Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Enhance the Brut Directed Cross Order, 62329-62331 [E6-17733]

Download as PDF Federal Register / Vol. 71, No. 205 / Tuesday, October 24, 2006 / Notices rmajette on PROD1PC67 with NOTICES1 Act 13 and Rule 19b–4(f)(6) thereunder 14 because the proposal: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) does not become operative prior to 30 days after the date of filing or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that Nasdaq has given the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. Nasdaq states that it would make this rule proposal operative upon the launch of the Single Book system. Nasdaq has satisfied the five-day prefiling requirement and has requested that the Commission waive the 30-day pre-operative delay. Nasdaq states that it has carefully planned a detailed and thorough testing and roll-out schedule for the Single Book system, and has coordinated that schedule with numerous industry participants. Nasdaq states that to disrupt that schedule would cause substantial inconvenience for all involved and delay the launch of a process that Nasdaq believes would dramatically improve the Nasdaq Stock Market, whereas a delay would benefit none. The Commission believes that this proposal contains modifications to the Single Book rules that provide useful clarifications or represent modifications substantially similar to rules currently in effect at Nasdaq. The Commission believes that waiving the 30-day preoperative delay is consistent with the protection of investors and the public interest because such waiver would permit Nasdaq to begin operation of its Single Book system under its current roll-out schedule. For this reason, the Commission designates the proposed rule change to be effective upon filing with the Commission.15 The Commission notes that Nasdaq intends to make the proposed rule changes operative upon the launch of the Single Book execution system. At any time within 60 days of the filing of such proposed rule change the Commission may summarily abrogate such rule change if it appears to the Commission that such action is 13 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 15 For the purposes only of waiving the 30-day pre-operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 14 17 VerDate Aug<31>2005 14:25 Oct 23, 2006 Jkt 211001 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 62329 For the Commission, by the Division of Market Regulation, pursuant to delegated authority.16 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–17734 Filed 10–23–06; 8:45 am] 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: BILLING CODE 8011–01–P Electronic Comments Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Enhance the Brut Directed Cross Order • 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–NASDAQ–2006–043 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54614; File No. SR–NASD– 2006–117] October 17, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Paper Comments notice is hereby given that on October • Send paper comments in triplicate 4, 2006, the National Association of to Nancy M. Morris, Secretary, Securities Dealers, Inc. (‘‘NASD’’), Securities and Exchange Commission, through its subsidiary, The Nasdaq 100 F Street, NE., Washington, DC Stock Market, Inc. (‘‘Nasdaq’’), filed 20549–1090. with the Securities and Exchange Commission (‘‘Commission’’) the All submissions should refer to File proposed rule change as described in Number SR–NASDAQ–2006–043. This Items I and II below, which Items have file number should be included on the been prepared by Nasdaq. Nasdaq has subject line if e-mail is used. To help the filed the proposal pursuant to section Commission process and review your 19(b)(3)(A) of the Act 3 and Rule 19b– comments more efficiently, please use 4(f)(6) thereunder,4 which renders the only one method. The Commission will proposal effective upon filing with the post all comments on the Commission’s Commission. The Commission is Internet Web site (http://www.sec.gov/ publishing this notice to solicit rules/sro.shtml). Copies of the comments on the proposed rule change submission, all subsequent from interested persons. amendments, all written statements I. Self-Regulatory Organization’s with respect to the proposed rule Statement of the Terms of Substance of change that are filed with the the Proposed Rule Change Commission, and all written communications relating to the Nasdaq proposes to enhance the proposed rule change between the flexibility of the Brut Directed Cross Commission and any person, other than Order by allowing it to check and, if those that may be withheld from the appropriate, interact with available public in accordance with the liquidity in any of Nasdaq’s three provisions of 5 U.S.C. 552, will be execution systems (ITS/CAES System, available for inspection and copying in Brut, and INET) before further the Commission’s Public Reference processing. Nasdaq has designated this proposal as noncontroversial and has Room. Copies of the filing also will be requested that the Commission waive available for inspection and copying at the 30-day pre-operative waiting period the principal office of Nasdaq. All contained in Rule 19b–4(f)(6)(iii) under comments received will be posted the Act.5 without change; the Commission does The text of the proposed rule change not edit personal identifying is below. Proposed new language is in information from submissions. You should submit only information that 16 17 CFR 200.30–3(a)(12). you wish to make available publicly. All 1 15 U.S.C. 78s(b)(1). submissions should refer to File 2 17 CFR 240.19b–4. Number SR–NASDAQ–2006–043 and 3 15 U.S.C. 78s(b)(3)(A). should be submitted on or before 4 17 CFR 240.19b–4(f)(6). November 14, 2006. 5 17 CFR 240.19b–4(f)(6)(iii). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 E:\FR\FM\24OCN1.SGM 24OCN1 62330 Federal Register / Vol. 71, No. 205 / Tuesday, October 24, 2006 / Notices italics; proposed deletions are in [brackets]. rmajette on PROD1PC67 with NOTICES1 4903. Order Entry Parameter (a) No Change. (b) Brut Cross Orders— (1) General. A Brut Cross Order is an order that is displayed in the System, and is executable against marketable contra-side orders in the System. The order also is eligible for routing to other market centers. If marketable upon receipt against both orders in the System as well as other market centers, the order shall execute first against System orders. With the exception of Directed Cross Orders, once a Brut Cross Order is routed (in whole or in part) to another market center, any remaining unexecuted or returned portion of the order shall be posted in System and shall no longer be eligible for routing to other market centers. Directed Cross Orders directed to the New York Stock Exchange shall remain at the exchange until executed or cancelled by the entering party. (A)–(C) No Change. (D) A Brut Cross Order may also be designated as a Directed Cross Order. A Directed Cross Order is an order that is entered into the System during market hours and is executable against marketable contra-side orders in the System. The order also is eligible for routing to other market centers. After being processed and exhausting available liquidity, the order is automatically routed to the specific market center selected by the entering party for potential execution. Any portion of the Directed Cross Order that remains unfilled after being routed to the selected market center will be returned to the entering party. For Directed Cross Orders directed to the New York Stock Exchange [if, after being processed in the Brut System and exhausting available liquidity in the Brut System], such orders will first interact with any available liquidity in the Brut, INET, and ITS/CAES systems [be automatically routed to the ITS/ CAES System and INET for potential execution] and thereafter, if instructed by the entering party, to other market centers that provide automated electronic executions before being sent to the New York Stock Exchange. Directed Cross Orders directed to the New York Stock Exchange shall remain at the New York Stock Exchange until executed or cancelled by the entering party. (E)–(F) No Change. (c)–(f) No Change. * * * * * VerDate Aug<31>2005 14:25 Oct 23, 2006 Jkt 211001 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 proposes to increase the flexibility of the Brut Directed Cross Order for orders directed to the New York Stock Exchange (‘‘NYSE’’). Currently parties entering a Brut Directed Cross Order directed to the NYSE have those orders first processed in the Brut System and, after exhausting available liquidity in the Brut System, thereafter automatically routed to the ITS/CAES System and Nasdaq’s INET Facility for potential execution and finally, if instructed by the entering party, to other market centers that provide automated electronic executions before being sent to the NYSE. Nasdaq proposes to modify the behavior of the Brut Directed Cross Order so that it will now check and, if appropriate, interact with available liquidity in any of the following Nasdaq-operated execution facilities: The ITS/CAES System, Nasdaq’s Brut Facility, and Nasdaq’s INET Facility, before being sent upon request to other market centers that provide automated electronic executions before finally being delivered to the NYSE. Nasdaq notes that each Nasdaq-operated execution facility would be checked for available liquidity before the order is routed away to another market.6 Nasdaq believes that the above change will enhance the ability of market participants to take advantage of beneficial liquidity residing across all three of Nasdaq’s current execution systems. Further, such processing will increase the likelihood of having users’ NYSE-bound orders executed electronically thereby improving the speed and efficiency of the market as a whole. As before, no Brut Directed Cross 6 Telephone conversation between Tomas Moran, Associate General Counsel, Nasdaq, and Theodore S. Venuti, Attorney, Division of Market Regulation, Commission, on October 10, 2006. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 Order will execute in a Nasdaq-operated execution venue at an inferior price to one that is available at an accessible alternative venue. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of section 15A of the Act,7 in general, and with section 15A(b)(6) of the Act,8 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to a free and open market and a national market system, and, in general, to protect investors and the public interest. 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 is subject to section 19(b)(3)(A)(iii) of the Act 9 and Rule 19b–4(f)(6) thereunder 10 because the proposal: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) does not become operative prior to 30 days after the date of filing or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that Nasdaq has given the Commission notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. Nasdaq has fulfilled the five-day prefiling requirement. Nasdaq has requested that the Commission waive the 30-day pre-operative delay. The Commission believes that waiving the 30-day pre-operative delay is consistent 7 15 U.S.C. 78o–3. U.S.C. 78o–3(b)(6). 9 15 U.S.C. 78s(b)(3)(A)(iii). 10 17 CFR 240.19b–4(f)(6). 8 15 E:\FR\FM\24OCN1.SGM 24OCN1 Federal Register / Vol. 71, No. 205 / Tuesday, October 24, 2006 / Notices with the protection of investors and the public interest because such waiver would immediately allow a Brut Directed Cross Order to check and, if appropriate, interact with available liquidity in any of Nasdaq’s three execution systems (ITS/CAES System, Brut, and INET) before further processing. For these reasons, the Commission designates the proposed rule change to be effective and operative upon filing with the Commission.11 At any time within 60 days of the filing of such 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: rmajette on PROD1PC67 with NOTICES1 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–2006–117 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–2006–117. 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 11 For the purposes only of waiving the 30-day pre-operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 14:25 Oct 23, 2006 Jkt 211001 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–2006–117 and should be submitted on or before November 14, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Jill M. Peterson, Assistant Secretary. [FR Doc. E6–17733 Filed 10–23–06; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54616; File Nos. SR–NYSE– 2006–77; SR–NASD–2006–112] Self-Regulatory Organizations; New York Stock Exchange LLC and the National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Changes Relating to NYSE Rule 472 and NASD Rule 2711 October 17, 2006. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 27, 2006, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) and the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule changes as described in Items I, II, and III below, which Items have been prepared by the respective selfregulatory organizations. The NYSE and NASD (the ‘‘SROs’’) have filed the proposed rule changes as constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of existing rules pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b– 12 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). 1 15 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 62331 4(f)(1) thereunder,4 which renders them effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule changes from interested persons. I. Self-Regulatory Organizations’ Statements of the Terms of Substance of the Proposed Rule Changes The Exchange proposes to amend NYSE Rule 472 to codify the Exchange’s existing interpretive guidance relating to certain provisions of the rule and to make certain non-substantive, technical changes to the rule’s text. The text of the proposed rule change is available on NYSE’s Web site, http://www.nyse.com, at the NYSE’s Office of the Secretary, and at the Commission’s Public Reference Room. NASD is proposing to amend NASD Rule 2711 to codify NASD’s existing interpretive guidance relating to certain provisions of the rule and to make several non-substantive, technical changes to clarify the rule’s intended meaning. The text of the proposed rule change is attached as Exhibit 5 to the NASD’s rule filing. II. Self-Regulatory Organizations’ Statements of the Purpose of, and Statutory Basis for, the Proposed Rule Changes In their filings with the Commission, the NYSE and NASD included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments they received on the proposed rule changes. The text of these statements may be examined at the places specified in Item IV below. The NYSE and NASD have prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organizations’ Statements of the Purpose of, and Statutory Basis for, the Proposed Rule Changes (1) NYSE’s Purpose Background NYSE Rule 472 is, in significant part, intended to improve the objectivity of research by requiring that investors be provided with conflict disclosures as well as other useful and reliable information with which to make investment decisions. Specifically, NYSE Rule 472 restricts the interaction between research departments and investment banking personnel; requires disclosure of financial interests in covered companies by the analyst and 4 17 E:\FR\FM\24OCN1.SGM CFR 240.19b–4(f)(1). 24OCN1

Agencies

[Federal Register Volume 71, Number 205 (Tuesday, October 24, 2006)]
[Notices]
[Pages 62329-62331]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-17733]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54614; File No. SR-NASD-2006-117]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Enhance the Brut Directed Cross Order

October 17, 2006.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 4, 2006, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by Nasdaq. Nasdaq has filed 
the proposal 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to enhance the flexibility of the Brut Directed 
Cross Order by allowing it to check and, if appropriate, interact with 
available liquidity in any of Nasdaq's three execution systems (ITS/
CAES System, Brut, and INET) before further processing. Nasdaq has 
designated this proposal as noncontroversial and has requested that the 
Commission waive the 30-day pre-operative waiting period contained in 
Rule 19b-4(f)(6)(iii) under the Act.\5\
---------------------------------------------------------------------------

    \5\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The text of the proposed rule change is below. Proposed new 
language is in

[[Page 62330]]

italics; proposed deletions are in [brackets].

4903. Order Entry Parameter

    (a) No Change.
    (b) Brut Cross Orders--
    (1) General. A Brut Cross Order is an order that is displayed in 
the System, and is executable against marketable contra-side orders in 
the System. The order also is eligible for routing to other market 
centers. If marketable upon receipt against both orders in the System 
as well as other market centers, the order shall execute first against 
System orders. With the exception of Directed Cross Orders, once a Brut 
Cross Order is routed (in whole or in part) to another market center, 
any remaining unexecuted or returned portion of the order shall be 
posted in System and shall no longer be eligible for routing to other 
market centers. Directed Cross Orders directed to the New York Stock 
Exchange shall remain at the exchange until executed or cancelled by 
the entering party.
    (A)-(C) No Change.
    (D) A Brut Cross Order may also be designated as a Directed Cross 
Order. A Directed Cross Order is an order that is entered into the 
System during market hours and is executable against marketable contra-
side orders in the System. The order also is eligible for routing to 
other market centers. After being processed and exhausting available 
liquidity, the order is automatically routed to the specific market 
center selected by the entering party for potential execution. Any 
portion of the Directed Cross Order that remains unfilled after being 
routed to the selected market center will be returned to the entering 
party. For Directed Cross Orders directed to the New York Stock 
Exchange [if, after being processed in the Brut System and exhausting 
available liquidity in the Brut System], such orders will first 
interact with any available liquidity in the Brut, INET, and ITS/CAES 
systems [be automatically routed to the ITS/CAES System and INET for 
potential execution] and thereafter, if instructed by the entering 
party, to other market centers that provide automated electronic 
executions before being sent to the New York Stock Exchange. Directed 
Cross Orders directed to the New York Stock Exchange shall remain at 
the New York Stock Exchange until executed or cancelled by the entering 
party.
    (E)-(F) No Change.
    (c)-(f) No Change.
* * * * *

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

    In its filing with the Commission, 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 proposes to increase the flexibility of the Brut Directed 
Cross Order for orders directed to the New York Stock Exchange 
(``NYSE''). Currently parties entering a Brut Directed Cross Order 
directed to the NYSE have those orders first processed in the Brut 
System and, after exhausting available liquidity in the Brut System, 
thereafter automatically routed to the ITS/CAES System and Nasdaq's 
INET Facility for potential execution and finally, if instructed by the 
entering party, to other market centers that provide automated 
electronic executions before being sent to the NYSE. Nasdaq proposes to 
modify the behavior of the Brut Directed Cross Order so that it will 
now check and, if appropriate, interact with available liquidity in any 
of the following Nasdaq-operated execution facilities: The ITS/CAES 
System, Nasdaq's Brut Facility, and Nasdaq's INET Facility, before 
being sent upon request to other market centers that provide automated 
electronic executions before finally being delivered to the NYSE. 
Nasdaq notes that each Nasdaq-operated execution facility would be 
checked for available liquidity before the order is routed away to 
another market.\6\
---------------------------------------------------------------------------

    \6\ Telephone conversation between Tomas Moran, Associate 
General Counsel, Nasdaq, and Theodore S. Venuti, Attorney, Division 
of Market Regulation, Commission, on October 10, 2006.
---------------------------------------------------------------------------

    Nasdaq believes that the above change will enhance the ability of 
market participants to take advantage of beneficial liquidity residing 
across all three of Nasdaq's current execution systems. Further, such 
processing will increase the likelihood of having users' NYSE-bound 
orders executed electronically thereby improving the speed and 
efficiency of the market as a whole. As before, no Brut Directed Cross 
Order will execute in a Nasdaq-operated execution venue at an inferior 
price to one that is available at an accessible alternative venue.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 15A of the Act,\7\ in general, and with 
section 15A(b)(6) of the Act,\8\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to remove impediments to a free 
and open market and a national market system, and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78o-3.
    \8\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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 is subject to section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder \10\ 
because the proposal: (i) Does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on competition; and (iii) does not become operative 
prior to 30 days after the date of filing or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest; provided that Nasdaq has given the Commission 
notice of its intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule change, 
or such shorter time as designated by the Commission.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    Nasdaq has fulfilled the five-day pre-filing requirement. Nasdaq 
has requested that the Commission waive the 30-day pre-operative delay. 
The Commission believes that waiving the 30-day pre-operative delay is 
consistent

[[Page 62331]]

with the protection of investors and the public interest because such 
waiver would immediately allow a Brut Directed Cross Order to check 
and, if appropriate, interact with available liquidity in any of 
Nasdaq's three execution systems (ITS/CAES System, Brut, and INET) 
before further processing. For these reasons, the Commission designates 
the proposed rule change to be effective and operative upon filing with 
the Commission.\11\
---------------------------------------------------------------------------

    \11\ For the purposes only of waiving the 30-day pre-operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASD-2006-117 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-2006-117. 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-2006-117 and should be submitted on or before November 14, 
2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E6-17733 Filed 10-23-06; 8:45 am]
BILLING CODE 8011-01-P