Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Technical and Conforming Changes to Nasdaq's 2000 and 3000 Series Rules, 44734-44738 [E6-12697]
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44734
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices
available for inspection and copying at
the principal office of CBOE. 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 publicly available. All
submissions should refer to File
Number SR–CBOE–2005–93 and should
be submitted on or before August 28,
2006.
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IV. Commission’s Findings and Order
Granting Accelerated Approval of
Proposed Rule Change
After careful review, the Commission
finds that the proposed rule change, as
amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder, applicable
to a national securities exchange.9 In
particular, the Commission believes that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,10 which
requires among other things, that the
rules of the Exchange are designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
The Commission believes that the
proposed QRM Mechanism should
provide Hybrid Market-Makers
assistance in effectively managing its
quotations. In conjunction with the
implementation of the QRM
Mechanism, CBOE proposes to define
the nature of Hybrid Market-Makers’
continuous electronic quoting
obligations under its rules. The
Commission believes that it is
consistent with the Act to allow CBOE
to define ‘‘continuous electronic
quotes’’ as providing electronic twosided quotes for 99% of the time that
the Hybrid Market-Maker is required to
provide electronic quotes in an
appointed option class on a given
trading day. The Commission notes that
when the QRM Mechanism is triggered
for an option class it will automatically
cancel all of the Hybrid Market-Maker’s
quotes in any series of that option class.
The Commission believes that the
proposed definition of ‘‘continuous
electronic quotes’’ should provide a
Hybrid Market-Maker a brief amount of
time to update its quotes after the QRM
Mechanism has canceled its quotes in
an option class.
9 In
approving this proposal, the Commission has
considered its impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
10 15 U.S.C. 78f(b)(5).
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In addition, CBOE proposes certain
clarifying changes to CBOE Rule 8.7
regarding Market-Maker and RMM
quoting obligations. Specifically, CBOE
proposes to clarify the intent and
application of the rule that the
continuous electronic quoting
obligations apply on a per class basis
and only during the time the respective
Market-Maker is quoting or respective
RMM is logged onto Hybrid and
quoting, and to clarify certain open
outcry quoting obligations. The
Commission believes that these
clarifying changes are appropriate and
consistent with the Act.
The Commission notes that the
proposal does not alter the obligations
of Hybrid Market-Makers, except for the
fact that it will specifically define what
it means to provide continuous
electronic quotes. The Commission also
notes that CBOE has represented that it
will conduct routine surveillance for
Hybrid Market-Maker compliance with
the 99% standard for continuous
electronic quotes set forth in CBOE Rule
1.1(ccc).
CBOE has requested that the
Commission find good cause for
approving the proposed rule change
prior to the thirtieth day after
publication of notice thereof in the
Federal Register. The Commission notes
that similar proposals to provide
protection from risk for market makers
have been approved for other options
exchanges.11 The Commission believes
that granting accelerated approval of the
proposal should allow Hybrid MarketMakers to have similar protections from
the risk associated with an excessive
number of near simultaneous executions
in a single options class. Accordingly,
the Commission finds good cause,
pursuant to Section 19(b)(2) of the
Act,12 for approving the proposed rule
change, as amended, prior to the
thirtieth day after the date of
publication of notice thereof in the
Federal Register.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,13 that the
proposed rule change (SR–CBOE–2005–
93) and Amendment No. 1 thereto be,
11 See Securities Exchange Act Release Nos.
51049 (January 18, 2005), 70 FR 3756 (January 26,
2005) (SR–BSE–2004–52); 51050 (January 18, 2005),
70 FR 3758 (January 26, 2005) (SR–ISE–2004–31);
51740 (May 25, 2005), 70 FR 32686 (June 3, 2005)
(SR–PCX–2005–64); 53148 (January 19, 2006), 71
FR 4386 (January 26, 2006) (SR–Amex–2005–131);
and 53166 (January 23, 2006), 71 FR 4625 (January
27, 2006) (SR–Phlx–2006–05).
12 15 U.S.C. 78s(b)(2).
13 15 U.S.C. 78s(b)(2).
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and hereby are, approved on an
accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Nancy M. Morris,
Secretary.
[FR Doc. E6–12740 Filed 8–4–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54253; File No. SR–
NASDAQ–2006–018]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Regarding
Technical and Conforming Changes to
Nasdaq’s 2000 and 3000 Series Rules
July 31, 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 July 25,
2006, The NASDAQ Stock Market LLC
(‘‘Exchange’’ or ‘‘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. Nasdaq has
filed this proposed rule change as a
‘‘non-controversial’’ rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder,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
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to conform the Rule
2000 and 3000 Series of Nasdaq’s rules
to certain changes made to the Rule
2000 and 3000 Series of the rules of
National Association of Securities
Dealers, Inc. (‘‘NASD’’) since approval
of Nasdaq’s rules by the Commission in
January 2006, to make several minor
modifications, and to correct certain
typographical errors in the approved
rules. Nasdaq proposes to implement
the proposed rule change immediately.
The text of the proposed rule change
is included below. Proposed new
14 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)(iii).
4 17 CFR 240.19b–4(f)(6).
1 15
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language is italicized; deletions are
[bracketed].
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2111. Trading Ahead of Customer
Market Orders
(a) Nasdaq members and persons
associated with a member shall comply
with NASD Rule 2111 as if such Rule
were part of Nasdaq’s rules.
(b) For purposes of this Rule,
references to IM–2110–2, Rule 2320,
and Rule 3110[, and Rule 6440] shall be
construed as references to Nasdaq IM–
2110–2, Nasdaq Rule 2320, and Nasdaq
Rule 3110[, and Nasdaq Rule 6440].
(c) Nasdaq members and persons
associated with a member relying upon
the exemption set forth in NASD Rule
2111(f) shall comply with the provisions
of the NASD Rule 4600 Series and 6400
Series cited therein as if such Rules
were part of Nasdaq’s Rules. Nasdaq and
NASD Regulation, an affiliate of NASD,
are parties to the Regulatory Contract
pursuant to which NASD Regulation has
agreed to perform certain functions on
behalf of Nasdaq. Therefore, Nasdaq
members are complying with Nasdaq
Rule 2111(f) by complying with NASD
Rule 2111(f) as written, including, for
example, filing requirements and
notifications. In addition, functions
performed by NASD Regulation, NASD
Regulation departments, and NASD
Regulation staff under Nasdaq Rule
2111(f) are being performed by NASD
Regulation on behalf of Nasdaq.
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2520. Margin Requirements
(a) No change.
(b) A member designated to Nasdaq
for oversight pursuant to SEC Rule 17d–
1 shall comply with the initial and
maintenance margin requirements of
Regulation T and the NASD Rule 2520
as if such Rules were part of Nasdaq’s
Rules.
(c) No change.
[(c)](d) Pursuant to the Rule 9600
Series, Nasdaq may exempt any member
from the requirements contained in
paragraph (e)(3) of NASD Rule 2520, as
applied to Nasdaq members through
Nasdaq Rule 2520, if the account
referenced in paragraph (e)(3) of NASD
Rule 2520 is confined exclusively to
transactions and positions in exempted
securities.
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2810. Direct Participation Programs
(a) No change.
(b) For purposes of this Rule 2810:
(1)—(2) No change.
(3) for purposes of this Rule only,
Nasdaq members and their associated
persons shall comply with applicable
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provisions of NASD Rule 2710 as [of]if
such Rule were part of Nasdaq’s Rules.
(c) No change.
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2852. Reporting Requirements
(a) Each member shall file with
Nasdaq Regulation a report with respect
to each account in which the member
has an interest, each account of a
partner, officer, director or employee of
such member, and each customer
account of the member, which has
established an aggregate position of
100,000 index warrants on the same
side of the market in an index warrant
issue listed on Nasdaq, combining such
index warrant position with positions in
index warrants overlying the same
index on the same side of the market
traded on Nasdaq or another national
securities exchange.
(b) Such report shall identify the
person or persons having an interest in
such account and shall identify
separately the total number of each type
of index warrant that comprises the
reportable position in such account. The
report shall be in such form as may be
prescribed by Nasdaq Regulation and
shall be filed no later than the close of
business on the next business day
following the day on which the
transaction or transactions necessitating
the filing of such report occurred.
Whenever a report shall be required to
be filed with respect to an account
pursuant to this Rule, the member filing
such report shall file with Nasdaq
Regulation such additional periodic
reports with respect to such account as
Nasdaq Regulation may from time to
time prescribe.
2853. Liquidation of Index Warrant
Positions
(a) Whenever Nasdaq Regulation
determines that a person or group of
persons acting in concert holds or
controls an aggregate position (whether
short or long) in index warrants
overlying the same index in excess of
the position limitations established by
Rule 2850, it may, when deemed
necessary or appropriate in the public
interest and for the protection of
investors, direct any member or all
members carrying a position in index
warrants overlying such index for such
person or persons to liquidate such
position or positions, or portions
thereof, as expeditiously as possible and
consistent with the maintenance of an
orderly market, so as to bring such
person or persons into compliance with
the position limitations contained in
Rule 2850.
(b) Whenever such a directive is
issued by Nasdaq Regulation no member
receiving notice thereof shall accept
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and/or execute for any person or
persons named in such directive any
order to purchase or sell short any index
warrants based on the same index,
unless in each instance express
approval therefor is given by Nasdaq
Regulation, or the directive is rescinded.
2854. [Trading Halts or Suspensions]
Reserved
[(a) The trading in an index warrant
on Nasdaq shall be halted whenever
Nasdaq Regulation shall conclude that
such action is appropriate in the
interests of a fair and orderly market
and to protect investors. Among the
factors that may be considered are the
following:]
[(1) trading has been halted or
suspended in underlying stocks whose
weighted value represents 20% or more
of the index value;]
[(2) the current calculation of the
index derived from the current market
prices of the stocks is not available;]
[(3) other unusual conditions or
circumstances detrimental to the
maintenance of a fair and orderly
market are present.]
[(b) Trading in index warrants that
has been the subject of a trading halt or
suspension may resume if Nasdaq
Regulation determines that the
conditions which led to the halt or
suspension are no longer present or that
the interests of a fair and orderly market
are served by a resumption of trading.
In either event, the reopening may not
occur until Nasdaq Regulation has
determined that trading in underlying
stocks whose weighted value represents
more than 50% of the index is
occurring.]
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IM–3010–1. Standards for Reasonable
Review
(a) Nasdaq members and persons
associated with a member shall comply
with NASD Interpretive Material IM–
3010–1 as if such Rule were part of
Nasdaq’s Rules.
(b) For purposes of this Rule:
(1) references to Rule 3010 shall be
construed as references to Nasdaq Rule
3010; and
(2) references to ‘‘NASD Rules’’ shall
be construed as references to ‘‘Nasdaq
Rules’’.
IM–3010–2. Guidance on Heightened
Supervision Requirements
Nasdaq members shall comply with
NASD Notice to Members 97–19 as if
such Rule were part of Nasdaq’s Rules.
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IM–3011–1. Independent Testing
Requirements
Nasdaq members and persons
associated with a member shall comply
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with NASD Interpretive Material IM–
3011–1 as if such Rule were part of
Nasdaq’s Rules. For purposes of this
Rule, references to Rule 3011 shall be
construed as references to Nasdaq Rule
3011.
IM–3011–2. Review of Anti-Money
Laundering Compliance Person
Information
Nasdaq members and persons
associated with a member shall comply
with NASD Interpretive Material IM–
3011–2 as if such Rule were part of
Nasdaq’s Rules. For purposes of this
Rule, references to Rule 3011 shall be
construed as references to Nasdaq Rule
3011.
3012. Supervisory Control System
(a) Members and persons associated
with a member shall comply with NASD
Rule 3012 as if such Rule were part of
Nasdaq’s rules. Nasdaq and NASD
Regulation, an affiliate of NASD, are
parties to the Regulatory Contract
pursuant to which NASD Regulation has
agreed to perform certain functions on
behalf of Nasdaq. Therefore, Nasdaq
members are complying with Nasdaq
Rule 3012 by complying with NASD
Rule 3012 as written, including, for
example, filing requirements and
notifications. In addition, functions
performed by NASD Regulation, NASD
Regulation departments, and NASD
Regulation staff under Nasdaq Rule
3012 are being performed by NASD
Regulation on behalf of Nasdaq.
(b) No change.
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(3)(A) A member shall provide a
customer with a copy of any predispute
arbitration clause or customer
agreement executed between the
customer and the member, or inform the
customer that the member does not have
a copy thereof, within ten business days
of receipt of the customer’s request. If a
customer requests such a copy before
the member has provided the customer
with a copy pursuant to subparagraph
(2)(B) of this [Rule]paragraph, the
member must provide a copy to the
customer by the earlier date required by
this subparagraph (3)(A) or by
subparagraph (2)(B).
(B) No change.
(4)–(7) No change.
(g)–(j) No change.
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3080. Disclosure to Associated Persons
When Signing Form U[–]4
3360. Short-Interest Reporting
Nasdaq Members shall comply with
NASD Rule 3080 as if such Rule were
part of Nasdaq’s Rules. In lieu of
incorporating in the written statement
the language in paragraph (2) of NASD
Rule 3080, members shall include the
following provision:
A claim alleging employment
discrimination, including a sexual
harassment claim, in violation of a
statute is not required to be arbitrated
under Nasdaq rules. Such a claim may
be arbitrated under Nasdaq rules only if
the parties have agreed to arbitrate it,
either before or after the dispute arose.
The rules of other arbitration forums
may be different.
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3110. Books and Records
(a)–(e) No change.
(f) Requirements When Using
Predispute Arbitration Agreements With
Customers
(1)–(2) No change.
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3130. Regulation of Activities of
Members Experiencing Financial and/or
Operational Difficulties
(a) A member designated to Nasdaq
for oversight pursuant to SEC Rule 17d–
1 shall comply with NASD Rule 3130
(except NASD Rule 3130(a)) as if such
Rule were part of Nasdaq’s Rules.
(b) No change.
IM–3130. Restrictions on a Member’s
Activity
(a) A member designated to Nasdaq
for oversight pursuant to SEC Rule 17d–
1 shall comply with NASD Interpretive
Material 3130 (except IM–3130(d)) as if
such Rule were part of Nasdaq’s Rules.
(b) No change.
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(a) To the extent such information is
not otherwise reported to the NASD in
conformance with NASD Rule 3360,
each member shall maintain a record of
total ‘‘short’’ positions in all customer
and proprietary firm accounts in
securities listed on Nasdaq and shall
regularly report such information to
Nasdaq in such a manner as may be
prescribed by Nasdaq. [For the purposes
of this rule, the term ‘‘customer’’
includes a broker/dealer.] Reports shall
be made as of the close of the settlement
date designated by Nasdaq. Reports
shall be received by Nasdaq no later
than the second business day after the
reporting settlement date designated by
Nasdaq.
(b) For purposes of this Rule[,]:
(1) ‘‘short’’ positions to be reported
are those resulting from ‘‘short sales’’ as
that term is defined in SEC Rule 200[,
under the Act]of Regulation SHO, with
the exception of positions that meet the
requirements of Subsections (e)(1), (6),
(7), (8), and (10) of SEC Rule 10a–1
adopted under the Act[.]; and
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(2) the term ‘‘customer’’ includes a
broker-dealer.
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3380. Order Entry and Execution
Practices
No member or associated person may
engage in conduct that has the intent or
effect of splitting any order into multiple
smaller orders for execution or any
execution into multiple smaller
executions for transaction reporting for
the primary purpose of maximizing a
monetary or in-kind amount to be
received by the member or associated
person as a result of the execution of
such orders or the transaction reporting
of such executions. For purposes of this
rule, ‘‘monetary or in-kind amount’’
shall be defined to include, but not be
limited to, any credits, commissions,
gratuities, payments for or rebates of
fees, or any other payments of value to
the member or associated person.
338[0]1. SEC Rule 19c–1—Governing
Certain Off-Board Agency Transactions
by Members of National Securities
Exchanges
No rule, stated policy, or practice of
this exchange shall prohibit or
condition, or be construed to prohibit or
condition or otherwise limit, directly or
indirectly, the ability of any member
acting as agent to effect any transaction
otherwise than on this exchange with
another person (except when such
member also is acting as agent for such
other person in such transaction), in any
equity security listed on this exchange
or to which unlisted trading privileges
on this exchange have been extended.
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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 is modifying its 2000 and
3000 Series Rules, which are based to a
substantial extent on comparable NASD
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Rules, to conform them to certain
changes made to the Rule 2000 and
3000 Series of the rules of NASD since
approval of Nasdaq’s rules by the
Commission in January 2006, to make
several minor modifications, and to
correct certain typographical errors in
the approved rules. Specifically, Nasdaq
is:
• Amending Nasdaq Rule 2111,
which incorporates NASD Rule 2111 by
reference, to reflect certain changes to
the underlying text of that rule made by
SR–NASD–2005–139.5
• Amending Nasdaq Rules 2852 and
2853 at the request of SEC staff to reflect
that certain functions identified therein
will be performed by Nasdaq Regulation
staff.
• Deleting Nasdaq Rule 2854,
governing trading halts and suspension
of index warrants, so that it may be
transferred to Nasdaq Rule 4120, which
contains Nasdaq’s other rules
concerning trading halts and
suspensions. The change to Nasdaq Rule
4120 will be made by a corresponding
filing concerning technical amendments
to the Nasdaq 4000 Series rules that
Nasdaq will submit on or prior to
August 1, 2006 on an immediately
effective basis.
• Incorporating by reference NASD
IM–3013–1, which was added to the
NASD Rules by SR–NASD–2003–104,6
and making a conforming change to the
numbering of current Nasdaq IM–3010.
• Incorporating by reference NASD
IM–3011–1 and IM–3011–2, which were
added to the NASD Rules by SR–NASD–
2005–066.7
• Amending Nasdaq Rule 3012,
which incorporates NASD Rule 3012 by
reference, to include language that
reflects a filing requirement added to
the NASD Rule by SR–NASD–2005–
084.8
• Amending Nasdaq Rule 3360 to
reflect minor changes made to the
comparable NASD Rule by SR–NASD–
2005–112.9
• Adopting new Nasdaq Rule 3380,
which is based on NASD Rule 3380, and
which was added to the NASD Rules by
5 See Securities Exchange Act Release No. 52998
(December 22, 2005), 70 FR 77223 (December 29,
2005) (SR–NASD–2005–139).
6 See Securities Exchange Act Release No. 52403
(September 9, 2005), 70 FR 54782 (September 16,
2005) (SR–NASD–2003–104).
7 See Securities Exchange Act Release No. 53030
(December 28, 2005), 71 FR 632 (January 5, 2006)
(SR–NASD–2005–066).
8 See Securities Exchange Act Release No. 52799
(November 18, 2005), 70 FR 71573 (November 29,
2005) (SR–NASD–2005–084).
9 See Securities Exchange Act Release No. 53224
(February 3, 2006), 71 FR 7101 (February 10, 2006)
(SR–NASD–2005–112).
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SR–NASD–2005–144,10 and
renumbering existing Nasdaq Rule 3380
as Nasdaq Rule 3381.
• Amending Nasdaq Rules 2520,
2810, 3080, 3110, 3130, and Nasdaq
IM–3130 to correct typographical errors.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,11 in
general, and with Section 6(b)(5) of the
Act,12 in particular, in that the proposal
is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The proposed rule
change conforms the Rule 2000 and
3000 Series of Nasdaq’s rules to certain
changes made to the Rule 2000 and
3000 Series of NASD rules since
approval of Nasdaq’s rules by the
Commission in January 2006, makes
several minor modifications and
corrects certain typographical errors in
the approved rules.
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
The foregoing proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 13 and
Rule 19b–4(f)(6) 14 thereunder because it
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 from the date on
10 See
Securities Exchange Act Release No. 53371
(February 24, 2006), 71 FR 11008 (March 3, 2006).
11 15 U.S.C. 78f.
12 15 U.S.C. 78f(b)(5).
13 15 U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(6).
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44737
which it was filed, or such shorter time
as the Commission may designate,
provided that the self-regulatory
organization has given the Commission
written notice of its intent to file the
proposed rule change at least five
business days prior to the filing date of
the proposed rule change.15
Nasdaq has requested that the
Commission waive the 30-day preoperative period requirement for ‘‘noncontroversial’’ proposals, based upon a
representation that such waiver will
allow Nasdaq to implement the rule
changes, which have either recently
been made effective as changes to NASD
rules or are technical in nature, prior to
the time when Nasdaq begins to operate
as a national securities exchange. The
Commission believes that waiver of the
operative delay is consistent with the
protection of investors and the public
interest. Waiver of the 30-day operative
period will allow Nasdaq to implement
these changes immediately so that they
can be in place prior to the time Nasdaq
begins to operate as a national securities
exchange. Accordingly, the Commission
designates the proposal to be effective
and operative upon filing with the
Commission.16 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–NASDAQ–2006–018 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
15 As required under Rule 19b–4(f)(6)(iii), Nasdaq
provided the Commission with written notice of its
intent to file the proposed rule change at least five
days prior to the filing date.
16 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rules impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\07AUN1.SGM
07AUN1
44738
Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2006–018. 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
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–2006–018 and
should be submitted on or before
August 28, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.17
Nancy M. Morris,
Secretary.
[FR Doc. E6–12697 Filed 8–4–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54248; File No. SR–
NASDAQ–2006–019]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Regarding
Technical and Conforming Changes to
Nasdaq’s 4000 Series Rules
sroberts on PROD1PC70 with NOTICES
July 31, 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 July 28,
2006, The NASDAQ Stock Market LLC
(‘‘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. Nasdaq
has designated the proposed rule change
as constituting a non-controversial rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposed rule change effective upon
filing with the Commission.5 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.
Nasdaq proposes to conform the Rule
4000 Series of Nasdaq’s rules to certain
changes made to the Rule 4000 Series of
the rules of the National Association of
Securities Dealers, Inc. (‘‘NASD’’) since
approval of Nasdaq’s rules by the
Commission in January 2006 and to
correct certain errors in the approved
rules. Nasdaq proposes to implement
the proposed rule change immediately.
The text of the proposed rule change
is available on Nasdaq’s Web site
(www.complinet.com/nasdaq), at
Nasdaq’s principal office, and at the
Commission’s Public Reference Room.
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 the
Statutory Basis for, the Proposed Rule
Change.
1. Purpose.
Nasdaq is modifying its 4000 Series
Rules to conform them to certain
changes made to the 4000 Series Rules
of the NASD since approval of Nasdaq’s
rules by the Commission in January
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 The Exchange requested the Commission to
waive the 30-day operative delay, as specified in
Rule 19b–4(f)(6)(iii). 17 CFR 240.19b–4(f)(6)(iii).
4 17
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Aug<31>2005
17:19 Aug 04, 2006
Jkt 208001
PO 00000
Frm 00134
Fmt 4703
Sfmt 4703
2006 and to correct certain
typographical errors in the approved
rules.
Specifically, Nasdaq is:
• Amending Nasdaq Rule 4120 to
reflect changes made by SR–NASD–
2006–015 6 in connection with the
implementation of the Nasdaq Halt
Cross, and to add language concerning
halts in Nasdaq index warrants that is
being relocated from former Nasdaq
Rule 2854.7
• Amending Nasdaq Rule 4120 to
update contact information for Nasdaq’s
MarketWatch Department and amending
Nasdaq IM–4120 and Nasdaq Rules
4310, 4320, and 4350 to remove
superfluous and outdated contact
information.
• Amending Nasdaq Rule 4305 to
change a reference to the Nasdaq
National Market to the Nasdaq Global
Market, consistent with changes made
through SR–NASDAQ–2006–007.8
• Amending Nasdaq Rule 4320 to
eliminate phase-in dates that have
already passed and rule text that has
been superseded by the phased-in
rules.9
• Amending Nasdaq Rule 4350 and
adding Nasdaq IM–4350–8 to reflect an
amendment made to NASD Rule 4350
by SR–NASD–2005–073.10
• Amending Nasdaq Rules 4510 and
4520, deleting Nasdaq IM–4500–3, and
adding new Nasdaq IM–4500–4, to
reflect changes made by SR–NASD–
2005–143 11 and SR–NASD–2006–047.12
• Adding Nasdaq Rule 4613(a)(2) and
(3) and Nasdaq IM–4613 to restore a
pilot program for supplemental MPIDs
that had lapsed at the time of the
approval of Nasdaq’s exchange
registration application but that was
6 Securities Exchange Act Release No. 53687
(April 20, 2006), 71 FR 24787 (April 27, 2006) (SR–
NASD–2006–015). Nasdaq notes that a further
amendment to Rule 4120 was approved by the
Commission in Securities Exchange Act Release No.
54155 (July 14, 2006), 71 FR 41291 (July 20, 2006)
(SR–NASDAQ–2006–001), but with an
implementation date of August 28, 2006.
Accordingly, Nasdaq will file a technical rule
change prior to that date to reflect the difference
between the version of the rule adopted in this
filing for the period prior to August 28, and the
version to take effect on that date.
7 SR–NASDAQ–2006–018 (July 25, 2006).
8 Securities Exchange Act Release No. 53799 (May
12, 2006), 71 FR 29195 (May 19, 2006) (SR–
NASDAQ–2006–007).
9 Securities Exchange Act Release No. 50753
(November 29, 2004), 69 FR 70486 (December 6,
2004) (SR–NASD–2004–147).
10 Securities Exchange Act Release No. 53578
(March 30, 2006), 71 FR 17532 (April 6, 2006) (SR–
NASD–2005–073).
11 Securities Exchange Act Release No. 52997
(December 22, 2005), 70 FR 77222 (December 29,
2005) (SR–NASD–2005–143).
12 Securities Exchange Act Release No. 53696
(April 21, 2006), 71 FR 25273 (April 28, 2006) (SR–
NASD–2006–047).
E:\FR\FM\07AUN1.SGM
07AUN1
]]>Agencies
[Federal Register Volume 71, Number 151 (Monday, August 7, 2006)]
[Notices]
[Pages 44734-44738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12697]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54253; File No. SR-NASDAQ-2006-018]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Regarding Technical and Conforming Changes to Nasdaq's 2000 and 3000
Series Rules
July 31, 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 July 25, 2006, The NASDAQ Stock Market LLC (``Exchange'' or
``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. Nasdaq has filed
this proposed rule change as a ``non-controversial'' rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\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 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)(iii).
\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 conform the Rule 2000 and 3000 Series of
Nasdaq's rules to certain changes made to the Rule 2000 and 3000 Series
of the rules of National Association of Securities Dealers, Inc.
(``NASD'') since approval of Nasdaq's rules by the Commission in
January 2006, to make several minor modifications, and to correct
certain typographical errors in the approved rules. Nasdaq proposes to
implement the proposed rule change immediately.
The text of the proposed rule change is included below. Proposed
new
[[Page 44735]]
language is italicized; deletions are [bracketed].
* * * * *
2111. Trading Ahead of Customer Market Orders
(a) Nasdaq members and persons associated with a member shall
comply with NASD Rule 2111 as if such Rule were part of Nasdaq's rules.
(b) For purposes of this Rule, references to IM-2110-2, Rule 2320,
and Rule 3110[, and Rule 6440] shall be construed as references to
Nasdaq IM-2110-2, Nasdaq Rule 2320, and Nasdaq Rule 3110[, and Nasdaq
Rule 6440].
(c) Nasdaq members and persons associated with a member relying
upon the exemption set forth in NASD Rule 2111(f) shall comply with the
provisions of the NASD Rule 4600 Series and 6400 Series cited therein
as if such Rules were part of Nasdaq's Rules. Nasdaq and NASD
Regulation, an affiliate of NASD, are parties to the Regulatory
Contract pursuant to which NASD Regulation has agreed to perform
certain functions on behalf of Nasdaq. Therefore, Nasdaq members are
complying with Nasdaq Rule 2111(f) by complying with NASD Rule 2111(f)
as written, including, for example, filing requirements and
notifications. In addition, functions performed by NASD Regulation,
NASD Regulation departments, and NASD Regulation staff under Nasdaq
Rule 2111(f) are being performed by NASD Regulation on behalf of
Nasdaq.
* * * * *
2520. Margin Requirements
(a) No change.
(b) A member designated to Nasdaq for oversight pursuant to SEC
Rule 17d-1 shall comply with the initial and maintenance margin
requirements of Regulation T and the NASD Rule 2520 as if such Rules
were part of Nasdaq's Rules.
(c) No change.
[(c)](d) Pursuant to the Rule 9600 Series, Nasdaq may exempt any
member from the requirements contained in paragraph (e)(3) of NASD Rule
2520, as applied to Nasdaq members through Nasdaq Rule 2520, if the
account referenced in paragraph (e)(3) of NASD Rule 2520 is confined
exclusively to transactions and positions in exempted securities.
* * * * *
2810. Direct Participation Programs
(a) No change.
(b) For purposes of this Rule 2810:
(1)--(2) No change.
(3) for purposes of this Rule only, Nasdaq members and their
associated persons shall comply with applicable provisions of NASD Rule
2710 as [of]if such Rule were part of Nasdaq's Rules.
(c) No change.
* * * * *
2852. Reporting Requirements
(a) Each member shall file with Nasdaq Regulation a report with
respect to each account in which the member has an interest, each
account of a partner, officer, director or employee of such member, and
each customer account of the member, which has established an aggregate
position of 100,000 index warrants on the same side of the market in an
index warrant issue listed on Nasdaq, combining such index warrant
position with positions in index warrants overlying the same index on
the same side of the market traded on Nasdaq or another national
securities exchange.
(b) Such report shall identify the person or persons having an
interest in such account and shall identify separately the total number
of each type of index warrant that comprises the reportable position in
such account. The report shall be in such form as may be prescribed by
Nasdaq Regulation and shall be filed no later than the close of
business on the next business day following the day on which the
transaction or transactions necessitating the filing of such report
occurred. Whenever a report shall be required to be filed with respect
to an account pursuant to this Rule, the member filing such report
shall file with Nasdaq Regulation such additional periodic reports with
respect to such account as Nasdaq Regulation may from time to time
prescribe.
2853. Liquidation of Index Warrant Positions
(a) Whenever Nasdaq Regulation determines that a person or group of
persons acting in concert holds or controls an aggregate position
(whether short or long) in index warrants overlying the same index in
excess of the position limitations established by Rule 2850, it may,
when deemed necessary or appropriate in the public interest and for the
protection of investors, direct any member or all members carrying a
position in index warrants overlying such index for such person or
persons to liquidate such position or positions, or portions thereof,
as expeditiously as possible and consistent with the maintenance of an
orderly market, so as to bring such person or persons into compliance
with the position limitations contained in Rule 2850.
(b) Whenever such a directive is issued by Nasdaq Regulation no
member receiving notice thereof shall accept and/or execute for any
person or persons named in such directive any order to purchase or sell
short any index warrants based on the same index, unless in each
instance express approval therefor is given by Nasdaq Regulation, or
the directive is rescinded.
2854. [Trading Halts or Suspensions] Reserved
[(a) The trading in an index warrant on Nasdaq shall be halted
whenever Nasdaq Regulation shall conclude that such action is
appropriate in the interests of a fair and orderly market and to
protect investors. Among the factors that may be considered are the
following:]
[(1) trading has been halted or suspended in underlying stocks
whose weighted value represents 20% or more of the index value;]
[(2) the current calculation of the index derived from the current
market prices of the stocks is not available;]
[(3) other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present.]
[(b) Trading in index warrants that has been the subject of a
trading halt or suspension may resume if Nasdaq Regulation determines
that the conditions which led to the halt or suspension are no longer
present or that the interests of a fair and orderly market are served
by a resumption of trading. In either event, the reopening may not
occur until Nasdaq Regulation has determined that trading in underlying
stocks whose weighted value represents more than 50% of the index is
occurring.]
* * * * *
IM-3010-1. Standards for Reasonable Review
(a) Nasdaq members and persons associated with a member shall
comply with NASD Interpretive Material IM-3010-1 as if such Rule were
part of Nasdaq's Rules.
(b) For purposes of this Rule:
(1) references to Rule 3010 shall be construed as references to
Nasdaq Rule 3010; and
(2) references to ``NASD Rules'' shall be construed as references
to ``Nasdaq Rules''.
IM-3010-2. Guidance on Heightened Supervision Requirements
Nasdaq members shall comply with NASD Notice to Members 97-19 as if
such Rule were part of Nasdaq's Rules.
* * * * *
IM-3011-1. Independent Testing Requirements
Nasdaq members and persons associated with a member shall comply
[[Page 44736]]
with NASD Interpretive Material IM-3011-1 as if such Rule were part of
Nasdaq's Rules. For purposes of this Rule, references to Rule 3011
shall be construed as references to Nasdaq Rule 3011.
IM-3011-2. Review of Anti-Money Laundering Compliance Person
Information
Nasdaq members and persons associated with a member shall comply
with NASD Interpretive Material IM-3011-2 as if such Rule were part of
Nasdaq's Rules. For purposes of this Rule, references to Rule 3011
shall be construed as references to Nasdaq Rule 3011.
3012. Supervisory Control System
(a) Members and persons associated with a member shall comply with
NASD Rule 3012 as if such Rule were part of Nasdaq's rules. Nasdaq and
NASD Regulation, an affiliate of NASD, are parties to the Regulatory
Contract pursuant to which NASD Regulation has agreed to perform
certain functions on behalf of Nasdaq. Therefore, Nasdaq members are
complying with Nasdaq Rule 3012 by complying with NASD Rule 3012 as
written, including, for example, filing requirements and notifications.
In addition, functions performed by NASD Regulation, NASD Regulation
departments, and NASD Regulation staff under Nasdaq Rule 3012 are being
performed by NASD Regulation on behalf of Nasdaq.
(b) No change.
* * * * *
3080. Disclosure to Associated Persons When Signing Form U[-]4
Nasdaq Members shall comply with NASD Rule 3080 as if such Rule
were part of Nasdaq's Rules. In lieu of incorporating in the written
statement the language in paragraph (2) of NASD Rule 3080, members
shall include the following provision:
A claim alleging employment discrimination, including a sexual
harassment claim, in violation of a statute is not required to be
arbitrated under Nasdaq rules. Such a claim may be arbitrated under
Nasdaq rules only if the parties have agreed to arbitrate it, either
before or after the dispute arose. The rules of other arbitration
forums may be different.
* * * * *
3110. Books and Records
(a)-(e) No change.
(f) Requirements When Using Predispute Arbitration Agreements With
Customers
(1)-(2) No change.
(3)(A) A member shall provide a customer with a copy of any
predispute arbitration clause or customer agreement executed between
the customer and the member, or inform the customer that the member
does not have a copy thereof, within ten business days of receipt of
the customer's request. If a customer requests such a copy before the
member has provided the customer with a copy pursuant to subparagraph
(2)(B) of this [Rule]paragraph, the member must provide a copy to the
customer by the earlier date required by this subparagraph (3)(A) or by
subparagraph (2)(B).
(B) No change.
(4)-(7) No change.
(g)-(j) No change.
* * * * *
3130. Regulation of Activities of Members Experiencing Financial and/or
Operational Difficulties
(a) A member designated to Nasdaq for oversight pursuant to SEC
Rule 17d-1 shall comply with NASD Rule 3130 (except NASD Rule 3130(a))
as if such Rule were part of Nasdaq's Rules.
(b) No change.
IM-3130. Restrictions on a Member's Activity
(a) A member designated to Nasdaq for oversight pursuant to SEC
Rule 17d-1 shall comply with NASD Interpretive Material 3130 (except
IM-3130(d)) as if such Rule were part of Nasdaq's Rules.
(b) No change.
* * * * *
3360. Short-Interest Reporting
(a) To the extent such information is not otherwise reported to the
NASD in conformance with NASD Rule 3360, each member shall maintain a
record of total ``short'' positions in all customer and proprietary
firm accounts in securities listed on Nasdaq and shall regularly report
such information to Nasdaq in such a manner as may be prescribed by
Nasdaq. [For the purposes of this rule, the term ``customer'' includes
a broker/dealer.] Reports shall be made as of the close of the
settlement date designated by Nasdaq. Reports shall be received by
Nasdaq no later than the second business day after the reporting
settlement date designated by Nasdaq.
(b) For purposes of this Rule[,]:
(1) ``short'' positions to be reported are those resulting from
``short sales'' as that term is defined in SEC Rule 200[, under the
Act]of Regulation SHO, with the exception of positions that meet the
requirements of Subsections (e)(1), (6), (7), (8), and (10) of SEC Rule
10a-1 adopted under the Act[.]; and
(2) the term ``customer'' includes a broker-dealer.
* * * * *
3380. Order Entry and Execution Practices
No member or associated person may engage in conduct that has the
intent or effect of splitting any order into multiple smaller orders
for execution or any execution into multiple smaller executions for
transaction reporting for the primary purpose of maximizing a monetary
or in-kind amount to be received by the member or associated person as
a result of the execution of such orders or the transaction reporting
of such executions. For purposes of this rule, ``monetary or in-kind
amount'' shall be defined to include, but not be limited to, any
credits, commissions, gratuities, payments for or rebates of fees, or
any other payments of value to the member or associated person.
338[0]1. SEC Rule 19c-1--Governing Certain Off-Board Agency
Transactions by Members of National Securities Exchanges
No rule, stated policy, or practice of this exchange shall prohibit
or condition, or be construed to prohibit or condition or otherwise
limit, directly or indirectly, the ability of any member acting as
agent to effect any transaction otherwise than on this exchange with
another person (except when such member also is acting as agent for
such other person in such transaction), in any equity security listed
on this exchange or to which unlisted trading privileges on this
exchange have been extended.
* * * * *
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 is modifying its 2000 and 3000 Series Rules, which are based
to a substantial extent on comparable NASD
[[Page 44737]]
Rules, to conform them to certain changes made to the Rule 2000 and
3000 Series of the rules of NASD since approval of Nasdaq's rules by
the Commission in January 2006, to make several minor modifications,
and to correct certain typographical errors in the approved rules.
Specifically, Nasdaq is:
Amending Nasdaq Rule 2111, which incorporates NASD Rule
2111 by reference, to reflect certain changes to the underlying text of
that rule made by SR-NASD-2005-139.\5\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 52998 (December 22,
2005), 70 FR 77223 (December 29, 2005) (SR-NASD-2005-139).
---------------------------------------------------------------------------
Amending Nasdaq Rules 2852 and 2853 at the request of SEC
staff to reflect that certain functions identified therein will be
performed by Nasdaq Regulation staff.
Deleting Nasdaq Rule 2854, governing trading halts and
suspension of index warrants, so that it may be transferred to Nasdaq
Rule 4120, which contains Nasdaq's other rules concerning trading halts
and suspensions. The change to Nasdaq Rule 4120 will be made by a
corresponding filing concerning technical amendments to the Nasdaq 4000
Series rules that Nasdaq will submit on or prior to August 1, 2006 on
an immediately effective basis.
Incorporating by reference NASD IM-3013-1, which was added
to the NASD Rules by SR-NASD-2003-104,\6\ and making a conforming
change to the numbering of current Nasdaq IM-3010.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 52403 (September 9,
2005), 70 FR 54782 (September 16, 2005) (SR-NASD-2003-104).
---------------------------------------------------------------------------
Incorporating by reference NASD IM-3011-1 and IM-3011-2,
which were added to the NASD Rules by SR-NASD-2005-066.\7\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 53030 (December 28,
2005), 71 FR 632 (January 5, 2006) (SR-NASD-2005-066).
---------------------------------------------------------------------------
Amending Nasdaq Rule 3012, which incorporates NASD Rule
3012 by reference, to include language that reflects a filing
requirement added to the NASD Rule by SR-NASD-2005-084.\8\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 52799 (November 18,
2005), 70 FR 71573 (November 29, 2005) (SR-NASD-2005-084).
---------------------------------------------------------------------------
Amending Nasdaq Rule 3360 to reflect minor changes made to
the comparable NASD Rule by SR-NASD-2005-112.\9\
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 53224 (February 3,
2006), 71 FR 7101 (February 10, 2006) (SR-NASD-2005-112).
---------------------------------------------------------------------------
Adopting new Nasdaq Rule 3380, which is based on NASD Rule
3380, and which was added to the NASD Rules by SR-NASD-2005-144,\10\
and renumbering existing Nasdaq Rule 3380 as Nasdaq Rule 3381.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 53371 (February 24,
2006), 71 FR 11008 (March 3, 2006).
---------------------------------------------------------------------------
Amending Nasdaq Rules 2520, 2810, 3080, 3110, 3130, and
Nasdaq IM-3130 to correct typographical errors.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\11\ in general, and with
Section 6(b)(5) of the Act,\12\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The proposed
rule change conforms the Rule 2000 and 3000 Series of Nasdaq's rules to
certain changes made to the Rule 2000 and 3000 Series of NASD rules
since approval of Nasdaq's rules by the Commission in January 2006,
makes several minor modifications and corrects certain typographical
errors in the approved rules.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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
The foregoing proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) \14\
thereunder because it 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 from the date on
which it was filed, or such shorter time as the Commission may
designate, provided that the self-regulatory organization has given the
Commission written notice of its intent to file the proposed rule
change at least five business days prior to the filing date of the
proposed rule change.\15\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ As required under Rule 19b-4(f)(6)(iii), Nasdaq provided
the Commission with written notice of its intent to file the
proposed rule change at least five days prior to the filing date.
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Nasdaq has requested that the Commission waive the 30-day pre-
operative period requirement for ``non-controversial'' proposals, based
upon a representation that such waiver will allow Nasdaq to implement
the rule changes, which have either recently been made effective as
changes to NASD rules or are technical in nature, prior to the time
when Nasdaq begins to operate as a national securities exchange. The
Commission believes that waiver of the operative delay is consistent
with the protection of investors and the public interest. Waiver of the
30-day operative period will allow Nasdaq to implement these changes
immediately so that they can be in place prior to the time Nasdaq
begins to operate as a national securities exchange. Accordingly, the
Commission designates the proposal to be effective and operative upon
filing with the Commission.\16\ 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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\16\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rules impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-NASDAQ-2006-018 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary,
[[Page 44738]]
Securities and Exchange Commission, Station Place, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2006-018. 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 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-2006-018 and should be submitted on or before
August 28, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-12697 Filed 8-4-06; 8:45 am]
BILLING CODE 8010-01-P
