Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Establish a Directed Order Type, 11069-11071 [E7-4328]
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Federal Register / Vol. 72, No. 47 / Monday, March 12, 2007 / Notices
The monthly credit is applied against
the first $25,000 (or $50,000, in the case
of December 2006) in monthly specialist
fixed fees otherwise due the CHX from
a participant firm. If the participant
firm’s fixed fee liability is less than the
credit amount, the CHX would apply a
credit equal to the amount of the fixed
fee liability, but would not issue a
refund to such participant firm for the
remaining balance of the credit, nor
would the CHX carry forward the
balance of the credit for application to
future fixed fee liabilities.5
2. Statutory Basis
The CHX believes the proposal is
consistent with the requirements of the
Act and the rules and regulations
thereunder that are applicable to a
national securities exchange, and, in
particular, with the requirements of
Section 6(b).6 The proposed rule change
is consistent with Section 6(b)(4) of the
Act in that it provides for the equitable
allocation of reasonable dues, fees and
other charges among the Exchange’s
members and will result in an
additional credit for CHX specialist
firms impacted by the Exchange’s
transition to its new trading model. The
proposed rule change is consistent with
Section 6(b)(5) of the Act because it
would promote just and equitable
principles of trade, remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system, and, in
general, protect investors and the public
interest by permitting the Exchange to
provide incentives for its specialist
firms to support the transition to new
technology that will result in fully
automated executions.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition.
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were either
solicited or received.
5 For example, if a specialist firm’s monthly fixed
fee liability for November 2006 was $32,000, the
CHX would apply the $25,000 credit and the firm
would be billed for the remaining balance of $7,000
in net fixed fees. If a specialist firm’s fixed fee
liability was $10,000, the CHX would apply a credit
of $10,000, offsetting the entire liability, and the
CHX would not bill the specialist firm for any fixed
fees. The CHX would not issue a refund of $15,000
to the specialist firm on account of the unused
portion of the available credit and the unused
portion would not be available to offset fixed fee
liabilities in future months.
6 15 U.S.C. 78f(b).
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the Exchange consents,
the Commission will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
11069
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–CHX–2007–02 and should
be submitted on or before March 27,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4325 Filed 3–9–07; 8:45 am]
BILLING CODE 8010–01–P
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:
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55405; File No. SR–
NASDAQ–2007–020]
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–CHX–2007–02 on the
subject line.
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change to Establish a
Directed Order Type
March 6, 2007.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on March 2,
Paper Comments
2007, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
• Send paper comments in triplicate
Securities and Exchange Commission
to Nancy M. Morris, Secretary,
(‘‘Commission’’) the proposed rule
Securities and Exchange Commission,
change as described in Items I and II
100 F Street, NE., Washington, DC
below, which Items have been
20549–1090.
substantially prepared by the Exchange.
All submissions should refer to File
Nasdaq has designated this proposal as
Number SR–CHX–2007–02. This file
non-controversial under Section
number should be included on the
19(b)(3)(A) of the Act 4 and Rule 19b–
subject line if e-mail is used. To help the
4(f)(6) thereunder.5 The Commission is
Commission process and review your
publishing this notice to solicit
comments more efficiently, please use
comments on the proposed rule change
only one method. The Commission will
from interested persons.
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
I. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the
Statement of the Terms of Substance of
submission, all subsequent
the Proposed Rule Change
amendments, all written statements
Nasdaq proposes to amend Nasdaq
with respect to the proposed rule
Rule 4611 to update and codify the
change that are filed with the
requirements applicable to Nasdaq
Commission, and all written
members that provide sponsored access
communications relating to the
to other firms and customers to the
proposed rule change between the
Nasdaq execution system.
Commission and any person, other than
The text of the proposed rule change
those that may be withheld from the
is below. Proposed new language is
public in accordance with the
provisions of 5 U.S.C. 552, will be
7 17 CFR 200.30–3(a)(12).
available for inspection and copying in
1 15 U.S.C.78s(b)(1).
the Commission’s Public Reference
2 15 U.S.C. 78a.
Room. Copies of the filing also will be
3 17 CFR 240.19b–4
4 15 U.S.C. 78s(b)(3)(A).
available for inspection and copying at
5 17 CFR 240.19b–4(f)(6).
the principal offices of the Exchange.
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11070
Federal Register / Vol. 72, No. 47 / Monday, March 12, 2007 / Notices
regarding the proposal. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
italicized; proposed deletions are in
brackets.6
*
*
*
*
*
4750. NASDAQ MARKET CENTER—
EXECUTION SERVICES
4751. Definitions
The following definitions apply to the
Rule 4600 and 4750 Series for the
trading of securities listed on a national
securities exchange other than Nasdaq.
(a)–(e) No change.
(f) The term ‘‘Order Type’’ shall mean
the unique processing prescribed for
designated orders that are eligible for
entry into the System, and shall include:
(1)–(8) No change.
(9) ‘‘Directed Orders’’ are orders that
are directed to an exchange other than
Nasdaq as directed by the entering party
without checking the Nasdaq book. If
unexecuted, the order (or unexecuted
portion thereof) shall be returned to the
entering party. This option may only be
used for orders with time-in-force
parameters of IOC.
Directed Orders may be designated as
intermarket sweep orders by the
entering party to execute against the full
displayed size of any protected bid or
offer (as defined in Rule 600(b) of
Regulation NMS under the Act). A
broker-dealer that designates an order as
an intermarket sweep order has the
responsibility of complying with Rules
610 and 611 of Regulation NMS.
(g)–(i) No change.
*
*
*
*
*
4755. Order Entry Parameters
(a) System Orders
(1)
(A) No Change.
(B) A System order may also be
designated as Reserve Order, a Pegged
Order, a Non-Displayed Order, a
Minimum Quantity Order, an
Intermarket Sweep Order, a Price to
Comply order, a Price to Comply Post
order, [or] a Discretionary Order, or a
Directed Order.
(C) No Change.
(2)–(4) No change.
*
*
*
*
*
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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
Exchange included statements
concerning the purpose of and basis for
the proposed rule changes and
discussed any comments it received
6 Changes are marked to the rule text that appears
in the electronic Nasdaq Manual found at
nasdaq.complinet.com/nasdaq/display/.
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18:04 Mar 09, 2007
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to create a new order
type—the Directed Order—for use by its
members in compliance with their
obligations under Regulation NMS.7
Directed Orders will be entered by a
Nasdaq member and sent to a market
center other than Nasdaq without
checking the Nasdaq book. The entering
member will select the market center to
receive the order This functionality
existed in Nasdaq’s former Brut and
INET facilities in the form of a ‘‘Thru’’
order that members used to route
trading interest directly to the New York
Stock Exchange or American Stock
Exchange to avoid trading through those
markets.8 If unexecuted, the order (or
unexecuted portion thereof) shall be
returned to the entering party. This
option may only be used for orders with
time-in-force parameters of IOC.
This order will provide additional
flexibility and functionality to Nasdaq’s
system and to members that wish to use
the system to comply with their
obligation to avoid trading through any
Protected Quotation within the meaning
of Rule 600(b)(58) of Regulation NMS.9
Directed Orders may be designated as
intermarket sweep orders (as defined in
Rule 600(b)(30) of Regulation NMS 10)
and therefore will provide Nasdaq
member’s the ability to execute against
the full displayed size) of any Protected
Bid or Protected Offer (as defined in
Rule 600(b)(57) of Regulation NMS 11) in
the case of a limit order to sell or buy
with a price that is superior to the limit
price of the limit order identified in the
intermarket sweep order.
Nasdaq members will be required to
comply with the requirements of Rules
610 and 611 of Regulation NMS 12 when
designating Directed Orders as
intermarket sweep orders. A brokerdealer that designates an order as an
intermarket sweep order has the
responsibility of complying with Rules
610 and 611 of Regulation NMS. When
7 See
17 CFR 242.600 et seq.
former NASD Rules 4903(b) and 4956(a).
9 17 CFR 242.600(b)(58).
10 17 CFR 242.600(b)(30).
11 17 CFR 242.600(b)(57).
12 17 CFR 242.610; 17 CFR 242.611.
8 See
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Nasdaq’s execution system receives a
Directed Order that is designated as an
intermarket sweep order, Nasdaq’s
system will pass that order to NASDAQ
Execution Services, LLC, Nasdaq’s
broker-dealer subsidiary. Nasdaq
Execution Services has connectivity to
route to all automated trading centers
displaying protected quotations.13
Nasdaq Execution Services will accept
orders only from Nasdaq, which in turn
accepts orders only from Nasdaq
members. Because Nasdaq Execution
Services will be routing orders strictly
on behalf of Nasdaq members, and
Nasdaq members that designate Directed
Orders as intermarket sweep orders are
obligated to comply with Rules 610 and
611 of Regulation NMS, Nasdaq
Execution Services will not perform
additional validations to ensure that
orders are properly designated as
intermarket sweep orders.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,14 in
general, and with Section 6(b)(5) of the
Act,15 in particular, in that the proposal
is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purpose of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments on the proposed
rule change were neither solicited nor
received.
13 See Responses to Frequently Asked Questions,
posted on the nasdaqtrader.com Web site at https://
www.nasdaqtrader.com/trader/tradingservices/
regnms_faqs.pdf.
14 15 U.S.C. 78f.
15 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 72, No. 47 / Monday, March 12, 2007 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change 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) normally may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 18 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest.19 The
Commission believes that the proposed
rule change will facilitate the ability of
Nasdaq members to utilize Nasdaq’s
automated system to comply with their
respective obligations under Regulation
NMS.
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.
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). When filing a proposed
rule change pursuant to Rule 19b–4(f)(6) under the
Act, an exchange is required to give the
Commission written 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. The Exchange has
requested that the Commission waive the 5-day prefiling notice requirement. The Commission has
determined to grant this request.
18 17 CFR 19b–4(f)(6)(iii).
19 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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17 17
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18:04 Mar 09, 2007
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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 e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2007–020 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.
11071
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55406; File Nos. SR–
NASD–2006–131; SR–NYSE–2006–111; SR–
Amex–2007–05]
Self-Regulatory Organizations:
National Association of Securities
Dealers, Inc.; New York Stock
Exchange LLC; American Stock
Exchange LLC; Order Approving
Proposed Rule Changes To Increase
the Frequency of the Short Interest
Reporting Requirements
March 6, 2007.
On December 4, 2006, December 7,
2006, and January 10, 2007,
respectively, the National Association of
Securities Dealers, Inc. (‘‘NASD’’), the
All submissions should refer to file
New York Stock Exchange LLC
Number SR–NASDAQ–2007–020. This
(‘‘NYSE’’), and the American Stock
file number should be included on the
subject line if e-mail is used. To help the Exchange LLC (‘‘Amex’’) (collectively,
the ‘‘SROs’’), pursuant to Section
Commission process and review your
19(b)(1) of the Securities Exchange Act
comments more efficiently, please use
only one method. The Commission will of 1934 (the ‘‘Act’’ or the ‘‘Exchange
1
2
post all comments on the Commission’s Act’’) and Rule 19b–4 thereunder,
filed with the Securities and Exchange
Internet Web site (https://www.sec.gov/
Commission (the ‘‘Commission’’) the
rules/sro/shtml). Copies of the
proposed rule changes as described
submission, all subsequent
below:
amendments, all written statements
Æ NASD proposed to increase the
with respect to the proposed rule
frequency of the short interest reporting
change that are filed with the
requirements under NASD Rule 3360
Commission, and all written
from monthly to twice per month.
communications relating to the
Currently, NASD Rule 3360, Shortproposed rule change between the
Interest Reporting, requires members to
Commission and any person, other than maintain a record of total short
those that may be withheld from the
positions in all customer and
public in accordance with the
proprietary firm accounts in OTC Equity
provisions of 5 U.S.C. 552, will be
Securities 3 and securities listed on a
available for inspection and copying in
national securities exchange if not
the Commission’s Public Reference
reported to another self-regulatory
Room. Copies of such filings will also be organization and to regularly report
such information in the manner
available for inspection and copying at
the principal office of the Exchange. All prescribed by NASD.4 Thus, no changes
to the text of NASD rules are required
comments received will be posted
by this proposed rule change.
without change; the Commission does
Æ NYSE proposed an amendment to
not edit personal identifying
NYSE Rule 421.10 (Short Positions),
information from submissions. You
which would increase the frequency of
should submit only information that
you wish to make available publicly. All the short interest reporting requirements
submissions should refer to File number under Rule 421.10 from monthly to
twice per month. In addition, NYSE
SR–NASDAQ–2007–020 and should be
proposed additional amendments to the
submitted on or before April 2, 2007.
Rule 421.10’s text in light of recent
For the Commission, by the Division of
changes to NYSE organizational
Market Regulation, pursuant to delegated
authority.20
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4328 Filed 3–9–07; 8:45 am]
BILLING CODE 8010–01–P
20 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00101
Fmt 4703
Sfmt 4703
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 NASD Rule 3360 provides that the term ‘‘OTC
Equity Securities’’ refers to any equity security that
is not listed on The Nasdaq Stock Market or a
national securities exchange.
4 Non-self-clearing broker-dealers generally are
considered to have satisfied their reporting
requirement by making appropriate arrangements
with their respective clearing organizations. See
NASD Notice to Members 03–08 (January 2003).
2 17
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]]>Agencies
[Federal Register Volume 72, Number 47 (Monday, March 12, 2007)]
[Notices]
[Pages 11069-11071]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4328]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55405; File No. SR-NASDAQ-2007-020]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Establish a Directed Order Type
March 6, 2007.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on March 2, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the Exchange.
Nasdaq has designated this proposal as non-controversial under Section
19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) thereunder.\5\ 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4
\4\ 15 U.S.C. 78s(b)(3)(A).
\5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to amend Nasdaq Rule 4611 to update and codify the
requirements applicable to Nasdaq members that provide sponsored access
to other firms and customers to the Nasdaq execution system.
The text of the proposed rule change is below. Proposed new
language is
[[Page 11070]]
italicized; proposed deletions are in brackets.\6\
---------------------------------------------------------------------------
\6\ Changes are marked to the rule text that appears in the
electronic Nasdaq Manual found at nasdaq.complinet.com/nasdaq/
display/.
---------------------------------------------------------------------------
* * * * *
4750. NASDAQ MARKET CENTER--EXECUTION SERVICES
4751. Definitions
The following definitions apply to the Rule 4600 and 4750 Series
for the trading of securities listed on a national securities exchange
other than Nasdaq.
(a)-(e) No change.
(f) The term ``Order Type'' shall mean the unique processing
prescribed for designated orders that are eligible for entry into the
System, and shall include: (1)-(8) No change.
(9) ``Directed Orders'' are orders that are directed to an exchange
other than Nasdaq as directed by the entering party without checking
the Nasdaq book. If unexecuted, the order (or unexecuted portion
thereof) shall be returned to the entering party. This option may only
be used for orders with time-in-force parameters of IOC.
Directed Orders may be designated as intermarket sweep orders by
the entering party to execute against the full displayed size of any
protected bid or offer (as defined in Rule 600(b) of Regulation NMS
under the Act). A broker-dealer that designates an order as an
intermarket sweep order has the responsibility of complying with Rules
610 and 611 of Regulation NMS.
(g)-(i) No change.
* * * * *
4755. Order Entry Parameters
(a) System Orders
(1)
(A) No Change.
(B) A System order may also be designated as Reserve Order, a
Pegged Order, a Non-Displayed Order, a Minimum Quantity Order, an
Intermarket Sweep Order, a Price to Comply order, a Price to Comply
Post order, [or] a Discretionary Order, or a Directed Order.
(C) No Change.
(2)-(4) No change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule changes and
discussed any comments it received regarding the proposal. The text of
these statements may be examined at the places specified in Item IV
below. The Exchange has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to create a new order type--the Directed Order--for
use by its members in compliance with their obligations under
Regulation NMS.\7\ Directed Orders will be entered by a Nasdaq member
and sent to a market center other than Nasdaq without checking the
Nasdaq book. The entering member will select the market center to
receive the order This functionality existed in Nasdaq's former Brut
and INET facilities in the form of a ``Thru'' order that members used
to route trading interest directly to the New York Stock Exchange or
American Stock Exchange to avoid trading through those markets.\8\ If
unexecuted, the order (or unexecuted portion thereof) shall be returned
to the entering party. This option may only be used for orders with
time-in-force parameters of IOC.
---------------------------------------------------------------------------
\7\ See 17 CFR 242.600 et seq.
\8\ See former NASD Rules 4903(b) and 4956(a).
---------------------------------------------------------------------------
This order will provide additional flexibility and functionality to
Nasdaq's system and to members that wish to use the system to comply
with their obligation to avoid trading through any Protected Quotation
within the meaning of Rule 600(b)(58) of Regulation NMS.\9\ Directed
Orders may be designated as intermarket sweep orders (as defined in
Rule 600(b)(30) of Regulation NMS \10\) and therefore will provide
Nasdaq member's the ability to execute against the full displayed size)
of any Protected Bid or Protected Offer (as defined in Rule 600(b)(57)
of Regulation NMS \11\) in the case of a limit order to sell or buy
with a price that is superior to the limit price of the limit order
identified in the intermarket sweep order.
---------------------------------------------------------------------------
\9\ 17 CFR 242.600(b)(58).
\10\ 17 CFR 242.600(b)(30).
\11\ 17 CFR 242.600(b)(57).
---------------------------------------------------------------------------
Nasdaq members will be required to comply with the requirements of
Rules 610 and 611 of Regulation NMS \12\ when designating Directed
Orders as intermarket sweep orders. A broker-dealer that designates an
order as an intermarket sweep order has the responsibility of complying
with Rules 610 and 611 of Regulation NMS. When Nasdaq's execution
system receives a Directed Order that is designated as an intermarket
sweep order, Nasdaq's system will pass that order to NASDAQ Execution
Services, LLC, Nasdaq's broker-dealer subsidiary. Nasdaq Execution
Services has connectivity to route to all automated trading centers
displaying protected quotations.\13\ Nasdaq Execution Services will
accept orders only from Nasdaq, which in turn accepts orders only from
Nasdaq members. Because Nasdaq Execution Services will be routing
orders strictly on behalf of Nasdaq members, and Nasdaq members that
designate Directed Orders as intermarket sweep orders are obligated to
comply with Rules 610 and 611 of Regulation NMS, Nasdaq Execution
Services will not perform additional validations to ensure that orders
are properly designated as intermarket sweep orders.
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\12\ 17 CFR 242.610; 17 CFR 242.611.
\13\ See Responses to Frequently Asked Questions, posted on the
nasdaqtrader.com Web site at https://www.nasdaqtrader.com/trader/
tradingservices/regnms_faqs.pdf.
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2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\14\ in general, and with
Section 6(b)(5) of the Act,\15\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
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\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments on the proposed rule change were neither solicited
nor received.
[[Page 11071]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (1) Significantly affect
the protection of investors or the public interest; (2) impose any
significant burden on competition; and (3) become operative for 30 days
after the date of the filing, or such shorter time as the Commission
may designate if consistent with the protection of investors and the
public interest, the proposed rule change has become effective pursuant
to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(6)
thereunder.\17\
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change
pursuant to Rule 19b-4(f)(6) under the Act, an exchange is required
to give the Commission written 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. The Exchange has requested that the
Commission waive the 5-day pre-filing notice requirement. The
Commission has determined to grant this request.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay. The Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest.\19\ The Commission
believes that the proposed rule change will facilitate the ability of
Nasdaq members to utilize Nasdaq's automated system to comply with
their respective obligations under Regulation NMS.
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\18\ 17 CFR 19b-4(f)(6)(iii).
\19\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 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 e-mail to rule-comments@sec.gov. Please include File
Number SR-NASDAQ-2007-020 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-NASDAQ-2007-020. 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
filings will also be available for inspection and copying at the
principal office of the Exchange. 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-NASDAQ-2007-020 and should be submitted on or before
April 2, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4328 Filed 3-9-07; 8:45 am]
BILLING CODE 8010-01-P
