. IM–2210–5 and
Rule 2210(c)(3) initially were approved
on an 18-month pilot basis that was
scheduled to expire on August 31,
2001.6 On August 10, 2001, NASD filed
with the Commission a proposed rule
change that was effective upon filing
that extended the effectiveness of IM–
2210–5 and Rule 2210(c)(3) an
additional two years until August 31,
2003.7 On August 7, 2003, NASD filed
a similar proposed rule change with the
Commission that was effective upon
filing and that extended the
effectiveness of IM–2210–5 and Rule
2210(c)(3) until August 31, 2005.8 Prior
to the pilot, NASD staff interpreted
NASD rules to prohibit the use of bond
fund volatility ratings in sales material.
Under the pilot, IM–2210–5 permits the
use of bond fund volatility ratings only
in supplemental sales literature and
only if certain conditions are met,
including that:
• The word ‘‘risk’’ may not be used to
describe the rating.
• The rating must be the most recent
available and be current to the most
recent calendar quarter ended prior to
use.
• The rating must be based
exclusively on objective, quantifiable
factors.
• The entity issuing the rating must
provide detailed disclosure on its rating
methodology to investors through a tollfree telephone number, a Web site, or
both.
• A disclosure statement containing
all of the information required by the
rule must accompany the rating. The
statement must include such
information as the name of the entity
issuing the rating, the most current
rating and the date it was issued, and a
description of the rating in narrative
form containing certain specified
disclosures.
Rule 2210(c)(3) requires members to
file bond mutual fund sales literature
that includes or incorporates volatility
ratings with the Advertising Regulation
Department of NASD (‘‘Department’’) at
5 See Securities Exchange Act Release No. 42476
(February 29, 2000); 65 FR 12305 (March 8, 2000)
(SR–NASD–97–89).
6 Id.
7 See Securities Exchange Act Release No. 44737
(August 22, 2001); 66 FR 45350 (August 28, 2001)
(SR–NASD–2001–49); NASD Notice to Members
01–58 (September 2001).
8 See Securities Exchange Act Release No. 48353
(August 15, 2003); 68 FR 50568 (August 21, 2003)
(SR–NASD–2003–126); NASD Notice to Members
03–48 (August 2003).
PO 00000
Frm 00076
Fmt 4703
Sfmt 4703
least 10 days prior to use for Department
approval. If the Department requests
changes to the material, the material
must be withheld from publication or
circulation until the requested changes
have been made or the material has been
re-filed and approved.
Proposed Rule Change to Extend IM–
2110–5 and Rule 2210(c)(3) for 120
Days. NASD intends shortly to submit to
the Commission a proposed rule change
to make the Rules effective on a
permanent basis. However, the process
to obtain Commission approval,
including publication of the proposal
for comment in the Federal Register and
responding to any comments received,
will extend beyond the expiration of the
current pilot on August 31, 2005.
Therefore, to maintain operation of the
pilot pending the approval process of
the Rules on a permanent basis, NASD
is proposing to extend the pilot for 120
days until December 29, 2005, unless
the Rules are extended or approved on
a permanent basis before that date.
The proposed rule change will
become effective upon filing, will be
implemented at the close of business,
August 31, 2005, and will expire on
December 29, 2005, unless the Rules are
extended or approved on a permanent
basis before that date.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,9 which
requires, among other things, that
NASD’s 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. NASD believes that
extending the effectiveness of IM–2210–
5 and Rule 2210(c)(3) for 120 days
unless the Rules are extended or
approved on a permanent basis before
that date will allow members to publish
sales material that contains bond fund
volatility ratings during this interim
period in a manner that will protect
investors and serve the public interest.
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.
9 15
E:\FR\FM\08SEN1.SGM
U.S.C. 78o–3(b)(6).
08SEN1
Federal Register / Vol. 70, No. 173 / Thursday, September 8, 2005 / Notices
Electronic Comments
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 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 because the proposal: (i)
Does not significantly affect the
protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) does not become operative prior to
30 days after the date of filing or such
shorter time as the Commission may
designate.12
NASD has requested that the
Commission waive the requirement that
the rule change not become operative
for 30 days after the date of the filing so
that NASD can begin implementation of
this proposed rule change as of the close
of business on August 31, 2005, in order
to prevent the current pilot Rules from
lapsing. The Commission believes that
such waiver is consistent with the
protection of investors and the public
interest because the proposed rule
change would prevent the current pilot
Rules from lapsing while the permanent
adoption of the Rules is under
consideration.
At any given 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 is consistent with the Act.
Comments may be submitted by any of
the following methods:
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12 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,
pursuant to Rule 19b–4(f)(6)(iii), the Commission
may designate a shorter time if such action is
consistent with the protection of investors and the
public interest.
11 17
VerDate Aug<18>2005
15:25 Sep 07, 2005
Jkt 205001
• 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–2005–104 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–NASD–2005–104. 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 also will
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–2005–104 and
should be submitted on or before
September 29, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jonathan G. Katz,
Secretary.
[FR Doc. E5–4874 Filed 9–7–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52373; File No. SR–PCX–
2005–99]
Self-Regulatory Organizations; Pacific
Exchange, Inc.; Notice of Filing and
Immediate Approval of Proposed Rule
Changes Relating to Direct
Communication Between Parties and
Arbitrators
September 1, 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 August
23, 2005, the Pacific Exchange, Inc.
(‘‘PCX’’) 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 the selfregulatory organization. The PCX has
designated this proposal as ‘‘noncontroversial’’ pursuant to Section
19(b)(3)(A)(iii) of the Act,3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposed rule change effective
immediately upon filing with the
Commission. 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
The PCX is proposing to amend the
PCX Options and PCX Equities, Inc.
arbitration rules to permit parties in an
arbitration to communicate directly
with the arbitrators if all parties and
arbitrators agree, and to establish
guidelines for such direct
communication. The text of the
proposed rule change is available on the
PCX’s Web site (https://
www.pacificex.com), at the PCX’s Office
of the Secretary, 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, the
PCX 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. The PCX has prepared
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
13 17
PO 00000
CFR 200.30–3(a)(12).
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53407
E:\FR\FM\08SEN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 173 (Thursday, September 8, 2005)]
[Notices]
[Pages 53405-53407]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4874]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52372; File No. SR-NASD-2005-104]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Extend on a Pilot Basis Rules Concerning Bond Mutual
Fund Volatility Ratings
August 31, 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 August 29, 2005, the National Association of Securities Dealers,
Inc. (``NASD'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by NASD. NASD has
filed the proposal as a ``non-controversial'' rule change pursuant to
[[Page 53406]]
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 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 extend on a pilot basis the provisions of NASD
Rule 2210(c)(3) and Interpretive Material 2210-5 concerning bond mutual
fund volatility ratings (collectively, the ``Rules'') until December
29, 2005, unless the Rules are extended or approved on a permanent
basis before that date. Below is the text of the proposed rule change.
Proposed new language is in italics; proposed deletions are in
brackets.
* * * * *
IM-2210-5. Requirements for the Use of Bond Mutual Fund Volatility
Ratings
(This rule and Rule 2210(c)(3) will expire on [August 31] December
29, 2005, unless extended or permanently approved by NASD at or before
such date.)
(a) through (c) 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, NASD included statements
concerning the purpose of and basis for 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
Background and Description of the NASD's Rules on Bond Mutual Fund
Volatility Ratings. On February 29, 2000, the SEC approved the adoption
of NASD Interpretive Material 2210-5, which permits members and their
associated persons to include bond fund volatility ratings in
supplemental sales literature (mutual fund sales material that is
accompanied or preceded by a fund prospectus).\5\ At that time, the SEC
also approved NASD Rule 2210(c)(3), which sets forth the filing
requirements and review procedures applicable to sales literature
containing bond mutual fund volatility ratings. IM-2210-5 and Rule
2210(c)(3) initially were approved on an 18-month pilot basis that was
scheduled to expire on August 31, 2001.\6\ On August 10, 2001, NASD
filed with the Commission a proposed rule change that was effective
upon filing that extended the effectiveness of IM-2210-5 and Rule
2210(c)(3) an additional two years until August 31, 2003.\7\ On August
7, 2003, NASD filed a similar proposed rule change with the Commission
that was effective upon filing and that extended the effectiveness of
IM-2210-5 and Rule 2210(c)(3) until August 31, 2005.\8\ Prior to the
pilot, NASD staff interpreted NASD rules to prohibit the use of bond
fund volatility ratings in sales material. Under the pilot, IM-2210-5
permits the use of bond fund volatility ratings only in supplemental
sales literature and only if certain conditions are met, including
that:
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 42476 (February 29,
2000); 65 FR 12305 (March 8, 2000) (SR-NASD-97-89).
\6\ Id.
\7\ See Securities Exchange Act Release No. 44737 (August 22,
2001); 66 FR 45350 (August 28, 2001) (SR-NASD-2001-49); NASD Notice
to Members 01-58 (September 2001).
\8\ See Securities Exchange Act Release No. 48353 (August 15,
2003); 68 FR 50568 (August 21, 2003) (SR-NASD-2003-126); NASD Notice
to Members 03-48 (August 2003).
---------------------------------------------------------------------------
The word ``risk'' may not be used to describe the rating.
The rating must be the most recent available and be
current to the most recent calendar quarter ended prior to use.
The rating must be based exclusively on objective,
quantifiable factors.
The entity issuing the rating must provide detailed
disclosure on its rating methodology to investors through a toll-free
telephone number, a Web site, or both.
A disclosure statement containing all of the information
required by the rule must accompany the rating. The statement must
include such information as the name of the entity issuing the rating,
the most current rating and the date it was issued, and a description
of the rating in narrative form containing certain specified
disclosures.
Rule 2210(c)(3) requires members to file bond mutual fund sales
literature that includes or incorporates volatility ratings with the
Advertising Regulation Department of NASD (``Department'') at least 10
days prior to use for Department approval. If the Department requests
changes to the material, the material must be withheld from publication
or circulation until the requested changes have been made or the
material has been re-filed and approved.
Proposed Rule Change to Extend IM-2110-5 and Rule 2210(c)(3) for
120 Days. NASD intends shortly to submit to the Commission a proposed
rule change to make the Rules effective on a permanent basis. However,
the process to obtain Commission approval, including publication of the
proposal for comment in the Federal Register and responding to any
comments received, will extend beyond the expiration of the current
pilot on August 31, 2005. Therefore, to maintain operation of the pilot
pending the approval process of the Rules on a permanent basis, NASD is
proposing to extend the pilot for 120 days until December 29, 2005,
unless the Rules are extended or approved on a permanent basis before
that date.
The proposed rule change will become effective upon filing, will be
implemented at the close of business, August 31, 2005, and will expire
on December 29, 2005, unless the Rules are extended or approved on a
permanent basis before that date.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\9\ which requires, among
other things, that NASD's 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. NASD believes that extending the effectiveness of IM-
2210-5 and Rule 2210(c)(3) for 120 days unless the Rules are extended
or approved on a permanent basis before that date will allow members to
publish sales material that contains bond fund volatility ratings
during this interim period in a manner that will protect investors and
serve the public interest.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
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.
[[Page 53407]]
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 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\
because the proposal: (i) Does not significantly affect the protection
of investors or the public interest; (ii) does not impose any
significant burden on competition; and (iii) does not become operative
prior to 30 days after the date of filing or such shorter time as the
Commission may designate.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 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, pursuant to Rule 19b-4(f)(6)(iii), the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest.
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NASD has requested that the Commission waive the requirement that
the rule change not become operative for 30 days after the date of the
filing so that NASD can begin implementation of this proposed rule
change as of the close of business on August 31, 2005, in order to
prevent the current pilot Rules from lapsing. The Commission believes
that such waiver is consistent with the protection of investors and the
public interest because the proposed rule change would prevent the
current pilot Rules from lapsing while the permanent adoption of the
Rules is under consideration.
At any given 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 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-2005-104 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-NASD-2005-104. 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 also will 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-2005-104 and should
be submitted on or before September 29, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
Jonathan G. Katz,
Secretary.
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\13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E5-4874 Filed 9-7-05; 8:45 am]
BILLING CODE 8010-01-P
