Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Conforming Changes to the Rules Relating to the NASD/NSX TRF, NASD/BSE TRF, and NASD/NYSE TRF Consistent With the New Requirements of Regulation NMS, 9807-9810 [E7-3744]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices
No. SR–NASDAQ–2007–007 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
[Release No. 34–55346; File No. SR–NASD–
2007–014]
erjones on PRODPC74 with NOTICES
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
All submissions should refer to File
Rule Change To Make Conforming
Changes to the Rules Relating to the
Number SR–NASDAQ–2007–007. This
NASD/NSX TRF, NASD/BSE TRF, and
file number should be included on the
subject line if e-mail is used. To help the NASD/NYSE TRF Consistent With the
New Requirements of Regulation NMS
Commission process and review your
comments more efficiently, please use
February 26, 2007.
only one method. The Commission will
Pursuant to Section 19(b)(1) of the
post all comments on the Commissions
Securities Exchange Act of 1934
Internet Web site (https://www.sec.gov/
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
rules/sro.shtml). Copies of the
notice is hereby given that on February
submission, all subsequent
12, 2007, the National Association of
amendments, all written statements
Securities Dealers, Inc. (‘‘NASD’’) filed
with respect to the proposed rule
with the Securities and Exchange
change that are filed with the
Commission (‘‘Commission’’) the
Commission, and all written
proposed rule change as described in
communications relating to the
Items I, II, and III below, which Items
proposed rule change between the
have been substantially prepared by
Commission and any person, other than NASD. NASD has filed the proposal as
those that may be withheld from the
a ‘‘non-controversial’’ rule change
public in accordance with the
pursuant to Section 19(b)(3)(A) of the
provisions of 5 U.S.C. 552, will be
Act 3 and Rule 19b–4(f)(6) thereunder,4
available for inspection and copying in
which renders it effective upon filing
with the Commission. The Commission
the Commission’s Public Reference
Room. Copies of such filing also will be is publishing this notice to solicit
comments on the proposed rule change
available for inspection and copying at
the principal office of the Exchange. All from interested persons.
comments received will be posted
I. Self-Regulatory Organization’s
without change; the Commission does
Statement of the Terms of Substance of
not edit personal identifying
the Proposed Rule Change
information from submissions. You
NASD proposes (1) amendments to
should submit only information that
the transaction reporting rules relating
you wish to make available publicly. All
to the NASD/NSX Trade Reporting
submissions should refer to File
Facility (‘‘NASD/NSX TRF’’), the
Number SR-NASDAQ–2007–007 and
NASD/BSE Trade Reporting Facility
should be submitted on or before March
(‘‘NASD/BSE TRF’’), and the NASD/
26, 2007.
NYSE Trade Reporting Facility (‘‘NASD/
For the Commission, by the Division of
NYSE TRF’’) (collectively referred to
Market Regulation, pursuant to delegated
herein as the ‘‘Subject TRFs’’) consistent
authority.11
with the new requirements of
Regulation NMS under the Act;5 and (2)
Florence E. Harmon,
technical amendments to conform, to
Deputy Secretary.
the extent practicable, the reporting
[FR Doc. E7–3751 Filed 3–2–07; 8:45 am]
rules of the Subject TRFs to the
BILLING CODE 8010–01–P
reporting rules of the NASD/Nasdaq
Trade Reporting Facility (‘‘NASD/
Nasdaq TRF’’) and NASD’s Alternative
Display Facility (‘‘ADF’’). The text of the
proposed rule change is available at
NASD, the Commission’s Public
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 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
2 17
11 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
15:17 Mar 02, 2007
Jkt 211001
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
9807
Reference Room, and 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,
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
Background
On June 29, 2005, the Commission
published its release adopting
Regulation NMS,6 which established
new substantive rules designed to
modernize and strengthen the regulatory
structure of the U.S. equities markets.
Pursuant to Regulation NMS, the
Commission, among other things,
adopted Rule 611 (‘‘Order Protection
Rule’’) to establish protection against
trade-throughs for NMS stocks.7
In general, the Order Protection Rule
requires a trading center (which
includes national securities exchanges,
self-regulatory organization (‘‘SRO’’)
trading facilities, alternative trading
systems, OTC market makers, and block
positioners) to establish, maintain, and
enforce written policies and procedures
that are reasonably designed to prevent
trade-throughs on that trading center of
protected quotations and, if relying on
an exception, that are reasonably
designed to assure compliance with the
terms of the exception. There currently
are nine exceptions and two exemptions
to the Order Protection Rule.8 In
6 Id.
7 NMS stock is defined in Rule 600(b)(47) of
Regulation NMS as ‘‘any NMS security other than
an option.’’ Rule 600(b)(46) of Regulation NMS
defines NMS security as ‘‘any security or class of
securities for which transaction reports are
collected, processed, and made available pursuant
to an effective transaction reporting plan, or an
effective national market system plan for reporting
transactions in listed options.’’
8 See 17 CFR 242.611; Securities Exchange Act
Release Nos. 54389 (August 31, 2006), 71 FR 52829
(September 7, 2006) (Order Granting an Exemption
for Qualified Contingent Trades from Rule 611(a) of
Regulation NMS) and 54678 (October 31, 2006), 71
FR 65018 (November 6, 2006) (Order Exempting
Certain Sub-Penny Trade-Throughs from Rule 611
of Regulation NMS).
E:\FR\FM\05MRN1.SGM
05MRN1
9808
Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices
erjones on PRODPC74 with NOTICES
addition, the Order Protection Rule
requires trading centers to surveil
regularly to ascertain the effectiveness
of the policies and procedures adopted
pursuant to Rule 611 of Regulation NMS
and take prompt action to remedy
deficiencies in such policies and
procedures.
On November 6, 2006, the
Commission approved the
establishment of the NASD/NSX TRF.9
On December 13, 2006, the Commission
approved the establishment of the
NASD/BSE TRF.10 On February 1, 2007,
NASD filed for immediate effectiveness
a proposed rule change relating to the
establishment of the NASD/NYSE
TRF.11 The Subject TRFs provide
members additional mechanisms for
reporting locked-in trades in exchangelisted securities executed otherwise
than on an exchange.
Neither NASD, generally, nor any of
the NASD Trade Reporting Facilities,
specifically, qualifies as a trading center
within the meaning of Regulation NMS.
Thus, the provisions of the Order
Protection Rule requiring trading
centers to establish, maintain, and
enforce written policies and procedures
that are reasonably designed to prevent
trade-throughs on that trading center of
protected quotations in NMS stocks are
not applicable to NASD. However,
NASD has a responsibility to enforce
requirements under the Act that apply
to activity within its regulatory
authority. Thus, unlike exchanges that
have direct Regulation NMS obligations
with respect to the SRO trading
facilities, NASD has indirect Regulation
NMS obligations with respect to all
over-the-counter market activity,
including post-trade regulation for
compliance with the Order Protection
Rule with respect to trading centers that
trade report through an NASD Trade
Reporting Facility. Such regulation
includes monitoring for whether trading
centers are reporting trades to an NASD
9 See Securities Exchange Act Release No. 54715
(November 6, 2006), 71 FR 66354 (November 14,
2006) (SR–NASD–2006–108). The NASD/NSX TRF
commenced operation for the reporting of over-thecounter trades in Nasdaq-listed securities on
November 27, 2006 and is expected to expand to
the reporting of over-the-counter trades in all
exchange-listed securities in the first quarter of
2007.
10 See Securities Exchange Act Release No. 54931
(December 13, 2006), 71 FR 76409 (December 20,
2006) (SR–NASD–2006–115). The NASD/BSE TRF
will commence operation upon successful
completion of system testing and certification
(currently anticipated to be in the first quarter of
2007).
11 See Securities Exchange Act Release No. 55325
(February 21, 2007) (SR–NASD–2007–011). The
NASD/NYSE TRF will commence operation upon
successful completion of system testing and
certification (currently anticipated to be in the first
quarter of 2007).
VerDate Aug<31>2005
15:17 Mar 02, 2007
Jkt 211001
Trade Reporting Facility that are tradethroughs of protected quotes and
whether such trade-throughs are
permissible under one of the specific
exceptions and exemptions under the
Order Protection Rule.
Proposed Amendments To Align the
Rules of the Subject TRFs With
Regulation NMS
NASD proposes to amend Rule 4632C
relating to the NASD/NSX TRF, Rule
4632D relating to the NASD/BSE TRF,
and Rule 4632E relating to the NASD/
NYSE TRF to require reporting members
to append applicable modifiers to lastsale transaction reports with respect to
trades that fall within the exceptions
and exemptions from Rule 611 of
Regulation NMS. The proposed
amendments are substantially similar to
amendments to the transaction reporting
requirements relating to the ADF, which
were approved by the Commission on
September 28, 2006,12 and the NASD/
Nasdaq TRF, which were filed for
immediate effectiveness on January 8,
2007.13
Specifically, NASD proposes to adopt
new paragraph (a)(5)(C) of Rule 4632C,
paragraph (a)(5)(F) of Rule 4632D, and
paragraph (a)(5)(I) of Rule 4632E to
require members to append a unique
modifier, specified by NASD, to indicate
whether the trade would be a tradethrough of a protected quotation but for
the trade being qualified for an
exception or exemption from Rule 611
of Regulation NMS. Further, NASD
proposes to adopt new paragraph
(a)(5)(D) of Rule 4632C, paragraph
(a)(5)(G) of Rule 4632D, and paragraph
(a)(5)(J) of Rule 4632E to require that, for
any trade that would be a trade-through
of a protected quotation but for the trade
being qualified for an exception or
exemption from Rule 611 of Regulation
NMS, a member must append to the
transaction report, in addition to the
modifier required under new Rule
4632C(a)(5)(C), Rule 4632D(a)(5)(F), and
Rule 4632E(a)(5)(I), respectively, a
unique modifier, specified by NASD,
that identifies the specific applicable
exception or exemption from Rule 611
of Regulation NMS upon which the
12 See Securities Exchange Act Release No. 54537
(September 28, 2006), 71 FR 59173 (October 6,
2006) (SR–NASD–2006–091). See also Securities
Exchange Act Release No. 55088 (January 11, 2007),
72 FR 2573 (January 19, 2007) (SR–NASD–2007–
001). Unlike the ADF, an NASD Trade Reporting
Facility (e.g., the NASD/NSX TRF) is a trade
reporting mechanism only; it does not permit
quoting. As such, not all of the amendments to the
ADF rules are applicable to the rules relating to the
NASD Trade Reporting Facilities.
13 See Securities Exchange Act Release No. 55101
(January 12, 2007), 72 FR 2568 (January 19, 2007)
(SR–NASD–2007–002).
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
member is relying.14 As stated in the
proposed rules, these modifiers will be
used in conformity with the
specifications approved by the
Operating Committee of the relevant
National Market System Plans to
identify trades executed pursuant to an
exception or exemption from Rule 611
of Regulation NMS. NASD, along with
the respective Subject TRFs, will
publish technical specifications
regarding the specific modifiers
required under the proposed new rules.
Additionally, NASD proposes to
adopt new paragraph (a)(5)(E) of Rule
4632C, paragraph (a)(5)(H) of Rule
4632D, and paragraph (a)(5)(K) of Rule
4632E to require members to append
‘‘[a]ny other modifier as specified by
NASD or the Securities and Exchange
Commission.’’ An identical provision in
the ADF rules was subject to notice and
comment and approved by the
Commission pursuant to SR–NASD–
2006–091 and also was incorporated in
Rule 4632 relating to the NASD/Nasdaq
TRF pursuant to SR–NASD–2007–002.
Under this proposed provision, NASD
will have the authority to prescribe
additional trade report modifiers by
updating the Technical Specifications
for the Subject TRFs without submitting
a further proposed rule change for
approval by the Commission. For
example, such authority will be used to
require additional modifiers to
designate trades that qualify under two
existing exemptions from the Order
Protection Rule (qualified contingent
trades and certain sub-penny tradethroughs) 15 as well as any other
exemption that the Commission may
grant in the future. This authority may
also be used to capture additional
regulatory information that NASD
deems necessary (e.g., NASD will
require more specific delineation of the
Intermarket Sweep Order (‘‘ISO’’)
exception than is required by the
National Market System
specifications).16 To enable members to
make the necessary systems changes,
NASD would provide at least 30 days
advance written notice relating to any
new modifiers.
NASD also proposes to amend Rules
4632C, 4632D, and 4632E to expressly
14 A Member using the trade report modifiers
under the proposed new rules is responsible for
ensuring that the transaction meets the criteria of
the specific exemption or exception set forth in
Rule 611 of Regulation NMS.
15 See supra note 8.
16 The National Market System specifications
identify both types of ISO orders with a single
modifier. NASD, however, intends to distinguish
between the ISO exceptions by requiring firms to
use a separate modifier, as defined by NASD, in
instances where the executing firm is responsible
for sweeping the market.
E:\FR\FM\05MRN1.SGM
05MRN1
Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices
provide that, in the event that the rules
require multiple modifiers on any given
trade report, members are to report in
accordance with guidance published by
NASD regarding priorities among
modifiers, if such guidance is provided.
A Member that reports in accordance
with such guidance would not be in
violation of the trade reporting rules for
failing to use a particular modifier.
NASD believes that the proposed rule
change is necessary to ensure that there
is transparency relating to trades that
are exempt from the trade-through rule
and to enhance NASD’s ability to
examine for compliance with the Order
Protection Rule.
erjones on PRODPC74 with NOTICES
Proposed Amendments to Rules of the
Subject TRFs To Conform to NASD/
Nasdaq TRF and ADF Rules
NASD proposes changes to conform,
to the extent practicable, the reporting
rules of the Subject TRFs to the NASD/
Nasdaq TRF and ADF reporting rules.
Specifically, NASD proposes to
reorganize Rule 4632C relating to the
NASD/NSX TRF, Rule 4632D relating to
the NASD/BSE TRF, and Rule 4632E
relating to the NASD/NYSE TRF and
renumber paragraphs (a)(3) and (a)(5) of
Rule 4632C, paragraphs (a)(3) and (a)(6)
of Rule 4632D, and paragraphs (a)(3)
and (a)(6) of Rule 4632E, without
amending the text of those provisions.
NASD also proposes to renumber
paragraphs (a)(4), (a)(6), and (a)(8) of
Rule 4632C, paragraphs (a)(5), (a)(8),
and (a)(10) of Rule 4632D and
paragraphs (a)(5), (a)(8), and(a)(10) of
Rule 4632E, and amend the text of those
provisions to conform to the text of the
equivalent provisions in Rule 4632
relating to the NASD/Nasdaq TRF.
Additionally, NASD proposes to
adopt new Rules 4632C(a)(5),
4632D(a)(5), and 4632E(a)(5) to require
members to use trade report modifiers
designated by NASD for certain
enumerated transactions. As with the
NASD/Nasdaq TRF and ADF, members
will be required to include such
modifiers on all trade reports, including
reports of ‘‘as/of’’ trades.17 Consistent
with SR–NASD–2007–001 and SR–
17 The NASD/NSX TRF currently does not accept
‘‘as/of’’trade reports and the rules for the NASD/
BSE TRF, which have been approved by the
Commission but are not yet effective, also do not
permit the submission of ‘‘as/of’’ trade reports.
NASD will file a separate proposed rule change to
reflect the reporting of ‘‘as/of’’ trades to the NASD/
NSX TRF and NASD/BSE TRF. Thus, upon the
operative date of this proposed rule change,
members will be required to append all applicable
trade report modifiers to ‘‘as/of’’ trade reports
submitted to the NASD/NSX TRF and the NASD/
BSE TRF. NASD reminds members that they should
mark any ‘‘as/of’’ trade report for publication if that
trade would have been for publication had it been
reported on trade date.
VerDate Aug<31>2005
15:17 Mar 02, 2007
Jkt 211001
NASD–2007–002, the proposed
amendments to Rules 4632C, 4632D,
and 4632E would delete the labels (e.g.,
.T or .W) for the modifiers that members
are required to use when reporting the
enumerated transactions. Thus, Rules
4632C, 4632D, and 4632E would
identify the types of transactions that
must have a unique identifier associated
with them, and such modifiers would be
labeled in the system technical
specifications rather than in the rules.
It should be noted that, because of
differences in functionality, not all of
the rules relating to NASD’s Trade
Reporting Facilities are identical. For
example, unlike the NASD/Nasdaq TRF,
the NASD/BSE TRF, and the NASD/
NYSE TRF, pursuant to current Rule
4632C(a)(7), the NASD/NSX TRF does
not accept trade reports for Stop Stock
Transactions (as such term is defined in
Rule 4200C), transactions occurring at
prices based on average-weighting or
other special pricing formulae, or
transactions that reflect a price different
from the current market when the
execution price is based on a prior
reference point in time. In this proposed
rule change, NASD proposes to
renumber Rule 4632C(a)(7) as
4632C(a)(8) without amending the text
of the rule.
In addition, neither the NASD/NSX
TRF nor the NASD/BSE TRF will accept
trades reported as other than regular
way settlement (see Rules 6130C(a) and
6130D(a), respectively). Thus, unlike
Rule 4632(a)(5) relating to the NASD/
Nasdaq TRF and Rule 4632E(a)(5)
relating to the NASD/NYSE TRF,
proposed Rules 4632C(a)(5) and
4632D(a)(5) do not include provisions
pertaining to trade report modifiers for
Seller’s Option, Cash, or Next Day
transactions.
As discussed in footnote 17 above, the
NASD/NSX TRF and NASD/BSE TRF
rules currently do not provide for the
submission of ‘‘as/of’’ trade reports;
however, once the necessary system
changes have been made, NASD will file
a separate proposed rule change
proposing amendments to Rules
4632C(a)(2)(B) and (D) and
4632D(a)(2)(B) and (D) that are
consistent with Rule 4632(a)(2)(B) and
(D) and proposed Rule 4632E(a)(2)(B)
and (D).
NASD has filed the proposed rule
change for immediate effectiveness. In
accordance with the Regulation NMS
compliance dates established by the
Commission,18 NASD proposes to make
the proposed rule change operative on
the Pilot Stocks Phase Date, which is
18 See Securities Exchange Act Release No. 55160
(January 24, 2007), 72 FR 4202 (January 30, 2007).
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
9809
currently anticipated to be July 9, 2007.
However, members may begin
submitting trade reports to the Subject
TRFs in compliance with the proposed
rule change after the Trading Phase
Date, which is currently anticipated to
be March 5, 2007. This does not change
in any way a member’s responsibilities
under the Regulation NMS compliance
dates.19
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,20 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
facilitates the goals articulated in
Regulation NMS, including providing
an effective mechanism and regulatory
framework for reporting over-thecounter transactions to NASD.
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
The foregoing proposed rule change is
subject to Section 19(b)(3)(A)(iii) of the
Act 21 and Rule 19b–4(f)(6) thereunder 22
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
19 NASD notes that, although the proposed rule
change will not be operative until the Pilot Stocks
Phase Date, members may be required to meet the
Regulation NMS message format requirements for
reporting to the Subject TRFs prior to that date.
NASD will notify members of the date of mandatory
compliance with Regulation NMS message
formatting requirements for the Subject TRFs and
on such date, members will be required to report
in accordance with the new systems requirements,
although the specific new modifiers proposed
herein would continue to be voluntary until the
Pilot Stocks Phase Date.
20 15 U.S.C. 78o–3(b)(6).
21 15 U.S.C. 78s(b)(3)(A)(iii).
22 17 CFR 240.19b–4(f)(6).
E:\FR\FM\05MRN1.SGM
05MRN1
9810
Federal Register / Vol. 72, No. 42 / Monday, March 5, 2007 / Notices
of filing or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest; provided that NASD 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.23
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:
erjones on PRODPC74 with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2007–014 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–2007–014. 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
23 NASD has satisfied the five-day pre-filing
requirement.
VerDate Aug<31>2005
15:17 Mar 02, 2007
Jkt 211001
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–2007–014 and
should be submitted on or before March
26, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.24
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–3744 Filed 3–2–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55351; File No. SR–NASD–
2005–146]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Amendment No. 3 to and Order
Granting Accelerated Approval of a
Proposed Rule Change as Modified by
Amendment Nos. 2 and 3 Thereto To
Expand the Scope of IM–2110–2
Relating To Trading Ahead of
Customer Limit Orders To Apply to All
OTC Equity Securities
February 26, 2007.
I. Introduction
On December 9, 2005, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to expand the
scope of NASD Interpretive Material
(‘‘IM’’) 2110–2, Trading Ahead of
Customer Limit Order (‘‘IM–2110–2’’,
which is commonly referred to as the
‘‘Manning Rule’’), and any interpretive
guidance thereunder, to include overthe-counter (‘‘OTC’’) equity securities.3
On September 26, 2006, NASD filed
Amendment No. 1 to the proposed rule
change, and on October 19, 2006, NASD
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See NASD Rule 6610(d) (defining ‘‘OTC Equity
Security’’).
1 15
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
filed Amendment No. 2 to the proposed
rule change.4 The proposed rule change,
as amended, was published for
comment in the Federal Register on
November 9, 2006.5 The Commission
received one comment letter on the
proposal, which supported the
proposal.6 On February 6, 2007, the
Exchange filed Amendment No. 3 to the
proposed rule change.7 This order
provides notice of Amendment No. 3 to
the proposed rule change and approves
the proposed rule change as modified by
Amendment Nos. 2 and 3 on an
accelerated basis.
II. Description of the Proposal
NASD’s Manning Rule generally
prohibits an NASD member from
trading for its own account in an
exchange-listed security at a price that
is equal to or better than an unexecuted
customer limit order in that security,
unless the member immediately
thereafter executes the customer limit
order at the price at which it traded for
its own account or better. The legal
underpinnings for the Manning Rule are
a member’s fiduciary obligations and
the requirement that a member must, in
the conduct of its business, ‘‘observe
high standards of commercial honor and
just and equitable principles of trade.’’ 8
IM–2110–2 currently applies to
exchange-listed securities, 9 but does not
apply to OTC equity securities.
NASD Rule 6541 extends the general
principles of the Manning Rule to a
subset of OTC equity securities—
specifically, those equity securities that
are quoted on NASD’s OTC Bulletin
Board (‘‘OTCBB’’). NASD Rule 6541,
however, differs from IM–2110–2 in
4 Amendment No. 1 replaced and superseded the
original filing in its entirety and Amendment No.
2 replaced and superseded Amendment No. 1 in its
entirety.
5 See Securities Exchange Act Release No. 54705
(November 3, 2006), 71 FR 65863 (‘‘Notice’’).
6 See Letter from Shane E. Swanson, Director of
Compliance, Automated Trading Desk, LLC, to
Nancy M. Morris, Secretary, Commission, dated
December 29, 2006. Although this letter was not
submitted in response to SR–NASD–2005–146, the
letter referred to the instant filing and expressed
support for NASD’s proposal to require the lesser
of $0.01 or 1⁄2 the spread of price improvement with
respect to the implementation of Manning Rule
protection to orders priced below $1.00.
7 The text of Amendment No. 3 is available at
NASD, the Commission’s Public Reference Room,
and https://www.nasd.com.
8 See NASD Rule 2110.
9 See Securities Exchange Act Release No. 52210
(August 4, 2005), 70 FR 46897 (August 11, 2005)
(SR–NASD–2004–089) (approving the expansion of
IM–2110–2, which previously applied only to
Nasdaq securities, to exchange-listed securities).
See also NASD Notice to Members 05–64 (October
2005) (announcing Commission approval of the
amendments to IM–2110–2, which became effective
on January 2, 2006).
E:\FR\FM\05MRN1.SGM
05MRN1
]]>Agencies
[Federal Register Volume 72, Number 42 (Monday, March 5, 2007)]
[Notices]
[Pages 9807-9810]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-3744]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55346; File No. SR-NASD-2007-014]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Make Conforming Changes to the Rules Relating to the
NASD/NSX TRF, NASD/BSE TRF, and NASD/NYSE TRF Consistent With the New
Requirements of Regulation NMS
February 26, 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 12, 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 substantially prepared by NASD.
NASD has filed the proposal as a ``non-controversial'' rule change
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it 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 (1) amendments to the transaction reporting rules
relating to the NASD/NSX Trade Reporting Facility (``NASD/NSX TRF''),
the NASD/BSE Trade Reporting Facility (``NASD/BSE TRF''), and the NASD/
NYSE Trade Reporting Facility (``NASD/NYSE TRF'') (collectively
referred to herein as the ``Subject TRFs'') consistent with the new
requirements of Regulation NMS under the Act;\5\ and (2) technical
amendments to conform, to the extent practicable, the reporting rules
of the Subject TRFs to the reporting rules of the NASD/Nasdaq Trade
Reporting Facility (``NASD/Nasdaq TRF'') and NASD's Alternative Display
Facility (``ADF''). The text of the proposed rule change is available
at NASD, the Commission's Public Reference Room, and https://
www.nasd.com.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
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
Background
On June 29, 2005, the Commission published its release adopting
Regulation NMS,\6\ which established new substantive rules designed to
modernize and strengthen the regulatory structure of the U.S. equities
markets. Pursuant to Regulation NMS, the Commission, among other
things, adopted Rule 611 (``Order Protection Rule'') to establish
protection against trade-throughs for NMS stocks.\7\
---------------------------------------------------------------------------
\6\ Id.
\7\ NMS stock is defined in Rule 600(b)(47) of Regulation NMS as
``any NMS security other than an option.'' Rule 600(b)(46) of
Regulation NMS defines NMS security as ``any security or class of
securities for which transaction reports are collected, processed,
and made available pursuant to an effective transaction reporting
plan, or an effective national market system plan for reporting
transactions in listed options.''
---------------------------------------------------------------------------
In general, the Order Protection Rule requires a trading center
(which includes national securities exchanges, self-regulatory
organization (``SRO'') trading facilities, alternative trading systems,
OTC market makers, and block positioners) to establish, maintain, and
enforce written policies and procedures that are reasonably designed to
prevent trade-throughs on that trading center of protected quotations
and, if relying on an exception, that are reasonably designed to assure
compliance with the terms of the exception. There currently are nine
exceptions and two exemptions to the Order Protection Rule.\8\ In
[[Page 9808]]
addition, the Order Protection Rule requires trading centers to surveil
regularly to ascertain the effectiveness of the policies and procedures
adopted pursuant to Rule 611 of Regulation NMS and take prompt action
to remedy deficiencies in such policies and procedures.
---------------------------------------------------------------------------
\8\ See 17 CFR 242.611; Securities Exchange Act Release Nos.
54389 (August 31, 2006), 71 FR 52829 (September 7, 2006) (Order
Granting an Exemption for Qualified Contingent Trades from Rule
611(a) of Regulation NMS) and 54678 (October 31, 2006), 71 FR 65018
(November 6, 2006) (Order Exempting Certain Sub-Penny Trade-Throughs
from Rule 611 of Regulation NMS).
---------------------------------------------------------------------------
On November 6, 2006, the Commission approved the establishment of
the NASD/NSX TRF.\9\ On December 13, 2006, the Commission approved the
establishment of the NASD/BSE TRF.\10\ On February 1, 2007, NASD filed
for immediate effectiveness a proposed rule change relating to the
establishment of the NASD/NYSE TRF.\11\ The Subject TRFs provide
members additional mechanisms for reporting locked-in trades in
exchange-listed securities executed otherwise than on an exchange.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 54715 (November 6,
2006), 71 FR 66354 (November 14, 2006) (SR-NASD-2006-108). The NASD/
NSX TRF commenced operation for the reporting of over-the-counter
trades in Nasdaq-listed securities on November 27, 2006 and is
expected to expand to the reporting of over-the-counter trades in
all exchange-listed securities in the first quarter of 2007.
\10\ See Securities Exchange Act Release No. 54931 (December 13,
2006), 71 FR 76409 (December 20, 2006) (SR-NASD-2006-115). The NASD/
BSE TRF will commence operation upon successful completion of system
testing and certification (currently anticipated to be in the first
quarter of 2007).
\11\ See Securities Exchange Act Release No. 55325 (February 21,
2007) (SR-NASD-2007-011). The NASD/NYSE TRF will commence operation
upon successful completion of system testing and certification
(currently anticipated to be in the first quarter of 2007).
---------------------------------------------------------------------------
Neither NASD, generally, nor any of the NASD Trade Reporting
Facilities, specifically, qualifies as a trading center within the
meaning of Regulation NMS. Thus, the provisions of the Order Protection
Rule requiring trading centers to establish, maintain, and enforce
written policies and procedures that are reasonably designed to prevent
trade-throughs on that trading center of protected quotations in NMS
stocks are not applicable to NASD. However, NASD has a responsibility
to enforce requirements under the Act that apply to activity within its
regulatory authority. Thus, unlike exchanges that have direct
Regulation NMS obligations with respect to the SRO trading facilities,
NASD has indirect Regulation NMS obligations with respect to all over-
the-counter market activity, including post-trade regulation for
compliance with the Order Protection Rule with respect to trading
centers that trade report through an NASD Trade Reporting Facility.
Such regulation includes monitoring for whether trading centers are
reporting trades to an NASD Trade Reporting Facility that are trade-
throughs of protected quotes and whether such trade-throughs are
permissible under one of the specific exceptions and exemptions under
the Order Protection Rule.
Proposed Amendments To Align the Rules of the Subject TRFs With
Regulation NMS
NASD proposes to amend Rule 4632C relating to the NASD/NSX TRF,
Rule 4632D relating to the NASD/BSE TRF, and Rule 4632E relating to the
NASD/NYSE TRF to require reporting members to append applicable
modifiers to last-sale transaction reports with respect to trades that
fall within the exceptions and exemptions from Rule 611 of Regulation
NMS. The proposed amendments are substantially similar to amendments to
the transaction reporting requirements relating to the ADF, which were
approved by the Commission on September 28, 2006,\12\ and the NASD/
Nasdaq TRF, which were filed for immediate effectiveness on January 8,
2007.\13\
---------------------------------------------------------------------------
\12\ See Securities Exchange Act Release No. 54537 (September
28, 2006), 71 FR 59173 (October 6, 2006) (SR-NASD-2006-091). See
also Securities Exchange Act Release No. 55088 (January 11, 2007),
72 FR 2573 (January 19, 2007) (SR-NASD-2007-001). Unlike the ADF, an
NASD Trade Reporting Facility (e.g., the NASD/NSX TRF) is a trade
reporting mechanism only; it does not permit quoting. As such, not
all of the amendments to the ADF rules are applicable to the rules
relating to the NASD Trade Reporting Facilities.
\13\ See Securities Exchange Act Release No. 55101 (January 12,
2007), 72 FR 2568 (January 19, 2007) (SR-NASD-2007-002).
---------------------------------------------------------------------------
Specifically, NASD proposes to adopt new paragraph (a)(5)(C) of
Rule 4632C, paragraph (a)(5)(F) of Rule 4632D, and paragraph (a)(5)(I)
of Rule 4632E to require members to append a unique modifier, specified
by NASD, to indicate whether the trade would be a trade-through of a
protected quotation but for the trade being qualified for an exception
or exemption from Rule 611 of Regulation NMS. Further, NASD proposes to
adopt new paragraph (a)(5)(D) of Rule 4632C, paragraph (a)(5)(G) of
Rule 4632D, and paragraph (a)(5)(J) of Rule 4632E to require that, for
any trade that would be a trade-through of a protected quotation but
for the trade being qualified for an exception or exemption from Rule
611 of Regulation NMS, a member must append to the transaction report,
in addition to the modifier required under new Rule 4632C(a)(5)(C),
Rule 4632D(a)(5)(F), and Rule 4632E(a)(5)(I), respectively, a unique
modifier, specified by NASD, that identifies the specific applicable
exception or exemption from Rule 611 of Regulation NMS upon which the
member is relying.\14\ As stated in the proposed rules, these modifiers
will be used in conformity with the specifications approved by the
Operating Committee of the relevant National Market System Plans to
identify trades executed pursuant to an exception or exemption from
Rule 611 of Regulation NMS. NASD, along with the respective Subject
TRFs, will publish technical specifications regarding the specific
modifiers required under the proposed new rules.
---------------------------------------------------------------------------
\14\ A Member using the trade report modifiers under the
proposed new rules is responsible for ensuring that the transaction
meets the criteria of the specific exemption or exception set forth
in Rule 611 of Regulation NMS.
---------------------------------------------------------------------------
Additionally, NASD proposes to adopt new paragraph (a)(5)(E) of
Rule 4632C, paragraph (a)(5)(H) of Rule 4632D, and paragraph (a)(5)(K)
of Rule 4632E to require members to append ``[a]ny other modifier as
specified by NASD or the Securities and Exchange Commission.'' An
identical provision in the ADF rules was subject to notice and comment
and approved by the Commission pursuant to SR-NASD-2006-091 and also
was incorporated in Rule 4632 relating to the NASD/Nasdaq TRF pursuant
to SR-NASD-2007-002. Under this proposed provision, NASD will have the
authority to prescribe additional trade report modifiers by updating
the Technical Specifications for the Subject TRFs without submitting a
further proposed rule change for approval by the Commission. For
example, such authority will be used to require additional modifiers to
designate trades that qualify under two existing exemptions from the
Order Protection Rule (qualified contingent trades and certain sub-
penny trade-throughs) \15\ as well as any other exemption that the
Commission may grant in the future. This authority may also be used to
capture additional regulatory information that NASD deems necessary
(e.g., NASD will require more specific delineation of the Intermarket
Sweep Order (``ISO'') exception than is required by the National Market
System specifications).\16\ To enable members to make the necessary
systems changes, NASD would provide at least 30 days advance written
notice relating to any new modifiers.
---------------------------------------------------------------------------
\15\ See supra note 8.
\16\ The National Market System specifications identify both
types of ISO orders with a single modifier. NASD, however, intends
to distinguish between the ISO exceptions by requiring firms to use
a separate modifier, as defined by NASD, in instances where the
executing firm is responsible for sweeping the market.
---------------------------------------------------------------------------
NASD also proposes to amend Rules 4632C, 4632D, and 4632E to
expressly
[[Page 9809]]
provide that, in the event that the rules require multiple modifiers on
any given trade report, members are to report in accordance with
guidance published by NASD regarding priorities among modifiers, if
such guidance is provided. A Member that reports in accordance with
such guidance would not be in violation of the trade reporting rules
for failing to use a particular modifier.
NASD believes that the proposed rule change is necessary to ensure
that there is transparency relating to trades that are exempt from the
trade-through rule and to enhance NASD's ability to examine for
compliance with the Order Protection Rule.
Proposed Amendments to Rules of the Subject TRFs To Conform to NASD/
Nasdaq TRF and ADF Rules
NASD proposes changes to conform, to the extent practicable, the
reporting rules of the Subject TRFs to the NASD/Nasdaq TRF and ADF
reporting rules. Specifically, NASD proposes to reorganize Rule 4632C
relating to the NASD/NSX TRF, Rule 4632D relating to the NASD/BSE TRF,
and Rule 4632E relating to the NASD/NYSE TRF and renumber paragraphs
(a)(3) and (a)(5) of Rule 4632C, paragraphs (a)(3) and (a)(6) of Rule
4632D, and paragraphs (a)(3) and (a)(6) of Rule 4632E, without amending
the text of those provisions. NASD also proposes to renumber paragraphs
(a)(4), (a)(6), and (a)(8) of Rule 4632C, paragraphs (a)(5), (a)(8),
and (a)(10) of Rule 4632D and paragraphs (a)(5), (a)(8), and(a)(10) of
Rule 4632E, and amend the text of those provisions to conform to the
text of the equivalent provisions in Rule 4632 relating to the NASD/
Nasdaq TRF.
Additionally, NASD proposes to adopt new Rules 4632C(a)(5),
4632D(a)(5), and 4632E(a)(5) to require members to use trade report
modifiers designated by NASD for certain enumerated transactions. As
with the NASD/Nasdaq TRF and ADF, members will be required to include
such modifiers on all trade reports, including reports of ``as/of''
trades.\17\ Consistent with SR-NASD-2007-001 and SR-NASD-2007-002, the
proposed amendments to Rules 4632C, 4632D, and 4632E would delete the
labels (e.g., .T or .W) for the modifiers that members are required to
use when reporting the enumerated transactions. Thus, Rules 4632C,
4632D, and 4632E would identify the types of transactions that must
have a unique identifier associated with them, and such modifiers would
be labeled in the system technical specifications rather than in the
rules.
---------------------------------------------------------------------------
\17\ The NASD/NSX TRF currently does not accept ``as/of''trade
reports and the rules for the NASD/BSE TRF, which have been approved
by the Commission but are not yet effective, also do not permit the
submission of ``as/of'' trade reports. NASD will file a separate
proposed rule change to reflect the reporting of ``as/of'' trades to
the NASD/NSX TRF and NASD/BSE TRF. Thus, upon the operative date of
this proposed rule change, members will be required to append all
applicable trade report modifiers to ``as/of'' trade reports
submitted to the NASD/NSX TRF and the NASD/BSE TRF. NASD reminds
members that they should mark any ``as/of'' trade report for
publication if that trade would have been for publication had it
been reported on trade date.
---------------------------------------------------------------------------
It should be noted that, because of differences in functionality,
not all of the rules relating to NASD's Trade Reporting Facilities are
identical. For example, unlike the NASD/Nasdaq TRF, the NASD/BSE TRF,
and the NASD/NYSE TRF, pursuant to current Rule 4632C(a)(7), the NASD/
NSX TRF does not accept trade reports for Stop Stock Transactions (as
such term is defined in Rule 4200C), transactions occurring at prices
based on average-weighting or other special pricing formulae, or
transactions that reflect a price different from the current market
when the execution price is based on a prior reference point in time.
In this proposed rule change, NASD proposes to renumber Rule
4632C(a)(7) as 4632C(a)(8) without amending the text of the rule.
In addition, neither the NASD/NSX TRF nor the NASD/BSE TRF will
accept trades reported as other than regular way settlement (see Rules
6130C(a) and 6130D(a), respectively). Thus, unlike Rule 4632(a)(5)
relating to the NASD/Nasdaq TRF and Rule 4632E(a)(5) relating to the
NASD/NYSE TRF, proposed Rules 4632C(a)(5) and 4632D(a)(5) do not
include provisions pertaining to trade report modifiers for Seller's
Option, Cash, or Next Day transactions.
As discussed in footnote 17 above, the NASD/NSX TRF and NASD/BSE
TRF rules currently do not provide for the submission of ``as/of''
trade reports; however, once the necessary system changes have been
made, NASD will file a separate proposed rule change proposing
amendments to Rules 4632C(a)(2)(B) and (D) and 4632D(a)(2)(B) and (D)
that are consistent with Rule 4632(a)(2)(B) and (D) and proposed Rule
4632E(a)(2)(B) and (D).
NASD has filed the proposed rule change for immediate
effectiveness. In accordance with the Regulation NMS compliance dates
established by the Commission,\18\ NASD proposes to make the proposed
rule change operative on the Pilot Stocks Phase Date, which is
currently anticipated to be July 9, 2007. However, members may begin
submitting trade reports to the Subject TRFs in compliance with the
proposed rule change after the Trading Phase Date, which is currently
anticipated to be March 5, 2007. This does not change in any way a
member's responsibilities under the Regulation NMS compliance
dates.\19\
---------------------------------------------------------------------------
\18\ See Securities Exchange Act Release No. 55160 (January 24,
2007), 72 FR 4202 (January 30, 2007).
\19\ NASD notes that, although the proposed rule change will not
be operative until the Pilot Stocks Phase Date, members may be
required to meet the Regulation NMS message format requirements for
reporting to the Subject TRFs prior to that date. NASD will notify
members of the date of mandatory compliance with Regulation NMS
message formatting requirements for the Subject TRFs and on such
date, members will be required to report in accordance with the new
systems requirements, although the specific new modifiers proposed
herein would continue to be voluntary until the Pilot Stocks Phase
Date.
---------------------------------------------------------------------------
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\20\ 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
facilitates the goals articulated in Regulation NMS, including
providing an effective mechanism and regulatory framework for reporting
over-the-counter transactions to NASD.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
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 \21\ and Rule 19b-4(f)(6) thereunder \22\
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
[[Page 9810]]
of filing or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest;
provided that NASD 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.\23\
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78s(b)(3)(A)(iii).
\22\ 17 CFR 240.19b-4(f)(6).
\23\ NASD has satisfied the five-day pre-filing requirement.
---------------------------------------------------------------------------
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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2007-014 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-2007-014. 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 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-2007-014 and should be submitted on or before March 26, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\24\
---------------------------------------------------------------------------
\24\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-3744 Filed 3-2-07; 8:45 am]
BILLING CODE 8010-01-P
