Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing of the Plan for Allocation of Regulatory Responsibilities Between The NASDAQ Stock Market LLC and the National Association of Securities Dealers, Inc., 19763-19769 [E6-5693]
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Federal Register / Vol. 71, No. 73 / Monday, April 17, 2006 / Notices
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is made from net profits, rule 19a–1 also
requires that the statement disclose
certain other information relating to the
appreciation or depreciation of portfolio
securities. If an estimated portion is
subsequently determined to be
significantly inaccurate, a correction
must be made on a statement made
pursuant to section 19(a) or in the first
report to shareholders following the
discovery of the inaccuracy.
The purpose of rule 19a–1 is to afford
fund shareholders adequate disclosure
of the sources from which distribution
payments are made. The rule is
intended to prevent shareholders from
confusing income dividends with
distributions made from capital sources.
Absent rule 19a–1, shareholders might
receive a false impression of fund gains.
Based on a review of filings made
with the Commission, the staff estimates
that approximately 3000 portfolios of
registered investment companies that
are management companies may be
subject to rule 19a–1 each year, and that
each portfolio on average mails two
statements per year to meet the
requirements of the rule.2 The staff
further estimates that the time needed to
make the determinations required by the
rule and to prepare the statement
required under the rule is
approximately 1.5 hours per statement.
The total annual burden for all
portfolios therefore is estimated to be
approximately 9,000 burden hours.
The staff estimates that approximately
one-third of the total annual burden
(3,000 hours) would be incurred by a
senior administrative officer with an
average hourly wage rate of
approximately $158 per hour, and
approximately two-thirds of the annual
burden (6,000 hours) would be incurred
by senior clerical staff with an average
hourly wage rate of $25 per hour.3 The
staff therefore estimates that the
aggregate annual cost of complying with
the paperwork requirements of the rule
is approximately $624,000 ((3,000 hours
× $158) + (6,000 hours × $25)).
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. Compliance
2 A few portfolios make monthly distributions
from sources other than net income, so the rule
requires them to send out a statement 12 times a
year. Other portfolios never make such
distributions.
3 All hourly rates in this Supporting Statement
are derived from the average annual salaries
reported for employees outside of New York City
in Securities Industry Association, Management
and Professional Earnings in the Securities Industry
(2003) and Securities Industry Association, Office
Salaries in the Securities Industry (2003).
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with the collection of information
required by rule 19a–1 is mandatory for
management companies that make
written statements to shareholders
pursuant to section 19(a) of the Act.
Responses will not be kept confidential.
An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a currently valid control
number.
General comments regarding the
above information should be directed to
the following persons: (i) Desk Officer
for the Securities and Exchange
Commission, Office of Information and
Regulatory Affairs, Office of
Management and Budget, Room 10102,
New Executive Office Building,
Washington, DC 20503 or e-mail to:
David_Rostker@omb.eop.gov; and (ii) R.
Corey Booth, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Shirley Martinson,
6432 General Green Way, Alexandria,
Virginia 22312, or send an e-mail to
PRA_Mailbox@sec.gov. Comments must
be submitted to OMB within 30 days of
this notice.
Dated: April 6, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6–5685 Filed 4–14–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
Submission for OMB Review;
Comment Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Filings and
Information Services, Washington, DC
20549
Extension:
Rule 19d–2, SEC File No. 270–204 and
OMB Control No. 3235–0205.
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.) the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget
request for extension of the previously
approved collection of information
discussed below.
Rule 19d–2 (17 CFR 240.19d–2) under
the Securities Exchange Act of 1934 (the
‘‘Act’’) prescribes the form and content
of applications to the Commission by
persons desiring stays of final
disciplinary sanctions and summary
action of self-regulatory organizations
(‘‘SROs’’) for which the Commission is
the appropriate regulatory agency.
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19763
It is estimated that approximately 30
respondents will utilize this application
procedure annually, with a total burden
of 90 hours, based upon past
submissions. The staff estimates that the
average number of hours necessary to
comply with the requirements of Rule
19d–2 is 3 hours.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
Written comments regarding the
above information should be directed to
the following persons: (i) Desk Officer
for the Securities and Exchange
Commission, Office of Information and
Regulatory Affairs, Office of
Management and Budget, Room 10102,
New Executive Office Building,
Washington, DC 20503 or by sending an
e-mail to David_Rostker@omb.eop.gov;
and (ii) R. Corey Booth, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Shirley
Martinson, 6432 General Green Way,
Alexandria, Virginia 22312, or send an
e-mail to: PRA_Mailbox@sec.gov.
Comments must be submitted to the
Office of Management and Budget
within 30 days of this notice.
Dated: April 6, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6–5689 Filed 4–14–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53628; File No. 4–517]
Program for Allocation of Regulatory
Responsibilities Pursuant to Rule 17d–
2; Notice of Filing of the Plan for
Allocation of Regulatory
Responsibilities Between The
NASDAQ Stock Market LLC and the
National Association of Securities
Dealers, Inc.
April 10, 2006.
Pursuant to Section 17(d) of the
Securities Exchange of 1934 (‘‘Act’’) 1
and Rule 17d–2 thereunder,2 notice is
hereby given that on April 6, 2006, The
NASDAQ Stock Market LLC (‘‘Nasdaq’’
or ‘‘Exchange’’) and the National
Association of Securities Dealers, Inc.
(‘‘NASD’’ or ‘‘Association’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
1 15
2 17
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U.S.C. 78q(d).
CFR 240.17d–2.
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Federal Register / Vol. 71, No. 73 / Monday, April 17, 2006 / Notices
a plan for the allocation of regulatory
responsibilities.
I. Introduction
Section 19(g)(1) of the Act 3, among
other things, requires every national
securities exchange and registered
securities association (‘‘SRO’’) to
examine for, and enforce compliance by,
its members and persons associated
with its members with the Act, the rules
and regulations thereunder, and the
SRO’s own rules, unless the SRO is
relieved of this responsibility pursuant
to Section 17(d) or 19(g)(2) of the Act.4
Without this relief, the statutory
obligation of each individual SRO could
result in a pattern of multiple
examinations of broker-dealers that
maintain memberships in more than one
SRO (‘‘common members’’). This
regulatory duplication would add
unnecessary expenses for common
members and their SROs.
Section 17(d)(1) of the Act was
intended, in part, to eliminate
unnecessary multiple examinations and
regulatory duplication.5 With respect to
a common member, Section 17(d)(1)
authorizes the Commission, by rule or
order, to relieve an SRO of the
responsibility to receive regulatory
reports, to examine for and enforce
compliance with applicable statutes,
rules and regulations, or to perform
other specified regulatory functions.
To implement Section 17(d)(1), the
Commission adopted two rules: Rule
17d–1 and Rule 17d–2 under the Act.6
Rule 17d–1, adopted on April 20, 1976,7
authorizes the Commission to name a
single SRO as the designated examining
authority (‘‘DEA’’) to examine common
members for compliance with financial
responsibility requirements imposed by
the Act, or by Commission or SRO rules.
When an SRO has been named as a
common member’s DEA, all other SROs
to which the common member belongs
are relieved of the responsibility to
examine the firm for compliance with
applicable financial responsibility rules.
On its face, Rule 17d–1 deals only
with an SRO’s obligation to enforce
broker-dealers’ compliance with the
financial responsibility requirements.
Rule 17d–1 does not relieve an SRO
from its obligation to examine a
common member for compliance with
its own rules and provisions of the
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3 15
U.S.C. 78s(g)(1).
U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2).
5 Securities Acts Amendments of 1975, Report of
the Senate Committee on Banking, Housing, and
Urban Affairs to Accompany S. 249, S. Rep. No. 94–
75, 94th Cong., 1st Session. 32 (1975).
6 17 CFR 240.17d–1 and 17 CFR 240.17d–2.
7 Securities Exchange Act Release No. 12352, 41
FR 18809 (May 3, 1976).
4 15
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federal securities laws governing
matters other than financial
responsibility, including sales practices,
and trading activities and practices.
To address regulatory duplication in
these other areas, on October 28, 1976,
the Commission adopted Rule 17d–2
under the Act.8 This rule permits SROs
to propose joint plans allocating
regulatory responsibilities with respect
to common members. Under paragraph
(c) of Rule 17d–2, the Commission may
declare such a plan effective if, after
providing for notice and comment, it
determines that the plan is necessary or
appropriate in the public interest and
for the protection of investors, to foster
cooperation and coordination among the
SROs, to remove impediments to and
foster the development of a national
market system and a national clearance
and settlement system, and in
conformity with the factors set forth in
Section 17(d) of the Act. Commission
approval of a plan filed pursuant to Rule
17d–2 relieves an SRO of those
regulatory responsibilities allocated by
the plan to another SRO.
II. The Plan
Nasdaq and NASD filed with the
Commission a plan for allocating
regulatory responsibilities pursuant to
Rule 17d–2. The proposed plan is
intended to reduce regulatory
duplication for firms that are common
members of Nasdaq and NASD. This
proposed plan would transfer to the
NASD certain regulatory responsibilities
for each common member. Included in
the plan is an attachment (‘‘The Nasdaq
Stock Market LLC Rules Certification for
17d–2 Agreement with NASD,’’ referred
to herein as the ‘‘Nasdaq Certification’’)
that delineates the Nasdaq rules that
would be subject to the plan. The
Nasdaq Certification lists every Nasdaq
rule that, under the plan, the NASD
would bear responsibility for overseeing
and enforcing with respect to common
members.
The text of the proposed 17d–2 plan
is as follows:
Agreement Between the National
Association of Securities Dealers, Inc.
and The Nasdaq Stock Market LLC
Pursuant To Section 17(D) And Rule
17d–2
This agreement (Agreement) pursuant
to Section 17(d) of the Securities
Exchange Act of 1934 (Act) and Rule
17d–2 thereunder is by and between the
National Association of Securities
Dealers, Inc. (NASD), a Delaware
corporation registered as a national
8 Securities Exchange Act Release No. 12935, 41
FR 49093 (November 8, 1976).
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securities association subject to
regulation by the Securities and
Exchange Commission (SEC) under the
Act, whose principal offices are located
at 1735 K Street, N.W., Washington,
D.C. 20006, and The NASDAQ Stock
Market LLC (Nasdaq), a Delaware
limited liability company registered as a
national securities exchange subject to
regulation by the SEC under the Act,
whose principal offices are located at 1
Liberty Plaza, New York, NY (NASD
and Nasdaq hereafter may be referred to
together as the parties or individually as
a party).
In consideration of the mutual
covenants contained hereafter, and in
consideration of other valuable
consideration, NASD and Nasdaq
hereby agree as follows:
1. Term. This Agreement shall be
effective on the later of either: (i) the
date that Nasdaq commences operations
as a national securities exchange; or (ii)
the date the SEC approves this
Agreement under Section 17(d)
(Effective Date).
2. Entities. Nasdaq is a registered
national securities exchange, as defined
in Section 6 of the Act, and a selfregulatory organization, as defined in
Section 3(a)(26) of the Act (SRO). NASD
is a registered securities association, as
defined in Section 15A of the Act and
an SRO. Both parties are responsible for
fulfilling certain regulatory obligations
and performing certain regulatory
functions under the Act.
3. Members. The parties have brokers
or dealers as their members, and some
of the brokers or dealers are members of
both such parties (hereinafter, members
of both such parties and persons
associated with such members are
referred to collectively as Common
Members). Each party has regulatory
obligations under the Act and the rules
of the party for Common Members. A
broker or dealer shall be considered a
member of one of the parties only upon
the approval of the membership
application of that broker or dealer. A
broker or dealer with a pending
membership application shall not be
considered a Common Member.
4. Structure. Under Rule 17d–2, the
parties may agree, in a plan or
agreement, to provide for coordinated,
non-duplicative regulation and
enforcement, and to serve other
purposes of the Act: (1) to allocate
certain regulatory responsibilities that
both parties have to one of the parties;
(2) to relieve a party of its regulatory
responsibility and obligations for a
certain function under the Act if the
other party agrees to exercise such
responsibility and undertake such
obligation for the specified function on
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behalf of the other party; and (3) to
provide for the allocation of expenses
reasonably incurred by the party
agreeing to exercise the responsibility
and undertake the obligation for the
specified function in the plan or
agreement.
Pursuant hereto, Nasdaq is
responsible for identifying the rules of
Nasdaq that are identical or
substantially similar to NASD rules.
After review and confirmation by
NASD, Nasdaq shall in a certification, as
attached hereto and made a part of this
Agreement (Nasdaq Certification),
certify the rules of Nasdaq that are
identical or substantially similar to
NASD rules (Common Rules) and,
therefore, are the subject of this
Agreement. Each year following the
commencement of operation of this
Agreement, or more frequently if
required by changes in either the rules
of Nasdaq or NASD, Nasdaq shall
submit an updated list of Common
Rules to NASD for review which shall
add Nasdaq rules not included in the
current Nasdaq Certification that are
identical or substantially similar to
NASD rules; delete Nasdaq rules
included in the Nasdaq Certification
that are no longer identical or
substantially similar to NASD rules; and
confirm that the remaining rules on the
Nasdaq Certification continue to be
Nasdaq rules that are identical or
substantially similar to NASD rules.
Within 30 days of receipt of such
updated list, NASD will confirm in
writing whether the rules listed in any
updated list are Common Rules as
defined in this Agreement. NASD shall
not assume regulatory responsibility for,
and Nasdaq will retain full
responsibility for (unless allocated
pursuant to Rule 17d–2 otherwise than
under this Agreement), surveillance and
enforcement with respect to trading
activities or practices involving solely
Nasdaq’s own marketplace. Also subject
to this Agreement are SEC rules
applicable to Common Members. NASD
shall assume regulatory responsibility
for such SEC rules with respect to
Common members to the same extent
that the NASD assumes regulatory
responsibility with respect to NASD
members.
5. Services. NASD agrees to provide
the following services (Services) as
related to Common Members:
(a) Membership Activities. (1) NASD
will receive and process in the Central
Registration Depository (CRD)
applications, reports, information,
filings, fingerprint cards, and notices
generally relating to: (a) an associated
person status, and (b) registration as a
principal of any type, a representative of
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any type, or any other type of employee
required to register or required to pass
a qualification examination.
(2) NASD will receive and process in
the CRD documentation of notice of the
passage of the appropriate qualification
examination for such principal,
registered representative, or other
employee required to qualify by
examination and, subsequently, forward
such information to Nasdaq.
(3) Upon request, NASD will advise
Nasdaq of any changes in the status of
members (including officer and partner
changes), and registered personnel as
reflected in CRD.
(4) NASD shall collect and forward
monthly to Nasdaq, any applicable fees
for the account of Nasdaq. NASD agrees
to provide Nasdaq with an accounting of
such fees in January of each year.
Nasdaq will reimburse NASD for
reasonable expenses incurred for
performing these accounting functions.
(5) Common Members will be
required to send to NASD all letters,
termination notices or other material
relating to their associated persons.
(6) When, as a result of processing
letters, termination notices, or other
material relating to their associated
persons, NASD becomes aware of a
statutory disqualification with respect to
a Common Member, NASD shall
determine, pursuant to Section 15A(g)
or Section 6(c) of the Act, the
acceptability or continued acceptability
of the person to whom such statutory
disqualification applies, but will not
make a determination regarding Nasdaq
membership or participation, or
association of a person with Nasdaq
member. NASD shall advise Nasdaq in
writing of its actions in this regard.
Nasdaq shall, within 30 days of
receiving such information from NASD,
determine whether to permit a
statutorily disqualified Common
Member to become or to remain a
Nasdaq member or a participant, or a
person associated with a member.
Nasdaq will advise NASD of its
decision. Nasdaq will reimburse NASD
for reasonable expenses incurred for
notifying Nasdaq of the NASD’s
decision regarding a statutory
disqualification under Section 15A(g) or
Section 6(c) of the Act.
(b) Branch Office Activities. NASD
will receive and process notices, filings,
or registrations received regarding a
Common Member’s branch offices,
including notices, filings, or
registrations to designate offices of
supervisory jurisdiction, and agrees to
provide notice to Nasdaq of such filings.
Nasdaq will reimburse NASD for
reasonable expenses incurred for
providing Nasdaq notification.
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(c) Examinations. For the portion of
those routine, cycle, cause, and special
examinations that NASD will perform
for Common Members under this
Agreement, NASD will, upon request,
provide copies of the relevant portion of
such examination reports to Nasdaq.
Nasdaq will reimburse NASD for
reasonable expenses incurred for
providing examination reports to
Nasdaq. This undertaking is limited to
examining Common Members for
compliance with:
(1) The federal securities laws and the
rules and regulations thereunder, except
that it does not include examining any
Common Member for compliance with
financial responsibility rules on behalf
of Nasdaq (unless the SEC has
designated NASD as the DEA for the
Common Member under Rule 17d–1);
(2) Other applicable federal laws,
rules and regulations; and
(3) The rules of Nasdaq that are
identical or substantially similar to
NASD rules because they have been
certified by Nasdaq as such.
(d) Violations.
(1) If NASD discovers an apparent
violation of a federal statute or
regulation or Nasdaq rule listed above in
paragraph 5(c) for which NASD agrees
to examine a Common Member for
compliance, NASD shall investigate the
apparent violation, notify Nasdaq of the
results of the investigation and provide
a copy of any written report, determine
if additional regulatory action is
required, take any disciplinary or other
regulatory action required, and provide
notice to Nasdaq at the termination of
the matter by enforcement or other
action. If a disciplinary proceeding is
conducted by NASD, NASD will apply
the NASD Code of Procedure (the Rule
9000 Series) and other applicable NASD
procedural rules. Nasdaq will reimburse
NASD for reasonable expenses incurred
for providing any information, notices,
or reports contemplated under this
provision.
(2) If NASD discovers an apparent
violation of a Nasdaq Rule not within
the examination responsibility of NASD
as described above in paragraph 5(c),
NASD shall notify Nasdaq and refer the
matter to Nasdaq for further
examination, investigation, or
enforcement or regulatory action, as
determined by Nasdaq.
(e) Enforcement. For Common
Members, NASD will enforce
compliance with:
(1) The federal securities laws and the
rules and regulations thereunder, except
that it does not include examining any
Common Member for compliance with
financial responsibility rules on behalf
of Nasdaq (unless the SEC has
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designated NASD as the DEA for the
Common Member under Rule 17d–1);
(2) Other applicable federal laws,
rules and regulations; and
(3) The rules of Nasdaq that are
identical or substantially similar to
NASD Rules because they have been
certified by Nasdaq as such.
6. Information Sharing. The parties
agree to provide each other with the
following information:
(a) General. A party shall promptly
furnish to the other party any
information that the party determines
indicates possible financial, operational,
or other problems of any Common
Member, including, but not limited to,
early warning indications of potential
problems resulting from unusual
accumulations or concentrations of
securities positions or market
fluctuations.
(b) Reports. Upon reasonable request,
a party will make available promptly to
a requesting party any financial,
operational, or related report filed with
the party by a Common Member, files,
information on customer complaints,
termination notices, copies of an
examination report, investigative
material, or other documents involving
compliance with the federal securities
laws and regulations and the rules of the
parties by the Common Member, or
other documents in the possession of
the party receiving the request relating
to the Common Member as necessary to
assist the other party in fulfilling the
self-regulatory responsibilities,
obligations, and functions allocated
under this Agreement. The parties agree
that a party will make available
promptly to the requesting party
witnesses as necessary to assist the
other party in fulfilling the selfregulatory responsibilities allocated
under this Agreement. The nonrequesting party will pay all reasonable
travel and other expenses incurred by
its employees to the extent that the
requesting party requires such
employees to serve as a witness, and
provide information or other assistance
pursuant to this Agreement.
(c) Customer Complaints. If a party
receives a copy of a customer complaint
relating to a Common Member’s activity
or conduct that is not the regulatory
responsibility of the receiving party, the
receiving party will forward to the other
party copies of such customer
complaints.
(d) Upon reasonable request of a
party, the other party shall use
reasonable efforts to furnish the
requesting party information on
informal or formal disciplinary actions
involving a Common Member. The
requesting party will reimburse the
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other party for reasonable expenses
incurred for providing such
information.
(e) Information-Miscellaneous. Where
not otherwise provided, in
consideration for NASD assuming any
of the above referenced regulatory
responsibilities and obligations of
Nasdaq with respect to Common
Members and thereafter providing
information to Nasdaq in any form that
is necessary or desirable to Nasdaq in
order for Nasdaq to fulfill its regulatory
obligations under the Act or in order for
Nasdaq to remain informed of the
actions of its members and associated
persons, Nasdaq will reimburse NASD
for all reasonable expenses incurred for
providing such information.
7. Special or Cause Examinations.
Nothing in this Agreement shall restrict
or in any way encumber the right of a
party to conduct special or cause
examinations of Common Members as
either party, in its sole discretion, shall
deem appropriate or necessary.
8. Fees. NASD will provide Nasdaq
with one hundred eighty (180) days
advance written notice in the event that
NASD decides to charge Nasdaq for any
expenses incurred or services performed
under this Agreement not otherwise set
forth above. Nasdaq will have thirty (30)
days from the date of such notification
to inform NASD that Nasdaq will seek
to terminate the Agreement pursuant to
Section 17 thereof or enter into an
agreement pursuant to applicable rules
of the SEC with another SRO with
respect to the performance of such
responsibilities.
9. Indemnification. Neither party,
including respective directors,
governors, officers, employees and
agents, will be liable to the other party
and its directors, governors, officers,
employees and agents for any liability,
loss or damage resulting from any
delays, inaccuracies, errors or omissions
with respect to its performing or failing
to perform regulatory responsibilities,
obligations, or functions, except as
otherwise provided for under the Act or
in instances of gross negligence, willful
misconduct or reckless disregard, or
breach of confidentiality. Both parties
understand and agree with each other
that the regulatory responsibilities are
being performed on a good faith and
best effort basis and no warranties,
express or implied, are made by either
party to the other party with respect to
any of the responsibilities to be
performed by either of these parties
hereunder.
10. Arbitration. Any claim, dispute,
controversy or other matter in question
with regard to the Agreement that
cannot be resolved by negotiation
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between the parties shall be submitted
to arbitration in accordance with the
rules and regulations of the American
Arbitration Association; provided,
however, that (a) submission of any
such claim, dispute, controversy or
other matter in question to the
American Arbitration Association shall
not be required if the parties agree upon
another arbitration forum, (b) the
foregoing shall not preclude either party
from pursuing all available
administrative, judicial or other
remedies for infringement of a registered
patent, trademark, service mark or
copyright, (c) the parties shall not
submit claims for punitive damages, and
do hereby waive any right to the same,
and (d) the arbitrators shall not be
authorized to award punitive damages.
11. SEC Approval.
(a) The parties agree to file promptly
this Agreement with the SEC for its
review and approval.
(b) If approved by the SEC, Nasdaq
will notify Common Members of the
general terms of the Agreement and its
impact on members. The notice will be
sent on behalf of both parties and, prior
to being sent, NASD will review and
approve the notice.
13. Definitions. Unless otherwise
defined in this Agreement, or unless the
context otherwise requires, the terms
used in this Agreement shall have the
same meaning as they have under the
Act and the rules and regulations
thereunder.
14. Subsequent Parties; Limited
Relationship. This Agreement shall
inure to the benefit of and shall be
binding upon the parties hereto and
their respective legal representatives,
successors, and assigns. Nothing in this
Agreement, expressed or implied, is
intended or shall (a) confer on any
person other than the parties hereto, or
their respective legal representatives,
successors, and assigns, any rights,
remedies, obligations or liabilities under
or by reason of this Agreement, (b)
constitute the parties hereto partners or
participants in a joint venture, or (c)
appoint one party the agent of the other.
15. Assignment. Neither party may
assign the Agreement without the prior
written consent of the other party,
which consent shall not be
unreasonably withheld, conditioned or
delayed; provided, however, that either
party may assign the Agreement to a
corporation controlling, controlled by or
under common control with the
assigning party without the prior
written consent of the other party.
16. Severability. Any term or
provision of this Agreement that is
invalid or unenforceable in any
jurisdiction shall, as to such
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jurisdiction, be ineffective to the extent
of such invalidity or unenforceability
without rendering invalid or
unenforceable the remaining terms and
provisions of this Agreement or
affecting the validity or enforceability of
any of the terms or provisions of this
Agreement in any other jurisdiction.
17. Termination.
(a) Termination for Cause. Either
party may terminate the Agreement due
to breach by the other party. The party
aggrieved by the breach shall give
written notice to the other party that the
Agreement shall be terminated not
earlier than sixty (60) calendar days
from receipt of the notice, and such
notice shall state with specificity the
grounds for termination. If the breach is
curable, the party in breach will have
the right to cure such breach prior to the
date stated for termination, and, should
the breach be cured and written notice
of such cure served on the aggrieved
party prior to the date stated for
termination, such notice shall vacate the
notice to terminate.
(b) Termination for Convenience.
Either party may terminate the
Agreement for any other reason by
giving written notice to the other party
that the Agreement will terminate not
less than one hundred eighty (180 days)
from receipt of the notice. The notice
will specify the basis for termination.
Nasdaq will pay NASD the amount due
for expenses incurred for generating
reports and notices as of the effective
date of termination.
18. General. The parties agree to
perform all acts and execute all
supplementary instruments or
documents that may be reasonably
necessary or desirable to carry out the
provisions of this Agreement.
19. Liaison and Notices. All questions
regarding the implementation of this
Agreement shall be directed to the
persons identified in subsections (a) and
(b), as applicable, below. All notices and
other communications required or
permitted to be given under this
Agreement shall be in writing and shall
be deemed to have been duly given
upon (i) actual receipt by the notified
party or (ii) constructive receipt (as of
the date marked on the return receipt)
if sent by certified or registered mail,
return receipt requested, to the
following addresses:
(a) If to NASD: National Association
of Securities Dealers, Inc. 1735 K Street,
NW., Washington, DC 20006. Attn:
NASD Regulation Office of General
Counsel.
With, if a notice of breach or default,
a required copy to: National Association
of Securities Dealers, Inc., 1735 K Street,
NW., Washington, DC 20006, Attn:
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Office of General Counsel—Contracts
Group.
(b) If to Nasdaq: The NASDAQ Stock
Market LLC, 9600 Blackwell Avenue,
Rockville, MD 20850, Attn: The Nasdaq
Stock Market LLC, Office of General
Counsel.
With, if a notice of breach or default,
a required copy to: The Nasdaq Stock
Market LLC, Office of General Counsel.
20. Regulatory Responsibility.
Pursuant to Section 17(d)(1)(A) of the
Act, and Rule 17d–2 thereunder, NASD
and Nasdaq jointly request the SEC,
upon its approval of this Agreement, to
relieve Nasdaq of any and all
responsibilities with respect to the
matters allocated to NASD pursuant to
this Agreement for purposes of Sections
17(d) and 19(g) of the Act; provided,
however, that Nasdaq will continue to
have exclusive responsibility for
ensuring the continued validity of the
Nasdaq certifications made under
Section 4 herein.
21. Governing Law. This Agreement
shall be deemed to have been made in
the State of New York, and shall be
construed and enforced in accordance
with the law of the State of New York,
without reference to principles of
conflicts of laws thereof. Each of the
parties hereby consents to submit to the
jurisdiction of the courts by or for the
State of New York in connection with
any action or proceeding relating to this
Agreement.
22. Survival of Provisions. Provisions
intended by their terms or context to
survive and continue notwithstanding
delivery of the Services by NASD, the
payment of the price by Nasdaq, and
any expiration of this Agreement shall
survive and continue, including but not
limited to, the items referred to in
Sections 9 and 10.
The Nasdaq Stock Market LLC Rules
Certification for 17D–2 Agreement With
NASD
The Nasdaq Stock Market LLC hereby
certifies that the requirements contained
in the Nasdaq Stock Market rules listed
below are identical to, or substantially
similar to, NASD rules.
0100. GENERAL PROVISIONS
0110. Adoptions and Application of
Rules
0113. Interpretation
0115. Applicability
0120. Definitions
0121. Definitions in By-Laws
1000. MEMBERSHIP, REGISTRATION
AND QUALIFICATION
REQUIREMENTS
1002. Qualifications of Nasdaq
Members and Associated Persons
IM–1002–1. Filing of Misleading
Information as to Membership or
PO 00000
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19767
Registration
IM–1002–2. Status of Sole Proprietors
and Registered Representatives
Serving in the Armed Forces
IM–1002–3. Failure to Register
Personnel
IM–1002–4. Branch Offices and
Offices of Supervisory Jurisdiction
1010. Membership Proceedings
Definitions
1011. Definitions
1012. General Provisions
1013. New Member Application and
Interview
1014. Department Decision
1017. Application for Approval of
Change in Ownership, Control, or
Business Operations
1020. Registration of Principals
1021. Registration Requirements
1022. Categories of Principal
Registration
IM–1022–2. Limited Principal—
General Securities Sales Supervisor
1030. Registration of Representatives
1031. Registration Requirements
1032. Categories of Representative
Registration
1040. Registration of Assistant
Representatives—Order Processing
1041. Registration Requirements
1042. Restrictions
1050. Research Analysts
1060. Persons Exempt from
Registration
1070. Qualification Examinations and
Waiver of Requirements
1080. Confidentiality of Examinations
1090. Foreign Members
1100. Foreign Associates
1120. Continuing Education
Requirements
1130. Reliance on Current
Membership List
1140. Electronic Filing Rules
1150. Executive Representative
2000. BUSINESS CONDUCT
2100. GENERAL STANDARDS
2110. Standards of Commercial Honor
and Principles of Trade
IM–2110–2. Trading Ahead of
Customer Limit Orders
IM–2110–3. Front Running Policy
IM–2110–4. Trading Ahead of
Research Reports
IM–2110–5. Anti-Intimidation/
Coordination
IM–2110–6. Confirmation of Callable
Common Stock
IM–2110–7. Interfering With the
Transfer of Customer Accounts in
the Context of Employment
Disputes
2111. Trading Ahead of Customer
Market Orders
2120. Use of Manipulative, Deceptive
or Other Fraudulent Devices
2200. COMMUNICATIONS WITH
CUSTOMERS AND THE PUBLIC
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2210. Communications with the
Public
IM–2210–1. Guidelines to Ensure
That Communications With the
Public Are Not Misleading
IM–2210–4. Limitations on Use of
Nasdaq’s Name
2211. Institutional Sales Material and
Correspondence
2212. Telemarketing
2240. Disclosure of Control
Relationship with Issuer
2250. Disclosure of Participation or
Interest in Primary or Secondary
Distribution
2260. Forwarding of Proxy and Other
Materials
IM–2260. Suggested Rates of
Reimbursement
2270. Disclosure of Financial
Condition to Customers
2300. TRANSACTIONS WITH
CUSTOMERS
2310. Recommendations to Customers
(Suitability)
IM–2310–2. Fair Dealing with
Customers
IM–2310–3. Suitability Obligations to
Institutional Customers
2320. Best Execution and
Interpositioning
2330. Customers’ Securities or Funds
IM–2330. Segregation of Customers’
Securities
2340. Customer Account Statements
2341. Margin Disclosure Statement
2360. Approval Procedures for Day
Trading Accounts
2361. Day-Trading Risk Disclosure
Statement
2370. Borrowing From or Lending to
Customers
2400. COMMISSIONS, MARK-UPS
AND CHARGES
2430. Charges for Services Performed
2460. Payments for Market Making
2500. SPECIAL ACCOUNTS
2510. Discretionary Accounts
2520. Margin Requirements
2800. SPECIAL PRODUCTS
2810. Direct Participation Programs
2830. Investment Company Securities
2840. Trading in Index Warrants,
Currency Index Warrants, and
Currency Warrants
2841. General
2842. Definitions
2850. Position Limits
2851. Exercise Limits
2852. Reporting Requirements
2853. Liquidation of Index Warrant
Positions
2854. Trading Halts or Suspensions
2900. RESPONSIBILITIES TO OTHER
BROKERS OR DEALERS
2910. Disclosure of Financial
Condition to Other Members
3000. RESPONSIBILITIES RELATING
TO ASSOCIATED PERSONS,
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EMPLOYEES, AND OTHERS’
EMPLOYEES
3010. Supervision
IM–3010. Guidance on Heightened
Supervision Requirements
3011. Anti-Money Laundering
Compliance Program
3012. Supervisory Control System
3013. Annual Certification of
Compliance and Supervisory
Processes
IM–3013. Annual Compliance and
Supervision Certification
3020. Fidelity Bonds
3030. Outside Business Activities of
an Associated Person
3040. Private Securities Transactions
of an Associated Person
3050. Transactions for or by
Associated Persons
3060. Influencing or Rewarding
Employees of Others
3070. Reporting Requirements
3080. Disclosure to Associated
Persons When Signing Form U–4
3090. Transactions Involving Nasdaq
Employees
3100. BOOKS AND RECORDS, AND
FINANCIAL CONDITION
3110. Books and Records
IM–3110. Customer Account
Information
3120. Use of Information Obtained in
Fiduciary Capacity
3121. Custodian of the Record
3130. Regulation of Activities of
Members Experiencing Financial
and/or Operational Difficulties
IM–3130. Restrictions on Member’s
Activity
3140. Approval of Change in Exempt
Status Under SEC Rule 15c3–3
3150. Reporting Requirements for
Clearing Firms
IM–3150. Exemptive Relief
3200. SETTLEMENTS
3220. Adjustment of Open Orders
3230. Clearing Agreements
3300. TRADING
3310. Publication of Transactions and
Quotations
IM–3310. Manipulative and Deceptive
Quotations
3320. Offers at Stated Prices
3330. Payment Designed to Influence
Market Prices, Other than Paid
Advertising
3370. Prompt Receipt and Delivery of
Securities
3500. EMERGENCY PREPAREDNESS
3510. Business Continuity Plans
3520. Emergency Contact Information
6000. OTHER SYSTEMS AND
PROGRAMS
6400. TRANSACTIONS IN SECURITIES
TRADED PURSUANT TO
UNLISTED TRADING PRIVILEGES
6430. Suspension of Trading
6440. Trading Practices
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Fmt 4703
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6500. PORTAL
6530. Requirements Applicable to
Nasdaq Members
6531. Limitations on Transactions in
PORTAL Securities
6532. Reporting Debt and Equity
Transactions in PORTAL Securities
6950. ORDER AUDIT TRAIL SYSTEM
6951. Definitions
6952. Applicability
6953. Synchronization of Member
Business Clocks
6954. Recording of Order Information
6955. Order Data Transmission
Requirements
6956. Violation of Order Audit Trail
System Rules
6957. Effective Date
8000. INVESTIGATIONS AND
SANCTIONS
8100. GENERAL PROVISIONS
8110. Availability of Manual to
Customers
8120. Definitions
10000. CODE OF ARBITRATION
PROCEDURE 10100. Jurisdiction
IM–10100. Failure to Act Under
Provisions of Code of Arbitration
Procedure
10101. Matters Eligible for
Submission
10102. Non-Waiver of Nasdaq Objects
and Purposes
11000. UNIFORM PRACTICE CODE
11100. Scope of Uniform Practice
Code
11110. Nasdaq Regulation
IM–11110. Refusal to Abide by
Rulings of Nasdaq Regulation
11120. Definitions
11130. When, As and If Issued/
Distributed Contracts
IM–11130. Standard Form of ‘‘When,
As and If Issued’’ or ‘‘When, As and
If Distributed’’ Contract
11140. Transactions in Securities ‘‘ExDividend,’’ ‘‘Ex-Rights’’ or ‘‘ExWarrants’’
11150. Transactions ‘‘Ex-Interest’’ in
Bonds Which Are Dealt in ‘‘Flat’’
11160. ‘‘Ex’’ Liquidating Payments
11170. Transactions in ‘‘PartRedeemed’’ Bonds
11190. Reconfirmation and Pricing
Service Participants
11200. COMPARISONS OR
CONFIRMATIONS AND ‘‘DON’T
KNOW NOTICES’’
11210. Sent By Each Party
IM–11210. Uniform Comparison Form
11220. Description of Securities
11300. DELIVERY OF SECURITIES
11310. Book-Entry Settlement
11320. Dates of Delivery
11330. Payment
11340. Stamp Taxes
11350. Part Delivery
11360. Units of Delivery
IM–11360. Uniform Delivery Ticket
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Form
11361. Units of Delivery—Stocks
11362. Units of Delivery—Bonds
11363. Units of Delivery—Unit
Investment Trust Securities
11364. Units of Delivery—Certificates
of Deposit for Bonds
IM–11364. Trading Securities As
‘‘Units’’ or Bonds ‘‘With Stock’’
11400. DELIVERY OF SECURITIES
WITH DRAFT ATTACHED
11410. Acceptance of Draft
11500. DELIVERY OF SECURITIES
WITH RESTRICTIONS
11510. Delivery of Temporary
Certificates
11520. Delivery of Mutilated
Securities
11530. Delivery of Securities Called
for Redemption or Which Are
Deemed Worthless
11540. Delivery Under Government
Regulations
11550. Assignments and Powers of
Substitution; Delivery of Registered
Securities
IM–11550. Uniform Transfer
Instructions Form
11560. Certificate of Company Whose
Transfer Books Are Closed
IM–11560. Sample Ownership
Transfer Indemnification Stamp
11570. Certificates in Various Names
11571. Certificate in Name of
Corporation
IM–11571. Sample Certificate and
Authorizing Resolution/Certificate
of Incumbency
11572. Certificate in Name of Firm
11573. Certificate in Name of
Dissolved Firm Succeeded by New
Firm
11574. Certificate in Name of
Deceased Person, Trustee, etc.
IM–11574. Sample Limited
Partnership Change of Trustee Form
11600. DELIVERY OF BONDS AND
OTHER EVIDENCES OF
INDEBTEDNESS
11610. Liability for Expenses
11620. Computation of Interest
11630. Due-Bills and Due-Bill Checks
IM–11630. Sample Due-Bill Forms
11640. Claims for Dividends, Rights,
Interest, etc.
11650. Transfer Fees
11700. RECLAMATIONS AND
REJECTIONS
11710. General Provisions
IM–11710. Uniform Reclamation
Form
11720. Irregular Delivery—Transfer
Refused—Lost or Stolen Securities
IM–11720. Obligations of Members
Who Discover Securities in Their
Possession to Which They Are Not
Entitled
11730. Called Securities
11740. Marking to the Market
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800. CLOSE-OUT PROCEDURES
11810. Buying-In
IM–11810. Sample Buy-In Forms
11820. Selling-Out
11840. Rights and Warrants
IM–11840. Sample Letter of
Indemnity
11860. Acceptance and Settlement of
COD Orders
11870. Customer Account Transfer
Contracts
IM–11870. Sample Transfer
Instruction Forms
11880. Settlement of Syndicate
Accounts
III. Date of Effectiveness of the
Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the
Act 9 and Rule 17d–2 thereunder,10 after
May 8, 2006, the Commission may, by
written notice, declare the plan
submitted by Nasdaq and NASD, File
No. 4–517, effective if the Commission
finds that the plan is necessary or
appropriate in the public interest and
for the protection of investors, to foster
cooperation and coordination among
self-regulatory organizations, or to
remove impediments to and foster the
development of the national market
system and a national system for the
clearance and settlement of securities
transactions and in conformity with the
factors set forth in Section 17(d) of the
Act.
In order to assist the Commission in
determining whether to approve this
plan and to relieve Nasdaq of those
responsibilities designated to NASD,
interested persons are invited to submit
written data, views, and arguments
concerning the foregoing. Comments
may be submitted by any of the
following methods:
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/other.shtml), or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number 4–517 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 4–517. This file number should
be included on the subject line if e-mail
U.S.C. 78q(d)(1).
CFR 240.17d–2.
10 17
Frm 00088
Fmt 4703
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Nancy M. Morris,
Secretary.
[FR Doc. E6–5693 Filed 4–14–06; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53623; File No. 4–514]
Self-Regulatory Organizations; Order
Approving Minor Rule Violation Plan
for The NASDAQ Stock Market LLC
April 10, 2006.
Electronic Comments
PO 00000
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/
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. Copies of the plan also will be
available for inspection and copying at
the principal office of the Exchange. 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 4–517 and should be submitted
on or before May 8, 2006.
BILLING CODE 8010–01–P
IV. Solicitation of Comments
9 15
19769
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On February 22, 2006, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) a proposed minor rule
violation plan (‘‘MRVP’’) pursuant to
Section 19(d)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’),1 and
Rule 19d–1(c)(2) thereunder.2 The
proposed MRVP was published for
public comment on March 16, 2006.3
The Commission received no comments
on the proposal. This order approves
Nasdaq’s proposed MRVP.
11 17
CFR 200.30–3(a)(34).
U.S.C. 78s(d)(1).
2 17 CFR 240.19d–1(c)(2).
3 See Securities Exchange Act Release No. 53428
(March 7, 2006), 71 FR 13645.
1 15
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[Federal Register Volume 71, Number 73 (Monday, April 17, 2006)]
[Notices]
[Pages 19763-19769]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-5693]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53628; File No. 4-517]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing of the Plan for Allocation of Regulatory
Responsibilities Between The NASDAQ Stock Market LLC and the National
Association of Securities Dealers, Inc.
April 10, 2006.
Pursuant to Section 17(d) of the Securities Exchange of 1934
(``Act'') \1\ and Rule 17d-2 thereunder,\2\ notice is hereby given that
on April 6, 2006, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') and the National Association of Securities Dealers, Inc.
(``NASD'' or ``Association'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'')
[[Page 19764]]
a plan for the allocation of regulatory responsibilities.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------
I. Introduction
Section 19(g)(1) of the Act \3\, among other things, requires every
national securities exchange and registered securities association
(``SRO'') to examine for, and enforce compliance by, its members and
persons associated with its members with the Act, the rules and
regulations thereunder, and the SRO's own rules, unless the SRO is
relieved of this responsibility pursuant to Section 17(d) or 19(g)(2)
of the Act.\4\ Without this relief, the statutory obligation of each
individual SRO could result in a pattern of multiple examinations of
broker-dealers that maintain memberships in more than one SRO (``common
members''). This regulatory duplication would add unnecessary expenses
for common members and their SROs.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78s(g)(1).
\4\ 15 U.S.C. 78q(d) and 15 U.S.C. 78s(g)(2).
---------------------------------------------------------------------------
Section 17(d)(1) of the Act was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\5\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules and regulations, or to perform other
specified regulatory functions.
---------------------------------------------------------------------------
\5\ Securities Acts Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session. 32 (1975).
---------------------------------------------------------------------------
To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\6\ Rule 17d-1, adopted on
April 20, 1976,\7\ authorizes the Commission to name a single SRO as
the designated examining authority (``DEA'') to examine common members
for compliance with financial responsibility requirements imposed by
the Act, or by Commission or SRO rules. When an SRO has been named as a
common member's DEA, all other SROs to which the common member belongs
are relieved of the responsibility to examine the firm for compliance
with applicable financial responsibility rules.
---------------------------------------------------------------------------
\6\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2.
\7\ Securities Exchange Act Release No. 12352, 41 FR 18809 (May
3, 1976).
---------------------------------------------------------------------------
On its face, Rule 17d-1 deals only with an SRO's obligation to
enforce broker-dealers' compliance with the financial responsibility
requirements. Rule 17d-1 does not relieve an SRO from its obligation to
examine a common member for compliance with its own rules and
provisions of the federal securities laws governing matters other than
financial responsibility, including sales practices, and trading
activities and practices.
To address regulatory duplication in these other areas, on October
28, 1976, the Commission adopted Rule 17d-2 under the Act.\8\ This rule
permits SROs to propose joint plans allocating regulatory
responsibilities with respect to common members. Under paragraph (c) of
Rule 17d-2, the Commission may declare such a plan effective if, after
providing for notice and comment, it determines that the plan is
necessary or appropriate in the public interest and for the protection
of investors, to foster cooperation and coordination among the SROs, to
remove impediments to and foster the development of a national market
system and a national clearance and settlement system, and in
conformity with the factors set forth in Section 17(d) of the Act.
Commission approval of a plan filed pursuant to Rule 17d-2 relieves an
SRO of those regulatory responsibilities allocated by the plan to
another SRO.
---------------------------------------------------------------------------
\8\ Securities Exchange Act Release No. 12935, 41 FR 49093
(November 8, 1976).
---------------------------------------------------------------------------
II. The Plan
Nasdaq and NASD filed with the Commission a plan for allocating
regulatory responsibilities pursuant to Rule 17d-2. The proposed plan
is intended to reduce regulatory duplication for firms that are common
members of Nasdaq and NASD. This proposed plan would transfer to the
NASD certain regulatory responsibilities for each common member.
Included in the plan is an attachment (``The Nasdaq Stock Market LLC
Rules Certification for 17d-2 Agreement with NASD,'' referred to herein
as the ``Nasdaq Certification'') that delineates the Nasdaq rules that
would be subject to the plan. The Nasdaq Certification lists every
Nasdaq rule that, under the plan, the NASD would bear responsibility
for overseeing and enforcing with respect to common members.
The text of the proposed 17d-2 plan is as follows:
Agreement Between the National Association of Securities Dealers, Inc.
and The Nasdaq Stock Market LLC Pursuant To Section 17(D) And Rule 17d-
2
This agreement (Agreement) pursuant to Section 17(d) of the
Securities Exchange Act of 1934 (Act) and Rule 17d-2 thereunder is by
and between the National Association of Securities Dealers, Inc.
(NASD), a Delaware corporation registered as a national securities
association subject to regulation by the Securities and Exchange
Commission (SEC) under the Act, whose principal offices are located at
1735 K Street, N.W., Washington, D.C. 20006, and The NASDAQ Stock
Market LLC (Nasdaq), a Delaware limited liability company registered as
a national securities exchange subject to regulation by the SEC under
the Act, whose principal offices are located at 1 Liberty Plaza, New
York, NY (NASD and Nasdaq hereafter may be referred to together as the
parties or individually as a party).
In consideration of the mutual covenants contained hereafter, and
in consideration of other valuable consideration, NASD and Nasdaq
hereby agree as follows:
1. Term. This Agreement shall be effective on the later of either:
(i) the date that Nasdaq commences operations as a national securities
exchange; or (ii) the date the SEC approves this Agreement under
Section 17(d) (Effective Date).
2. Entities. Nasdaq is a registered national securities exchange,
as defined in Section 6 of the Act, and a self-regulatory organization,
as defined in Section 3(a)(26) of the Act (SRO). NASD is a registered
securities association, as defined in Section 15A of the Act and an
SRO. Both parties are responsible for fulfilling certain regulatory
obligations and performing certain regulatory functions under the Act.
3. Members. The parties have brokers or dealers as their members,
and some of the brokers or dealers are members of both such parties
(hereinafter, members of both such parties and persons associated with
such members are referred to collectively as Common Members). Each
party has regulatory obligations under the Act and the rules of the
party for Common Members. A broker or dealer shall be considered a
member of one of the parties only upon the approval of the membership
application of that broker or dealer. A broker or dealer with a pending
membership application shall not be considered a Common Member.
4. Structure. Under Rule 17d-2, the parties may agree, in a plan or
agreement, to provide for coordinated, non-duplicative regulation and
enforcement, and to serve other purposes of the Act: (1) to allocate
certain regulatory responsibilities that both parties have to one of
the parties; (2) to relieve a party of its regulatory responsibility
and obligations for a certain function under the Act if the other party
agrees to exercise such responsibility and undertake such obligation
for the specified function on
[[Page 19765]]
behalf of the other party; and (3) to provide for the allocation of
expenses reasonably incurred by the party agreeing to exercise the
responsibility and undertake the obligation for the specified function
in the plan or agreement.
Pursuant hereto, Nasdaq is responsible for identifying the rules of
Nasdaq that are identical or substantially similar to NASD rules. After
review and confirmation by NASD, Nasdaq shall in a certification, as
attached hereto and made a part of this Agreement (Nasdaq
Certification), certify the rules of Nasdaq that are identical or
substantially similar to NASD rules (Common Rules) and, therefore, are
the subject of this Agreement. Each year following the commencement of
operation of this Agreement, or more frequently if required by changes
in either the rules of Nasdaq or NASD, Nasdaq shall submit an updated
list of Common Rules to NASD for review which shall add Nasdaq rules
not included in the current Nasdaq Certification that are identical or
substantially similar to NASD rules; delete Nasdaq rules included in
the Nasdaq Certification that are no longer identical or substantially
similar to NASD rules; and confirm that the remaining rules on the
Nasdaq Certification continue to be Nasdaq rules that are identical or
substantially similar to NASD rules. Within 30 days of receipt of such
updated list, NASD will confirm in writing whether the rules listed in
any updated list are Common Rules as defined in this Agreement. NASD
shall not assume regulatory responsibility for, and Nasdaq will retain
full responsibility for (unless allocated pursuant to Rule 17d-2
otherwise than under this Agreement), surveillance and enforcement with
respect to trading activities or practices involving solely Nasdaq's
own marketplace. Also subject to this Agreement are SEC rules
applicable to Common Members. NASD shall assume regulatory
responsibility for such SEC rules with respect to Common members to the
same extent that the NASD assumes regulatory responsibility with
respect to NASD members.
5. Services. NASD agrees to provide the following services
(Services) as related to Common Members:
(a) Membership Activities. (1) NASD will receive and process in the
Central Registration Depository (CRD) applications, reports,
information, filings, fingerprint cards, and notices generally relating
to: (a) an associated person status, and (b) registration as a
principal of any type, a representative of any type, or any other type
of employee required to register or required to pass a qualification
examination.
(2) NASD will receive and process in the CRD documentation of
notice of the passage of the appropriate qualification examination for
such principal, registered representative, or other employee required
to qualify by examination and, subsequently, forward such information
to Nasdaq.
(3) Upon request, NASD will advise Nasdaq of any changes in the
status of members (including officer and partner changes), and
registered personnel as reflected in CRD.
(4) NASD shall collect and forward monthly to Nasdaq, any
applicable fees for the account of Nasdaq. NASD agrees to provide
Nasdaq with an accounting of such fees in January of each year. Nasdaq
will reimburse NASD for reasonable expenses incurred for performing
these accounting functions.
(5) Common Members will be required to send to NASD all letters,
termination notices or other material relating to their associated
persons.
(6) When, as a result of processing letters, termination notices,
or other material relating to their associated persons, NASD becomes
aware of a statutory disqualification with respect to a Common Member,
NASD shall determine, pursuant to Section 15A(g) or Section 6(c) of the
Act, the acceptability or continued acceptability of the person to whom
such statutory disqualification applies, but will not make a
determination regarding Nasdaq membership or participation, or
association of a person with Nasdaq member. NASD shall advise Nasdaq in
writing of its actions in this regard. Nasdaq shall, within 30 days of
receiving such information from NASD, determine whether to permit a
statutorily disqualified Common Member to become or to remain a Nasdaq
member or a participant, or a person associated with a member. Nasdaq
will advise NASD of its decision. Nasdaq will reimburse NASD for
reasonable expenses incurred for notifying Nasdaq of the NASD's
decision regarding a statutory disqualification under Section 15A(g) or
Section 6(c) of the Act.
(b) Branch Office Activities. NASD will receive and process
notices, filings, or registrations received regarding a Common Member's
branch offices, including notices, filings, or registrations to
designate offices of supervisory jurisdiction, and agrees to provide
notice to Nasdaq of such filings. Nasdaq will reimburse NASD for
reasonable expenses incurred for providing Nasdaq notification.
(c) Examinations. For the portion of those routine, cycle, cause,
and special examinations that NASD will perform for Common Members
under this Agreement, NASD will, upon request, provide copies of the
relevant portion of such examination reports to Nasdaq. Nasdaq will
reimburse NASD for reasonable expenses incurred for providing
examination reports to Nasdaq. This undertaking is limited to examining
Common Members for compliance with:
(1) The federal securities laws and the rules and regulations
thereunder, except that it does not include examining any Common Member
for compliance with financial responsibility rules on behalf of Nasdaq
(unless the SEC has designated NASD as the DEA for the Common Member
under Rule 17d-1);
(2) Other applicable federal laws, rules and regulations; and
(3) The rules of Nasdaq that are identical or substantially similar
to NASD rules because they have been certified by Nasdaq as such.
(d) Violations.
(1) If NASD discovers an apparent violation of a federal statute or
regulation or Nasdaq rule listed above in paragraph 5(c) for which NASD
agrees to examine a Common Member for compliance, NASD shall
investigate the apparent violation, notify Nasdaq of the results of the
investigation and provide a copy of any written report, determine if
additional regulatory action is required, take any disciplinary or
other regulatory action required, and provide notice to Nasdaq at the
termination of the matter by enforcement or other action. If a
disciplinary proceeding is conducted by NASD, NASD will apply the NASD
Code of Procedure (the Rule 9000 Series) and other applicable NASD
procedural rules. Nasdaq will reimburse NASD for reasonable expenses
incurred for providing any information, notices, or reports
contemplated under this provision.
(2) If NASD discovers an apparent violation of a Nasdaq Rule not
within the examination responsibility of NASD as described above in
paragraph 5(c), NASD shall notify Nasdaq and refer the matter to Nasdaq
for further examination, investigation, or enforcement or regulatory
action, as determined by Nasdaq.
(e) Enforcement. For Common Members, NASD will enforce compliance
with:
(1) The federal securities laws and the rules and regulations
thereunder, except that it does not include examining any Common Member
for compliance with financial responsibility rules on behalf of Nasdaq
(unless the SEC has
[[Page 19766]]
designated NASD as the DEA for the Common Member under Rule 17d-1);
(2) Other applicable federal laws, rules and regulations; and
(3) The rules of Nasdaq that are identical or substantially similar
to NASD Rules because they have been certified by Nasdaq as such.
6. Information Sharing. The parties agree to provide each other
with the following information:
(a) General. A party shall promptly furnish to the other party any
information that the party determines indicates possible financial,
operational, or other problems of any Common Member, including, but not
limited to, early warning indications of potential problems resulting
from unusual accumulations or concentrations of securities positions or
market fluctuations.
(b) Reports. Upon reasonable request, a party will make available
promptly to a requesting party any financial, operational, or related
report filed with the party by a Common Member, files, information on
customer complaints, termination notices, copies of an examination
report, investigative material, or other documents involving compliance
with the federal securities laws and regulations and the rules of the
parties by the Common Member, or other documents in the possession of
the party receiving the request relating to the Common Member as
necessary to assist the other party in fulfilling the self-regulatory
responsibilities, obligations, and functions allocated under this
Agreement. The parties agree that a party will make available promptly
to the requesting party witnesses as necessary to assist the other
party in fulfilling the self-regulatory responsibilities allocated
under this Agreement. The non-requesting party will pay all reasonable
travel and other expenses incurred by its employees to the extent that
the requesting party requires such employees to serve as a witness, and
provide information or other assistance pursuant to this Agreement.
(c) Customer Complaints. If a party receives a copy of a customer
complaint relating to a Common Member's activity or conduct that is not
the regulatory responsibility of the receiving party, the receiving
party will forward to the other party copies of such customer
complaints.
(d) Upon reasonable request of a party, the other party shall use
reasonable efforts to furnish the requesting party information on
informal or formal disciplinary actions involving a Common Member. The
requesting party will reimburse the other party for reasonable expenses
incurred for providing such information.
(e) Information-Miscellaneous. Where not otherwise provided, in
consideration for NASD assuming any of the above referenced regulatory
responsibilities and obligations of Nasdaq with respect to Common
Members and thereafter providing information to Nasdaq in any form that
is necessary or desirable to Nasdaq in order for Nasdaq to fulfill its
regulatory obligations under the Act or in order for Nasdaq to remain
informed of the actions of its members and associated persons, Nasdaq
will reimburse NASD for all reasonable expenses incurred for providing
such information.
7. Special or Cause Examinations. Nothing in this Agreement shall
restrict or in any way encumber the right of a party to conduct special
or cause examinations of Common Members as either party, in its sole
discretion, shall deem appropriate or necessary.
8. Fees. NASD will provide Nasdaq with one hundred eighty (180)
days advance written notice in the event that NASD decides to charge
Nasdaq for any expenses incurred or services performed under this
Agreement not otherwise set forth above. Nasdaq will have thirty (30)
days from the date of such notification to inform NASD that Nasdaq will
seek to terminate the Agreement pursuant to Section 17 thereof or enter
into an agreement pursuant to applicable rules of the SEC with another
SRO with respect to the performance of such responsibilities.
9. Indemnification. Neither party, including respective directors,
governors, officers, employees and agents, will be liable to the other
party and its directors, governors, officers, employees and agents for
any liability, loss or damage resulting from any delays, inaccuracies,
errors or omissions with respect to its performing or failing to
perform regulatory responsibilities, obligations, or functions, except
as otherwise provided for under the Act or in instances of gross
negligence, willful misconduct or reckless disregard, or breach of
confidentiality. Both parties understand and agree with each other that
the regulatory responsibilities are being performed on a good faith and
best effort basis and no warranties, express or implied, are made by
either party to the other party with respect to any of the
responsibilities to be performed by either of these parties hereunder.
10. Arbitration. Any claim, dispute, controversy or other matter in
question with regard to the Agreement that cannot be resolved by
negotiation between the parties shall be submitted to arbitration in
accordance with the rules and regulations of the American Arbitration
Association; provided, however, that (a) submission of any such claim,
dispute, controversy or other matter in question to the American
Arbitration Association shall not be required if the parties agree upon
another arbitration forum, (b) the foregoing shall not preclude either
party from pursuing all available administrative, judicial or other
remedies for infringement of a registered patent, trademark, service
mark or copyright, (c) the parties shall not submit claims for punitive
damages, and do hereby waive any right to the same, and (d) the
arbitrators shall not be authorized to award punitive damages.
11. SEC Approval.
(a) The parties agree to file promptly this Agreement with the SEC
for its review and approval.
(b) If approved by the SEC, Nasdaq will notify Common Members of
the general terms of the Agreement and its impact on members. The
notice will be sent on behalf of both parties and, prior to being sent,
NASD will review and approve the notice.
13. Definitions. Unless otherwise defined in this Agreement, or
unless the context otherwise requires, the terms used in this Agreement
shall have the same meaning as they have under the Act and the rules
and regulations thereunder.
14. Subsequent Parties; Limited Relationship. This Agreement shall
inure to the benefit of and shall be binding upon the parties hereto
and their respective legal representatives, successors, and assigns.
Nothing in this Agreement, expressed or implied, is intended or shall
(a) confer on any person other than the parties hereto, or their
respective legal representatives, successors, and assigns, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement, (b) constitute the parties hereto partners or participants
in a joint venture, or (c) appoint one party the agent of the other.
15. Assignment. Neither party may assign the Agreement without the
prior written consent of the other party, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that
either party may assign the Agreement to a corporation controlling,
controlled by or under common control with the assigning party without
the prior written consent of the other party.
16. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such
[[Page 19767]]
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
17. Termination.
(a) Termination for Cause. Either party may terminate the Agreement
due to breach by the other party. The party aggrieved by the breach
shall give written notice to the other party that the Agreement shall
be terminated not earlier than sixty (60) calendar days from receipt of
the notice, and such notice shall state with specificity the grounds
for termination. If the breach is curable, the party in breach will
have the right to cure such breach prior to the date stated for
termination, and, should the breach be cured and written notice of such
cure served on the aggrieved party prior to the date stated for
termination, such notice shall vacate the notice to terminate.
(b) Termination for Convenience. Either party may terminate the
Agreement for any other reason by giving written notice to the other
party that the Agreement will terminate not less than one hundred
eighty (180 days) from receipt of the notice. The notice will specify
the basis for termination. Nasdaq will pay NASD the amount due for
expenses incurred for generating reports and notices as of the
effective date of termination.
18. General. The parties agree to perform all acts and execute all
supplementary instruments or documents that may be reasonably necessary
or desirable to carry out the provisions of this Agreement.
19. Liaison and Notices. All questions regarding the implementation
of this Agreement shall be directed to the persons identified in
subsections (a) and (b), as applicable, below. All notices and other
communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given upon
(i) actual receipt by the notified party or (ii) constructive receipt
(as of the date marked on the return receipt) if sent by certified or
registered mail, return receipt requested, to the following addresses:
(a) If to NASD: National Association of Securities Dealers, Inc.
1735 K Street, NW., Washington, DC 20006. Attn: NASD Regulation Office
of General Counsel.
With, if a notice of breach or default, a required copy to:
National Association of Securities Dealers, Inc., 1735 K Street, NW.,
Washington, DC 20006, Attn: Office of General Counsel--Contracts Group.
(b) If to Nasdaq: The NASDAQ Stock Market LLC, 9600 Blackwell
Avenue, Rockville, MD 20850, Attn: The Nasdaq Stock Market LLC, Office
of General Counsel.
With, if a notice of breach or default, a required copy to: The
Nasdaq Stock Market LLC, Office of General Counsel.
20. Regulatory Responsibility. Pursuant to Section 17(d)(1)(A) of
the Act, and Rule 17d-2 thereunder, NASD and Nasdaq jointly request the
SEC, upon its approval of this Agreement, to relieve Nasdaq of any and
all responsibilities with respect to the matters allocated to NASD
pursuant to this Agreement for purposes of Sections 17(d) and 19(g) of
the Act; provided, however, that Nasdaq will continue to have exclusive
responsibility for ensuring the continued validity of the Nasdaq
certifications made under Section 4 herein.
21. Governing Law. This Agreement shall be deemed to have been made
in the State of New York, and shall be construed and enforced in
accordance with the law of the State of New York, without reference to
principles of conflicts of laws thereof. Each of the parties hereby
consents to submit to the jurisdiction of the courts by or for the
State of New York in connection with any action or proceeding relating
to this Agreement.
22. Survival of Provisions. Provisions intended by their terms or
context to survive and continue notwithstanding delivery of the
Services by NASD, the payment of the price by Nasdaq, and any
expiration of this Agreement shall survive and continue, including but
not limited to, the items referred to in Sections 9 and 10.
The Nasdaq Stock Market LLC Rules Certification for 17D-2 Agreement
With NASD
The Nasdaq Stock Market LLC hereby certifies that the requirements
contained in the Nasdaq Stock Market rules listed below are identical
to, or substantially similar to, NASD rules.
0100. GENERAL PROVISIONS
0110. Adoptions and Application of Rules
0113. Interpretation
0115. Applicability
0120. Definitions
0121. Definitions in By-Laws
1000. MEMBERSHIP, REGISTRATION AND QUALIFICATION REQUIREMENTS
1002. Qualifications of Nasdaq Members and Associated Persons
IM-1002-1. Filing of Misleading Information as to Membership or
Registration
IM-1002-2. Status of Sole Proprietors and Registered
Representatives Serving in the Armed Forces
IM-1002-3. Failure to Register Personnel
IM-1002-4. Branch Offices and Offices of Supervisory Jurisdiction
1010. Membership Proceedings Definitions
1011. Definitions
1012. General Provisions
1013. New Member Application and Interview
1014. Department Decision
1017. Application for Approval of Change in Ownership, Control, or
Business Operations
1020. Registration of Principals
1021. Registration Requirements
1022. Categories of Principal Registration
IM-1022-2. Limited Principal--General Securities Sales Supervisor
1030. Registration of Representatives
1031. Registration Requirements
1032. Categories of Representative Registration
1040. Registration of Assistant Representatives--Order Processing
1041. Registration Requirements
1042. Restrictions
1050. Research Analysts
1060. Persons Exempt from Registration
1070. Qualification Examinations and Waiver of Requirements
1080. Confidentiality of Examinations
1090. Foreign Members
1100. Foreign Associates
1120. Continuing Education Requirements
1130. Reliance on Current Membership List
1140. Electronic Filing Rules
1150. Executive Representative
2000. BUSINESS CONDUCT
2100. GENERAL STANDARDS
2110. Standards of Commercial Honor and Principles of Trade
IM-2110-2. Trading Ahead of Customer Limit Orders
IM-2110-3. Front Running Policy
IM-2110-4. Trading Ahead of Research Reports
IM-2110-5. Anti-Intimidation/Coordination
IM-2110-6. Confirmation of Callable Common Stock
IM-2110-7. Interfering With the Transfer of Customer Accounts in
the Context of Employment Disputes
2111. Trading Ahead of Customer Market Orders
2120. Use of Manipulative, Deceptive or Other Fraudulent Devices
2200. COMMUNICATIONS WITH CUSTOMERS AND THE PUBLIC
[[Page 19768]]
2210. Communications with the Public
IM-2210-1. Guidelines to Ensure That Communications With the Public
Are Not Misleading
IM-2210-4. Limitations on Use of Nasdaq's Name
2211. Institutional Sales Material and Correspondence
2212. Telemarketing
2240. Disclosure of Control Relationship with Issuer
2250. Disclosure of Participation or Interest in Primary or
Secondary Distribution
2260. Forwarding of Proxy and Other Materials
IM-2260. Suggested Rates of Reimbursement
2270. Disclosure of Financial Condition to Customers
2300. TRANSACTIONS WITH CUSTOMERS
2310. Recommendations to Customers (Suitability)
IM-2310-2. Fair Dealing with Customers
IM-2310-3. Suitability Obligations to Institutional Customers
2320. Best Execution and Interpositioning
2330. Customers' Securities or Funds
IM-2330. Segregation of Customers' Securities
2340. Customer Account Statements
2341. Margin Disclosure Statement
2360. Approval Procedures for Day Trading Accounts
2361. Day-Trading Risk Disclosure Statement
2370. Borrowing From or Lending to Customers
2400. COMMISSIONS, MARK-UPS AND CHARGES
2430. Charges for Services Performed
2460. Payments for Market Making
2500. SPECIAL ACCOUNTS
2510. Discretionary Accounts
2520. Margin Requirements
2800. SPECIAL PRODUCTS
2810. Direct Participation Programs
2830. Investment Company Securities
2840. Trading in Index Warrants, Currency Index Warrants, and
Currency Warrants
2841. General
2842. Definitions
2850. Position Limits
2851. Exercise Limits
2852. Reporting Requirements
2853. Liquidation of Index Warrant Positions
2854. Trading Halts or Suspensions
2900. RESPONSIBILITIES TO OTHER BROKERS OR DEALERS
2910. Disclosure of Financial Condition to Other Members
3000. RESPONSIBILITIES RELATING TO ASSOCIATED PERSONS, EMPLOYEES, AND
OTHERS' EMPLOYEES
3010. Supervision
IM-3010. Guidance on Heightened Supervision Requirements
3011. Anti-Money Laundering Compliance Program
3012. Supervisory Control System
3013. Annual Certification of Compliance and Supervisory Processes
IM-3013. Annual Compliance and Supervision Certification
3020. Fidelity Bonds
3030. Outside Business Activities of an Associated Person
3040. Private Securities Transactions of an Associated Person
3050. Transactions for or by Associated Persons
3060. Influencing or Rewarding Employees of Others
3070. Reporting Requirements
3080. Disclosure to Associated Persons When Signing Form U-4
3090. Transactions Involving Nasdaq Employees
3100. BOOKS AND RECORDS, AND FINANCIAL CONDITION
3110. Books and Records
IM-3110. Customer Account Information
3120. Use of Information Obtained in Fiduciary Capacity
3121. Custodian of the Record
3130. Regulation of Activities of Members Experiencing Financial
and/or Operational Difficulties
IM-3130. Restrictions on Member's Activity
3140. Approval of Change in Exempt Status Under SEC Rule 15c3-3
3150. Reporting Requirements for Clearing Firms
IM-3150. Exemptive Relief
3200. SETTLEMENTS
3220. Adjustment of Open Orders
3230. Clearing Agreements
3300. TRADING
3310. Publication of Transactions and Quotations
IM-3310. Manipulative and Deceptive Quotations
3320. Offers at Stated Prices
3330. Payment Designed to Influence Market Prices, Other than Paid
Advertising
3370. Prompt Receipt and Delivery of Securities
3500. EMERGENCY PREPAREDNESS
3510. Business Continuity Plans
3520. Emergency Contact Information
6000. OTHER SYSTEMS AND PROGRAMS
6400. TRANSACTIONS IN SECURITIES TRADED PURSUANT TO UNLISTED TRADING
PRIVILEGES
6430. Suspension of Trading
6440. Trading Practices
6500. PORTAL[supreg]
6530. Requirements Applicable to Nasdaq Members
6531. Limitations on Transactions in PORTAL Securities
6532. Reporting Debt and Equity Transactions in PORTAL Securities
6950. ORDER AUDIT TRAIL SYSTEM
6951. Definitions
6952. Applicability
6953. Synchronization of Member Business Clocks
6954. Recording of Order Information
6955. Order Data Transmission Requirements
6956. Violation of Order Audit Trail System Rules
6957. Effective Date
8000. INVESTIGATIONS AND SANCTIONS
8100. GENERAL PROVISIONS
8110. Availability of Manual to Customers
8120. Definitions
10000. CODE OF ARBITRATION PROCEDURE 10100. Jurisdiction
IM-10100. Failure to Act Under Provisions of Code of Arbitration
Procedure
10101. Matters Eligible for Submission
10102. Non-Waiver of Nasdaq Objects and Purposes
11000. UNIFORM PRACTICE CODE
11100. Scope of Uniform Practice Code
11110. Nasdaq Regulation
IM-11110. Refusal to Abide by Rulings of Nasdaq Regulation
11120. Definitions
11130. When, As and If Issued/Distributed Contracts
IM-11130. Standard Form of ``When, As and If Issued'' or ``When, As
and If Distributed'' Contract
11140. Transactions in Securities ``Ex-Dividend,'' ``Ex-Rights'' or
``Ex-Warrants''
11150. Transactions ``Ex-Interest'' in Bonds Which Are Dealt in
``Flat''
11160. ``Ex'' Liquidating Payments
11170. Transactions in ``Part-Redeemed'' Bonds
11190. Reconfirmation and Pricing Service Participants
11200. COMPARISONS OR CONFIRMATIONS AND ``DON'T KNOW NOTICES''
11210. Sent By Each Party
IM-11210. Uniform Comparison Form 11220. Description of Securities
11300. DELIVERY OF SECURITIES
11310. Book-Entry Settlement
11320. Dates of Delivery
11330. Payment
11340. Stamp Taxes
11350. Part Delivery
11360. Units of Delivery
IM-11360. Uniform Delivery Ticket
[[Page 19769]]
Form
11361. Units of Delivery--Stocks
11362. Units of Delivery--Bonds
11363. Units of Delivery--Unit Investment Trust Securities
11364. Units of Delivery--Certificates of Deposit for Bonds
IM-11364. Trading Securities As ``Units'' or Bonds ``With Stock''
11400. DELIVERY OF SECURITIES WITH DRAFT ATTACHED
11410. Acceptance of Draft
11500. DELIVERY OF SECURITIES WITH RESTRICTIONS
11510. Delivery of Temporary Certificates
11520. Delivery of Mutilated Securities
11530. Delivery of Securities Called for Redemption or Which Are
Deemed Worthless
11540. Delivery Under Government Regulations
11550. Assignments and Powers of Substitution; Delivery of
Registered Securities
IM-11550. Uniform Transfer Instructions Form
11560. Certificate of Company Whose Transfer Books Are Closed
IM-11560. Sample Ownership Transfer Indemnification Stamp
11570. Certificates in Various Names
11571. Certificate in Name of Corporation
IM-11571. Sample Certificate and Authorizing Resolution/Certificate
of Incumbency
11572. Certificate in Name of Firm
11573. Certificate in Name of Dissolved Firm Succeeded by New Firm
11574. Certificate in Name of Deceased Person, Trustee, etc.
IM-11574. Sample Limited Partnership Change of Trustee Form
11600. DELIVERY OF BONDS AND OTHER EVIDENCES OF INDEBTEDNESS
11610. Liability for Expenses
11620. Computation of Interest
11630. Due-Bills and Due-Bill Checks
IM-11630. Sample Due-Bill Forms
11640. Claims for Dividends, Rights, Interest, etc.
11650. Transfer Fees
11700. RECLAMATIONS AND REJECTIONS
11710. General Provisions
IM-11710. Uniform Reclamation Form
11720. Irregular Delivery--Transfer Refused--Lost or Stolen
Securities
IM-11720. Obligations of Members Who Discover Securities in Their
Possession to Which They Are Not Entitled
11730. Called Securities
11740. Marking to the Market
800. CLOSE-OUT PROCEDURES
11810. Buying-In
IM-11810. Sample Buy-In Forms
11820. Selling-Out
11840. Rights and Warrants
IM-11840. Sample Letter of Indemnity
11860. Acceptance and Settlement of COD Orders
11870. Customer Account Transfer Contracts
IM-11870. Sample Transfer Instruction Forms
11880. Settlement of Syndicate Accounts
III. Date of Effectiveness of the Proposed Plan and Timing for
Commission Action
Pursuant to Section 17(d)(1) of the Act \9\ and Rule 17d-2
thereunder,\10\ after May 8, 2006, the Commission may, by written
notice, declare the plan submitted by Nasdaq and NASD, File No. 4-517,
effective if the Commission finds that the plan is necessary or
appropriate in the public interest and for the protection of investors,
to foster cooperation and coordination among self-regulatory
organizations, or to remove impediments to and foster the development
of the national market system and a national system for the clearance
and settlement of securities transactions and in conformity with the
factors set forth in Section 17(d) of the Act.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78q(d)(1).
\10\ 17 CFR 240.17d-2.
---------------------------------------------------------------------------
IV. Solicitation of Comments
In order to assist the Commission in determining whether to approve
this plan and to relieve Nasdaq of those responsibilities designated to
NASD, interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/other.shtml), or
Send an e-mail to rule-comments@sec.gov. Please include
File Number 4-517 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 4-517. 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/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. Copies of the plan also will be
available for inspection and copying at the principal office of the
Exchange. 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 4-517
and should be submitted on or before May 8, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(34).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-5693 Filed 4-14-06; 8:45 am]
BILLING CODE 8010-01-P
