Self-Regulatory Organizations; National Association of Securities Dealers, Inc; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto Related to Non-NASD Member Broker/Dealer Access to Nasdaq's Brut and INET Facilities, 30209-30211 [E6-7996]
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Federal Register / Vol. 71, No. 101 / Thursday, May 25, 2006 / Notices
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of Nasdaq. 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–NASDAQ–2006–010 and
should be submitted on or before June
15, 2006.
cchase on PROD1PC60 with NOTICES
IV. Commission’s Findings and Order
Granting Accelerated Approval of a
Proposed Rule Change
After careful consideration, the
Commission finds that the proposed
rule change is consistent with the Act
and the rules and regulations
thereunder applicable to a national
securities exchange.14 In particular, the
Commission believes that the proposal
is consistent with Section 6(b)(4) of the
Act,15 which requires that the rules of
an exchange provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
issuers and other persons using its
facilities. National securities exchanges
obtain funds to pay their Section 31 fees
to the Commission by charging fees to
broker-dealers who generate the covered
sales on which Section 31 fees are
based. An exchange can obtain most of
these funds by imposing a fee on one of
its members whenever the member is on
the sell side of a transaction. However,
when the exchange accepts an ITS
commitment to buy, the ultimate seller
is a party on another market. The
exchange lacks the ability to pass a fee
to that seller directly, because the seller
may not be a member of the exchange.
Under the proposed arrangement, which
has been adopted by each of the ITS
participant exchanges other than
NASD,16 the exchange that routed the
ITS commitment away will continue to
collect a fee from the broker-dealer that
placed the sell order. Then, with respect
to each ITS participant exchange, the
exchange will determine whether it is a
net sender or net receiver of ITS trades
and send fees to or accept fees from
each other exchange accordingly. The
Commission believes this is an equitable
manner for the exchanges to obtain
14 In approving this proposal, the Commission has
considered its impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
15 15 U.S.C. 78f(b)(4).
16 See letter from George W. Mann, Jr., Executive
Vice President and General Counsel, BSE, and
Chairman, Subcommittee, to Michael Gaw,
Assistant Director, Division, Commission, dated
September 29, 2005.
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16:42 May 24, 2006
Jkt 208001
funds to pay their Section 31 fees on
covered sales resulting from ITS trades.
Under Section 19(b)(2) of the Act,17
the Commission may not approve any
proposed rule change prior to the
thirtieth day after the date of
publication of the notice of filing
thereof, unless the Commission finds
good cause for so doing. The
Commission hereby finds good cause for
approving the proposed rule change
prior to the thirtieth day after
publishing notice of filing thereof in the
Federal Register. In this case, the
Commission does not believe a
comment period is necessary because all
of the parties affected by the proposed
fee—the other ITS participant
exchanges—have already adopted the
same fee arrangement.18
For the reasons set forth above, the
Commission finds good cause to
accelerate approval of the proposed rule
change pursuant to Section 19(b)(2) of
the Act.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (SR–NASDAQ–
2006–010) is hereby approved on an
accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.19
Nancy M. Morris,
Secretary.
[FR Doc. E6–7990 Filed 5–24–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53838; File No. SR–NASD–
2006–059]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change and Amendment No. 1
Thereto Related to Non-NASD Member
Broker/Dealer Access to Nasdaq’s Brut
and INET Facilities
May 18, 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 1,
2006, the National Association of
Securities Dealers, Inc. (‘‘NASD’’),
through its subsidiary, the Nasdaq Stock
17 15
U.S.C. 78s(b)(2).
18 See supra note 16.
19 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
30209
Market, Inc. (‘‘Nasdaq’’), filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by Nasdaq. On May 16, 2006, Nasdaq
submitted Amendment No. 1 to the
proposed rule change.3 Nasdaq filed the
proposed rule change, as amended, as a
‘‘non-controversial’’ rule change under
Rule 19b–4(f)(6) under the Act,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to continue the
participation of broker-dealers that are
non-NASD members in Nasdaq’s Brut
and INET systems through the earlier of
July 1, 2006, or the date Nasdaq
becomes operational as a national
securities exchange for the particular
types of securities traded by those nonmembers in Nasdaq’s INET and Brut
systems. Nasdaq would implement the
proposed rule change immediately. The
text of the proposed rule change is
below. Proposed new language is in
italics. Proposed deletions are in
[brackets].
4901. Definitions
(a) through (h) No change.
(i) The term ‘‘Participant’’ shall mean
an NASD member that fulfills the
obligations contained in Rule 4902
regarding participation in the System.
[Until May 1, 2006] [t]The term
‘‘Participant’’ shall also include nonNASD broker/dealers that desire to use
the System and otherwise meet all other
requirements for System participation.
Non-NASD member broker/dealers shall
have access to System until the earlier
of either July 1, 2006, or the date that
Nasdaq becomes operational as a
national securities exchange for the
particular class of securities traded by
the non-NASD member.
(j) through (w) No Change
*
*
*
*
*
4952. System Participant Registration
(a) Participation in INET requires
current registration with the System and
is conditioned upon the Participant’s
3 In Amendment No. 1, the Exchange clarified in
the purpose section the number of non-member
broker-dealers with access to the Brut and INET
systems. In addition, Nasdaq requested waivers of
the 5-day notice and 30-day pre-operative delay
contained in Rule 19b–4(f)(6)(iii) under the Act.
4 17 CFR 240.19b–4(f)(6).
E:\FR\FM\25MYN1.SGM
25MYN1
30210
Federal Register / Vol. 71, No. 101 / Thursday, May 25, 2006 / Notices
initial and continuing compliance with
the following requirements:
(1)–(5) No Change.
(6) In addition to the above, [on or
before May 1, 2006,] all System
Participants shall be members of the
Association. Exception: Non-NASD
member broker/dealers shall have
access to System until the earlier of
either July 1, 2006, or the date that
Nasdaq becomes operational as a
national securities exchange for the
particular class of securities traded by
the non-NASD member.
*
*
*
*
*
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, as amended,
and discussed any comments it received
on the proposed rule change, as
amended. 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.
cchase on PROD1PC60 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, Proposed Rule
Change
1. Purpose
Nasdaq states that, under current
rules, broker-dealers that are not
members of the NASD may use the Brut
and INET systems until May 1, 2006.
Nasdaq is proposing to modify this
provision so as to allow non-NASD
member broker-dealers to use the Brut
and INET systems until the earlier of
either July 1, 2006, or the date that
Nasdaq becomes operational as a
national securities exchange for the
particular class of securities traded by
the non-member. Nasdaq believes that
this division of dates upon which nonNASD members must be members of the
Nasdaq exchange in order to continue to
use Nasdaq’s trading facilities is
necessary because Nasdaq plans to
become operational as an exchange in
two phases with the first involving only
Nasdaq securities, with a second later
phase for securities listed by other
exchanges. Under the proposal, nonNASD members trading Nasdaq-listed
securities would be required to be a
Nasdaq exchange member to continue to
trade Nasdaq securities in Brut and
INET on the date that Nasdaq becomes
operational as exchange for Nasdaq
issues, while entities trading other
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16:42 May 24, 2006
Jkt 208001
exchange-listed securities would be
allowed continued access to the Brut
and INET systems for that trading until
such time as Nasdaq becomes
operational as an exchange for nonNasdaq issues. Nasdaq states that in
neither scenario would non-NASD
member access to the Brut and INET
systems extend beyond July 1, 2006
without a further Commission-approved
extension.
Nasdaq states that this extension is
intended to allow these non-NASD
member broker-dealers to have
continued access to Brut and INET
while they take actions to become
members of the recently-approved
Nasdaq exchange. Nasdaq notes that
only 44 non-NASD member broker
dealers currently have access to its Brut
and INET systems (4 in the Brut system
and 40 in the INET system) and, as
before, Nasdaq commits not to allow
any additional non-NASD brokerdealers access during this extension
period.5
2. Statutory Basis
Nasdaq believes that the proposed
rule change, as amended, is consistent
with the provisions of Section 15A of
the Act,6 in general, and with Section
15A(b)(5) of the Act,7 in particular, in
that it is designed to promote just and
equitable principles of trade, and to
remove impediments to a free and open
market and a national market system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change, as amended, will
result in any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Nasdaq states that written comments
were neither solicited nor received with
respect to the proposed rule change, as
amended.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change, as
amended, does not: (i) Significantly
affect the protection of investors or the
public interest; (ii) impose any
significant burden on competition; and
(iii) become operative for 30 days after
the date of filing (or such shorter time
5 See
Amendment No. 1, supra note 3.
U.S.C. 78o–3.
7 15 U.S.C. 78o–3(b)(5).
6 15
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
as the Commission may designate if
consistent with the protection of
investors and the public interest), the
proposed rule change, as amended, has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and
subparagraph (f)(6) of Rule 19b–4
thereunder.9
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.10 However, Rule 19b–
4(f)(6)(iii) 11 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.
Nasdaq has requested that the
Commission waive the 30-day preoperative delay and the five-day prefiling notice requirement and designate
the proposed rule change, as amended,
to become effective upon filing. Nasdaq
believes that waivers of such periods
will allow continued uninterrupted
access to the Brut and INET systems for
non-NASD broker dealers in the period
of time immediately preceding Nasdaq’s
operation as an exchange. The
Commission believes that waiving the
30-day pre-operative delay and the fiveday pre-filing notice requirement is
consistent with the protection of
investors and the public interest
because it would facilitate the orderly
transition of Nasdaq to a national
securities exchange, thus removing
impediments to a free and open market
and a national market system. For the
reasons stated above, the Commission
designates the proposal, as amended, to
become effective and operative on May
1, 2006.12
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.13
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii).
11 Id.
12 For purposes only of accelerating the operative
date of this proposal, the Commission has
considered the impact of the proposed rule on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
13 The effective date of the original proposed rule
change is May 1, 2006, and the effective date of
Amendment No. 1 is May 16, 2006. For purposes
of calculating the 60-day period within which the
Commission may summarily abrogate the proposal,
the Commission considers the period to commence
on May 16, 2006, the date on which the Exchange
submitted Amendment No. 1.
9 17
E:\FR\FM\25MYN1.SGM
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Federal Register / Vol. 71, No. 101 / Thursday, May 25, 2006 / Notices
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–2006–059 on the
subject line.
Paper Comments
cchase on PROD1PC60 with NOTICES
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–7996 Filed 5–24–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53826; File No. SR–NYSE–
2005–90]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing of Proposed Rule Change and
Amendment No. 1 To Allow Certain
Institutional Customers To Elect Not
To Receive Account Statements
May 18, 2006.
Pursuant to section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’),2 and Rule 19b–4
thereunder,3 notice is hereby given that
on December 21, 2005, the New York
Stock Exchange, Inc. (‘‘NYSE’’ or the
All submissions should refer to File
‘‘Exchange’’) filed with the Securities
Number SR-NASD–2006–059. This file
and Exchange Commission (‘‘SEC’’ or
number should be included on the
the ‘‘Commission’’) the proposed change
subject line if e-mail is used. To help the
to NYSE Rule 409 (Statements of
Commission process and review your
Accounts to Customers) as described in
comments more efficiently, please use
Items I, II, and III below, which Items
only one method. The Commission will have been prepared by the Exchange.
post all comments on the Commission’s On March 28, 2006, the NYSE filed
Internet Web site (https://www.sec.gov/
Amendment No. 1 to the proposed rule
rules/sro.shtml). Copies of the
change.4 The Commission is publishing
submission, all subsequent
this notice to solicit comments on the
amendments, all written statements
proposed rule change from interested
with respect to the proposed rule
persons.
change that are filed with the
I. Self-Regulatory Organization’s
Commission, and all written
Statement of the Terms of Substance of
communications relating to the
the Proposed Rule Change
proposed rule change between the
The Exchange is proposing to amend
Commission and any person, other than
NYSE Rule 409 to allow institutional
those that may be withheld from the
customers conducting a Delivery versus
public in accordance with the
Payment and Receive versus Payment
provisions of 5 U.S.C. 552, will be
(‘‘DVP/RVP’’) business to elect not to
available for inspection and copying in
receive account statements.
the Commission’s Public Reference
The text of the proposed rule change
Section, 100 F Street, NE., Washington,
is set forth below. Italics indicate new
DC 20549. Copies of such filing also will text that would be added to the current
be available for inspection and copying
text of NYSE Rule 409.
at the principal office of Nasdaq. All
Rule 409.
comments received will be posted
without change; the Commission does
Statements of Accounts to Customers
not edit personal identifying
(a) Except with the permission of the
information from submissions. You
Exchange, or as otherwise provided by
should submit only information that
this paragraph, member organizations
you wish to make available publicly. All
14 17 CFR 200.30–3(a)(12).
submissions should refer to File
1 15 U.S.C. 78s(b)(1).
Number SR–NASD–2006–059 and
2 15 U.S.C. 78a et seq.
should be submitted on or before June
3 17 CFR 240.19b–4.
15, 2006.
4
In Amendment No. 1, a partial amendment, the
NYSE proposed additional changes to the text of
proposed amended Rule 409, which are
incorporated in the proposed rule text below.
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16:42 May 24, 2006
Jkt 208001
PO 00000
Frm 00099
Fmt 4703
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30211
shall send to their customers statements
of account showing security and money
positions and entries at least quarterly
to all accounts having an entry, money
or security position during the
preceding quarter. Quarterly statements
need not be sent to a customer pursuant
to Rule 409(a) if:
(1) The customer’s account is carried
solely for the purpose of execution on a
Delivery versus Payment/Receive versus
Payment basis (DVP/RVP);
(2) All transactions effected for the
account are done on a DVP/RVP basis
in conformity with Rule 387;
(3) The account does not show
security or money positions at the end
of the quarter;
(4) The customer consents to the
suspension of such statements in
writing. Such consents must be
maintained by the member organization
in a manner consistent with Exchange
Rule 440 and Rule 17a–4 under the
Securities Exchange Act of 1934;
(5) The member organization
undertakes to provide any particular
statement or statements to the customer
promptly upon request; and
(6) The member organization
undertakes to promptly reinstate the
delivery of such statements to the
customer upon request.
Nothing in this rule shall be seen to
qualify or condition the obligations of a
member organization under SEC Rule
15c3–2 concerning quarterly notices of
free credit balances on statements.
For purposes of this rule, a DVP/RVP
account is an arrangement whereby
payment for securities purchased is to
be made to the selling customer’s agent
and/or delivery of securities sold is to be
made to the buying customer’s agent in
exchange for payment at time of
settlement, usually in the form of cash.
(b) through (g)—No change.
Supplementary Material—No change.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In filing the proposed rule change and
Amendment No. 1 with the
Commission, the Exchange included
statements concerning the purpose of,
and basis for, the proposed rule change,
as amended. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
E:\FR\FM\25MYN1.SGM
25MYN1
]]>Agencies
[Federal Register Volume 71, Number 101 (Thursday, May 25, 2006)]
[Notices]
[Pages 30209-30211]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7996]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53838; File No. SR-NASD-2006-059]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change and Amendment No. 1 Thereto Related to Non-NASD
Member Broker/Dealer Access to Nasdaq's Brut and INET Facilities
May 18, 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 1, 2006, the National Association of Securities Dealers, Inc.
(``NASD''), through its subsidiary, the Nasdaq Stock Market, Inc.
(``Nasdaq''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by Nasdaq. On May 16, 2006,
Nasdaq submitted Amendment No. 1 to the proposed rule change.\3\ Nasdaq
filed the proposed rule change, as amended, as a ``non-controversial''
rule change under Rule 19b-4(f)(6) under the Act,\4\ which renders the
proposal effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange clarified in the purpose
section the number of non-member broker-dealers with access to the
Brut and INET systems. In addition, Nasdaq requested waivers of the
5-day notice and 30-day pre-operative delay contained in Rule 19b-
4(f)(6)(iii) under the Act.
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to continue the participation of broker-dealers
that are non-NASD members in Nasdaq's Brut and INET systems through the
earlier of July 1, 2006, or the date Nasdaq becomes operational as a
national securities exchange for the particular types of securities
traded by those non-members in Nasdaq's INET and Brut systems. Nasdaq
would implement the proposed rule change immediately. The text of the
proposed rule change is below. Proposed new language is in italics.
Proposed deletions are in [brackets].
4901. Definitions
(a) through (h) No change.
(i) The term ``Participant'' shall mean an NASD member that
fulfills the obligations contained in Rule 4902 regarding participation
in the System. [Until May 1, 2006] [t]The term ``Participant'' shall
also include non-NASD broker/dealers that desire to use the System and
otherwise meet all other requirements for System participation. Non-
NASD member broker/dealers shall have access to System until the
earlier of either July 1, 2006, or the date that Nasdaq becomes
operational as a national securities exchange for the particular class
of securities traded by the non-NASD member.
(j) through (w) No Change
* * * * *
4952. System Participant Registration
(a) Participation in INET requires current registration with the
System and is conditioned upon the Participant's
[[Page 30210]]
initial and continuing compliance with the following requirements:
(1)-(5) No Change.
(6) In addition to the above, [on or before May 1, 2006,] all
System Participants shall be members of the Association. Exception:
Non-NASD member broker/dealers shall have access to System until the
earlier of either July 1, 2006, or the date that Nasdaq becomes
operational as a national securities exchange for the particular class
of securities traded by the non-NASD member.
* * * * *
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, as
amended, and discussed any comments it received on the proposed rule
change, as amended. 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, Proposed Rule Change
1. Purpose
Nasdaq states that, under current rules, broker-dealers that are
not members of the NASD may use the Brut and INET systems until May 1,
2006. Nasdaq is proposing to modify this provision so as to allow non-
NASD member broker-dealers to use the Brut and INET systems until the
earlier of either July 1, 2006, or the date that Nasdaq becomes
operational as a national securities exchange for the particular class
of securities traded by the non-member. Nasdaq believes that this
division of dates upon which non-NASD members must be members of the
Nasdaq exchange in order to continue to use Nasdaq's trading facilities
is necessary because Nasdaq plans to become operational as an exchange
in two phases with the first involving only Nasdaq securities, with a
second later phase for securities listed by other exchanges. Under the
proposal, non-NASD members trading Nasdaq-listed securities would be
required to be a Nasdaq exchange member to continue to trade Nasdaq
securities in Brut and INET on the date that Nasdaq becomes operational
as exchange for Nasdaq issues, while entities trading other exchange-
listed securities would be allowed continued access to the Brut and
INET systems for that trading until such time as Nasdaq becomes
operational as an exchange for non-Nasdaq issues. Nasdaq states that in
neither scenario would non-NASD member access to the Brut and INET
systems extend beyond July 1, 2006 without a further Commission-
approved extension.
Nasdaq states that this extension is intended to allow these non-
NASD member broker-dealers to have continued access to Brut and INET
while they take actions to become members of the recently-approved
Nasdaq exchange. Nasdaq notes that only 44 non-NASD member broker
dealers currently have access to its Brut and INET systems (4 in the
Brut system and 40 in the INET system) and, as before, Nasdaq commits
not to allow any additional non-NASD broker-dealers access during this
extension period.\5\
---------------------------------------------------------------------------
\5\ See Amendment No. 1, supra note 3.
---------------------------------------------------------------------------
2. Statutory Basis
Nasdaq believes that the proposed rule change, as amended, is
consistent with the provisions of Section 15A of the Act,\6\ in
general, and with Section 15A(b)(5) of the Act,\7\ in particular, in
that it is designed to promote just and equitable principles of trade,
and to remove impediments to a free and open market and a national
market system.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78o-3.
\7\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change, as amended,
will result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Nasdaq states that written comments were neither solicited nor
received with respect to the proposed rule change, as amended.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change, as amended, does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
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, as
amended, has become effective pursuant to Section 19(b)(3)(A) of the
Act \8\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. Nasdaq has requested that the
Commission waive the 30-day pre-operative delay and the five-day pre-
filing notice requirement and designate the proposed rule change, as
amended, to become effective upon filing. Nasdaq believes that waivers
of such periods will allow continued uninterrupted access to the Brut
and INET systems for non-NASD broker dealers in the period of time
immediately preceding Nasdaq's operation as an exchange. The Commission
believes that waiving the 30-day pre-operative delay and the five-day
pre-filing notice requirement is consistent with the protection of
investors and the public interest because it would facilitate the
orderly transition of Nasdaq to a national securities exchange, thus
removing impediments to a free and open market and a national market
system. For the reasons stated above, the Commission designates the
proposal, as amended, to become effective and operative on May 1,
2006.\12\
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\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
\12\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the impact of the
proposed rule on efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
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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.\13\
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\13\ The effective date of the original proposed rule change is
May 1, 2006, and the effective date of Amendment No. 1 is May 16,
2006. For purposes of calculating the 60-day period within which the
Commission may summarily abrogate the proposal, the Commission
considers the period to commence on May 16, 2006, the date on which
the Exchange submitted Amendment No. 1.
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[[Page 30211]]
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-2006-059 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-2006-059. 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 Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filing also will be available
for inspection and copying at the principal office of Nasdaq. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASD-2006-059 and should be
submitted on or before June 15, 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. E6-7996 Filed 5-24-06; 8:45 am]
BILLING CODE 8010-01-P
