Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change Regarding the Nasdaq Crossing Network, 26579-26582 [E6-6806]
Download as PDF
Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
Commission expects to consider these
proposals simultaneously after the close
of their respective comment periods.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
cchase on PROD1PC60 with NOTICES
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–MSRB–2006–01 on the
subject line.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Nancy M. Morris,
Secretary.
[FR Doc. E6–6807 Filed 5–4–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53745; File No. SR–NASD–
2005–140]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change Regarding the
Nasdaq Crossing Network
May 1, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Paper Comments
notice is hereby given that on December
• Send paper comments in triplicate
2, 2005, the National Association of
to Nancy M. Morris, Secretary,
Securities Dealers, Inc. (‘‘NASD’’),
Securities and Exchange Commission,
through its subsidiary, The Nasdaq
Station Place, 100 F Street., NE,
Stock Market, Inc. (‘‘Nasdaq’’), filed
with the Securities and Exchange
Washington, DC 20549–1090.
Commission (‘‘Commission’’) the
All submissions should refer to File
proposed rule change as described in
Number SR–MSRB–2006–01. This file
Items I, II, and III below, which Items
number should be included on the
subject line if e-mail is used. To help the have been prepared by Nasdaq. On
February 28, 2006, Nasdaq filed
Commission process and review your
Amendment No. 1 to the proposed rule
comments more efficiently, please use
change.3 On April 24, 2006, Nasdaq
only one method. The Commission will filed Amendment No. 2 to the proposed
post all comments on the Commission’s rule change.4 The Commission is
Internet Web site (https://www.sec.gov/
publishing this notice to solicit
rules/sro.shtml). Copies of the
comments on the proposed rule change,
submission, all subsequent
as amended, from interested persons.
amendments, all written statements
I. Self-Regulatory Organization’s
with respect to the proposed rule
Statement of the Terms of Substance of
change that are filed with the
the Proposed Rule Change
Commission, and all written
Nasdaq proposes to establish the
communications relating to the
Nasdaq Crossing Network for Nasdaq
proposed rule change between the
Commission and any person, other than listed and certain exchange listed
securities. The text of the proposed rule
those that may be withheld from the
change is below. Proposed new
public in accordance with the
language is in italics.5
provisions of 5 U.S.C. 552, will be
*
*
*
*
*
available for inspection and copying in
the Commission’s Public Reference
12 17 CFR 200.30–3(a)(12).
Room. Copies of such filing also will be
1 15 U.S.C. 78s(b)(1).
available for inspection and copying at
2 17 CFR 240.19b–4.
the MSRB’s offices. All comments
3 Amendment No. 1 replaced and superseded the
received will be posted without change; original filing in its entirety.
4 In Amendment No. 2, Nasdaq made certain
the Commission does not edit personal
representations related to the applicability of Rule
identifying information from
11a2–2(T) under the Act and the ‘‘Manning Rule’’
submissions. You should submit only
to the proposed rule change. In addition, Nasdaq
information that you wish to make
indicated its plan to request exemptive relief from
Rule 10a–1 under the Exchange Act and NASD Rule
available publicly. All submissions
well as from Rule 602
should refer to File Number SR–MSRB– 3350 (‘‘Short Sale Rule’’), as Rule’’). Nasdaq also
of Regulation NMS (‘‘Quote
2006–01 and should be submitted on or made clarifying edits to the proposed rule change.
5 5 Changes are marked to the rule text that
before May 26, 2006.
appears in the electronic NASD Manual found at
https://www.nasd.com. Prior to the date when The
VerDate Aug<31>2005
18:48 May 04, 2006
Jkt 208001
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
26579
4716. Nasdaq Crossing Network
(a) Definitions. For the purposes of
this rule the term:
(1) ‘‘Nasdaq Reference Price Cross’’
shall mean the process for executing
orders at a predetermined reference
price at a randomly selected point in
time during a one minute trading
window beginning at 11:00 a.m., 1:00
p.m. and 3:00 p.m. during the regular
hours session and at 4:30 p.m. during
the after hours session.
(2) ‘‘Nasdaq Reference Price Cross
eligible securities’’ shall mean Nasdaqlisted securities and securities listed on
the New York Stock Exchange, the
American Stock Exchange or a regional
exchange.
(3)(A) ‘‘Reference Price Cross Order’’
or ‘‘RPC’’ shall mean a market or limit
order to buy or sell in Nasdaq Reference
Price eligible securities that may be
executed only during a Nasdaq
Reference Price Cross. RPC orders shall
not be displayed and must be
designated with a time-in-force value to
participate either:
(i) In the next scheduled regular hours
cross with unexecuted shares being
immediately canceled back to the
market participant after that cross
(NXT);
(ii) In all remaining crosses during the
trading day with unexecuted shares
being immediately canceled back to the
market participant after the final regular
hours cross (REG); or
(iii) In all remaining crosses in the
current day with unexecuted shares
immediately canceled back to the
market participant after the after hours
cross (ALX).
(B) Starting at 7:30 a.m. Eastern Time
until the time of the last after hours
session Reference Price Cross,
participants may enter, cancel or correct
RPC orders, but such orders shall not be
available for execution until the next
eligible Reference Price Cross. RPC
orders must be entered in round lots
with a minimum size of one round lot
and may designate a minimum
acceptable execution quantity. All RPC
orders must be available for automatic
execution.
(b) Processing of Nasdaq Reference Price
Cross
(1) Each Nasdaq Reference Price
Cross shall occur during the regular
hours session or the after hours session
window commencing at such times as
may be designated by Nasdaq upon
prior notice to market participants.
Nasdaq Stock Market LLC (‘‘Nasdaq LLC’’)
commences operations, Nasdaq LLC will file a
conforming change to the rules of Nasdaq LLC
approved in Securities Exchange Act Release No.
53128 (January 13, 2006).
E:\FR\FM\05MYN1.SGM
05MYN1
cchase on PROD1PC60 with NOTICES
26580
Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
(2) Nasdaq Reference Price Crosses
that occur during the regular hours
session shall be executed at the
midpoint of the national best bid and
offer, trade reported without identifying
the contra party, and disseminated via
the consolidated tape.
(3) Nasdaq Reference Price Crosses
that occur during the after hours session
shall execute at the Nasdaq Official
Closing Price for Nasdaq-listed
securities or at the official closing price
of the primary market for securities
listed on the New York Stock Exchange,
the American Stock Exchange or a
regional exchange, shall be trade
reported without identifying the contra
party, and disseminated via the
consolidated tape.
(4) RPC orders will be allocated on a
pro-rata basis, such that shares will be
allocated pro-rata in round lots to
eligible orders based on the original size
of the order. If additional shares remain
after the initial pro-rata allocation,
those shares will continue to be
allocated pro-rata to eligible orders until
a number of round lots remain that is
less than the number of eligible orders.
Any remaining shares will be allocated
to the oldest eligible order. If the
allocation to an eligible order would be
less than the minimum acceptable
execution quantity for that order, the
order shall not be eligible for execution
in that cross.
(5) If the reference price described in
subparagraph (3) above is outside the
benchmarks established by Nasdaq by a
threshold amount at the time an after
hours cross is scheduled to occur, the
Nasdaq Reference Price Cross shall not
occur for that security. Nasdaq
management shall set and modify such
benchmarks and thresholds from time to
time upon prior notice to market
participants.
(6) If the national best bid and offer
is crossed at the time of a Reference
Price Cross during the regular hours
session, the cross shall be delayed for
up to five minutes beyond the time the
Reference Price Cross was scheduled to
occur and shall execute at the midpoint
of the national best bid and offer when
the quote becomes uncrossed. In the
event the quote remains crossed beyond
five minutes after the time of the
scheduled Reference Price Cross, the
cross will not occur and unexecuted
NXT orders shall be returned to market
participants.
(7) If the national best bid and offer
is locked at the time of a Reference Price
Cross during the regular hours session,
the cross shall execute at the lock price.
(8) If trading in a security is halted for
regulatory or other reasons at the time
a cross is scheduled to occur, the cross
VerDate Aug<31>2005
18:48 May 04, 2006
Jkt 208001
will not occur and all unexecuted NXT
orders shall be returned to market
participants.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to extend the
success of Nasdaq’s Opening and
Closing Cross matching functionality,6
which has been widely accepted in the
industry, with the introduction of the
Nasdaq Crossing Network. The Nasdaq
Crossing Network would provide a new
execution option to market participants
trading in Nasdaq-listed securities and
securities listed on the New York Stock
Exchange (‘‘NYSE’’), the American
Stock Exchange (‘‘Amex’’) or a regional
exchange. During the regular hours
session, a series of Nasdaq Reference
Price Crosses would allow market
participants to place orders to be
executed at the midpoint of the National
Best Bid and Offer (‘‘NBBO’’). An
additional cross would take place after
the close of the trading day and eligible
orders would be executed at the Nasdaq
Official Closing Price (‘‘NOCP’’) for
Nasdaq-listed securities or the official
closing price of the primary market for
securities listed on the NYSE, Amex or
a regional exchange (‘‘Primary Market
Close’’). Initially, the Nasdaq Reference
Price Crosses would commence at 11
a.m., 1 p.m., 3 p.m. and 4:30 p.m.
(Eastern Time or ‘‘ET’’). Orders would
be designated for one or more Nasdaq
Reference Price Crosses with a time-inforce indicator.
While the Opening and Closing
Crosses act as price discovery facilities,
the purpose of the Nasdaq Crossing
Network would be to provide market
participants and investors with an
6 See Securities Exchange Act Release Nos. 50405
(September 16, 2004), 69 FR 57118 (September 23,
2004) (SR–NASD–2004–071) and 49406 (March 11,
2004), 69 FR 12879 (March 18, 2004) (SR–NASD–
2003–173), respectively.
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
accurate single trading price at specific
times during the trading day, resulting
in an enhanced ability to execute block
trades quickly and anonymously, while
minimizing market impact and
associated price movements.7 The
Reference Price Crosses are designed to
occur at an externally derived price and
in accordance with a predetermined
algorithm. Participation in the Reference
Price Crosses would be voluntary and
would not result in any advantage to
market participants over those market
participants that do not choose to
participate.
Orders. Market participants would be
able to enter orders in the Nasdaq
Market Center for participation in the
Reference Price Crosses without
restriction from the session open at 7:30
a.m. until the post-close cross is
initiated. Orders would be able to be
submitted as existing market or limit
order types and would be designated by
the firm upon entry with a time-in-force
indicator as follows: (i) participate in
the next scheduled regular hours cross
with unexecuted shares being
immediately canceled back to the user
after that cross (NXT), (ii) participate in
all of the regular hours crosses (i.e., 11
a.m., 1 p.m. or 3 p.m. ET) with
unexecuted shares being immediately
canceled back to the user following the
last regular hours cross (REG) or (iii)
participate in all crosses for the current
day (i.e., 11 a.m., 1 p.m., 3 p.m. and 4:30
p.m. ET) with unexecuted shares
immediately canceled back to the user
following the after hours cross (AHX).8
7 In connection with Nasdaq’s application for
registration as a national securities exchange,
Nasdaq submitted a letter to Commission Staff
(‘‘Rule 11a2–2(T) Letter’’) requesting interpretive
guidance with respect to the application of
Exchange Act Rule 11a2–2(T) (known as the ‘‘effect
and execute’’ rule) to transactions effected through
the Nasdaq Market Center, Brut or Inet (collectively
‘‘Nasdaq Execution Systems’’). See Letter to Nancy
M. Morris, Secretary, Commission, and Elizabeth
King, Associate Director, Division of Market
Regulation, Commission, from Edward S. Knight,
Executive Vice President and General Counsel,
Nasdaq, dated January 12, 2006. The ‘‘effect and
execute’’ rule provides exchange members with an
exemption from the Section 11(a) prohibition
against a member of a national securities exchange
effecting transactions on that exchange for its own
account, the account of an associated person, or an
account over which it or its associated person
exercises discretion unless an exception applies. In
reliance on Nasdaq’s representations in its letter,
the Commission concluded in its order approving
Nasdaq’s exchange registration application that
Nasdaq Exchange members that enter orders into
Nasdaq Execution Systems satisfy the requirements
of Exchange Act Rule 11a2–2(T). See Exchange Act
Release No. 53128 (January 13, 2006), 71 FR 3550
(January 23, 2006) (File No. 10–131). Nasdaq
represents that the proposed rule change will not
change the continued accuracy of the
representations made by Nasdaq in the Rule 11a2–
2(T) Letter.
8 Until such time as an exemption or other relief
is granted, short sale orders that participate in the
E:\FR\FM\05MYN1.SGM
05MYN1
Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
cchase on PROD1PC60 with NOTICES
Orders that are designated for one or
more Reference Price Crosses would not
be displayed.
Orders would be required to be
entered in round lots with a minimum
of one round lot and may designate a
minimum acceptable quantity (‘‘MAQ’’)
for execution. No mixed or odd lot
execution amount would be permitted.
Orders may not be canceled or replaced
during the time of the cross, but may at
any other time, including periods when
trading in the applicable security is
halted. Like Nasdaq Opening and
Closing Cross orders, Reference Price
Cross orders would be required to be
available for automatic execution. The
Reference Price Cross would have no
order delivery capability and no special
orders would be accommodated. Both
automatic execution and order delivery
participants, however, would be able to
enter eligible orders into the Nasdaq
Market Center to participate in the
Reference Price Cross, so long as the
orders are available for automatic
execution.
Automatic execution. Like closing
and opening cross orders, crossing
network orders would be required to be
available for automatic execution. The
cross would have no order delivery
capability and no special orders could
be accommodated. The only eligible
order types would be limit orders or
market orders. Although there would be
no order delivery capability, both
automatic execution and order delivery
participants would be able to enter
eligible orders into the Nasdaq Market
Center so long as the orders are
available for auto execution.
Nasdaq Reference Price Crosses. The
Nasdaq Reference Price Crosses initially
would commence at 11 a.m., 1 p.m., 3
p.m. and 4:30 p.m. ET. In order to
minimize the opportunity for
manipulation, Nasdaq would execute
the cross through an automated and
random matching mechanism at a
randomly selected time during the
predetermined one minute cross trading
window. All eligible orders for the
trading day crosses would be executed
in accordance with a predetermined
algorithm at the NBBO midpoint on a
pro-rata basis and at the NOCP or
Primary Market Close, as applicable, for
post-close cross executions.
Nasdaq Reference Price Crosses must comply with
applicable short sale rules. Nasdaq intends to
propose a rule change to the NASD’s short sale rule,
NASD Rule 3350, and to submit to the Commission
a request for exemptive relief from the Short Sale
Rule to permit short sales of certain securities at the
midpoint of the NBBO effected during the
Reference Price Crosses. In addition, Nasdaq plans
to submit to the Commission a request for
exemptive relief from the Quote Rule.
VerDate Aug<31>2005
18:48 May 04, 2006
Jkt 208001
Upon initiation of the cross, available
shares would be treated as if they were
the same price and would be allocated
on a pro rata basis to eligible orders. In
order to prevent orders that participate
in more than one cross from being
disadvantaged with regard to their
execution priority based on diminishing
size, shares would be allocated based on
the original size of the order, not on the
value of the remaining unexecuted
shares. If additional shares remain after
the initial pro-rata allocation, those
shares would continue to be allocated
pro-rata to eligible orders until a
number of round lots remain that is less
than the number of eligible orders. Any
remaining shares would be allocated to
the oldest eligible order. In addition, in
the case of an order that has designated
a MAQ, if the pro rata allocation would
be less than the MAQ, the order would
not be eligible for execution in that
cross.
For example, assume the following
orders are received in the following
sequence:
Orders
1.
2.
3.
4.
5.
Liquidity pool
Sell 10,000@MKT ....
Sell 10,000@MKT ....
Buy 10,000@MKT ....
Sell 10,000@MKT ....
Sell 10,000@MKT
(where 2,000
unexecuted shares
remain from a prior
cross where 8,000
shares of the order
were executed).
Buy 10,000@MKT.
Sell 32,000@MKT.
Based on these orders and the
available liquidity pool, the cross would
operate as if there are 10,000 shares to
buy and 32,000 shares to sell with the
algorithm allocating 2,500 shares to
each sell order. Although order #5
consists of only 2,000 unexecuted
shares, it receives an allocation (2,500
shares) based on the original size of the
order (10,000 shares). Since order #5
can only execute 2,000 shares, the
remaining 500 shares are allocated to
the other orders pro rata. After each
order is allocated an additional 100
shares, the remaining 200 shares are
allocated to the oldest eligible order.
The executions resulting from this cross
would be as follows:
Order
Order
Order
Order
Order
1
2
3
4
5
..............................
..............................
..............................
..............................
..............................
2,800 shares.
2,600 shares.
10,000 shares.
2,600 shares.
2,000 shares.
The executions would be reported to
the market participants via Nasdaq
Market Center execution reports as a
single trade reflecting the aggregate
PO 00000
Frm 00133
Fmt 4703
Sfmt 4703
26581
shares executed. In order to reduce
information leakage that could lead to
adverse price movements, executions
would be reported as anonymous trades,
without identifying a contra party. Each
execution would be reported to the
Nasdaq Market Center trade reporting
service for trade reporting, clearance
and settlement.9 Trades from the regular
hours cross would be disseminated the
regular way, and trades from the post
close cross would be disseminated with
a .PRP sale condition modifier. In the
event that a Reference Price Cross order
that executes at the midpoint of the
NBBO results in a Nasdaq member
trading ahead of a held customer order
by less than $0.01 (i.e., $0.005), Nasdaq
believes that a Manning obligation
would be triggered under NASD IM–
2110–2, Rule on Trading Ahead of
Customer Limit Order (known as the
‘‘Manning Rule’’). Under this rule, a
firm cannot trade ahead of a held
customer limit order without executing
the customer order unless it trades at a
price that is at least $0.01 better than the
customer limit order price.
If based on usage and demand,
Nasdaq desires to add more frequent
crosses or to modify the time of the
crosses in the future, it would submit a
rule change to the Commission. Nasdaq
would publish the information about
any changes via its public NasdaqTrader
Web site.
Reference Price Cross Circuit Breaker.
As it did with the Nasdaq Opening
Cross and Nasdaq Closing Cross, Nasdaq
would establish a circuit breaker for
Nasdaq Reference Price Crosses that
occur during the after hours session.
The circuit breaker would protect
against unusual occurrences when the
market has moved significantly from the
NOCP or the Primary Market Close
based on information that becomes
available after the market close. In this
situation, Nasdaq may decide to cancel
the cross rather than execute the cross
at a price that no longer reflects the
sentiment of the marketplace.
If the post-close cross would not
execute within a preset boundary
(‘‘Threshold Percentage’’) of the
consolidated last sale price of the
security, the cross would not take place.
Initially, the Threshold Percentage
would be set at ten percent, with a $0.50
minimum spread. Thus, if the difference
9 Nasdaq will submit each underlying trade to the
National Securities Clearing Corporation for
clearing. When Nasdaq is operational as a national
securities exchange, these trades will be reported as
‘‘covered sales’’ of the exchange for the purposes of
Section 31 of the Act. If the Reference Price
Crossing Network is launched before Nasdaq is
operational as an exchange, these trades will be
reported by the NASD for the purposes of Section
31 of the Act.
E:\FR\FM\05MYN1.SGM
05MYN1
26582
Federal Register / Vol. 71, No. 87 / Friday, May 5, 2006 / Notices
between the NOCP or Primary Market
Close, as applicable, and the
consolidated last sale price of the
security would be ten percent or more,
but not less than the minimum value of
$0.50, then the cross would be canceled.
As in the case of the Nasdaq Opening
and Closing Crosses, Nasdaq believes
that market conditions and experience
with the Nasdaq Reference Price Crosses
may require Nasdaq to adjust the
Threshold Percentage at a future point
in time. Any changes to the Threshold
Percentage would be made in advance
and communicated to members. Nasdaq
would publish any changes to the
Threshold Percentage via its public
NasdaqTrader Web site.
In addition, if trading in a security is
halted at the time a cross is scheduled
to occur, the cross would be canceled
and orders that are not designated for
any future crosses would be returned to
the market participants.
Locked or Crossed Markets. In the
event of a crossed NBBO at the time of
a Reference Price Cross during the
regular hours session, the cross would
be delayed and would execute based on
the midpoint NBBO when the quote
becomes uncrossed. If the quote remains
crossed, however, for five minutes
beyond when the cross normally would
have occurred, the cross would be
canceled and orders that are not
designated for any future crosses would
be returned to the market participants.
In the event of a locked NBBO at the
time of a Reference Price Cross during
the regular hours session, the cross
would execute at the lock price.
cchase on PROD1PC60 with NOTICES
2. Statutory Basis
Nasdaq believes that the proposed
rule change, as amended, is consistent
with the provisions of Section 15A of
the Act,10 in general, and with Section
15A(b)(6) of the Act,11 in particular,
which requires the NASD’s rules to be
designed, among other things, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities. Nasdaq believes that the
proposed rule change is consistent with
these requirements in that the changes
are designed to expand the types of
crossing products available to members
and to provide additional tools for
facilitating transactions.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change will result in any
10 15
11 15
U.S.C. 78o–3.
U.S.C. 78o–3(b)(6).
VerDate Aug<31>2005
18:48 May 04, 2006
Jkt 208001
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
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 NASD consents, the
Commission will:
(A) By order approve such proposed
rule change, as amended, or
(B) Institute proceedings to determine
whether the proposed rule change, as
amended, 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, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–140 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASD–2005–140. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
PO 00000
Frm 00134
Fmt 4703
Sfmt 4703
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
Nasdaq’s principal office. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NASD–
2005–140 and should be submitted on
or before May 26, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Nancy M. Morris,
Secretary
[FR Doc. E6–6806 Filed 5–4–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53736; File No. SR–PCX–
2006–22]
Self-Regulatory Organizations; Pacific
Exchange, Inc. (n/k/a NYSE Arca, Inc.);
Notice of Filing and Order Granting
Accelerated Approval of a Proposed
Rule Change Relating to the Trading of
the DB Commodity Index Tracking
Fund Pursuant to Unlisted Trading
Privileges
April 27, 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 3,
2006, the Pacific Exchange, Inc. (n/k/a
NYSE Arca, Inc.) (‘‘Exchange’’),3
through its wholly owned subsidiary
PCX Equities, Inc. (n/k/a NYSE Arca
Equities, Inc.) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 On March 6, 2006, the Pacific Exchange, Inc.
(‘‘PCX’’), filed with the Commission a proposed rule
change, which was effective upon filing, to change
the name of the Exchange, as well as several other
related entities, to reflect Archipelago’s recent
acquisition of PCX and the merger of the NYSE with
Archipelago. See File No. SR–PCX–2006–24. All
references herein have been changed to reflect these
transactions. Telephone Conference between David
Strandberg, Director, NYSE Arca Equities Inc., and
Florence E. Harmon, Senior Special Counsel,
Division of Market Regulation (‘‘Division’’),
Commission, on March 10, 2006.
1 15
E:\FR\FM\05MYN1.SGM
05MYN1
Agencies
[Federal Register Volume 71, Number 87 (Friday, May 5, 2006)]
[Notices]
[Pages 26579-26582]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-6806]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53745; File No. SR-NASD-2005-140]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing of Proposed Rule Change Regarding the
Nasdaq Crossing Network
May 1, 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 December 2, 2005, the National Association of Securities Dealers,
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc.
(``Nasdaq''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by Nasdaq. On February
28, 2006, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\
On April 24, 2006, Nasdaq filed Amendment No. 2 to the proposed rule
change.\4\ The Commission is publishing this notice to solicit comments
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Amendment No. 1 replaced and superseded the original filing
in its entirety.
\4\ In Amendment No. 2, Nasdaq made certain representations
related to the applicability of Rule 11a2-2(T) under the Act and the
``Manning Rule'' to the proposed rule change. In addition, Nasdaq
indicated its plan to request exemptive relief from Rule 10a-1 under
the Exchange Act and NASD Rule 3350 (``Short Sale Rule''), as well
as from Rule 602 of Regulation NMS (``Quote Rule''). Nasdaq also
made clarifying edits to the proposed rule change.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to establish the Nasdaq Crossing Network for Nasdaq
listed and certain exchange listed securities. The text of the proposed
rule change is below. Proposed new language is in italics.\5\
---------------------------------------------------------------------------
\5\ 5 Changes are marked to the rule text that appears in the
electronic NASD Manual found at https://www.nasd.com. Prior to the
date when The Nasdaq Stock Market LLC (``Nasdaq LLC'') commences
operations, Nasdaq LLC will file a conforming change to the rules of
Nasdaq LLC approved in Securities Exchange Act Release No. 53128
(January 13, 2006).
---------------------------------------------------------------------------
* * * * *
4716. Nasdaq Crossing Network
(a) Definitions. For the purposes of this rule the term:
(1) ``Nasdaq Reference Price Cross'' shall mean the process for
executing orders at a predetermined reference price at a randomly
selected point in time during a one minute trading window beginning at
11:00 a.m., 1:00 p.m. and 3:00 p.m. during the regular hours session
and at 4:30 p.m. during the after hours session.
(2) ``Nasdaq Reference Price Cross eligible securities'' shall mean
Nasdaq-listed securities and securities listed on the New York Stock
Exchange, the American Stock Exchange or a regional exchange.
(3)(A) ``Reference Price Cross Order'' or ``RPC'' shall mean a
market or limit order to buy or sell in Nasdaq Reference Price eligible
securities that may be executed only during a Nasdaq Reference Price
Cross. RPC orders shall not be displayed and must be designated with a
time-in-force value to participate either:
(i) In the next scheduled regular hours cross with unexecuted
shares being immediately canceled back to the market participant after
that cross (NXT);
(ii) In all remaining crosses during the trading day with
unexecuted shares being immediately canceled back to the market
participant after the final regular hours cross (REG); or
(iii) In all remaining crosses in the current day with unexecuted
shares immediately canceled back to the market participant after the
after hours cross (ALX).
(B) Starting at 7:30 a.m. Eastern Time until the time of the last
after hours session Reference Price Cross, participants may enter,
cancel or correct RPC orders, but such orders shall not be available
for execution until the next eligible Reference Price Cross. RPC orders
must be entered in round lots with a minimum size of one round lot and
may designate a minimum acceptable execution quantity. All RPC orders
must be available for automatic execution.
(b) Processing of Nasdaq Reference Price Cross
(1) Each Nasdaq Reference Price Cross shall occur during the
regular hours session or the after hours session window commencing at
such times as may be designated by Nasdaq upon prior notice to market
participants.
[[Page 26580]]
(2) Nasdaq Reference Price Crosses that occur during the regular
hours session shall be executed at the midpoint of the national best
bid and offer, trade reported without identifying the contra party, and
disseminated via the consolidated tape.
(3) Nasdaq Reference Price Crosses that occur during the after
hours session shall execute at the Nasdaq Official Closing Price for
Nasdaq-listed securities or at the official closing price of the
primary market for securities listed on the New York Stock Exchange,
the American Stock Exchange or a regional exchange, shall be trade
reported without identifying the contra party, and disseminated via the
consolidated tape.
(4) RPC orders will be allocated on a pro-rata basis, such that
shares will be allocated pro-rata in round lots to eligible orders
based on the original size of the order. If additional shares remain
after the initial pro-rata allocation, those shares will continue to be
allocated pro-rata to eligible orders until a number of round lots
remain that is less than the number of eligible orders. Any remaining
shares will be allocated to the oldest eligible order. If the
allocation to an eligible order would be less than the minimum
acceptable execution quantity for that order, the order shall not be
eligible for execution in that cross.
(5) If the reference price described in subparagraph (3) above is
outside the benchmarks established by Nasdaq by a threshold amount at
the time an after hours cross is scheduled to occur, the Nasdaq
Reference Price Cross shall not occur for that security. Nasdaq
management shall set and modify such benchmarks and thresholds from
time to time upon prior notice to market participants.
(6) If the national best bid and offer is crossed at the time of a
Reference Price Cross during the regular hours session, the cross shall
be delayed for up to five minutes beyond the time the Reference Price
Cross was scheduled to occur and shall execute at the midpoint of the
national best bid and offer when the quote becomes uncrossed. In the
event the quote remains crossed beyond five minutes after the time of
the scheduled Reference Price Cross, the cross will not occur and
unexecuted NXT orders shall be returned to market participants.
(7) If the national best bid and offer is locked at the time of a
Reference Price Cross during the regular hours session, the cross shall
execute at the lock price.
(8) If trading in a security is halted for regulatory or other
reasons at the time a cross is scheduled to occur, the cross will not
occur and all unexecuted NXT orders shall be returned to market
participants.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to extend the success of Nasdaq's Opening and
Closing Cross matching functionality,\6\ which has been widely accepted
in the industry, with the introduction of the Nasdaq Crossing Network.
The Nasdaq Crossing Network would provide a new execution option to
market participants trading in Nasdaq-listed securities and securities
listed on the New York Stock Exchange (``NYSE''), the American Stock
Exchange (``Amex'') or a regional exchange. During the regular hours
session, a series of Nasdaq Reference Price Crosses would allow market
participants to place orders to be executed at the midpoint of the
National Best Bid and Offer (``NBBO''). An additional cross would take
place after the close of the trading day and eligible orders would be
executed at the Nasdaq Official Closing Price (``NOCP'') for Nasdaq-
listed securities or the official closing price of the primary market
for securities listed on the NYSE, Amex or a regional exchange
(``Primary Market Close''). Initially, the Nasdaq Reference Price
Crosses would commence at 11 a.m., 1 p.m., 3 p.m. and 4:30 p.m.
(Eastern Time or ``ET''). Orders would be designated for one or more
Nasdaq Reference Price Crosses with a time-in-force indicator.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release Nos. 50405 (September
16, 2004), 69 FR 57118 (September 23, 2004) (SR-NASD-2004-071) and
49406 (March 11, 2004), 69 FR 12879 (March 18, 2004) (SR-NASD-2003-
173), respectively.
---------------------------------------------------------------------------
While the Opening and Closing Crosses act as price discovery
facilities, the purpose of the Nasdaq Crossing Network would be to
provide market participants and investors with an accurate single
trading price at specific times during the trading day, resulting in an
enhanced ability to execute block trades quickly and anonymously, while
minimizing market impact and associated price movements.\7\ The
Reference Price Crosses are designed to occur at an externally derived
price and in accordance with a predetermined algorithm. Participation
in the Reference Price Crosses would be voluntary and would not result
in any advantage to market participants over those market participants
that do not choose to participate.
---------------------------------------------------------------------------
\7\ In connection with Nasdaq's application for registration as
a national securities exchange, Nasdaq submitted a letter to
Commission Staff (``Rule 11a2-2(T) Letter'') requesting interpretive
guidance with respect to the application of Exchange Act Rule 11a2-
2(T) (known as the ``effect and execute'' rule) to transactions
effected through the Nasdaq Market Center, Brut or Inet
(collectively ``Nasdaq Execution Systems''). See Letter to Nancy M.
Morris, Secretary, Commission, and Elizabeth King, Associate
Director, Division of Market Regulation, Commission, from Edward S.
Knight, Executive Vice President and General Counsel, Nasdaq, dated
January 12, 2006. The ``effect and execute'' rule provides exchange
members with an exemption from the Section 11(a) prohibition against
a member of a national securities exchange effecting transactions on
that exchange for its own account, the account of an associated
person, or an account over which it or its associated person
exercises discretion unless an exception applies. In reliance on
Nasdaq's representations in its letter, the Commission concluded in
its order approving Nasdaq's exchange registration application that
Nasdaq Exchange members that enter orders into Nasdaq Execution
Systems satisfy the requirements of Exchange Act Rule 11a2-2(T). See
Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550
(January 23, 2006) (File No. 10-131). Nasdaq represents that the
proposed rule change will not change the continued accuracy of the
representations made by Nasdaq in the Rule 11a2-2(T) Letter.
---------------------------------------------------------------------------
Orders. Market participants would be able to enter orders in the
Nasdaq Market Center for participation in the Reference Price Crosses
without restriction from the session open at 7:30 a.m. until the post-
close cross is initiated. Orders would be able to be submitted as
existing market or limit order types and would be designated by the
firm upon entry with a time-in-force indicator as follows: (i)
participate in the next scheduled regular hours cross with unexecuted
shares being immediately canceled back to the user after that cross
(NXT), (ii) participate in all of the regular hours crosses (i.e., 11
a.m., 1 p.m. or 3 p.m. ET) with unexecuted shares being immediately
canceled back to the user following the last regular hours cross (REG)
or (iii) participate in all crosses for the current day (i.e., 11 a.m.,
1 p.m., 3 p.m. and 4:30 p.m. ET) with unexecuted shares immediately
canceled back to the user following the after hours cross (AHX).\8\
[[Page 26581]]
Orders that are designated for one or more Reference Price Crosses
would not be displayed.
---------------------------------------------------------------------------
\8\ Until such time as an exemption or other relief is granted,
short sale orders that participate in the Nasdaq Reference Price
Crosses must comply with applicable short sale rules. Nasdaq intends
to propose a rule change to the NASD's short sale rule, NASD Rule
3350, and to submit to the Commission a request for exemptive relief
from the Short Sale Rule to permit short sales of certain securities
at the midpoint of the NBBO effected during the Reference Price
Crosses. In addition, Nasdaq plans to submit to the Commission a
request for exemptive relief from the Quote Rule.
---------------------------------------------------------------------------
Orders would be required to be entered in round lots with a minimum
of one round lot and may designate a minimum acceptable quantity
(``MAQ'') for execution. No mixed or odd lot execution amount would be
permitted. Orders may not be canceled or replaced during the time of
the cross, but may at any other time, including periods when trading in
the applicable security is halted. Like Nasdaq Opening and Closing
Cross orders, Reference Price Cross orders would be required to be
available for automatic execution. The Reference Price Cross would have
no order delivery capability and no special orders would be
accommodated. Both automatic execution and order delivery participants,
however, would be able to enter eligible orders into the Nasdaq Market
Center to participate in the Reference Price Cross, so long as the
orders are available for automatic execution.
Automatic execution. Like closing and opening cross orders,
crossing network orders would be required to be available for automatic
execution. The cross would have no order delivery capability and no
special orders could be accommodated. The only eligible order types
would be limit orders or market orders. Although there would be no
order delivery capability, both automatic execution and order delivery
participants would be able to enter eligible orders into the Nasdaq
Market Center so long as the orders are available for auto execution.
Nasdaq Reference Price Crosses. The Nasdaq Reference Price Crosses
initially would commence at 11 a.m., 1 p.m., 3 p.m. and 4:30 p.m. ET.
In order to minimize the opportunity for manipulation, Nasdaq would
execute the cross through an automated and random matching mechanism at
a randomly selected time during the predetermined one minute cross
trading window. All eligible orders for the trading day crosses would
be executed in accordance with a predetermined algorithm at the NBBO
midpoint on a pro-rata basis and at the NOCP or Primary Market Close,
as applicable, for post-close cross executions.
Upon initiation of the cross, available shares would be treated as
if they were the same price and would be allocated on a pro rata basis
to eligible orders. In order to prevent orders that participate in more
than one cross from being disadvantaged with regard to their execution
priority based on diminishing size, shares would be allocated based on
the original size of the order, not on the value of the remaining
unexecuted shares. If additional shares remain after the initial pro-
rata allocation, those shares would continue to be allocated pro-rata
to eligible orders until a number of round lots remain that is less
than the number of eligible orders. Any remaining shares would be
allocated to the oldest eligible order. In addition, in the case of an
order that has designated a MAQ, if the pro rata allocation would be
less than the MAQ, the order would not be eligible for execution in
that cross.
For example, assume the following orders are received in the
following sequence:
------------------------------------------------------------------------
Orders Liquidity pool
------------------------------------------------------------------------
1. Sell 10,000@MKT................... Buy 10,000@MKT.
2. Sell 10,000@MKT................... Sell 32,000@MKT.
3. Buy 10,000@MKT.................... .................................
4. Sell 10,000@MKT................... .................................
5. Sell 10,000@MKT (where 2,000 .................................
unexecuted shares remain from a
prior cross where 8,000 shares of
the order were executed).
------------------------------------------------------------------------
Based on these orders and the available liquidity pool, the cross
would operate as if there are 10,000 shares to buy and 32,000 shares to
sell with the algorithm allocating 2,500 shares to each sell order.
Although order 5 consists of only 2,000 unexecuted shares, it
receives an allocation (2,500 shares) based on the original size of the
order (10,000 shares). Since order 5 can only execute 2,000
shares, the remaining 500 shares are allocated to the other orders pro
rata. After each order is allocated an additional 100 shares, the
remaining 200 shares are allocated to the oldest eligible order. The
executions resulting from this cross would be as follows:
Order 1................................ 2,800 shares.
Order 2................................ 2,600 shares.
Order 3................................ 10,000 shares.
Order 4................................ 2,600 shares.
Order 5................................ 2,000 shares.
The executions would be reported to the market participants via
Nasdaq Market Center execution reports as a single trade reflecting the
aggregate shares executed. In order to reduce information leakage that
could lead to adverse price movements, executions would be reported as
anonymous trades, without identifying a contra party. Each execution
would be reported to the Nasdaq Market Center trade reporting service
for trade reporting, clearance and settlement.\9\ Trades from the
regular hours cross would be disseminated the regular way, and trades
from the post close cross would be disseminated with a .PRP sale
condition modifier. In the event that a Reference Price Cross order
that executes at the midpoint of the NBBO results in a Nasdaq member
trading ahead of a held customer order by less than $0.01 (i.e.,
$0.005), Nasdaq believes that a Manning obligation would be triggered
under NASD IM-2110-2, Rule on Trading Ahead of Customer Limit Order
(known as the ``Manning Rule''). Under this rule, a firm cannot trade
ahead of a held customer limit order without executing the customer
order unless it trades at a price that is at least $0.01 better than
the customer limit order price.
---------------------------------------------------------------------------
\9\ Nasdaq will submit each underlying trade to the National
Securities Clearing Corporation for clearing. When Nasdaq is
operational as a national securities exchange, these trades will be
reported as ``covered sales'' of the exchange for the purposes of
Section 31 of the Act. If the Reference Price Crossing Network is
launched before Nasdaq is operational as an exchange, these trades
will be reported by the NASD for the purposes of Section 31 of the
Act.
---------------------------------------------------------------------------
If based on usage and demand, Nasdaq desires to add more frequent
crosses or to modify the time of the crosses in the future, it would
submit a rule change to the Commission. Nasdaq would publish the
information about any changes via its public NasdaqTrader Web site.
Reference Price Cross Circuit Breaker. As it did with the Nasdaq
Opening Cross and Nasdaq Closing Cross, Nasdaq would establish a
circuit breaker for Nasdaq Reference Price Crosses that occur during
the after hours session. The circuit breaker would protect against
unusual occurrences when the market has moved significantly from the
NOCP or the Primary Market Close based on information that becomes
available after the market close. In this situation, Nasdaq may decide
to cancel the cross rather than execute the cross at a price that no
longer reflects the sentiment of the marketplace.
If the post-close cross would not execute within a preset boundary
(``Threshold Percentage'') of the consolidated last sale price of the
security, the cross would not take place. Initially, the Threshold
Percentage would be set at ten percent, with a $0.50 minimum spread.
Thus, if the difference
[[Page 26582]]
between the NOCP or Primary Market Close, as applicable, and the
consolidated last sale price of the security would be ten percent or
more, but not less than the minimum value of $0.50, then the cross
would be canceled.
As in the case of the Nasdaq Opening and Closing Crosses, Nasdaq
believes that market conditions and experience with the Nasdaq
Reference Price Crosses may require Nasdaq to adjust the Threshold
Percentage at a future point in time. Any changes to the Threshold
Percentage would be made in advance and communicated to members. Nasdaq
would publish any changes to the Threshold Percentage via its public
NasdaqTrader Web site.
In addition, if trading in a security is halted at the time a cross
is scheduled to occur, the cross would be canceled and orders that are
not designated for any future crosses would be returned to the market
participants.
Locked or Crossed Markets. In the event of a crossed NBBO at the
time of a Reference Price Cross during the regular hours session, the
cross would be delayed and would execute based on the midpoint NBBO
when the quote becomes uncrossed. If the quote remains crossed,
however, for five minutes beyond when the cross normally would have
occurred, the cross would be canceled and orders that are not
designated for any future crosses would be returned to the market
participants. In the event of a locked NBBO at the time of a Reference
Price Cross during the regular hours session, the cross would execute
at the lock price.
2. Statutory Basis
Nasdaq believes that the proposed rule change, as amended, is
consistent with the provisions of Section 15A of the Act,\10\ in
general, and with Section 15A(b)(6) of the Act,\11\ in particular,
which requires the NASD's rules to be designed, among other things, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities. Nasdaq believes that the
proposed rule change is consistent with these requirements in that the
changes are designed to expand the types of crossing products available
to members and to provide additional tools for facilitating
transactions.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78o-3.
\11\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 NASD consents, the Commission will:
(A) By order approve such proposed rule change, as amended, or
(B) Institute proceedings to determine whether the proposed rule
change, as amended, 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, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2005-140 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASD-2005-140. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at Nasdaq's
principal office. All comments received will be posted without change;
the Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NASD-2005-140 and should be submitted on or before May 26, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary
[FR Doc. E6-6806 Filed 5-4-06; 8:45 am]
BILLING CODE 8010-01-P