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 Allow Members To Report Certain Trades in Exchange-Listed Securities Through the Execution Services of the Nasdaq Market Center, 53698-53700 [E5-4926]
Download as PDF
53698
Federal Register / Vol. 70, No. 174 / Friday, September 9, 2005 / Notices
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending December 31, 2000.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Pinnacle
Micro, Inc., because despite an October
3, 1997 Commission cease-and-desist
order against future violations of
Section 13(a) of the Securities Exchange
Act of 1934 and Rules 13a–1 and 13a–
13 thereunder, it is delinquent in its
periodic filing obligations under Section
13(a) of the Securities Exchange Act of
1934, having not filed a periodic report
since the period ending December 25,
1999.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of
Semiconductor Laser International
Corp., because it is delinquent in its
periodic filing obligations under Section
13(a) of the Securities Exchange Act of
1934, having not filed a periodic report
since the period ending September 30,
2000.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Socrates
Technologies Corp., because it is
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending September 30, 2000.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Star
Technologies, Inc., because despite a
November 15, 1993 Commission ceaseand-desist order against future
violations of Section 13(a) of the
Securities Exchange Act of 1934 and
Rules 13a–1 and 13a–13 thereunder, it
is delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending September 30, 1999.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Sunrise
Technologies International, Inc.,
because it is delinquent in its periodic
filing obligations under Section 13(a) of
the Securities Exchange Act of 1934,
having not filed a periodic report since
the period ending September 30, 2001.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
VerDate Aug<18>2005
15:19 Sep 08, 2005
Jkt 205001
concerning the securities of Telemonde,
Inc., because it is delinquent in its
periodic filing obligations under Section
13(a) of the Securities Exchange Act of
1934, having not filed a periodic report
since the period ending June 30, 2002.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of
thehealthchannel.com, Inc., because it is
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending September 30, 2001.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Transmedia
Asia Pacific, Inc., because it is
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending December 31, 2000.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Tristar
Corp., because despite a September 29,
1995 Commission cease-and-desist
order against future violations of
Section 13(a) of the Securities Exchange
Act of 1934 and Rules 13a–1 and 13a–
13 thereunder, it is delinquent in its
periodic filing obligations under Section
13(a) of the Securities Exchange Act of
1934, having not filed a periodic report
since the period ending February 24,
2001.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of VDC
Communications, Inc., because it is
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending March 31, 2001.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Vianet
Technologies, Inc., because it is
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
not filed a periodic report since the
period ending December 31, 2002.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of
Visionamerica, Inc., because it is
delinquent in its periodic filing
obligations under Section 13(a) of the
Securities Exchange Act of 1934, having
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
not filed a periodic report since the
period ending June 30, 2000.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed companies
is suspended for the period from 9:30
a.m. EDT on September 7, 2005, through
11:59 p.m. EDT on September 20, 2005.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 05–17991 Filed 9–7–05; 11:52 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52376; File No. SR–NASD–
2005–102]
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 Allow Members To Report
Certain Trades in Exchange-Listed
Securities Through the Execution
Services of the Nasdaq Market Center
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
26, 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
August 31, 2005, Nasdaq filed
Amendment No. 1 to the proposed rule
change.3 Nasdaq filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 4 and Rule 19b–4(f)(5) 5
thereunder, and therefore the proposed
rule change is effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 3 Amendment No. 1 clarified the scope of NASD
Rule 4720 prior to adoption of the proposed rule
change, corrected typographical errors, and made
other clarifying changes in response to comments
from the Commission staff.
4 15 U.S.C. 78s(b)(3)(A).
5 17 CFR 240.19b–4(f)(5).
2 17
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Federal Register / Vol. 70, No. 174 / Friday, September 9, 2005 / Notices
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
Nasdaq proposes changes to NASD
Rule 4720. The text of the proposed rule
change is below. Proposed new
language is in italics; proposed
deletions are in [brackets].6
*
*
*
*
*
4720. Reporting Through the Execution
Services of the Nasdaq Market Center
Subject to the conditions set forth
below, members may utilize the Nasdaq
Market Center to report trades in Nasdaq
Market Center eligible securities
required or eligible to be reported to
Nasdaq pursuant to the Rule 4630, 4640,
4650, [and] 6100 and 6400 Series.
(1) Members shall include the time of
execution on reports submitted to the
Nasdaq Market Center; and
(2) For transactions between
members, the members who are parties
to the trade shall agree to all trade
details prior to submitting the report to
the Nasdaq Market Center, and have in
effect and on file with Nasdaq, an
Automated Confirmation Transaction
Service Service Bureau/Executing
Broker Supplement to the Nasdaq
Workstation II Agreement (‘‘Attachment
2 Agreement’’), and a Nasdaq National
Market Execution System Give-Up
Addendum to the Nasdaq Workstation II
Subscriber Agreement (‘‘SuperMontage
Give-Up Agreement’’).
*
*
*
*
*
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 provide
members the ability to use the execution
6 Changes are marked to the rule text that appears
in the electronic NASD Manual found at
www.nasd.com.
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15:19 Sep 08, 2005
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services of the Nasdaq Market Center to
report trades in exchange-listed
securities that were matched outside of
any system operated by a self-regulatory
organization. Currently, Nasdaq
members’ ability to use the order
execution service to report matched
trades is limited to trades in Nasdaq
National Market and SmallCap Market
securities, convertible bonds listed on
Nasdaq, and other reportable securities
identified in the NASD Rule 6100
Series.7
Under Nasdaq’s proposal, matched
trades in exchange-listed securities that
are reported though the execution
services of the Nasdaq Market Center
will be transmitted to the trade
reporting service and processed in the
same manner as information about
matched trades in Nasdaq and other
eligible securities submitted to that
system. For example, trade information
will be disseminated on the
consolidated tape, and included in the
reporting service’s risk management
calculations and Nasdaq’s audit trail. In
addition, the trades will be submitted to
the National Securities Clearing
Corporation (‘‘NSCC’’) for clearing, if
necessary. Trades in exchange-listed
securities reported through the order
execution service will not be included
in the execution algorithm, and thus
will not interact with any Quotes/
Orders in the system.
Under this rule change, members will
not be permitted to report through the
execution services of the Nasdaq Market
Center trades in exchange-listed
securities for which comparison is
necessary. As is the case for trades in
Nasdaq and other eligible securities, the
order execution service will accept only:
(1) Tape only reports; 8 (2) locked-in
clearing only reports;9 (3) tape reports of
7 A detailed description of how matched trades in
Nasdaq and other eligible securities are reported
through the execution services of the Nasdaq
Market Center is contained in Securities Exchange
Act Release No. 49733 (May 19, 2004), 69 FR 29990
(May 26, 2004) (SR–NASD–2004–034). The
reporting of matched trades in exchange-listed
securities proposed in this rule change is intended
to operate in the same manner.
8 A ‘‘tape only report’’ is a trade that is reported
to Nasdaq for dissemination to the public, but the
trade does not need to be transmitted to NSCC
because one of the parties to the trade is a customer
(i.e., not a broker-dealer), or the buyer and seller
both are broker-dealers and they have a common
clearing arrangement that will enable them to settle
the trade without using NSCC’s facilities.
9 A transaction is ‘‘locked-in’’ when the buying
and selling broker-dealers have agreed to all the
trade details prior to submitting the trade to Nasdaq
and no further comparison is necessary. A ‘‘lockedin clearing only report’’ is a report that is lockedin and Nasdaq must forward the trade to NSCC for
settlement. The trade does not have to be
disseminated to the public because an exception to
the public reporting requirement is applicable (e.g.,
PO 00000
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Fmt 4703
Sfmt 4703
53699
locked-in trades that are to be submitted
to clearing; 10 and (4) non-tape, nonclearing reports.11 Members will be able
to report trades through the execution
services of the Nasdaq Market Center
during the hours that the trade reporting
service is operational, which presently
is 8 a.m. until 6:30 p.m. Eastern time.
By extending this functionality to
reporting of matched trades in
exchange-listed securities, members will
be able to take advantage of several
benefits that previously were limited to
reporting matched trades in Nasdaq and
other eligible securities. For example, it
will be possible for members to
consolidate the reporting and execution
systems for a broader range of trades. In
addition, members will be able to take
advantage of the existing anonymity
feature available in the order execution
service by utilizing it for trades
transmitted to the trade reporting
service, and combine it with the benefits
of ‘‘give up’’ relationships, also
available to members today in both the
order execution and trade reporting
services of the Nasdaq Market Center.12
As a result, members will be able to give
up the true contra parties to a trade in
exchange-listed securities, but still
preserve full anonymity between these
parties.
2. Statutory Basis
Nasdaq believes that the proposed
rule change, as amended, is consistent
with the provisions of Section 15A of
the Act,13 in general and with Section
15A(b)(6) of the Act,14 in particular, in
that it is designed to foster coordination
and cooperation with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities. The proposal is consistent
with this obligation because it will
provide members both the opportunity
the transaction is the offsetting leg of a riskless
principal trade).
10 A ‘‘tape report of a locked-in trade that is
submitted for clearing’’ is a locked-in report of a
trade that must be disseminated to the public and
settled through NSCC.
11 A ‘‘non-tape, non-clearing report’’ is a report of
trade that is not required to be disseminated to the
public, and does not need to be transmitted to
NSCC for settlement, but the broker-dealer is
obligated or chooses to submit this ‘‘regulatory
report’’ to Nasdaq. See e.g., NASD Rule
4632(d)(3)(B) and Notice to Members 00–79.
12 When a ‘‘give up’’ occurs, the member that
submits the order to the order execution service (or
the trade report to the trade reporting service)
discloses to the contra party that the order (or
report) is being entered on behalf of another
member and the trade is to be settled with this other
member. The member submitting the order (or trade
report) has ‘‘given up’’ the identity of the other
member who is the true party to the trade.
13 13 15 U.S.C. 78o–3.
14 15 U.S.C. 78o–3(b)(6).
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Federal Register / Vol. 70, No. 174 / Friday, September 9, 2005 / Notices
to consolidate the execution and
reporting of a wider range of trades, and
will extend the combined benefits of
give-up relationships and anonymous
trading to reporting of matched trades in
exchange-listed securities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change, as amended, 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, as
amended, has become effective upon
filing pursuant to Section 19(b)(3)(A)(iii)
of the Act 15 and Rule 19b–4(f)(5) 16
thereunder in that it effects a change in
an existing order execution system of
Nasdaq that does not significantly affect
the protection of investors or the public
interest, does not impose any significant
burden on competition, and it does not
have the effect of limiting the access to
or availability of the system. 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.17
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:
15 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(5).
17 The effective date of the original proposed rule
is August 26, 2005. The effective date of
Amendment No. 1 is August 31, 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
August 31, 2005, the date on which Nasdaq
submitted Amendment No. 1. See 15 U.S.C.
78s(b)(3)(C).
16 17
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15:19 Sep 08, 2005
Jkt 205001
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–2005–102 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–2005–102. 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 Nasdaq. 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–NASD–2005–102 and
should be submitted on or before
September 30, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.18
Jonathan G. Katz,
Secretary.
[FR Doc. E5–4926 Filed 9–8–05; 8:45 am]
BILLING CODE 8010–01–P
18 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00084
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52377; File No. SR–NASD–
2005–051]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Order Approving
Proposed Rule Change To Create an
Enterprise License Fee for the
TotalView Entitlement
September 2, 2005.
I. Introduction
On April 13, 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’’) a
proposed rule change pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 to create an
enterprise license fee for the TotalView
entitlement. On June 3, 2005, Nasdaq
amended the proposed rule change. The
proposed rule change, as modified by
Amendment No. 1, was published for
comment in the Federal Register on
June 28, 2005.3 The Commission
received one comment letter on the
proposal.4 On August 16, 2005, Nasdaq
filed a response to the comment letter.5
This order approves the proposed rule
change, as amended.
II. Description of the Proposal
Nasdaq proposes to establish a
program whereby a broker-dealer
distributor could obtain an enterprise
license for the distribution of the
TotalView market data entitlement for a
fixed cost of either $25,000 per month
for non-professional subscribers or of
$100,000 per month for broker-dealer
distributors that serve both nonprofessional and professional
subscribers. This enterprise license
pricing structure would mirror the
pricing structure already established for
individual professional and nonprofessional subscribers and is an
alternative way to pay for the data.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 51869
(June 17, 2005), 70 FR 37144.
4 See letter to Jonathan G. Katz, Secretary,
Securities and Exchange Commission, from
Christopher Gilkerson, Chair, SIA Technology &
Regulation Committee, and Andrew Wels, Chair,
SIA Market Data Subcommittee, dated July 19, 2005
(‘‘SIA Letter’’).
5 See letter to Jonathan G. Katz, Secretary,
Securities and Exchange Commission, from Edward
S. Knight, Executive Vice President and General
Counsel, Nasdaq, dated August 16, 2005 (‘‘Nasdaq
Response Letter’’).
2 17
E:\FR\FM\09SEN1.SGM
09SEN1
Agencies
[Federal Register Volume 70, Number 174 (Friday, September 9, 2005)]
[Notices]
[Pages 53698-53700]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4926]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52376; File No. SR-NASD-2005-102]
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 Allow Members To Report
Certain Trades in Exchange-Listed Securities Through the Execution
Services of the Nasdaq Market Center
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 26, 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 August 31,
2005, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\
Nasdaq filed the proposed rule change pursuant to Section 19(b)(3)(A)
of the Act \4\ and Rule 19b-4(f)(5) \5\ thereunder, and therefore the
proposed rule change is effective upon filing with the Commission. The
Commission is publishing this notice to solicit
[[Page 53699]]
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.
\3\ 3 Amendment No. 1 clarified the scope of NASD Rule 4720
prior to adoption of the proposed rule change, corrected
typographical errors, and made other clarifying changes in response
to comments from the Commission staff.
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes changes to NASD Rule 4720. The text of the proposed
rule change is below. Proposed new language is in italics; proposed
deletions are in [brackets].\6\
---------------------------------------------------------------------------
\6\ Changes are marked to the rule text that appears in the
electronic NASD Manual found at www.nasd.com.
---------------------------------------------------------------------------
* * * * *
4720. Reporting Through the Execution Services of the Nasdaq Market
Center
Subject to the conditions set forth below, members may utilize the
Nasdaq Market Center to report trades in Nasdaq Market Center eligible
securities required or eligible to be reported to Nasdaq pursuant to
the Rule 4630, 4640, 4650, [and] 6100 and 6400 Series.
(1) Members shall include the time of execution on reports
submitted to the Nasdaq Market Center; and
(2) For transactions between members, the members who are parties
to the trade shall agree to all trade details prior to submitting the
report to the Nasdaq Market Center, and have in effect and on file with
Nasdaq, an Automated Confirmation Transaction Service Service Bureau/
Executing Broker Supplement to the Nasdaq Workstation II Agreement
(``Attachment 2 Agreement''), and a Nasdaq National Market Execution
System Give-Up Addendum to the Nasdaq Workstation II Subscriber
Agreement (``SuperMontage Give-Up Agreement'').
* * * * *
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 provide members the ability to use the
execution services of the Nasdaq Market Center to report trades in
exchange-listed securities that were matched outside of any system
operated by a self-regulatory organization. Currently, Nasdaq members'
ability to use the order execution service to report matched trades is
limited to trades in Nasdaq National Market and SmallCap Market
securities, convertible bonds listed on Nasdaq, and other reportable
securities identified in the NASD Rule 6100 Series.\7\
---------------------------------------------------------------------------
\7\ A detailed description of how matched trades in Nasdaq and
other eligible securities are reported through the execution
services of the Nasdaq Market Center is contained in Securities
Exchange Act Release No. 49733 (May 19, 2004), 69 FR 29990 (May 26,
2004) (SR-NASD-2004-034). The reporting of matched trades in
exchange-listed securities proposed in this rule change is intended
to operate in the same manner.
---------------------------------------------------------------------------
Under Nasdaq's proposal, matched trades in exchange-listed
securities that are reported though the execution services of the
Nasdaq Market Center will be transmitted to the trade reporting service
and processed in the same manner as information about matched trades in
Nasdaq and other eligible securities submitted to that system. For
example, trade information will be disseminated on the consolidated
tape, and included in the reporting service's risk management
calculations and Nasdaq's audit trail. In addition, the trades will be
submitted to the National Securities Clearing Corporation (``NSCC'')
for clearing, if necessary. Trades in exchange-listed securities
reported through the order execution service will not be included in
the execution algorithm, and thus will not interact with any Quotes/
Orders in the system.
Under this rule change, members will not be permitted to report
through the execution services of the Nasdaq Market Center trades in
exchange-listed securities for which comparison is necessary. As is the
case for trades in Nasdaq and other eligible securities, the order
execution service will accept only: (1) Tape only reports; \8\ (2)
locked-in clearing only reports;\9\ (3) tape reports of locked-in
trades that are to be submitted to clearing; \10\ and (4) non-tape,
non-clearing reports.\11\ Members will be able to report trades through
the execution services of the Nasdaq Market Center during the hours
that the trade reporting service is operational, which presently is 8
a.m. until 6:30 p.m. Eastern time.
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\8\ A ``tape only report'' is a trade that is reported to Nasdaq
for dissemination to the public, but the trade does not need to be
transmitted to NSCC because one of the parties to the trade is a
customer (i.e., not a broker-dealer), or the buyer and seller both
are broker-dealers and they have a common clearing arrangement that
will enable them to settle the trade without using NSCC's
facilities.
\9\ A transaction is ``locked-in'' when the buying and selling
broker-dealers have agreed to all the trade details prior to
submitting the trade to Nasdaq and no further comparison is
necessary. A ``locked-in clearing only report'' is a report that is
locked-in and Nasdaq must forward the trade to NSCC for settlement.
The trade does not have to be disseminated to the public because an
exception to the public reporting requirement is applicable (e.g.,
the transaction is the offsetting leg of a riskless principal
trade).
\10\ A ``tape report of a locked-in trade that is submitted for
clearing'' is a locked-in report of a trade that must be
disseminated to the public and settled through NSCC.
\11\ A ``non-tape, non-clearing report'' is a report of trade
that is not required to be disseminated to the public, and does not
need to be transmitted to NSCC for settlement, but the broker-dealer
is obligated or chooses to submit this ``regulatory report'' to
Nasdaq. See e.g., NASD Rule 4632(d)(3)(B) and Notice to Members 00-
79.
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By extending this functionality to reporting of matched trades in
exchange-listed securities, members will be able to take advantage of
several benefits that previously were limited to reporting matched
trades in Nasdaq and other eligible securities. For example, it will be
possible for members to consolidate the reporting and execution systems
for a broader range of trades. In addition, members will be able to
take advantage of the existing anonymity feature available in the order
execution service by utilizing it for trades transmitted to the trade
reporting service, and combine it with the benefits of ``give up''
relationships, also available to members today in both the order
execution and trade reporting services of the Nasdaq Market Center.\12\
As a result, members will be able to give up the true contra parties to
a trade in exchange-listed securities, but still preserve full
anonymity between these parties.
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\12\ When a ``give up'' occurs, the member that submits the
order to the order execution service (or the trade report to the
trade reporting service) discloses to the contra party that the
order (or report) is being entered on behalf of another member and
the trade is to be settled with this other member. The member
submitting the order (or trade report) has ``given up'' the identity
of the other member who is the true party to the trade.
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2. Statutory Basis
Nasdaq believes that the proposed rule change, as amended, is
consistent with the provisions of Section 15A of the Act,\13\ in
general and with Section 15A(b)(6) of the Act,\14\ in particular, in
that it is designed to foster coordination and cooperation with persons
engaged in regulating, clearing, settling, processing information with
respect to, and facilitating transactions in securities. The proposal
is consistent with this obligation because it will provide members both
the opportunity
[[Page 53700]]
to consolidate the execution and reporting of a wider range of trades,
and will extend the combined benefits of give-up relationships and
anonymous trading to reporting of matched trades in exchange-listed
securities.
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\13\ 13 15 U.S.C. 78o-3.
\14\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change, as amended,
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, as amended, has become effective upon
filing pursuant to Section 19(b)(3)(A)(iii) of the Act \15\ and Rule
19b-4(f)(5) \16\ thereunder in that it effects a change in an existing
order execution system of Nasdaq that does not significantly affect the
protection of investors or the public interest, does not impose any
significant burden on competition, and it does not have the effect of
limiting the access to or availability of the system. 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.\17\
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\15\ 15 U.S.C. 78s(b)(3)(A)(iii).
\16\ 17 CFR 240.19b-4(f)(5).
\17\ The effective date of the original proposed rule is August
26, 2005. The effective date of Amendment No. 1 is August 31, 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 August 31, 2005, the date on which Nasdaq submitted
Amendment No. 1. 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, 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-2005-102 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-2005-102. 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 Nasdaq. 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-NASD-2005-102 and should be submitted on or before
September 30, 2005.
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\18\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
Jonathan G. Katz,
Secretary.
[FR Doc. E5-4926 Filed 9-8-05; 8:45 am]
BILLING CODE 8010-01-P