Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Implement Certain Approved NASD Rule Changes Upon the Operation of the Nasdaq Stock Market LLC for Non-Nasdaq Exchange-Listed Securities, 7785-7787 [E7-2839]
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Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / Notices
the date of filing.11 However, Rule 19b–
4(f)(6)(iii) 12 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
ISE has requested that the Commission
waive the 30-day operative delay. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest because the proposed
rule change will make the ISE’s position
and exercise limits for options on BKX
consistent with the Phlx’s position and
exercise limits for such options.13
Further, the Commission notes that the
increased position and exercise limits
for Phlx were previously noticed for
comment and no comments were
received. For this reason, the
Commission designates the proposal to
be effective and operative upon filing
with the Commission.14
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–ISE–2007–02 on the subject
line.
hsrobinson on PROD1PC76 with NOTICES
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–ISE–2007–02. 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
11 17
CFR 240.19b–4(f)(6)(iii).
12 Id.
13 See
supra note 6.
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).
14 For
VerDate Aug<31>2005
16:14 Feb 16, 2007
Jkt 211001
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 ISE. 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–ISE–2007–02 and should be
submitted on or before March 13, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2842 Filed 2–16–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55274; File No. SR–NASD–
2007–012]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Implement Certain
Approved NASD Rule Changes Upon
the Operation of the Nasdaq Stock
Market LLC for Non-Nasdaq ExchangeListed Securities
February 12, 2007.
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 February
9, 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, II, and III below, which Items
have been prepared by the NASD. The
NASD filed the proposed rules change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposed rule change
effective upon filing with the
Commission. The Commission is
15 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).
1 15
PO 00000
Frm 00023
Fmt 4703
Sfmt 4703
7785
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The NASD has filed a proposed rule
change to (1) Provide notice that the
amendments to the NASD Rule 4700
Series that were approved pursuant to
SR–NASD–2006–104 5 will not be
implemented; (2) implement certain
amendments that were approved
pursuant to SR–NASD–2006–104 upon
the operation of the Nasdaq Stock
Market LLC (the ‘‘Nasdaq Exchange’’) as
a national securities exchange for nonNasdaq exchange-listed securities; and
(3) propose additional changes that were
not approved pursuant to SR–NASD–
2006–104, specifically the deletion of
the Rule 4700 Series and Rule 5150. All
other rule changes that were approved
pursuant to SR–NASD–2006–104, and
were not implemented pursuant to SR–
NASD–2006–135,6 will be implemented
upon the operation of NASD’s
Alternative Display Facility (‘‘ADF’’) for
non-Nasdaq exchange-listed securities,
as approved by the Commission on
September 28, 2006.7 The text of the
proposed amendments is available at
the NASD, from the Commission’s
Public Reference Room, and on the
NASD’s Web site (https://
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, the
NASD included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. NASD has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
5 See Securities Exchange Act Release No. 54798
(November 21, 2006), 71 FR 69156 (November 29,
2006) (order approving SR–NASD–2006–104).
6 See Securities Exchange Act Release No. 54984
(December 20, 2006), 71 FR 78245 (December 28,
2006) (notice of filing and immediate effectiveness
of SR–NASD–2006–135).
7 See Securities Exchange Act Release No. 54537
(September 28, 2006), 71 FR 59173 (October 6,
2006) (order approving SR–NASD–2006–091).
E:\FR\FM\20FEN1.SGM
20FEN1
7786
Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
hsrobinson on PROD1PC76 with NOTICES
On June 30, 2006, the Commission
approved SR–NASD–2005–087, which,
among other things, proposed an
implementation strategy for the
operation of the Nasdaq Exchange as a
national securities exchange for Nasdaqlisted securities during a transitional
period and also proposed rules for
reporting trades in Nasdaq-listed
securities effected otherwise than on an
exchange to the NASD/Nasdaq Trade
Reporting Facility (the ‘‘NASD/Nasdaq
TRF’’).8 On November 21, 2006, the
Commission approved SR–NASD–2006–
104, which, among other things,
proposed amendments necessary to
reflect the complete separation of The
Nasdaq Stock Market Inc. (‘‘Nasdaq’’)
from the NASD upon the operation of
the Nasdaq Exchange as a national
securities exchange for non-Nasdaq
exchange-listed securities and also
proposed to expand the scope of the
NASD/Nasdaq TRF rules to include
reporting of over-the-counter trades in
non-Nasdaq exchange-listed securities.9
As originally approved, the rule
changes in SR–NASD–2006–104 were to
become effective on the date that the
Nasdaq Exchange commences operation
as a national securities exchange for
non-Nasdaq exchange-listed securities.
However, as described in SR–NASD–
2006–135, for a transitional period,
Nasdaq has continued to operate the
SuperIntermarket (SiM) trading platform
on NASD’s behalf via the Transitional
System and Regulatory Services
Agreement.10 As contemplated in SR–
NASD–2006–135, the NASD has
determined to continue to use Nasdaq as
a vendor to operate SiM, even upon the
Nasdaq Exchange’s operation as an
exchange for non-Nasdaq exchangelisted securities, which is currently
8 See Securities Exchange Act Release No. 54084
(June 30, 2006), 71 FR 38935 (July 10, 2006) (order
approving SR–NASD–2005–087).
9 See Securities Exchange Act Release No. 54798
(November 21, 2006), 71 FR 69156 (November 29,
2006) (order approving SR–NASD–2006–104).
10 See Securities Exchange Act Release No. 54984
(December 20, 2006), 71 FR 78245 (December 28,
2006) (notice of filing and immediate effectiveness
of SR–NASD–2006–135). In that filing, amendments
to the Plan of Allocation and Delegation of
Functions by NASD to Subsidiaries and the ByLaws of NASD, NASD Regulation and NASD
Dispute Resolution, and the deletion of the Nasdaq
By-Laws, which were previously approved in SR–
NASD–2006–104, were implemented on December
20, 2006 to reflect Nasdaq’s complete separation
from NASD, and, on that same date, dissolution of
NASD’s controlling share in Nasdaq.
VerDate Aug<31>2005
16:14 Feb 16, 2007
Jkt 211001
scheduled for February 12, 2007.11 As
such, the current rules relating to SiM
will remain in place and the approved
rule changes to the Rule 4700 Series in
SR–NASD–2006–104 will not be
implemented.
In addition, the following rule
changes that were approved pursuant to
SR–NASD–2006–104 will be
implemented on the date upon which
the Nasdaq Exchange operates as a
national securities exchange for nonNasdaq exchange-listed securities: (1)
Deletion of the Rule 4900 Series and the
4950 Series; and (2) adoption of new
Rules 5120 (Other Trading Practices)
and 5130 (Obligation to Provide
Information) relating to trading
otherwise than on an exchange. All
other rule changes that are part of SR–
NASD–2006–104, and were not
implemented pursuant to SR–NASD–
2006–135 (i.e., amendments to the Rule
0100 Series; amendments to the Rule
4000 Series and Rule 6100 Series
relating to the NASD/Nasdaq TRF;
deletion of Rule 4400; amendments to
Rule 11890, Interpretive Material (IM)
11890–1 and IM–11890–2; and the
deletion of IM–11890–3), will be
implemented upon the operation of the
ADF for non-Nasdaq exchange-listed
securities, which will be the Regulation
NMS Trading Phase Date (currently
anticipated to be March 5, 2007).12
In this proposed rule change, NASD is
proposing two additional rule changes
that were not approved as part of SR–
NASD–2006–104. First, NASD is
proposing to delete the Rule 4700 Series
in its entirety upon the operation of the
ADF for non-Nasdaq exchange-listed
securities.13 Second, NASD is proposing
to delete Rule 5150 upon the operation
of the ADF for non-Nasdaq exchangelisted securities. Rule 5150 requires an
NASD member that is registered as a
market maker with the Nasdaq
Exchange in a non-Nasdaq exchangelisted security to comply with the
provisions of NASD Rule 5262 relating
to trade-throughs with respect to that
security for trades reported to NASD.
Rule 5150 was approved by the
11 See
Securities Exchange Act Release No. 54984
(December 20, 2006), 71 FR 78245 (December 28,
2006) (notice of filing and immediate effectiveness
of SR–NASD–2006–135), infra note 13.
12 Pursuant to SR–NASD–2006–091, among other
changes, the following will be deleted from the
NASD Manual on the Trading Phase Date: the Rule
5200 Series, the Rule 6300 Series and the Rule 6400
Series.
13 Thus, in the period between commencement of
operation of the Nasdaq Exchange for non-Nasdaq
exchange-listed securities and the operation of the
ADF for non-Nasdaq exchange-listed securities, the
Rule 4700 Series will remain in the NASD Manual
as it exists today. Upon the operation of the ADF
for non-Nasdaq exchange-listed securities, the Rule
4700 Series will be deleted in its entirety.
PO 00000
Frm 00024
Fmt 4703
Sfmt 4703
Commission on September 19, 2006 and
will become effective on the date that
the Nasdaq Exchange operates as a
national securities exchange for nonNasdaq exchange-listed securities.14
Upon the operation of the ADF for nonNasdaq exchange-listed securities, the
Rule 5200 Series, including Rule 5262,
will be deleted pursuant to NASD–
2006–091. Thus, NASD is proposing to
delete Rule 5150 on that same date.
NASD has filed the proposed rule
change for immediate effectiveness.
NASD proposes to implement the
proposed rule change as described
herein.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,15 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
will provide an effective mechanism
and regulatory framework for quoting
and trading activities otherwise than on
an exchange in non-Nasdaq exchangelisted securities upon the operation of
the Nasdaq Exchange as a national
securities exchange for non-Nasdaq
exchange-listed securities and the
operation of the ADF for non-Nasdaq
exchange-listed securities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not:
(i) Significantly affect the protection
of investors or the public interest;
(ii) impose any significant burden on
competition; and
(iii) become operative for 30 days
from the date on which it was filed, or
14 See Securities Exchange Act Release No. 54471
(September 19, 2006), 71 FR 56202 (September 26,
2006) (order approving SR–NASD–2006–081).
15 15 U.S.C. 78o–3(b)(6).
E:\FR\FM\20FEN1.SGM
20FEN1
Federal Register / Vol. 72, No. 33 / Tuesday, February 20, 2007 / Notices
such shorter time as the Commission
may designate if consistent with the
protection of investors and the public
interest, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act,16 and Rule 19b–4(f)(6)
thereunder.17 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.
A proposed rule change filed under
Rule 19b–4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii),19 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
NASD has asked the Commission to
waive the 30-day pre-operative delay.
The Commission believes that such
waiver is consistent with the protection
of investors and the public interest
because it would allow the NASD to
update and clarify its rules.20 The
Commission notes that the proposed
rule change will facilitate the
implementation of NASD rules that
were subject to notice and comment and
approved by the Commission on
November 21, 2006. For this reason, the
Commission designates the proposed
rule change to be operative on the date
that the Nasdaq Exchange begins
operations as a national securities
exchange for non-Nasdaq exchangelisted securities.
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
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–2007–012. 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 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–2007–012 and
should be submitted on or before March
13, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.21
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–2839 Filed 2–16–07; 8:45 am]
BILLING CODE 8010–01–P
hsrobinson on PROD1PC76 with NOTICES
• 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–2007–012 on the
subject line.
16 15
17 17
[Release No. 34–55283; File No. SR–NASD–
2007–010]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend NASD Rule
7010 To Modify Pricing for NASD
Members Using ITS/CAES System and
Inet Facility
February 12, 2007.
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 January
29, 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, II, and III below, which Items
have been prepared substantially by
NASD. NASD submitted the proposed
rule change under Section 19(b)(3)(A) of
the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the proposal
effective upon filing with the
Commission.5 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD proposes to amend NASD Rule
7010 to modify the pricing for its
members using the ITS/CAES System
and the Inet facility (the ‘‘Nasdaq
Facilities’’), which are currently
operated by The Nasdaq Stock Market,
Inc. and its subsidiaries (‘‘Nasdaq’’) as
facilities of NASD. The text of the
proposed rule change is available on the
NASD’s Web site at https://
www.nasd.com, at NASD and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1 15
18 Id.
16:14 Feb 16, 2007
Jkt 211001
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)(2).
5 NASD stipulated the implementation date to be
February 1, 2007.
2 17
19 17
VerDate Aug<31>2005
SECURITIES AND EXCHANGE
COMMISSION
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
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
20 For purposes only of waiving the operative date
of this proposal, the Commission has considered
the rule’s impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
7787
21 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00025
Fmt 4703
Sfmt 4703
E:\FR\FM\20FEN1.SGM
20FEN1
]]>Agencies
[Federal Register Volume 72, Number 33 (Tuesday, February 20, 2007)]
[Notices]
[Pages 7785-7787]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-2839]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55274; File No. SR-NASD-2007-012]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change to Implement Certain Approved NASD Rule Changes Upon the
Operation of the Nasdaq Stock Market LLC for Non-Nasdaq Exchange-Listed
Securities
February 12, 2007.
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 February 9, 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, II,
and III below, which Items have been prepared by the NASD. The NASD
filed the proposed rules change pursuant to Section 19(b)(3)(A) of the
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed
rule change effective upon filing with the Commission. 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
The NASD has filed a proposed rule change to (1) Provide notice
that the amendments to the NASD Rule 4700 Series that were approved
pursuant to SR-NASD-2006-104 \5\ will not be implemented; (2) implement
certain amendments that were approved pursuant to SR-NASD-2006-104 upon
the operation of the Nasdaq Stock Market LLC (the ``Nasdaq Exchange'')
as a national securities exchange for non-Nasdaq exchange-listed
securities; and (3) propose additional changes that were not approved
pursuant to SR-NASD-2006-104, specifically the deletion of the Rule
4700 Series and Rule 5150. All other rule changes that were approved
pursuant to SR-NASD-2006-104, and were not implemented pursuant to SR-
NASD-2006-135,\6\ will be implemented upon the operation of NASD's
Alternative Display Facility (``ADF'') for non-Nasdaq exchange-listed
securities, as approved by the Commission on September 28, 2006.\7\ The
text of the proposed amendments is available at the NASD, from the
Commission's Public Reference Room, and on the NASD's Web site (https://
www.nasd.com).
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 54798 (November 21,
2006), 71 FR 69156 (November 29, 2006) (order approving SR-NASD-
2006-104).
\6\ See Securities Exchange Act Release No. 54984 (December 20,
2006), 71 FR 78245 (December 28, 2006) (notice of filing and
immediate effectiveness of SR-NASD-2006-135).
\7\ See Securities Exchange Act Release No. 54537 (September 28,
2006), 71 FR 59173 (October 6, 2006) (order approving SR-NASD-2006-
091).
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the NASD included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NASD has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
[[Page 7786]]
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, which,
among other things, proposed an implementation strategy for the
operation of the Nasdaq Exchange as a national securities exchange for
Nasdaq-listed securities during a transitional period and also proposed
rules for reporting trades in Nasdaq-listed securities effected
otherwise than on an exchange to the NASD/Nasdaq Trade Reporting
Facility (the ``NASD/Nasdaq TRF'').\8\ On November 21, 2006, the
Commission approved SR-NASD-2006-104, which, among other things,
proposed amendments necessary to reflect the complete separation of The
Nasdaq Stock Market Inc. (``Nasdaq'') from the NASD upon the operation
of the Nasdaq Exchange as a national securities exchange for non-Nasdaq
exchange-listed securities and also proposed to expand the scope of the
NASD/Nasdaq TRF rules to include reporting of over-the-counter trades
in non-Nasdaq exchange-listed securities.\9\
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 54084 (June 30,
2006), 71 FR 38935 (July 10, 2006) (order approving SR-NASD-2005-
087).
\9\ See Securities Exchange Act Release No. 54798 (November 21,
2006), 71 FR 69156 (November 29, 2006) (order approving SR-NASD-
2006-104).
---------------------------------------------------------------------------
As originally approved, the rule changes in SR-NASD-2006-104 were
to become effective on the date that the Nasdaq Exchange commences
operation as a national securities exchange for non-Nasdaq exchange-
listed securities. However, as described in SR-NASD-2006-135, for a
transitional period, Nasdaq has continued to operate the
SuperIntermarket (SiM) trading platform on NASD's behalf via the
Transitional System and Regulatory Services Agreement.\10\ As
contemplated in SR-NASD-2006-135, the NASD has determined to continue
to use Nasdaq as a vendor to operate SiM, even upon the Nasdaq
Exchange's operation as an exchange for non-Nasdaq exchange-listed
securities, which is currently scheduled for February 12, 2007.\11\ As
such, the current rules relating to SiM will remain in place and the
approved rule changes to the Rule 4700 Series in SR-NASD-2006-104 will
not be implemented.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 54984 (December 20,
2006), 71 FR 78245 (December 28, 2006) (notice of filing and
immediate effectiveness of SR-NASD-2006-135). In that filing,
amendments to the Plan of Allocation and Delegation of Functions by
NASD to Subsidiaries and the By-Laws of NASD, NASD Regulation and
NASD Dispute Resolution, and the deletion of the Nasdaq By-Laws,
which were previously approved in SR-NASD-2006-104, were implemented
on December 20, 2006 to reflect Nasdaq's complete separation from
NASD, and, on that same date, dissolution of NASD's controlling
share in Nasdaq.
\11\ See Securities Exchange Act Release No. 54984 (December 20,
2006), 71 FR 78245 (December 28, 2006) (notice of filing and
immediate effectiveness of SR-NASD-2006-135), infra note 13.
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In addition, the following rule changes that were approved pursuant
to SR-NASD-2006-104 will be implemented on the date upon which the
Nasdaq Exchange operates as a national securities exchange for non-
Nasdaq exchange-listed securities: (1) Deletion of the Rule 4900 Series
and the 4950 Series; and (2) adoption of new Rules 5120 (Other Trading
Practices) and 5130 (Obligation to Provide Information) relating to
trading otherwise than on an exchange. All other rule changes that are
part of SR-NASD-2006-104, and were not implemented pursuant to SR-NASD-
2006-135 (i.e., amendments to the Rule 0100 Series; amendments to the
Rule 4000 Series and Rule 6100 Series relating to the NASD/Nasdaq TRF;
deletion of Rule 4400; amendments to Rule 11890, Interpretive Material
(IM) 11890-1 and IM-11890-2; and the deletion of IM-11890-3), will be
implemented upon the operation of the ADF for non-Nasdaq exchange-
listed securities, which will be the Regulation NMS Trading Phase Date
(currently anticipated to be March 5, 2007).\12\
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\12\ Pursuant to SR-NASD-2006-091, among other changes, the
following will be deleted from the NASD Manual on the Trading Phase
Date: the Rule 5200 Series, the Rule 6300 Series and the Rule 6400
Series.
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In this proposed rule change, NASD is proposing two additional rule
changes that were not approved as part of SR-NASD-2006-104. First, NASD
is proposing to delete the Rule 4700 Series in its entirety upon the
operation of the ADF for non-Nasdaq exchange-listed securities.\13\
Second, NASD is proposing to delete Rule 5150 upon the operation of the
ADF for non-Nasdaq exchange-listed securities. Rule 5150 requires an
NASD member that is registered as a market maker with the Nasdaq
Exchange in a non-Nasdaq exchange-listed security to comply with the
provisions of NASD Rule 5262 relating to trade-throughs with respect to
that security for trades reported to NASD. Rule 5150 was approved by
the Commission on September 19, 2006 and will become effective on the
date that the Nasdaq Exchange operates as a national securities
exchange for non-Nasdaq exchange-listed securities.\14\ Upon the
operation of the ADF for non-Nasdaq exchange-listed securities, the
Rule 5200 Series, including Rule 5262, will be deleted pursuant to
NASD-2006-091. Thus, NASD is proposing to delete Rule 5150 on that same
date.
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\13\ Thus, in the period between commencement of operation of
the Nasdaq Exchange for non-Nasdaq exchange-listed securities and
the operation of the ADF for non-Nasdaq exchange-listed securities,
the Rule 4700 Series will remain in the NASD Manual as it exists
today. Upon the operation of the ADF for non-Nasdaq exchange-listed
securities, the Rule 4700 Series will be deleted in its entirety.
\14\ See Securities Exchange Act Release No. 54471 (September
19, 2006), 71 FR 56202 (September 26, 2006) (order approving SR-
NASD-2006-081).
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NASD has filed the proposed rule change for immediate
effectiveness. NASD proposes to implement the proposed rule change as
described herein.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\15\ 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 will
provide an effective mechanism and regulatory framework for quoting and
trading activities otherwise than on an exchange in non-Nasdaq
exchange-listed securities upon the operation of the Nasdaq Exchange as
a national securities exchange for non-Nasdaq exchange-listed
securities and the operation of the ADF for non-Nasdaq exchange-listed
securities.
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\15\ 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 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
Because the foregoing proposed rule change does not:
(i) Significantly affect the protection of investors or the public
interest;
(ii) impose any significant burden on competition; and
(iii) become operative for 30 days from the date on which it was
filed, or
[[Page 7787]]
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act,\16\ and Rule 19b-
4(f)(6) thereunder.\17\ At any time within 60 days of the filing of the
proposed rule change the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\19\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The NASD has asked the
Commission to waive the 30-day pre-operative delay. The Commission
believes that such waiver is consistent with the protection of
investors and the public interest because it would allow the NASD to
update and clarify its rules.\20\ The Commission notes that the
proposed rule change will facilitate the implementation of NASD rules
that were subject to notice and comment and approved by the Commission
on November 21, 2006. For this reason, the Commission designates the
proposed rule change to be operative on the date that the Nasdaq
Exchange begins operations as a national securities exchange for non-
Nasdaq exchange-listed securities.
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\18\ Id.
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ For purposes only of waiving the operative date of this
proposal, the Commission has considered the rule's impact on
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2007-012 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-2007-012. 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 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-2007-012
and should be submitted on or before March 13, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-2839 Filed 2-16-07; 8:45 am]
BILLING CODE 8010-01-P
