Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Reflect the Revised Effective Date of Certain Amendments to NASD's Order Audit Trail System Rules, 29695-29697 [E6-7816]
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Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Notices
appropriate in the 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
The ISE has not solicited, and does
not intend to solicit, comments on this
proposed rule change. The ISE has not
received any unsolicited written
comments from members or other
interested persons.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The ISE has filed the proposed rule
change pursuant to section 19(b)(3)(A)
of the Act 10 and subparagraph (f)(6) of
Rule 19b–4 thereunder.11 Because the
foregoing proposed rule change: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this 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 and Rule
19b–4(f)(6) thereunder. As required
under Rule 19b–4(f)(6)(iii), the ISE
provided the Commission with written
notice of its intention to file the
proposed rule change at least five
business days prior to filing the
proposal with the Commission or such
shorter period as designated by the
Commission.12
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12 As set forth in the Commission’s initial
approval of the Pilot Program, if the ISE proposes
to: (1) Extend the Pilot Program; (2) expand the
number of options eligible for inclusion in the Pilot
Program; or (3) seek permanent approval of the Pilot
Program, it must submit a Pilot Program report to
the Commission along with the filing of its proposal
to extend, expand, or seek permanent approval of
the Pilot Program. The ISE must file any such
proposal and the Pilot Program report with the
Commission at least 60 days prior to the expiration
of the Pilot Program. The Pilot Program report must
cover the entire time the Pilot Program was in effect
and must include: (1) Data and written analysis on
the open interest and trading volume for options (at
all strike price intervals) selected for the Pilot
Program; (2) delisted options series (for all strike
price intervals) for all options selected for the Pilot
Program; (3) an assessment of the appropriateness
of $1 strike price intervals for the options the ISE
selected for the Pilot Program; (4) an assessment of
the impact of the Pilot Program on the capacity of
the ISE’s, the Options Price Reporting Authority’s,
and vendors’ automated systems; (5) any capacity
problems or other problems that arose during the
operation of the Pilot Program and how the ISE
addressed them; (6) any complaints that the ISE
received during the operation of the Pilot Program
and how the ISE addressed them; and (7) any
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11 17
VerDate Aug<31>2005
15:14 May 22, 2006
Jkt 208001
29695
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
submissions should refer to File No.
SR–ISE–2006–20 and should be
submitted on or before June 13, 2006.
IV. Solicitation of Comments
BILLING CODE 8010–01–P
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR-ISE–2006–20 on the subject line.
• 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
No. SR-ISE–2006–20. 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 will also be
available for inspection and copying at
the principal office of the ISE. 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
additional information that would help to assess the
operation of the Pilot Program. See Pilot Program
Approval Order, supra note 5.
Frm 00090
Fmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53818; File No. SR–NASD–
2006–062]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Reflect the Revised
Effective Date of Certain Amendments
to NASD’s Order Audit Trail System
Rules
May 17, 2006.
Paper Comments
PO 00000
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Nancy M. Morris,
Secretary.
[FR Doc. E6–7797 Filed 5–22–06; 8:45 am]
Sfmt 4703
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 May 15,
2006, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by NASD. NASD
has designated the proposed rule change
as constituting a stated policy, practice,
or interpretation with respect to the
meaning, administration, or
enforcement of an existing rule under
section 19(b)(3)(A)(i) of the Act 3 and
Rule 19b–4(f)(1) thereunder,4 which
renders the proposal effective upon
receipt of this filing with the
Commission. 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
NASD is proposing to amend Rule
6957(c) to reflect July 10, 2006 as the
effective date for the Order Audit Trail
System (‘‘OATS’’) reporting
requirements for manual orders on an
immediately effective basis.5
13 13
17 CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(i).
4 17 CFR 240.19b–4(f)(1).
5 The SEC recently approved amendments to the
NASD Rule 6950 Series (‘‘OATS Rules’’) relating to
1 15
E:\FR\FM\23MYN1.SGM
Continued
23MYN1
29696
Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Notices
Below is the text of the proposed rule
change. Proposed new language is in
italics; proposed deletions are in
[brackets].6
*
*
*
*
*
6950. Order Audit Trail System
*
*
*
*
*
6957. Effective Date
The requirements of the Order Audit
Trail System shall be effective in
accordance with the following schedule:
(a) and (b) No Change.
(c) Manual Orders
The requirements of the Order Audit
Trail System shall be effective on July
10, 2006 [120 days after SEC approval
of SR–NASD–00–23,] for all manual
orders, provided that firms shall be
required to report information item (18)
specified in Rule 6954(b) only to the
extent such item is available to them
[and shall not be required to record and
report information items (4) and (5)
specified in Rule 6954(b) and
information item (1) specified in Rule
6954(c)].
(d) No Change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD 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. NASD 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
NASD is proposing to amend NASD
Rule 6957(c) to reflect July 10, 2006 as
OATS. See Securities Exchange Act Release No.
52521 (September 28, 2005), 70 FR 57909 (October
4, 2005). See also Notice to Members 05–78
(November 2005). NASD recently filed a proposed
rule change for immediate effectiveness that
extends the effective date of these amendments to
the OATS Rules until July 10, 2006. See SR–NASD–
2006–052. See also Notice to Members 06–17 (April
2006).
6 In addition, the instant filing is proposing
changes to the current text of NASD Rule 6957 to
accurately reflect the requirements of the rule that
will be in effect beginning July 10, 2006. See supra
note 5. As part of SR–NASD–2006–052, NASD is
amending NASD Rule 6957(c) to make it identical
to the proposed changes in this filing.
VerDate Aug<31>2005
15:14 May 22, 2006
Jkt 208001
the effective date for the OATS
reporting requirements for manual
orders. On September 28, 2005, the SEC
approved amendments to the OATS
Rules which, among other things,7
implement the OATS reporting
requirements for manual orders.8 On
April 20, 2006, NASD filed a proposed
rule change for immediate effectiveness
that extends the effective date of these
recent amendments to the OATS Rules
until July 10, 2006.9 In doing so, NASD,
among other things, amended NASD
Rule 6957(c) relating to the effective
date for manual orders to reflect the
revised effective date.
Because these changes to NASD Rule
6957(c) will not be incorporated into the
NASD manual until July 10, 2006,
NASD is proposing to amend NASD
Rule 6957(c) to reflect the new
implementation date on an immediately
effective basis and make the effective
date of the OATS requirements for
manual orders transparent in the current
version of the NASD Rules.10
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of section 15A(b)(6) of the Act,11 which
requires, among other things, that NASD
rules be 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 the proposed rule change
will provide transparency regarding the
effective date of the OATS reporting
requirements for manual orders.
7 These amendments to the OATS Rules also: (1)
Provide that members are required to capture and
report the time the order is received by the member
from the customer for all orders; (2) expand the
order transmittal requirements to include orders
routed to a member’s trading desk or trading
department; (3) exclude certain members from the
definition of ‘‘Reporting Member’’ for those orders
that meet specified conditions and are recorded and
reported to OATS by another member; and (4)
permit NASD to grant exemptive relief from the
OATS requirements in certain circumstances to
members that meet specified criteria. In SR–NASD–
2006–052, NASD revised the effective date of these
amendments to the OATS Rules to July 10, 2006.
See SR–NASD–2006–052. See also Notice to
Members 06–17 (April 2006).
8 See supra note 5.
9 Id.
10 NASD also is proposing to amend the rule text
to reflect certain technical amendments to NASD
Rule 6957(c) to clarify that the OATS order
information required under NASD Rules 6954(b)(4)
and (5) and the OATS transmittal requirements
under NASD Rule 6951(c)(1) apply to manual
orders. These technical amendments were approved
by Commission in SR–NASD–00–23. See Securities
Exchange Act Release No. 52521 (September 28,
2005), 70 FR 57909 (October 4, 2005).
11 15 U.S.C. 78o–3(b)(6).
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD 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
The foregoing rule change has become
effective pursuant to section 19(b)(3)(A)
of the Act 12 and paragraph (f)(1) of Rule
19b–4 thereunder,13 in that the
proposed rule change constitutes a
stated policy, practice, or interpretation
with respect to the meaning,
administration, or enforcement of an
existing rule of NASD. At any time
within 60 days of the filing of the
proposed rule change, the Commission
may summarily abrogate such rule
change if it appears to the Commission
that such action is necessary or
appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2006–062 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–2006–062. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
12 15
13 17
E:\FR\FM\23MYN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(1).
23MYN1
Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Notices
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of NASD. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–NASD–2006–062 and should be
submitted on or before June 13, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–7816 Filed 5–22–06; 8:45 am]
*
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53819; File No. SR–NASD–
2006–052]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto to Reflect the Revised
Effective Date of Certain Amendments
to NASD’s Order Audit Trail System
Rules
rmajette on PROD1PC67 with NOTICES
May 17, 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 April 20,
2006, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Aug<31>2005
15:14 May 22, 2006
Jkt 208001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD is proposing to establish July
10, 2006 as the effective date of the
amendments to NASD’s Order Audit
Trail System (‘‘OATS’’) rules approved
by the Commission on September 28,
2005 6 and March 30, 2006.7
Below is the text of the proposed rule
change. Proposed new language is in
italics; proposed deletions are in
[brackets].8
*
*
*
*
*
6950. Order Audit Trail System
BILLING CODE 8010–01–P
14 17
have been prepared by NASD. NASD
has designated the proposed rule change
as constituting a stated policy, practice,
or interpretation with respect to the
meaning, administration, or
enforcement of an existing rule under
Section 19(b)(3)(A)(i) of the Act 3 and
Rule 19b–4(f)(1) thereunder,4 which
renders the proposal effective upon
receipt of this filing with the
Commission. The Exchange filed
Amendment No. 1 to the proposed rule
change on May 15, 2006.5 The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
*
*
*
*
6957. Effective Date
The requirements of the Order Audit
Trail System shall be effective in
accordance with the following schedule:
(a) and (b) No Change.
(c) Manual Orders
The requirements of the Order Audit
Trail System shall be effective on July
10, 2006[six months after publication of
the revised OATS Reporting Technical
Specifications relating to SR–NASD–00–
23,] for all manual orders, provided that
3 15
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
5 In Amendment No. 1, NASD made certain
technical and clarifying changes to the rule text and
throughout the proposed rule change. For purposes
of calculating the 60-day period within which the
Commission may summarily abrogate the proposed
rule change under Section 19(b)(3)(C) of the Act, the
Commission considers the period to commence on
May 15, 2006, the date on which the Exchange filed
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
6 See Securities Exchange Act Release No. 52521
(September 28, 2005), 70 FR 57909 (October 4,
2005) (SR–NASD–00–23). See also Notice to
Members 05–78 (November 2005).
7 See Securities Exchange Act Release No. 53580
(March 30, 2006), 71 FR 17529 (April 6, 2006) (SR–
NASD–2006–040). See also Notice to Members 06–
15 (April 2006).
8 The proposed changes indicated below are
based on rule text approved by the SEC on
September 28, 2005 and March 30, 2006, which, but
for this subsequent filing, would have become
effective May 8, 2006. See supra notes 5 and 6.
4 17
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
29697
firms shall be required to report
information item (18) specified in Rule
6954(b) only to the extent such item is
available to them.
(d) No Change.
*
*
*
*
*
6958. Exemption to the Order Recording
and Data Transmission Requirements
(a) through (b) No Change.
(c) This Rule shall be in effect until
July 10, 2011[May 8, 2011].
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD 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. NASD 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
NASD is proposing to establish July
10, 2006 as the effective date of the
amendments to NASD’s rules relating to
OATS requirements approved by the
Commission on September 28, 2005 and
March 30, 2006. Specifically, on
September 28, 2005, the SEC approved
amendments to NASD Rules 6950
through 6957 (‘‘OATS Rules’’).9 The
amendments to the OATS Rules: (1)
Implement the OATS reporting
requirements for manual orders (‘‘OATS
Phase III’’); (2) provide that members are
required to capture and report the time
the order is received by the member
from the customer for all orders; (3)
expand the order transmittal
requirements to include orders routed to
a member’s trading desk or trading
department; (4) exclude certain
members from the definition of
‘‘Reporting Member’’ for those orders
that meet specified conditions and are
recorded and reported to OATS by
another member; and (5) permit NASD
to grant exemptive relief from the OATS
reporting requirements in certain
circumstances to members that meet
specified criteria.
On March 30, 2006, the SEC approved
further amendments to the OATS Rules
9 See
E:\FR\FM\23MYN1.SGM
supra note 5.
23MYN1
]]>Agencies
[Federal Register Volume 71, Number 99 (Tuesday, May 23, 2006)]
[Notices]
[Pages 29695-29697]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7816]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53818; File No. SR-NASD-2006-062]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change to Reflect the Revised Effective Date of Certain Amendments
to NASD's Order Audit Trail System Rules
May 17, 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 May 15, 2006, the National Association of Securities Dealers, Inc.
(``NASD'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by NASD. NASD has
designated the proposed rule change as constituting a stated policy,
practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule under section
19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) thereunder,\4\ which
renders the proposal effective upon receipt of this filing with the
Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(i).
\4\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to amend Rule 6957(c) to reflect July 10, 2006 as
the effective date for the Order Audit Trail System (``OATS'')
reporting requirements for manual orders on an immediately effective
basis.\5\
[[Page 29696]]
Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in [brackets].\6\
---------------------------------------------------------------------------
\5\ The SEC recently approved amendments to the NASD Rule 6950
Series (``OATS Rules'') relating to OATS. See Securities Exchange
Act Release No. 52521 (September 28, 2005), 70 FR 57909 (October 4,
2005). See also Notice to Members 05-78 (November 2005). NASD
recently filed a proposed rule change for immediate effectiveness
that extends the effective date of these amendments to the OATS
Rules until July 10, 2006. See SR-NASD-2006-052. See also Notice to
Members 06-17 (April 2006).
\6\ In addition, the instant filing is proposing changes to the
current text of NASD Rule 6957 to accurately reflect the
requirements of the rule that will be in effect beginning July 10,
2006. See supra note 5. As part of SR-NASD-2006-052, NASD is
amending NASD Rule 6957(c) to make it identical to the proposed
changes in this filing.
---------------------------------------------------------------------------
* * * * *
6950. Order Audit Trail System
* * * * *
6957. Effective Date
The requirements of the Order Audit Trail System shall be effective
in accordance with the following schedule:
(a) and (b) No Change.
(c) Manual Orders
The requirements of the Order Audit Trail System shall be effective
on July 10, 2006 [120 days after SEC approval of SR-NASD-00-23,] for
all manual orders, provided that firms shall be required to report
information item (18) specified in Rule 6954(b) only to the extent such
item is available to them [and shall not be required to record and
report information items (4) and (5) specified in Rule 6954(b) and
information item (1) specified in Rule 6954(c)].
(d) No Change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD 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. NASD 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
NASD is proposing to amend NASD Rule 6957(c) to reflect July 10,
2006 as the effective date for the OATS reporting requirements for
manual orders. On September 28, 2005, the SEC approved amendments to
the OATS Rules which, among other things,\7\ implement the OATS
reporting requirements for manual orders.\8\ On April 20, 2006, NASD
filed a proposed rule change for immediate effectiveness that extends
the effective date of these recent amendments to the OATS Rules until
July 10, 2006.\9\ In doing so, NASD, among other things, amended NASD
Rule 6957(c) relating to the effective date for manual orders to
reflect the revised effective date.
---------------------------------------------------------------------------
\7\ These amendments to the OATS Rules also: (1) Provide that
members are required to capture and report the time the order is
received by the member from the customer for all orders; (2) expand
the order transmittal requirements to include orders routed to a
member's trading desk or trading department; (3) exclude certain
members from the definition of ``Reporting Member'' for those orders
that meet specified conditions and are recorded and reported to OATS
by another member; and (4) permit NASD to grant exemptive relief
from the OATS requirements in certain circumstances to members that
meet specified criteria. In SR-NASD-2006-052, NASD revised the
effective date of these amendments to the OATS Rules to July 10,
2006. See SR-NASD-2006-052. See also Notice to Members 06-17 (April
2006).
\8\ See supra note 5.
\9\ Id.
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Because these changes to NASD Rule 6957(c) will not be incorporated
into the NASD manual until July 10, 2006, NASD is proposing to amend
NASD Rule 6957(c) to reflect the new implementation date on an
immediately effective basis and make the effective date of the OATS
requirements for manual orders transparent in the current version of
the NASD Rules.\10\
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\10\ NASD also is proposing to amend the rule text to reflect
certain technical amendments to NASD Rule 6957(c) to clarify that
the OATS order information required under NASD Rules 6954(b)(4) and
(5) and the OATS transmittal requirements under NASD Rule 6951(c)(1)
apply to manual orders. These technical amendments were approved by
Commission in SR-NASD-00-23. See Securities Exchange Act Release No.
52521 (September 28, 2005), 70 FR 57909 (October 4, 2005).
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2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of section 15A(b)(6) of the Act,\11\ which requires, among
other things, that NASD rules be 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 the proposed rule change will
provide transparency regarding the effective date of the OATS reporting
requirements for manual orders.
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\11\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD 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
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act \12\ and paragraph (f)(1) of Rule 19b-4
thereunder,\13\ in that the proposed rule change constitutes a stated
policy, practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule of NASD. At any time
within 60 days of the filing of the proposed rule change, the
Commission may summarily abrogate such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(1).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change 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-2006-062 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-2006-062. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your
[[Page 29697]]
comments more efficiently, please use only one method. The Commission
will post all comments on the Commission's Internet Web site (https://
www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for inspection and copying in the Commission's Public
Reference Room. Copies of such filing also will be available for
inspection and copying at the principal office of NASD. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File No. SR-NASD-2006-062 and should be
submitted on or before June 13, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-7816 Filed 5-22-06; 8:45 am]
BILLING CODE 8010-01-P
