Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Periods for NASD Rules Governing Multiple MPIDs on the Trade Reporting Facilities and on the Alternative Display Facility, 5479-5481 [E7-1859]

Download as PDF Federal Register / Vol. 72, No. 24 / Tuesday, February 6, 2007 / Notices Cancellation Fee by the cancellation activity of each correspondent firm (and the executing clearing firm’s own cancellation activity when it self clears), rather than by the aggregate cancellation activity of the executing clearing firm. Correspondent firms using multiple executing clearing firms would be evaluated separately, per executing clearing firm. The Exchange will be able to provide executing clearing members with information regarding the cancellation activity of each of its correspondent firms so that the executing clearing member can pass through any cancellation fees. In addition, the Exchange proposes to increase the ORS Cancellation Fee from $1.00 to $1.25 per cancelled ORS order. The Exchange proposes that the following ORS cancellation activity would be exempt from the fee: (i) Cancelled ORS orders that improve the Exchange’s prevailing bid-offer (‘‘BBO’’) market when received; and (ii) fill and cancellation activity occurring within the first one minute of trading following the opening of each option class. The Exchange believes the foregoing cancel activity is not an inappropriate use of systems capacity and therefore should not be subject to the fee. The Exchange believes that the proposed ORS Cancellation Fee is similar to the cancellation fee of another exchange.25 i. DPM Facilities Fee The Exchange proposes to eliminate the DPM facilities fee, which the Exchange charges DPMs each month for use of Exchange floor trading stations. The elimination of this fee is intended to provide fee relief to DPMs in light of a recently adopted fee that DPMs may incur in fiscal year 2007.26 j. Miscellaneous, Non-substantive Changes The Exchange proposes various nonsubstantive clean-up changes to its Fees Schedule. The Section of the Fees Schedule entitled ‘‘Index Customer Boxes’’ under ‘‘Member Transaction Fee Policies and Rebate Programs’’ is proposed to be deleted, as that program is superseded by the Customer Large Trade Discount Program. sroberts on PROD1PC70 with NOTICES 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the 25 See Securities Exchange Act Release No. 53862 (May 24, 2006), 71 FR 31244 (June 1, 200) (SR–ISE– 2006–23). 26 See Securities Exchange Act Release No. 54804 (November 21, 2006), 71 FR 69150 (November 29, 2006) (SR–CBOE–2006–98) (Hybrid Electronic Quoting Fee). VerDate Aug<31>2005 16:03 Feb 05, 2007 Jkt 211001 Act,27 in general, and furthers the objectives of Section 6(b)(4) 28 of the Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among CBOE members and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the Act 29 and subparagraph (f)(2) of Rule 19b–4 30 thereunder. 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.31 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 rulecomments@sec.gov. Please include File Number SR–CBOE–2006–111 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, 27 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 29 15 U.S.C. 78s(b)(3)(A). 30 17 CFR 240.19b–4(f)(2). 31 Id. 28 15 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 5479 Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2006–111. 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 such filing also will be available for inspection and copying at the principal office of the CBOE. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2006–111 and should be submitted on or before February 27, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.32 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–1860 Filed 2–5–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55206; File No. SR–NASD– 2007–008] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Pilot Periods for NASD Rules Governing Multiple MPIDs on the Trade Reporting Facilities and on the Alternative Display Facility January 31, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 32 17 E:\FR\FM\06FEN1.SGM CFR 200.30–3(a)(12). 06FEN1 5480 Federal Register / Vol. 72, No. 24 / Tuesday, February 6, 2007 / Notices (‘‘Act’’)1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 26, 2007, 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 and II below, which Items have been substantially prepared by NASD. NASD 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to amend NASD Rules 4613A(b) and 5140 to extend the pilot programs for the use of multiple Market Participant Symbols (‘‘MPIDs’’) for Registered Reporting Alternative Display Facility (‘‘ADF’’) electronic communications networks (‘‘ECNs’’) and Trade Reporting Facility Participants. The text of the proposed rule change is available at NASD, the Commission’s Public Reference Room, and www.nasd.com. 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 sroberts on PROD1PC70 with NOTICES 1. Purpose Rule 4613A(b) and IM–4613A–1 Rule 4613A(b) (Character of Quotations) provides that a Registered Reporting ADF ECN may request additional MPIDs for displaying quotes and orders and reporting trades through the ADF trade reporting facility, the Trade Reporting and Comparison 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 VerDate Aug<31>2005 16:03 Feb 05, 2007 Jkt 211001 Service, for any ADF-Eligible Security. A Registered Reporting ADF ECN that is permitted the use of additional MPIDs for displaying quotes and orders is subject to the same rules applicable to the member’s first quotation (i.e., an ECN that displays one or more additional quotes/orders is required to comply with all rules applicable to ECNs in their display of quotes/orders). A Registered Reporting ADF ECN also is prohibited from using an additional MPID to accomplish indirectly what it is prohibited from doing directly through its Primary MPID. In addition, NASD staff retains full discretion to determine whether a bona fide regulatory and/or business need exists for being granted an additional MPID privilege and to limit or withdraw the additional MPID display privilege at any time. The procedures for requesting, and the restrictions surrounding the use of, multiple MPIDs are set forth in IM– 4613A–1 (Procedures for Allocation of Multiple MPIDs). The Commission approved Rule 4613A(b) and IM–4613A–1 on a pilot basis on August 11, 2006.5 By its terms, the pilot period expires on January 26, 2007, and NASD has determined to seek an extension of the pilot period until January 25, 2008. NASD believes that such an extension will provide additional time to analyze the use of multiple MPIDs on the ADF. NASD is not proposing any other changes to the pilot as this time.6 Rule 5140 and IM–5140 Rule 5140 (Multiple MPIDs for Trade Reporting Facility Participants) provides that any Trade Reporting Facility Participant that wishes to use more than one MPID for purposes of reporting trades to a Trade Reporting Facility must submit a written request to, and obtain approval from, NASD Operations for such additional MPIDs. In addition, IM–5140 (Use of Multiple MPIDs) states that NASD considers the issuance of, and trade reporting with, multiple MPIDs to be a privilege and not a right. A Trade Reporting Facility Participant must identify the purpose(s) and system(s) for which the multiple MPIDs will be used. If NASD determines that the use of multiple MPIDs is detrimental 5 See Securities Exchange Act Release No. 54307 (August 11, 2006), 71 FR 47551 (August 17, 2006). 6 The expiration of the pilot period coincided with the expiration of the current ADF pilot period. See Securities Exchange Act Release No. 53699 (April 21, 2006), 71 FR 25271 (April 28, 2006). In a separate rule filing, NASD proposed to make the ADF rules permanent. See Securities Exchange Act Release No. 55181 (January 26, 2007) (SR–NASD– 2007–005). At this time, NASD is seeking to extend only Rule 4613A(b) and IM–4613A–1 for another year. PO 00000 Frm 00067 Fmt 4703 Sfmt 4703 to the marketplace, or that a Trade Reporting Facility Participant is using one or more additional MPIDs improperly or for other than the purpose(s) identified by the Participant, NASD staff retains full discretion to limit or withdraw its grant of the additional MPID(s) to such Trade Reporting Facility Participant for purposes of reporting trades to a Trade Reporting Facility. NASD believes that Rule 5140 and IM–5140 are necessary to consolidate the process of issuing, and tracking the use of, multiple MPIDs used to report trades to NASD Trade Reporting Facilities. The Commission approved Rule 5140 on a pilot basis on November 6, 2006.7 By its terms, the pilot period expires on January 26, 2007, and NASD has determined to seek an extension of the pilot period until January 25, 2008. NASD believes that such an extension will provide additional time to analyze the use of multiple MPIDs on the Trade Reporting Facilities. NASD is not proposing any other changes to the pilot as this time. NASD proposes to implement the proposed rule change on January 27, 2007. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,8 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 is consistent with these requirements because it would provide a process by which ECNs (in the case of the ADF) and Trade Reporting Facility Participants (in the case of the Trade Reporting Facilities) can request, and NASD can properly allocate, the use of additional MPIDs for displaying quotes and orders through the ADF or reporting trades to a Trade Reporting Facility. B. Self-Regulatory Organization’s Statement on Burden on Competition NASD does not believe that the proposed rule change would result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 7 See Securities Exchange Act Release No. 54715 (November 6, 2006), 71 FR 66354 (November 14, 2006); see also Securities Exchange Act Release No. 54715A (November 14, 2006), 71 FR 67183 (November 20, 2006) (correcting original approval order). 8 15 U.S.C. 78o–3(b)(6). E:\FR\FM\06FEN1.SGM 06FEN1 Federal Register / Vol. 72, No. 24 / Tuesday, February 6, 2007 / Notices Electronic Comments 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.11 NASD has requested that the Commission waive the 30-day operative delay in this case. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the benefits of the multiple MPID pilots to continue uninterrupted. For this reason, the Commission designates the proposed rule change to be operative upon filing with the Commission.12 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: 9 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 11 Rule 19b–4(f)(6) also requires the selfregulatory organization to give 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. NASD has satisfied the five-day prefiling requirement. 12 For the purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). sroberts on PROD1PC70 with NOTICES 10 17 VerDate Aug<31>2005 16:03 Feb 05, 2007 Jkt 211001 • 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–2007–008 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. 5481 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55185; File No. SR– NYSEArca–2007–10] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Establishment of a Pilot Program That Increases Position and Exercise Limits for Options on the iShares Russell 2000 Index Fund January 29, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 All submissions should refer to File notice is hereby given that on January Number SR–NASD–2007–008. This file 25, 2007, the NYSE Arca, Inc. (‘‘NYSE number should be included on the Arca’’ or ‘‘Exchange’’) filed with the subject line if e-mail is used. To help the Securities and Exchange Commission Commission process and review your (‘‘Commission’’) the proposed rule comments more efficiently, please use change as described in Items I and II only one method. The Commission will below, which Items have been post all comments on the Commission’s substantially prepared by NYSE Arca. Internet Web site (http://www.sec.gov/ NYSE Arca has filed the proposal rules/sro.shtml). Copies of the pursuant to Section 19(b)(3)(A) of the submission, all subsequent Act 3 and Rule 19b–4(f)(6) thereunder,4 amendments, all written statements which renders the proposal effective with respect to the proposed rule upon filing with the Commission. The change that are filed with the Commission is publishing this notice to Commission, and all written solicit comments on the proposed rule communications relating to the change from interested persons. proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the NYSE Arca proposes to amend Rule provisions of 5 U.S.C. 552, will be 6.8 to exempt options on the iShares available for inspection and copying in Russell 2000 Index Fund (‘‘IWM’’) the Commission’s Public Reference from the position and exercise limits Room. Copies of the filing also will be provided for under the Rule 6.8 Pilot available for inspection and copying at Program and to increase the standard the principal office of NASD. All position and exercise limits for IWM as comments received will be posted part of an approximately six-month without change; the Commission does pilot (‘‘Rule 6.8 IWM Pilot Program’’).5 not edit personal identifying The text of the proposed rule change is information from submissions. You available at NYSE Arca, the should submit only information that Commission’s Public Reference Room, you wish to make available publicly. All and www.nysearca.com. submissions should refer to File II. Self-Regulatory Organization’s Number SR–NASD–2007–008 and Statement of the Purpose of, and should be submitted on or before Statutory Basis for, the Proposed Rule February 27, 2007. Change For the Commission, by the Division of In its filing with the Commission, Market Regulation, pursuant to delegated NYSE Arca included statements 13 authority. concerning the purpose of and basis for Florence E. Harmon, the proposed rule change and discussed Deputy Secretary. [FR Doc. E7–1859 Filed 2–5–07; 8:45 am] 13 17 PO 00000 CFR 200.30–3(a)(12). Frm 00068 Fmt 4703 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 Due to the effective date of this filing, the duration of the pilot will actually be slightly less than six months so that the expiration date of the pilot may coincide with similar pilot programs in effect at other options exchanges. 2 17 BILLING CODE 8010–01–P Sfmt 4703 E:\FR\FM\06FEN1.SGM 06FEN1

Agencies

[Federal Register Volume 72, Number 24 (Tuesday, February 6, 2007)]
[Notices]
[Pages 5479-5481]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-1859]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55206; File No. SR-NASD-2007-008]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Extending the Pilot Periods for NASD Rules Governing 
Multiple MPIDs on the Trade Reporting Facilities and on the Alternative 
Display Facility

January 31, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 5480]]

(``Act'')\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 26, 2007, 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 and 
II below, which Items have been substantially prepared by NASD. NASD 
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).
---------------------------------------------------------------------------

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

    NASD proposes to amend NASD Rules 4613A(b) and 5140 to extend the 
pilot programs for the use of multiple Market Participant Symbols 
(``MPIDs'') for Registered Reporting Alternative Display Facility 
(``ADF'') electronic communications networks (``ECNs'') and Trade 
Reporting Facility Participants. The text of the proposed rule change 
is available at NASD, the Commission's Public Reference Room, and 
www.nasd.com.

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

Rule 4613A(b) and IM-4613A-1

    Rule 4613A(b) (Character of Quotations) provides that a Registered 
Reporting ADF ECN may request additional MPIDs for displaying quotes 
and orders and reporting trades through the ADF trade reporting 
facility, the Trade Reporting and Comparison Service, for any ADF-
Eligible Security. A Registered Reporting ADF ECN that is permitted the 
use of additional MPIDs for displaying quotes and orders is subject to 
the same rules applicable to the member's first quotation (i.e., an ECN 
that displays one or more additional quotes/orders is required to 
comply with all rules applicable to ECNs in their display of quotes/
orders). A Registered Reporting ADF ECN also is prohibited from using 
an additional MPID to accomplish indirectly what it is prohibited from 
doing directly through its Primary MPID. In addition, NASD staff 
retains full discretion to determine whether a bona fide regulatory 
and/or business need exists for being granted an additional MPID 
privilege and to limit or withdraw the additional MPID display 
privilege at any time. The procedures for requesting, and the 
restrictions surrounding the use of, multiple MPIDs are set forth in 
IM-4613A-1 (Procedures for Allocation of Multiple MPIDs).
    The Commission approved Rule 4613A(b) and IM-4613A-1 on a pilot 
basis on August 11, 2006.\5\ By its terms, the pilot period expires on 
January 26, 2007, and NASD has determined to seek an extension of the 
pilot period until January 25, 2008. NASD believes that such an 
extension will provide additional time to analyze the use of multiple 
MPIDs on the ADF. NASD is not proposing any other changes to the pilot 
as this time.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54307 (August 11, 
2006), 71 FR 47551 (August 17, 2006).
    \6\ The expiration of the pilot period coincided with the 
expiration of the current ADF pilot period. See Securities Exchange 
Act Release No. 53699 (April 21, 2006), 71 FR 25271 (April 28, 
2006). In a separate rule filing, NASD proposed to make the ADF 
rules permanent. See Securities Exchange Act Release No. 55181 
(January 26, 2007) (SR-NASD-2007-005). At this time, NASD is seeking 
to extend only Rule 4613A(b) and IM-4613A-1 for another year.
---------------------------------------------------------------------------

Rule 5140 and IM-5140

    Rule 5140 (Multiple MPIDs for Trade Reporting Facility 
Participants) provides that any Trade Reporting Facility Participant 
that wishes to use more than one MPID for purposes of reporting trades 
to a Trade Reporting Facility must submit a written request to, and 
obtain approval from, NASD Operations for such additional MPIDs. In 
addition, IM-5140 (Use of Multiple MPIDs) states that NASD considers 
the issuance of, and trade reporting with, multiple MPIDs to be a 
privilege and not a right. A Trade Reporting Facility Participant must 
identify the purpose(s) and system(s) for which the multiple MPIDs will 
be used. If NASD determines that the use of multiple MPIDs is 
detrimental to the marketplace, or that a Trade Reporting Facility 
Participant is using one or more additional MPIDs improperly or for 
other than the purpose(s) identified by the Participant, NASD staff 
retains full discretion to limit or withdraw its grant of the 
additional MPID(s) to such Trade Reporting Facility Participant for 
purposes of reporting trades to a Trade Reporting Facility. NASD 
believes that Rule 5140 and IM-5140 are necessary to consolidate the 
process of issuing, and tracking the use of, multiple MPIDs used to 
report trades to NASD Trade Reporting Facilities.
    The Commission approved Rule 5140 on a pilot basis on November 6, 
2006.\7\ By its terms, the pilot period expires on January 26, 2007, 
and NASD has determined to seek an extension of the pilot period until 
January 25, 2008. NASD believes that such an extension will provide 
additional time to analyze the use of multiple MPIDs on the Trade 
Reporting Facilities. NASD is not proposing any other changes to the 
pilot as this time. NASD proposes to implement the proposed rule change 
on January 27, 2007.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 54715 (November 6, 
2006), 71 FR 66354 (November 14, 2006); see also Securities Exchange 
Act Release No. 54715A (November 14, 2006), 71 FR 67183 (November 
20, 2006) (correcting original approval order).
---------------------------------------------------------------------------

2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ 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 is 
consistent with these requirements because it would provide a process 
by which ECNs (in the case of the ADF) and Trade Reporting Facility 
Participants (in the case of the Trade Reporting Facilities) can 
request, and NASD can properly allocate, the use of additional MPIDs 
for displaying quotes and orders through the ADF or reporting trades to 
a Trade Reporting Facility.
---------------------------------------------------------------------------

    \8\ 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 would result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

[[Page 5481]]

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.\11\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ Rule 19b-4(f)(6) also requires the self-regulatory 
organization to give 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. NASD has satisfied the five-day pre-
filing requirement.
---------------------------------------------------------------------------

    NASD has requested that the Commission waive the 30-day operative 
delay in this case. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver will allow the benefits of the 
multiple MPID pilots to continue uninterrupted. For this reason, the 
Commission designates the proposed rule change to be operative upon 
filing with the Commission.\12\
---------------------------------------------------------------------------

    \12\ For the purposes only of waiving the 30-day 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-2007-008 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-2007-008. 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 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-2007-008 and should be submitted on or before February 27, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1859 Filed 2-5-07; 8:45 am]
BILLING CODE 8010-01-P