Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NASD Rule 5110 and Certain Other NASD Rules Amended Pursuant to SR-NASD-2005-087, 44747-44749 [E6-12738]

Download as PDF Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule III. Date of Effectiveness of the change that are filed with the Proposed Rule Change and Timing for Commission, and all written Commission Action communications relating to the The proposed rule change has become proposed rule change between the Commission and any person, other than effective pursuant to Section 19(b)(3)(A)(i) of the Act 24 and Rule 19b– those that may be withheld from the public in accordance with the 4(f)(1) thereunder,25 in that the provisions of 5 U.S.C. 552, will be proposed rule change constitutes a stated policy, practice, or interpretation available for inspection and copying in the Commission’s Public Reference with respect to the meaning, Room. Copies of such filing also will be administration, or enforcement of an available for inspection and copying at existing rule of the self-regulatory the principal office of NASD. All organization. NASD proposes to comments received will be posted implement the revised Series 55 without change; the Commission does examination program on August 15, not edit personal identifying 2006. NASD will announce the information from submissions. You implementation date in a Notice to should submit only information that Members to be published on the same you wish to make available publicly. All date as this filing. submissions should refer to File At any time within 60 days of the filing of such proposed rule change, the Number SR–NASD–2006–086 and should be submitted on or before Commission may summarily abrogate August 28, 2006. such rule change if it appears to the Commission that such action is For the Commission, by the Division of Market Regulation, pursuant to delegated necessary or appropriate in the public authority.26 interest, for the protection of investors, Nancy M. Morris, or otherwise in furtherance of the purposes of the Act. Secretary. 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. [FR Doc. E6–12704 Filed 8–4–06; 8:45 am] Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–NASD–2006–086 on the subject line. sroberts on PROD1PC70 with 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 is consistent with the Act. Comments may be submitted by any of the following methods: Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NASD Rule 5110 and Certain Other NASD Rules Amended Pursuant to SR–NASD– 2005–087 Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NASD–2006–086. 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 August 1, 2006. BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54256; File No. SR–NASD– 2006–087] 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 20, 2006, the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the NASD. The 26 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 24 15 U.S.C. 78s(b)(3)(A)(i). 25 17 CFR 240.19b–4(f)(1). VerDate Aug<31>2005 17:19 Aug 04, 2006 1 15 Jkt 208001 PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 44747 NASD filed the proposed rules change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. NASD proposes to make the proposed rule change operative on the date on which the Nasdaq Stock Market LLC (‘‘Nasdaq Exchange’’) commences operation as a national securities exchange for Nasdaq-listed securities.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 The NASD proposes to (1) amend NASD Rule 5110 to clarify that the rule is applicable to both Nasdaq and nonNasdaq exchange-listed securities; and (2) make technical, non-substantive changes to certain other NASD rules that were amended by proposed rule change SR–NASD–2005–087.6 Rule 5110 and the other amendments to NASD rules proposed by SR–NASD– 2005–087 will become effective on the date upon which the Nasdaq Exchange operates as a national securities exchange for Nasdaq-listed securities. Currently, that date is projected to be August 1, 2006. The text of the proposed rule change is available on the NASD’s Web site (http://www.nasd.com), at NASD’s principal office, 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, the NASD included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NASD has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 These securities will not include approximately 40 securities that are dually-listed on the New York Stock Exchange. 6 The NASD filed SR–NASD–2005–087 on July 11, 2005 and Amendment No. 1 on June 15, 2006. The Commission approved SR–NASD–2005–087, as amended, on June 30, 2006. See Securities Exchange Act Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) (‘‘June 30 Approval Order’’). 4 17 E:\FR\FM\07AUN1.SGM 07AUN1 44748 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On June 30, 2006, the Commission approved SR–NASD–2005–087.7 Among other things, in SR–NASD–2005–087, the NASD proposed (1) amendments to the NASD Delegation Plan, NASD ByLaws and NASD rules to reflect a proposed phased implementation strategy for the operation of the Nasdaq Exchange as a national securities exchange with respect to Nasdaq-listed securities during a transitional period; and (2) rules for reporting transactions effected otherwise than on an exchange to the new Trade Reporting Facility. The NASD is filing this proposed rule change in anticipation of SR–NASD– 2005–087 becoming effective to (1) amend Rule 5110 to clarify that the rule is applicable to both Nasdaq and nonNasdaq exchange-listed securities; and (2) make technical, non-substantive changes to certain other NASD rules that were amended by SR–NASD–2005– 087. sroberts on PROD1PC70 with NOTICES Amendments to Rule 5110 Pursuant to SR–NASD–2005–087, NASD proposed to renumber Rule 6440(i) as Rule 5110 and extend its application to Nasdaq exchange-listed securities. Currently, the rule prohibits members from executing, otherwise than on an exchange, a transaction in a security subject to an initial public offering until such security has first opened for trading on the national securities exchange listing the security, as indicated by the dissemination of an opening transaction in the security by the listing exchange via the Consolidated Tape. As described in footnote 23 of the June 30 Approval Order, the NASD is proposing to amend Rule 5110 to delete the reference to dissemination of the opening transaction ‘‘via the Consolidated Tape.’’ Pursuant to SR– NASD–2005–087, Rule 5110 is intended to apply to both Nasdaq and nonNasdaq exchange-listed securities. As such, the reference in the rule to the Consolidated Tape is too narrow given that transactions in securities listed on the Nasdaq Exchange are reported to the Nasdaq Unlisted Trading Privileges Plan. Technical, Non-Substantive Amendments NASD is proposing a number of grammatical and technical, non7 Id. VerDate Aug<31>2005 17:19 Aug 04, 2006 Jkt 208001 substantive changes to certain NASD rules that were amended by SR–NASD– 2005–087. Rules 4120A, 4633 and 6431 give NASD authority to halt trading on the ADF and trading reported to the Trade Reporting Facility, with respect to Nasdaq-listed securities, and trading otherwise than on an exchange with respect to non-Nasdaq exchange-listed securities, respectively. These rules are intended to be consistent in their language and application. Accordingly, NASD is proposing to amend Rule 4633(a)(2)(C)(i) and (ii) and Rule 6431(a)(2)(C)(i) and (ii) by replacing the word ‘‘believes’’ with the word ‘‘determines.’’ The proposed change would conform the language of these rules to the language of Rule 4120A(a)(2)(C)(i) and (ii).8 NASD is also proposing to amend Rule 4633 to change references to trading halts ‘‘on’’ or ‘‘in’’ the Trade Reporting Facility to ‘‘reported to’’ the Trade Reporting Facility, to clarify that trades are not executed on the Trade Reporting Facility. In addition, SR–NASD–2005–087 inadvertently renumbered subparagraphs (MM) through (PP) of Rule 2860(b)(2) as (KK) through (OO). These subparagraphs should have been renumbered (KK) through (NN). As a result, there currently is no subparagraph (OO). Therefore, the proposed rule change would renumber the rule’s subparagraphs (PP) through (AAA) as (OO) through (ZZ). Finally, several rule changes that were approved by the Commission and implemented subsequent to the filing of Amendment No. 1 to SR–NASD–2005– 087 change the underlying or proposed text provided in Exhibit 5 of SR–NASD– 2005–087. As a result, NASD is proposing changes to the rule text approved pursuant to SR–NASD–2005– 087 to make it consistent with the other recently approved rule changes. These include the following rule changes along with the rules affected: SR– NASD–2000–023 amended Rules 6951 and 6954; SR–NASD–2005–098 amended Rule 6740 (renumbered as Rule 6640 pursuant to SR–NASD–2005– 087); SR–NASD–2006–040 amended Rule 9610; and SR–NASD–2006–080 8 Specifically, each rule grants NASD authority to halt trades in a particular security, including in the event of extraordinary market activity in the security. Rule 4120A(a)(2)(C)(i) and (ii) provides that NASD may exercise this authority if it ‘‘determines’’ that such activity is caused by the misuse or malfunction of a system operated by or linked to NASD or a national securities exchange. In otherwise identical provisions, Rule 4633(a)(2)(C)(i) and (ii) and Rule 6431(a)(2)(C)(i) and (ii) use the word ‘‘believes’’ instead of ‘‘determines.’’ PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 amended Rule 4901. In addition, the ‘‘Nasdaq National Market’’ was recently renamed the ‘‘Nasdaq Global Market,’’ and pursuant to SR–NASD–2006–068, a number of rules were amended to change ‘‘Nasdaq National Market,’’ ‘‘NNM’’ or ‘‘Nasdaq National Market securities’’ to ‘‘Nasdaq Global Market,’’ ‘‘NGM’’ or ‘‘Nasdaq Global Market securities,’’ respectively. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,9 which requires, among other things, that NASD rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that the proposed rule change relating to Rule 5110 will result in uniform regulation of securities that are subject to an initial public offering. In addition, NASD believes that the proposed rule change will enhance the integrity of the market by increasing the consistency and clarity of its rules. B. Self-Regulatory Organization’s Statement on Burden on Competition NASD does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. 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 Because the foregoing proposed rule change 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 if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act,10 and Rule 19b–4(f)(6) thereunder.11 At any time within 60 days of the filing of the proposed rule change the Commission may summarily 9 15 U.S.C. 78o–3(b)(6). U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). 10 15 E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / Notices 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. A proposed rule change filed under Rule 19b–4(f)(6) 12 normally does not become operative prior to 30 days after the date of filing. However, pursuant to Rule 19b–4(f)(6)(iii),13 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The NASD has asked the Commission to waive the 30-day pre-operative delay. The Commission believes that such waiver is consistent with the protection of investors and the public interest because it would allow the NASD to update and clarify its rules.14 For this reason, the Commission designates the proposed rule change to be operative on the date that the Nasdaq Exchange begins operations as a national securities exchange for Nasdaq-listed securities.15 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: post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room. Copies of the filing also will be available for inspection and copying at the principal office of the NASD. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASD–2006–087 and should be submitted on or before August 28, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Nancy M. Morris, Secretary. [FR Doc. E6–12738 Filed 8–4–06; 8:45 am] BILLING CODE 8010–01–P Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NASD–2006–087 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–2006–087. 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 12 17 CFR 240.19b–4(f)(6). CFR 240.19b–4(f)(6)(iii). 14 For purposes only of accelerating the operative date of this proposal, the Commission has considered the rule’s impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 15 As noted above, the Nasdaq Exchange is currently scheduled to commence operating as a national securities exchange with respect to Nasdaq-listed securities on August 1, 2006. sroberts on PROD1PC70 with NOTICES 13 17 VerDate Aug<31>2005 17:19 Aug 04, 2006 Jkt 208001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54258; File No. SR–NASD– 2006–080] Self-Regulatory Organizations; National Association of Securities Dealers, Inc; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto To Extend the Time for NonMember Broker/Dealers To Access the Brut and INET Facilities August 1, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 3, 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 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00145 Fmt 4703 Sfmt 4703 44749 been prepared by Nasdaq. On July 5, 2006, Nasdaq filed Amendment No. 1 to the proposed rule change.3 Nasdaq filed the proposed rule change as a ‘‘noncontroversial’’ rule change under Rule 19b–4(f)(6) under the Act,4 which renders the proposal effective upon filing with the Commission.5 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 September 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. The purpose of the proposed rule change is to allow the non-NASD member broker/dealers to have continued access to the Brut and INET systems while they take actions to become members of The NASDAQ Stock Market LLC (‘‘Nasdaq Exchange’’).6 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 Unless stated otherwise, the terms described below shall have the following meaning: (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. 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 3 In Amendment No. 1, Nasdaq revised the proposed rule text to conform it with the existing language of NASD Rule 4901. 4 17 CFR 240.19b–4(f)(6). 5 Nasdaq has requested the Commission to waive the 30-day pre-operative delay required by Rule 19b–4(f)(6)(iii), 17 CFR 240.19b–4(f)(6)(iii). See discussion infra Section III. 6 The Commission recently approved Nasdaq’s application for one of its proposed subsidiaries, The NASDAQ Stock Market LLC, to be registered as a national securities exchange under Section 6 of the Act. See Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10–131). E:\FR\FM\07AUN1.SGM 07AUN1

Agencies

[Federal Register Volume 71, Number 151 (Monday, August 7, 2006)]
[Notices]
[Pages 44747-44749]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12738]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54256; File No. SR-NASD-2006-087]


 Self-Regulatory Organizations; National Association of 
Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness 
of Proposed Rule Change Relating to NASD Rule 5110 and Certain Other 
NASD Rules Amended Pursuant to SR-NASD-2005-087

 August 1, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 20, 2006, the National Association of Securities Dealers, Inc. 
(``NASD'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the NASD. The NASD 
filed the proposed rules change pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed 
rule change effective upon filing with the Commission. NASD proposes to 
make the proposed rule change operative on the date on which the Nasdaq 
Stock Market LLC (``Nasdaq Exchange'') commences operation as a 
national securities exchange for Nasdaq-listed securities.\5\ 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).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ These securities will not include approximately 40 
securities that are dually-listed on the New York Stock Exchange.
---------------------------------------------------------------------------

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

    The NASD proposes to (1) amend NASD Rule 5110 to clarify that the 
rule is applicable to both Nasdaq and non-Nasdaq exchange-listed 
securities; and (2) make technical, non-substantive changes to certain 
other NASD rules that were amended by proposed rule change SR-NASD-
2005-087.\6\ Rule 5110 and the other amendments to NASD rules proposed 
by SR-NASD-2005-087 will become effective on the date upon which the 
Nasdaq Exchange operates as a national securities exchange for Nasdaq-
listed securities. Currently, that date is projected to be August 1, 
2006. The text of the proposed rule change is available on the NASD's 
Web site (http://www.nasd.com), at NASD's principal office, at the 
Commission's Public Reference Room.
---------------------------------------------------------------------------

    \6\ The NASD filed SR-NASD-2005-087 on July 11, 2005 and 
Amendment No. 1 on June 15, 2006. The Commission approved SR-NASD-
2005-087, as amended, on June 30, 2006. See Securities Exchange Act 
Release No. 54084 (June 30, 2006), 71 FR 38935 (July 10, 2006) 
(``June 30 Approval Order'').
---------------------------------------------------------------------------

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

    In its filing with the Commission, the NASD included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The NASD has prepared summaries, set forth in Sections 
A, B, and C below, of the most significant aspects of such statements.

[[Page 44748]]

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

1. Purpose
    On June 30, 2006, the Commission approved SR-NASD-2005-087.\7\ 
Among other things, in SR-NASD-2005-087, the NASD proposed (1) 
amendments to the NASD Delegation Plan, NASD By-Laws and NASD rules to 
reflect a proposed phased implementation strategy for the operation of 
the Nasdaq Exchange as a national securities exchange with respect to 
Nasdaq-listed securities during a transitional period; and (2) rules 
for reporting transactions effected otherwise than on an exchange to 
the new Trade Reporting Facility. The NASD is filing this proposed rule 
change in anticipation of SR-NASD-2005-087 becoming effective to (1) 
amend Rule 5110 to clarify that the rule is applicable to both Nasdaq 
and non-Nasdaq exchange-listed securities; and (2) make technical, non-
substantive changes to certain other NASD rules that were amended by 
SR-NASD-2005-087.
---------------------------------------------------------------------------

    \7\ Id.
---------------------------------------------------------------------------

Amendments to Rule 5110

    Pursuant to SR-NASD-2005-087, NASD proposed to renumber Rule 
6440(i) as Rule 5110 and extend its application to Nasdaq exchange-
listed securities. Currently, the rule prohibits members from 
executing, otherwise than on an exchange, a transaction in a security 
subject to an initial public offering until such security has first 
opened for trading on the national securities exchange listing the 
security, as indicated by the dissemination of an opening transaction 
in the security by the listing exchange via the Consolidated Tape.
    As described in footnote 23 of the June 30 Approval Order, the NASD 
is proposing to amend Rule 5110 to delete the reference to 
dissemination of the opening transaction ``via the Consolidated Tape.'' 
Pursuant to SR- NASD-2005-087, Rule 5110 is intended to apply to both 
Nasdaq and non-Nasdaq exchange-listed securities. As such, the 
reference in the rule to the Consolidated Tape is too narrow given that 
transactions in securities listed on the Nasdaq Exchange are reported 
to the Nasdaq Unlisted Trading Privileges Plan.

Technical, Non-Substantive Amendments

    NASD is proposing a number of grammatical and technical, non-
substantive changes to certain NASD rules that were amended by SR-NASD-
2005-087.
    Rules 4120A, 4633 and 6431 give NASD authority to halt trading on 
the ADF and trading reported to the Trade Reporting Facility, with 
respect to Nasdaq-listed securities, and trading otherwise than on an 
exchange with respect to non-Nasdaq exchange-listed securities, 
respectively. These rules are intended to be consistent in their 
language and application. Accordingly, NASD is proposing to amend Rule 
4633(a)(2)(C)(i) and (ii) and Rule 6431(a)(2)(C)(i) and (ii) by 
replacing the word ``believes'' with the word ``determines.'' The 
proposed change would conform the language of these rules to the 
language of Rule 4120A(a)(2)(C)(i) and (ii).\8\
---------------------------------------------------------------------------

    \8\ Specifically, each rule grants NASD authority to halt trades 
in a particular security, including in the event of extraordinary 
market activity in the security. Rule 4120A(a)(2)(C)(i) and (ii) 
provides that NASD may exercise this authority if it ``determines'' 
that such activity is caused by the misuse or malfunction of a 
system operated by or linked to NASD or a national securities 
exchange. In otherwise identical provisions, Rule 4633(a)(2)(C)(i) 
and (ii) and Rule 6431(a)(2)(C)(i) and (ii) use the word 
``believes'' instead of ``determines.''
---------------------------------------------------------------------------

    NASD is also proposing to amend Rule 4633 to change references to 
trading halts ``on'' or ``in'' the Trade Reporting Facility to 
``reported to'' the Trade Reporting Facility, to clarify that trades 
are not executed on the Trade Reporting Facility.
    In addition, SR-NASD-2005-087 inadvertently renumbered 
subparagraphs (MM) through (PP) of Rule 2860(b)(2) as (KK) through 
(OO). These subparagraphs should have been renumbered (KK) through 
(NN). As a result, there currently is no subparagraph (OO). Therefore, 
the proposed rule change would renumber the rule's subparagraphs (PP) 
through (AAA) as (OO) through (ZZ).
    Finally, several rule changes that were approved by the Commission 
and implemented subsequent to the filing of Amendment No. 1 to SR-NASD-
2005-087 change the underlying or proposed text provided in Exhibit 5 
of SR-NASD-2005-087. As a result, NASD is proposing changes to the rule 
text approved pursuant to SR-NASD-2005-087 to make it consistent with 
the other recently approved rule changes. These include the following 
rule changes along with the rules affected: SR-NASD-2000-023 amended 
Rules 6951 and 6954; SR-NASD-2005-098 amended Rule 6740 (renumbered as 
Rule 6640 pursuant to SR-NASD-2005-087); SR-NASD-2006-040 amended Rule 
9610; and SR-NASD-2006-080 amended Rule 4901. In addition, the ``Nasdaq 
National Market'' was recently renamed the ``Nasdaq Global Market,'' 
and pursuant to SR-NASD-2006-068, a number of rules were amended to 
change ``Nasdaq National Market,'' ``NNM'' or ``Nasdaq National Market 
securities'' to ``Nasdaq Global Market,'' ``NGM'' or ``Nasdaq Global 
Market securities,'' respectively.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\9\ which requires, among 
other things, that NASD rules be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest. NASD believes that the proposed rule change relating 
to Rule 5110 will result in uniform regulation of securities that are 
subject to an initial public offering. In addition, NASD believes that 
the proposed rule change will enhance the integrity of the market by 
increasing the consistency and clarity of its rules.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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

    NASD does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

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

    Because the foregoing proposed rule change 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 if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act,\10\ 
and Rule 19b-4(f)(6) thereunder.\11\ At any time within 60 days of the 
filing of the proposed rule change the Commission may summarily

[[Page 44749]]

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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The NASD has asked the 
Commission to waive the 30-day pre-operative delay. The Commission 
believes that such waiver is consistent with the protection of 
investors and the public interest because it would allow the NASD to 
update and clarify its rules.\14\ For this reason, the Commission 
designates the proposed rule change to be operative on the date that 
the Nasdaq Exchange begins operations as a national securities exchange 
for Nasdaq-listed securities.\15\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
    \15\ As noted above, the Nasdaq Exchange is currently scheduled 
to commence operating as a national securities exchange with respect 
to Nasdaq-listed securities on August 1, 2006.
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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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASD-2006-087 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-2006-087. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/
sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of the filing 
also will be available for inspection and copying at the principal 
office of the NASD. All comments received will be posted without 
change; the Commission does not edit personal identifying information 
from submissions. You should submit only information that you wish to 
make available publicly. All submissions should refer to File Number 
SR-NASD-2006-087 and should be submitted on or before August 28, 2006.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
Nancy M. Morris,
Secretary.
[FR Doc. E6-12738 Filed 8-4-06; 8:45 am]
BILLING CODE 8010-01-P