Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Certain Technical, Non-Substantive Changes to its Trade Reporting Rules, 48959-48961 [E6-13816]
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Federal Register / Vol. 71, No. 162 / Tuesday, August 22, 2006 / Notices
• Rule 17a–11(c)(2)—Net capital is
less than 5 percent of aggregate debit
items
• Rule 17a–11(c)(3)—Net capital is
less than 120 percent of required
minimum dollar amount
• Rule 17a–11(d)—Failure to make
and keep current books and records
• Rule 17a–11(e)—Material
inadequacy in accounting systems,
internal controls, or practices and
procedures
NASD members will be required to
file these specified notices with NASD
via an electronic, Internet-based
receiving and processing system
(‘‘System’’), using templates developed
by NASD for each notice. The System
will be available to members on NASD’s
Internet Web site.
2. Statutory Basis
NASD believes that the proposed
amendment to NYSE Rule 418 is
consistent with Section 6(b) of the Act 4
in general, and furthers the objectives of
Section 6(b)(5) of the Act 5 in particular,
in that it is designed to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments and perfect the
mechanism of a free and open market
and to protect investors and the public
interest. NASD believes that the
electronic filing of notices is cost-saving
and efficient and that it will enhance
the speed and efficiency of processing
the filings and reduce administrative
costs.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD does not believe that the
proposed rule change will impose any
inappropriate burden on competition.
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.
cprice-sewell on PROD1PC66 with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(2) of the
Act,6 within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
4 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
6 15 U.S.C. 78f(b)(2).
5 15
VerDate Aug<31>2005
15:34 Aug 21, 2006
Jkt 208001
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the proposed rule
change, including whether the proposed
rule change is consistent with the Act.
Comments may be submitted by any of
the following methods:
48959
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Nancy M. Morris,
Secretary.
[FR Doc. E6–13812 Filed 8–21–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54318; File No. SR–NASD–
2006–098]
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2006–060 on the
subject line.
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Make Certain
Technical, Non-Substantive Changes
to its Trade Reporting Rules
August 15, 2006.
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–2006–060. To help
the Commission process and review
your comments more efficiently, please
use only one method. The Commission
will post all comments on the
Commission’s Internet Web site (https://
www.sec.gov/rules/sro/shtml). Copies of
the submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Section, 100 F Street, Washington, DC
20549. Copies of the filings will also 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–2006–060 and should be
submitted on or before September 12,
2006.
PO 00000
Frm 00053
Fmt 4703
Sfmt 4703
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
10, 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 NASD. NASD
has designated the proposed rule change
as constituting a ‘‘non-controversial’’
rule change pursuant to Section
19(b)(3)(A) 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
NASD is proposing to make technical,
non-substantive changes to certain
NASD rules previously approved by the
Commission in SR–NASD–2006–055
that were amended by SR–NASD–2005–
087, which became effective August 1,
2006.5 Below is the text of the proposed
rule change.6 Proposed new language is
7 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).
4 17 CFR 240.19b–4(f)(6).
5 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).
6 The proposed changes indicated below are
based on the rule text approved by the Commission
1 15
E:\FR\FM\22AUN1.SGM
Continued
22AUN1
48960
Federal Register / Vol. 71, No. 162 / Tuesday, August 22, 2006 / Notices
in italics; proposed deletions are in
[brackets].
*
*
*
*
*
6000. NASD SYSTEMS AND
PROGRAMS
4000. THE [NASDAQ STOCK MARKET]
TRADE REPORTING FACILITY
6100. CLEARING AND COMPARISON
RULES [TRADE REPORTING SERVICE]
*
*
*
*
*
*
*
[4600. NASDAQ MARKET MAKER
REQUIREMENTS]
*
*
*
*
*
*
*
*
*
4632. Transaction Reporting
(a) through (d) No Change.
(e) Transactions Not To Be Reported for
Publication Purposes
The following types of transactions
shall not be reported to the Trade
Reporting Facility for publication
purposes:
(1) through (6) No Change.
(f) through (g) No Change.
*
*
*
*
*
4640 Series. Deleted in its entirety
*
*
*
*
*
4000A. NASD ALTERNATIVE DISPLAY
FACILITY
*
*
*
*
*
4600A. TRADING IN NASDAQ
SECURITIES
*
*
*
*
*
cprice-sewell on PROD1PC66 with NOTICES
4632A. Transactions Reported by
Members
(a) through (j) No Change.
(k) Transactions Not To Be Reported
to NASD for Publication Purposes.
The following types of transactions
effected by NASD members shall not be
reported to TRACS for publication
purposes:
(1) through (4) No Change.
(5) purchases or sales of securities
effected upon the exercise of an option
pursuant to the terms thereof or the
exercise of any other right to acquire
securities at a pre-established
consideration unrelated to the current
market[.]; and
(6) transactions reported on or
through an exchange.
(l) No Change.
*
*
*
*
*
as part of SR–NASD–2006–055 on June 12, 2006,
which, but for this subsequent filing (which became
necessary due to the intervening approval and
implementation of SR–NASD–2005–087), would
become effective on December 1, 2006.
VerDate Aug<31>2005
15:34 Aug 21, 2006
Jkt 208001
*
*
*
*
*
*
*
6130. Trade Report Input
4630. Reporting Transactions in
Designated [Nasdaq National Market]
Securities
*
*
(a) through (f) No Change.
(g) Reporting Certain Transactions for
Purposes of Regulatory Transaction Fee
Assessment
The following types of transactions
that are assessed a regulatory
transaction fee in accordance with
Section 3 of Schedule A to the NASD
By-Laws must be reported to the
[Nasdaq Market Center]System as
prescribed below. Transactions must be
submitted to the [Nasdaq Market
Center]System by 6:30 p.m. Eastern
Time (or the end of the [Nasdaq Market
Center]System reporting session that is
in effect at that time).
(1) Odd-Lot Transactions
Transactions for less than a normal
unit of trading shall be reported to the
[Nasdaq Market Center]System with a
modifier of .RO to designate the
transaction as submitted for purposes of
the regulatory transaction fee under
Section 3 of Schedule A to the NASD
By-Laws. Transactions may be entered
as clearing or non-clearing.
(2) Away From the Market Sales
Transactions where the buyer and
seller have agreed to trade at a price
substantially unrelated to the current
market for the security, and
consideration is given, shall be reported
to the [Nasdaq Market Center]System
with a modifier of .RA to designate the
transaction as submitted for purposes of
the regulatory transaction fee under
Section 3 of Schedule A to the NASD
By-Laws. Transactions may be entered
as clearing or non-clearing.
(3) Exercises of OTC Options
Transactions effected pursuant to the
exercise of an OTC option shall be
reported to the [Nasdaq Market
Center]System with a modifier of .RX to
designate the transaction as submitted
for purposes of the regulatory
transaction fee under Section 3 of
Schedule A to the NASD By-Laws.
Transactions may be entered as clearing
or non-clearing.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NASD included statements concerning
the purpose of, and basis for, the
PO 00000
Frm 00054
Fmt 4703
Sfmt 4703
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. NASD has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On June 30, 2006, the Commission
approved SR–NASD–2005–087.7 Among
other things, SR–NASD–2005–087
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. SR–
NASD–2005–087 became effective on
August 1, 2006.
On June 12, 2006, the Commission
approved SR–NASD–2006–055 which
requires members to report all
transactions that must be reported to
NASD and that are subject to a
regulatory transaction fee pursuant to
Section 3 of Schedule A to the NASD
By-Laws to the Nasdaq Market Center
and/or the Trade Reporting and
Comparison Service; provided,
however, that certain identified
transactions shall not be reported for
publication purposes.8 SR–NASD–
2006–055 will become effective on a
date to be announced in a future Notice
to Members, which is anticipated to be
December 1, 2006.
These two rule filings amended
several of the same NASD rules.
Because of the timing of the approval
and implementation dates of these two
filings, NASD is filing this proposed
rule change to make technical, nonsubstantive changes to those NASD
rules previously approved by the
Commission but not yet effective in SR–
NASD–2006–055 that were
subsequently amended by the approval
and implementation of SR–NASD–
2005–087, which became effective on
August 1, 2006.
Specifically, the underlying rule text
for NASD Rules 4632, 4632A, and 6130
7 See Securities Exchange Act Release No. 54084
(June 30, 2006), 71 FR 38935 (July 10, 2006).
8 See Securities Exchange Act Release No. 53977
(June 12, 2006), 71 FR 34976 (June 16, 2006)
(approving SR–NASD–2006–055).
E:\FR\FM\22AUN1.SGM
22AUN1
Federal Register / Vol. 71, No. 162 / Tuesday, August 22, 2006 / Notices
contained in SR–NASD–2006–055 was
subsequently amended by SR–NASD–
2005–087.9 In addition, in light of the
changes implemented as part of SR–
NASD–2005–087, the transactions that
are subject to a regulatory transaction
fee pursuant to Section 3 of Schedule A
to NASD By-Laws will no longer be
reported to the Nasdaq Market Center as
originally proposed in NASD Rule
6120(g), but to another NASD facility,
either the Trade Reporting Facility or
the OTC Reporting Facility, as defined
in NASD Rule 6110. As a result, NASD
is proposing changes to the rule text
approved pursuant to SR–NASD–2006–
055 to conform it to the recently
approved rule changes as part of SR–
NASD–2005–087. In addition, SR–
NASD–2006–055 proposed amendments
to NASD Rule 4642, which was
subsequently deleted in SR–NASD–
2005–087, and therefore these rule
changes are no longer necessary.
NASD has filed the proposed rule
change for immediate effectiveness. The
implementation date will be the
implementation date of SR–NASD–
2006–055, which is anticipated to be
December 1, 2006.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,10 which
requires, among other things, that NASD
rules must be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, and, in general, to
protect investors and the public interest.
NASD believes that the proposed rule
change will 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
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
cprice-sewell on PROD1PC66 with NOTICES
Written comments were neither
solicited nor received.
9 The amendments to Section 3 of Schedule A to
NASD By-Laws and NASD Rules 6420, 6620, and
6130A were unaffected by SR–NASD–2005–087.
Accordingly, these amendments will become
effective in accordance with SR–NASD–2006–055
and the corresponding Notice to Members that will
announce the effective date of the amendments,
which is anticipated to be December 1, 2006.
10 15 U.S.C. 78o–3(b)(6).
15:34 Aug 21, 2006
Jkt 208001
Because the foregoing proposed rule
change does not: (1) Significantly affect
the protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) 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,
provided that the Exchange 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 proposal.11
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an E-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2006–098 on the
subject line.
Paper Comments
NASD does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
VerDate Aug<31>2005
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
• 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–2006–098. 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
11 As required under Rule 19b–4(f)(6)(iii), NASD
provided the Commission with notice of its intent
to file the proposed rule change at least five
business days prior to the date of filing of the
proposal.
PO 00000
Frm 00055
Fmt 4703
Sfmt 4703
48961
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 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–2006–098 and
should be submitted on or before
September 12, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Nancy M. Morris,
Secretary.
[FR Doc. E6–13816 Filed 8–21–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54320; File No. SR–NYSE–
2005–18]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Order
Approving Proposed Rule Change and
Amendments No. 1 and 2 Thereto
Regarding NYSE Rule 619 To Clarify
That Failure To Appear or Produce
Documents in Arbitration May Be
Deemed Conduct Inconsistent With
Just and Equitable Principles of Trade
August 15, 2006.
I. Introduction
On February 17, 2005, the New York
Stock Exchange, Inc. (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’)1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend Rule 619 to clarify that it may be
deemed conduct or proceeding
inconsistent with just and equitable
principles of trade for purposes of NYSE
Rule 476(a)(6) for a member, member
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\22AUN1.SGM
22AUN1
]]>Agencies
[Federal Register Volume 71, Number 162 (Tuesday, August 22, 2006)]
[Notices]
[Pages 48959-48961]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-13816]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54318; File No. SR-NASD-2006-098]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Make Certain Technical, Non-Substantive Changes to its
Trade Reporting Rules
August 15, 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 August 10, 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 NASD. NASD has
designated the proposed rule change as constituting a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) 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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to make technical, non-substantive changes to
certain NASD rules previously approved by the Commission in SR-NASD-
2006-055 that were amended by SR-NASD-2005-087, which became effective
August 1, 2006.\5\ Below is the text of the proposed rule change.\6\
Proposed new language is
[[Page 48960]]
in italics; proposed deletions are in [brackets].
---------------------------------------------------------------------------
\5\ 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).
\6\ The proposed changes indicated below are based on the rule
text approved by the Commission as part of SR-NASD-2006-055 on June
12, 2006, which, but for this subsequent filing (which became
necessary due to the intervening approval and implementation of SR-
NASD-2005-087), would become effective on December 1, 2006.
---------------------------------------------------------------------------
* * * * *
4000. THE [NASDAQ STOCK MARKET] TRADE REPORTING FACILITY
* * * * *
[4600. NASDAQ MARKET MAKER REQUIREMENTS]
* * * * *
4630. Reporting Transactions in Designated [Nasdaq National Market]
Securities
* * * * *
4632. Transaction Reporting
(a) through (d) No Change.
(e) Transactions Not To Be Reported for Publication Purposes
The following types of transactions shall not be reported to the
Trade Reporting Facility for publication purposes:
(1) through (6) No Change.
(f) through (g) No Change.
* * * * *
4640 Series. Deleted in its entirety
* * * * *
4000A. NASD ALTERNATIVE DISPLAY FACILITY
* * * * *
4600A. TRADING IN NASDAQ SECURITIES
* * * * *
4632A. Transactions Reported by Members
(a) through (j) No Change.
(k) Transactions Not To Be Reported to NASD for Publication
Purposes.
The following types of transactions effected by NASD members shall
not be reported to TRACS for publication purposes:
(1) through (4) No Change.
(5) purchases or sales of securities effected upon the exercise of
an option pursuant to the terms thereof or the exercise of any other
right to acquire securities at a pre-established consideration
unrelated to the current market[.]; and
(6) transactions reported on or through an exchange.
(l) No Change.
* * * * *
6000. NASD SYSTEMS AND PROGRAMS
* * * * *
6100. CLEARING AND COMPARISON RULES [TRADE REPORTING SERVICE]
* * * * *
6130. Trade Report Input
(a) through (f) No Change.
(g) Reporting Certain Transactions for Purposes of Regulatory
Transaction Fee Assessment
The following types of transactions that are assessed a regulatory
transaction fee in accordance with Section 3 of Schedule A to the NASD
By-Laws must be reported to the [Nasdaq Market Center]System as
prescribed below. Transactions must be submitted to the [Nasdaq Market
Center]System by 6:30 p.m. Eastern Time (or the end of the [Nasdaq
Market Center]System reporting session that is in effect at that time).
(1) Odd-Lot Transactions
Transactions for less than a normal unit of trading shall be
reported to the [Nasdaq Market Center]System with a modifier of .RO to
designate the transaction as submitted for purposes of the regulatory
transaction fee under Section 3 of Schedule A to the NASD By-Laws.
Transactions may be entered as clearing or non-clearing.
(2) Away From the Market Sales
Transactions where the buyer and seller have agreed to trade at a
price substantially unrelated to the current market for the security,
and consideration is given, shall be reported to the [Nasdaq Market
Center]System with a modifier of .RA to designate the transaction as
submitted for purposes of the regulatory transaction fee under Section
3 of Schedule A to the NASD By-Laws. Transactions may be entered as
clearing or non-clearing.
(3) Exercises of OTC Options
Transactions effected pursuant to the exercise of an OTC option
shall be reported to the [Nasdaq Market Center]System with a modifier
of .RX to designate the transaction as submitted for purposes of the
regulatory transaction fee under Section 3 of Schedule A to the NASD
By-Laws. Transactions may be entered as clearing or non-clearing.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NASD has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On June 30, 2006, the Commission approved SR-NASD-2005-087.\7\
Among other things, SR-NASD-2005-087 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. SR-NASD-2005-087 became effective on
August 1, 2006.
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\7\ See Securities Exchange Act Release No. 54084 (June 30,
2006), 71 FR 38935 (July 10, 2006).
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On June 12, 2006, the Commission approved SR-NASD-2006-055 which
requires members to report all transactions that must be reported to
NASD and that are subject to a regulatory transaction fee pursuant to
Section 3 of Schedule A to the NASD By-Laws to the Nasdaq Market Center
and/or the Trade Reporting and Comparison Service; provided, however,
that certain identified transactions shall not be reported for
publication purposes.\8\ SR-NASD-2006-055 will become effective on a
date to be announced in a future Notice to Members, which is
anticipated to be December 1, 2006.
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\8\ See Securities Exchange Act Release No. 53977 (June 12,
2006), 71 FR 34976 (June 16, 2006) (approving SR-NASD-2006-055).
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These two rule filings amended several of the same NASD rules.
Because of the timing of the approval and implementation dates of these
two filings, NASD is filing this proposed rule change to make
technical, non-substantive changes to those NASD rules previously
approved by the Commission but not yet effective in SR-NASD-2006-055
that were subsequently amended by the approval and implementation of
SR-NASD-2005-087, which became effective on August 1, 2006.
Specifically, the underlying rule text for NASD Rules 4632, 4632A,
and 6130
[[Page 48961]]
contained in SR-NASD-2006-055 was subsequently amended by SR-NASD-2005-
087.\9\ In addition, in light of the changes implemented as part of SR-
NASD-2005-087, the transactions that are subject to a regulatory
transaction fee pursuant to Section 3 of Schedule A to NASD By-Laws
will no longer be reported to the Nasdaq Market Center as originally
proposed in NASD Rule 6120(g), but to another NASD facility, either the
Trade Reporting Facility or the OTC Reporting Facility, as defined in
NASD Rule 6110. As a result, NASD is proposing changes to the rule text
approved pursuant to SR-NASD-2006-055 to conform it to the recently
approved rule changes as part of SR-NASD-2005-087. In addition, SR-
NASD-2006-055 proposed amendments to NASD Rule 4642, which was
subsequently deleted in SR-NASD-2005-087, and therefore these rule
changes are no longer necessary.
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\9\ The amendments to Section 3 of Schedule A to NASD By-Laws
and NASD Rules 6420, 6620, and 6130A were unaffected by SR-NASD-
2005-087. Accordingly, these amendments will become effective in
accordance with SR-NASD-2006-055 and the corresponding Notice to
Members that will announce the effective date of the amendments,
which is anticipated to be December 1, 2006.
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NASD has filed the proposed rule change for immediate
effectiveness. The implementation date will be the implementation date
of SR-NASD-2006-055, which is anticipated to be December 1, 2006.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among
other things, that NASD rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. NASD believes that the proposed rule change will
enhance the integrity of the market by increasing the consistency and
clarity of its rules.
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\10\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change will impose 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
Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
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, provided that the
Exchange 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 proposal.\11\
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\11\ As required under Rule 19b-4(f)(6)(iii), NASD provided the
Commission with notice of its intent to file the proposed rule
change at least five business days prior to the date of filing of
the proposal.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in 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 rule-comments@sec.gov. Please include
File Number SR-NASD-2006-098 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-2006-098. 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 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-2006-098 and should be submitted on or before
September 12, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-13816 Filed 8-21-06; 8:45 am]
BILLING CODE 8010-01-P
