Self-Regulatory Organizations; National Stock Exchange; Notice of Filing of Proposed Rule Change To Prohibit Tape Shredding, 21063-21064 [E6-6067]

Download as PDF 21063 Federal Register / Vol. 71, No. 78 / Monday, April 24, 2006 / Notices the Act,5 in general, and section 15A(b)(6) 6 of the Act, in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that amending the references in NASD Rule 3080 to the name of the Form and the location of the predispute arbitration clause in the Form will eliminate confusion as to these points. B. Self-Regulatory Organization’s Statement on Burden on Competition NASD does not believe that the proposed rule change will impose 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 NASD has neither solicited nor received written comments on the proposed rule change. rmajette on PROD1PC67 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not become operative for 30 days after the date of filing, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act 7 and subparagraph (f)(6) of Rule 19b–4 thereunder.8 NASD has requested that the Commission waive the 30-day operative delay period for ‘‘non-controversial’’ proposals and make the proposed rule change effective and operative upon filing. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest, because the proposed rule change is intended to correct references and crossreferences in NASD 3080 which are no longer correct due to the operation of prior rule changes. For this reason, the Commission designates the proposal to 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–2006–046 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASD–2006–046. 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/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 NASD. All comments received will be posted without change; the Commission does the purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). U.S.C. 78o–3. 6 15 U.S.C. 78o–3(b)(6). 7 15 U.S.C. 78s(b)(3)(A). 8 17 CFR 240.19b–4(f)(6). 14:56 Apr 21, 2006 IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: 9 For 5 15 VerDate Aug<31>2005 be effective and operative upon filing with the Commission.9 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in the furtherance of the purposes of the Act. Jkt 208001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 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–2006–046 and should be submitted on or before May 15, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.10 Nancy M. Morris, Secretary. [FR Doc. E6–6076 Filed 4–21–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53663; File No. SR–NSX– 2006–05] Self-Regulatory Organizations; National Stock Exchange; Notice of Filing of Proposed Rule Change To Prohibit Tape Shredding April 17, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, as amended, (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 4, 2006, National Stock Exchange SM (‘‘NSX’’ or ‘‘Exchange’’) 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 the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to add an interpretation to Rule 3.1, which identifies the splitting of any order into multiple smaller orders (‘‘tape shredding’’) for any purpose other than best execution as contrary to the high standards of commercial honor and just and equitable principles of trade. The text of the proposed rule change is below. Proposed new language is in italic. RULES OF NATIONAL STOCK EXCHANGE * * * 10 17 * CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\24APN1.SGM 24APN1 * 21064 Federal Register / Vol. 71, No. 78 / Monday, April 24, 2006 / Notices CHAPTER III. Rules of Fair Practice Rule 3.1. Business Conduct of Members A member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade Interpretations and Policies: 01. A member may not split any order into multiple smaller orders for any purpose other than seeking the best execution for the entire order. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NSX 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 rmajette on PROD1PC67 with NOTICES 1. Purpose The Commission has expressed concern that participants in the United States securities markets may be engaging in the practice of ‘‘tape shredding,’’ the practice of unbundling customer orders into multiple smaller orders for the primary purpose of maximizing payments to the participant or participant firms. Accordingly, the Commission has requested selfregulatory organizations to adopt rules to prohibit the practice. The Exchange strongly believes that the practice of tape shredding is inappropriate and should be prohibited. Further, it believes that tape shredding constitutes conduct that is inconsistent with the high standard of commercial honor and just and equitable principles of trade. Accordingly, the Exchange is adding an interpretation and policy to its Rule 3.1 to explicitly prohibit NSX members from splitting large orders into multiple smaller orders for any purpose other than best execution. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Act,3 in general, and furthers the objectives of Section 6(b)(5) of the Act,4 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, to protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any inappropriate burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. 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–NSX–2006–05 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–NSX–2006–05. 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/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 offices of NSX. 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–NSX–2006–05 and should be submitted on or before May 15, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.5 Nancy M. Morris, Secretary. [FR Doc. E6–6067 Filed 4–21–06; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53658; File No. SR–NYSE– 2006–20] Self-Regulatory Organizations; New York Stock Exchange, LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto to List and Trade Index-Linked Securities of Barclays Bank PLC Linked to the Performance of the GSCI Total Return Index April 14, 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 March 13, 2006 the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the 5 17 CFR 200.30–3(a)(12). U.S.C 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 3 15 U.S.C. 78f(b). VerDate Aug<31>2005 14:56 Apr 21, 2006 4 15 Jkt 208001 PO 00000 U.S.C. 78f(b)(5). Frm 00096 Fmt 4703 Sfmt 4703 E:\FR\FM\24APN1.SGM 24APN1

Agencies

[Federal Register Volume 71, Number 78 (Monday, April 24, 2006)]
[Notices]
[Pages 21063-21064]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-6067]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53663; File No. SR-NSX-2006-05]


Self-Regulatory Organizations; National Stock Exchange; Notice of 
Filing of Proposed Rule Change To Prohibit Tape Shredding

April 17, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934, as amended, (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is 
hereby given that on April 4, 2006, National Stock Exchange 
SM (``NSX'' or ``Exchange'') 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 the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to add an interpretation to Rule 3.1, 
which identifies the splitting of any order into multiple smaller 
orders (``tape shredding'') for any purpose other than best execution 
as contrary to the high standards of commercial honor and just and 
equitable principles of trade. The text of the proposed rule change is 
below. Proposed new language is in italic.
RULES OF NATIONAL STOCK EXCHANGE
* * * * *

[[Page 21064]]

CHAPTER III.
Rules of Fair Practice
Rule 3.1. Business Conduct of Members
    A member, in the conduct of his business, shall observe high 
standards of commercial honor and just and equitable principles of 
trade
    Interpretations and Policies:
    01. A member may not split any order into multiple smaller orders 
for any purpose other than seeking the best execution for the entire 
order.
* * * * *

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The NSX 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
    The Commission has expressed concern that participants in the 
United States securities markets may be engaging in the practice of 
``tape shredding,'' the practice of unbundling customer orders into 
multiple smaller orders for the primary purpose of maximizing payments 
to the participant or participant firms. Accordingly, the Commission 
has requested self-regulatory organizations to adopt rules to prohibit 
the practice.
    The Exchange strongly believes that the practice of tape shredding 
is inappropriate and should be prohibited. Further, it believes that 
tape shredding constitutes conduct that is inconsistent with the high 
standard of commercial honor and just and equitable principles of 
trade. Accordingly, the Exchange is adding an interpretation and policy 
to its Rule 3.1 to explicitly prohibit NSX members from splitting large 
orders into multiple smaller orders for any purpose other than best 
execution.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\3\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act,\4\ in particular, in that it is designed to promote just and 
equitable principles of trade, to remove impediments to, and perfect 
the mechanism of, a free and open market and a national market system, 
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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-NSX-2006-05 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-NSX-2006-05. 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/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 offices of NSX. 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-NSX-2006-05 and should be submitted on or before May 15, 2006.
---------------------------------------------------------------------------

    \5\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
Nancy M. Morris,
Secretary.
[FR Doc. E6-6067 Filed 4-21-06; 8:45 am]
BILLING CODE 8010-01-P