Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Odd Lot Transactions in the Nasdaq Market Center, 13646-13647 [06-2543]

Download as PDF 13646 Federal Register / Vol. 71, No. 51 / Thursday, March 16, 2006 / Notices Rule 3010(b) (Failure to timely file reports pursuant to the Taping Rule); Rule 3070 (Failure to timely file reports); Rule 4619(e) (Failure to timely file notifications pursuant to SEC Regulation M); Rules 6954 and 6955 (Failure to submit data in accordance with the Order Audit Trail System); Rule 11870 (Failure to abide by Customer Account Transfer Contracts); SEC Exchange Act Rule 604 (Failure to properly display limit orders); SEC Exchange Act Rule 602(b)(5) (Failure to properly update published quotations in certain Electronic Communication Networks); SEC Exchange Act Rule 17a– 5 (Failure to timely file FOCUS reports and annual reports); and SEC Exchange Act Rule 17a–10 (Failure to timely file Schedule I). Nasdaq represented that modifications may be made to IM–9216. Nasdaq proposes that when amendments to IM–9216 are made pursuant to a rule filing submitted under Rule 19b–4 of the Act,9 such a filing would automatically be deemed a request by Nasdaq for Commission approval of a modification to its MRVP. I. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning Nasdaq’s proposed Minor Rule Violation Plan, including whether the proposed plan is consistent with the Act. Comments may be submitted by any of the following methods: wwhite on PROD1PC61 with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/other.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number 4–514 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number 4–514. 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 (http://www.sec.gov/rules/ other.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed plan that are filed with the Commission, and all written communications relating to the proposed plan 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. 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 4–514 and should be submitted on or before April 6, 2006. II. Date of Effectiveness of the Proposed Minor Rule Violation Plan and Timing for Commission Action Pursuant to Section 19d–1 of the Act and Rule 19d–1(c)(2) thereunder,10 after April 6, 2006, the Commission may, by order, declare Nasdaq’s proposed Minor Rule Violation Plan effective if the plan is consistent with the public interest, the protection of investors, or otherwise in furtherance of the purposes of the Act. The Commission in its order may restrict the categories of violations to be designated as minor rule violations and may impose any other terms or conditions to the proposed Minor Rule Violation Plan, File No. 4–514, and to the period of its effectiveness which the Commission deems necessary or appropriate in the public interest, for the protection of investors or otherwise in furtherance of the purposes of the Act. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Nancy M. Morris, Secretary. [FR Doc. E6–3809 Filed 3–15–06; 8:45 am] BILLING CODE 8010–01–P CFR 240.19b–4. VerDate Aug<31>2005 15:48 Mar 15, 2006 [Release No. 34–53440; File No. SR–NASD– 2006–020] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Odd Lot Transactions in the Nasdaq Market Center March 8, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 11 17 Jkt 208001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to amend Rule 4706(d) to permit ITS/CAES Market Makers to enter orders in increments less than 100 shares. Nasdaq expects to implement the proposed rule change, as amended, on March 27, 2006.6 The text of the proposed rule change is below. Proposed new language is in italics; proposed deletions are in brackets.7 * * * * * 4706 Order Entry Parameters (a)–(c) No Change. (d) Order Size— (1) [In Nasdaq-listed securities, a] Any order in whole shares up to 999,999 shares may be entered into the Nasdaq Market Center for normal execution processing. (2) [Orders in ITS Securities must be entered for a minimum of one round lot, 1 15 SECURITIES AND EXCHANGE COMMISSION 10 15 9 17 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 6, 2006, 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 February 27, 2006, NASD filed Amendment No. 1 to the proposed rule change.3 The NASD filed the proposal, as amended, pursuant to section 19(b)(3)(A) of the Act 4 and Rule 19b– 4(f)(6) thereunder,5 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. PO 00000 U.S.C. 78s(d)(1) and 17 CFR 240.19d–1(c)(2). CFR 200.30–3(a)(12). Frm 00081 Fmt 4703 Sfmt 4703 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Partial Amendment dated February 27, 2006 (‘‘Amendment No. 1’’). In Amendment No. 1, Nasdaq clarified the rationale behind the proposed rule change. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). 6 Originally, Nasdaq stated that it would implement the proposed rule change on March 6, 2006. Later, the implementation date was changed to March 27, 2006. Telephone conversation between Jeffrey Davis, Associate Vice President, Nasdaq, and Natasha Cowen, Attorney, Division of Market Regulation, Commission, on March 7, 2006. 7 Changes are marked to the rule text that appears in the electronic NASD Manual found at http:// www.nasd.com. Prior to the date when The NASDAQ Stock Market LLC (‘‘NASDAQ LLC’’) commences operations, NASDAQ LLC will file a conforming change to the rules of NASDAQ LLC approved in Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10–131). 2 17 E:\FR\FM\16MRN1.SGM 16MRN1 Federal Register / Vol. 71, No. 51 / Thursday, March 16, 2006 / Notices promote just and equitable principles of trade, remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. or in round lot multiples, or in mixed lots.] Orders in ITS Securities will be delivered to ITS Exchanges in round lots only. (e) No Change. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change wwhite on PROD1PC61 with NOTICES 1. Purpose Nasdaq proposes to amend Rule 4706(d) to permit ITS/CAES Market Makers to enter orders in increments less than 100 shares. This functionality has been available for several years and is widely utilized in the trading of Nasdaq-listed securities. Nasdaq has not previously made this functionality available for the trading of ITS Securities due to the limitation in the Intermarket Trading System (‘‘ITS’’) that prohibits the sending of commitments in increments smaller than 100 shares. Nasdaq has identified a method for permitting Nasdaq participants to enter trading interest into the Nasdaq Market Center in odd-lot increments and for the Nasdaq Market Center to execute transactions in odd-lot increments while leaving undisturbed the ITS limitation requiring participation in round-lot multiples.8 In other words, Nasdaq will program its own system to use both round lots and odd lots, and continue to comply with this ITS restriction by programming its system not to send ITS commitments in increments smaller than 100 shares. 2. Statutory Basis Nasdaq believes that the proposed rule change, as amended, is consistent with the provisions of section 15A of the Act,9 in general, and with section 15A(b)(6) of the Act,10 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to 8 See Amendment No. 1 U.S.C. 78o–3. 10 15 U.S.C. 78o–3(b)(6). 9 15 VerDate Aug<31>2005 15:48 Mar 15, 2006 Jkt 208001 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. 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, as amended, does not: (1) Significantly affect the protection of investors or the public interest; (2) Impose any significant burden on competition; and (3) Become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to section 19b(3)(A) of the Act 11 and Rule 19b–4(f)(6) thereunder.12 As required under Rule 19b–4(f)(6)(iii) under the Act,13 the Nasdaq 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. At any time within 60 days of the filing of the proposed rule change, as amended, the Commission may summarily abrogate the 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.14 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 13 17 CFR 240.19b–4(f)(6)(iii). 14 For purposes of calculating the 30-day operative delay and the 60-day abrogation period, the Commission considers the proposed rule change to have been filed on February 27, 2006, when Amendment No. 1 was filed. 12 17 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 13647 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASD–2006–020 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASD–2006–020. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comment more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASD–2006–020 and should be submitted on or before April 6, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Nancy M. Morris, Secretary. [FR Doc. 06–2543 Filed 3–15–06; 8:45 am] BILLING CODE 8010–01–P 15 17 E:\FR\FM\16MRN1.SGM CFR 200.30–3(a)(12). 16MRN1

Agencies

[Federal Register Volume 71, Number 51 (Thursday, March 16, 2006)]
[Notices]
[Pages 13646-13647]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-2543]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53440; File No. SR-NASD-2006-020]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Related to Odd Lot Transactions in the Nasdaq Market Center

March 8, 2006.
    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 February 6, 2006, 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 February 
27, 2006, NASD filed Amendment No. 1 to the proposed rule change.\3\ 
The NASD filed the proposal, as amended, pursuant to section 
19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which 
renders the proposal effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Partial Amendment dated February 27, 2006 (``Amendment 
No. 1''). In Amendment No. 1, Nasdaq clarified the rationale behind 
the proposed rule change.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to amend Rule 4706(d) to permit ITS/CAES Market 
Makers to enter orders in increments less than 100 shares. Nasdaq 
expects to implement the proposed rule change, as amended, on March 27, 
2006.\6\
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    \6\ Originally, Nasdaq stated that it would implement the 
proposed rule change on March 6, 2006. Later, the implementation 
date was changed to March 27, 2006. Telephone conversation between 
Jeffrey Davis, Associate Vice President, Nasdaq, and Natasha Cowen, 
Attorney, Division of Market Regulation, Commission, on March 7, 
2006.
---------------------------------------------------------------------------

    The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in brackets.\7\
---------------------------------------------------------------------------

    \7\ Changes are marked to the rule text that appears in the 
electronic NASD Manual found at http://www.nasd.com. Prior to the 
date when The NASDAQ Stock Market LLC (``NASDAQ LLC'') commences 
operations, NASDAQ LLC will file a conforming change to the rules of 
NASDAQ LLC approved in Securities Exchange Act Release No. 53128 
(January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131).
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* * * * *
4706 Order Entry Parameters
    (a)-(c) No Change.
    (d) Order Size--
    (1) [In Nasdaq-listed securities, a] Any order in whole shares up 
to 999,999 shares may be entered into the Nasdaq Market Center for 
normal execution processing.
    (2) [Orders in ITS Securities must be entered for a minimum of one 
round lot,

[[Page 13647]]

or in round lot multiples, or in mixed lots.] Orders in ITS Securities 
will be delivered to ITS Exchanges in round lots only.
    (e) No Change.
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. Nasdaq has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Nasdaq proposes to amend Rule 4706(d) to permit ITS/CAES Market 
Makers to enter orders in increments less than 100 shares. This 
functionality has been available for several years and is widely 
utilized in the trading of Nasdaq-listed securities. Nasdaq has not 
previously made this functionality available for the trading of ITS 
Securities due to the limitation in the Intermarket Trading System 
(``ITS'') that prohibits the sending of commitments in increments 
smaller than 100 shares. Nasdaq has identified a method for permitting 
Nasdaq participants to enter trading interest into the Nasdaq Market 
Center in odd-lot increments and for the Nasdaq Market Center to 
execute transactions in odd-lot increments while leaving undisturbed 
the ITS limitation requiring participation in round-lot multiples.\8\ 
In other words, Nasdaq will program its own system to use both round 
lots and odd lots, and continue to comply with this ITS restriction by 
programming its system not to send ITS commitments in increments 
smaller than 100 shares.
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    \8\ See Amendment No. 1
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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,\9\ in 
general, and with section 15A(b)(6) of the Act,\10\ in particular, in 
that it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, remove 
impediments to a free and open market and a national market system, 
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78o-3.
    \10\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change, as amended, 
will result in any burden on competition that is 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

    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, as amended, does not:
    (1) Significantly affect the protection of investors or the public 
interest;
    (2) Impose any significant burden on competition; and
    (3) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to section 19b(3)(A) of the Act \11\ and 
Rule 19b-4(f)(6) thereunder.\12\ As required under Rule 19b-
4(f)(6)(iii) under the Act,\13\ the Nasdaq 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of the proposed rule 
change, as amended, the Commission may summarily abrogate the 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.\14\
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    \14\ For purposes of calculating the 30-day operative delay and 
the 60-day abrogation period, the Commission considers the proposed 
rule change to have been filed on February 27, 2006, when Amendment 
No. 1 was filed.
---------------------------------------------------------------------------

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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASD-2006-020 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASD-2006-020. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comment more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of such 
filing also will be available for inspection and copying at the 
principal office of the NASD. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NASD-2006-020 and should be submitted on or before April 
6, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. 06-2543 Filed 3-15-06; 8:45 am]
BILLING CODE 8010-01-P