Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change as Modified by Amendment No. 1 to Assess a Fee for Unsuccessful Appeals Under Rule 11890, 11413-11414 [E7-4506]
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Federal Register / Vol. 72, No. 48 / Tuesday, March 13, 2007 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act15 and Rule 19b-4(f)(2)16
thereunder. 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:
cprice-sewell on PROD1PC66 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
No. SR–ISE–2007–13 on the subject
line.
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–2007–13 and should be
submitted on or before April 3, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4504 Filed 3–12–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55413; File No. SR–
NASDAQ–2007–013]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change as Modified by
Amendment No. 1 to Assess a Fee for
Unsuccessful Appeals Under Rule
11890
March 7, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
Paper Comments
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate
notice is hereby given that on February
to Nancy M. Morris, Secretary,
27, 2007, The NASDAQ Stock Market
Securities and Exchange Commission,
LLC (‘‘Nasdaq’’ or the ‘‘Exchange’’) filed
Station Place, 100 F Street, NE.,
with the Securities and Exchange
Washington, DC 20549–1090.
Commission (‘‘Commission’’) the
All submissions should refer to File
proposed rule change as described in
Number SR–ISE–2007–13. This file
Items I, II, and III below, which Items
number should be included on the
have been substantially prepared by
subject line if e-mail is used. To help the Nasdaq. Nasdaq submitted the proposed
Commission process and review your
rule change under Section 19(b)(3)(A) of
comments more efficiently, please use
the Act 3 and Rule 19b–4(f)(2)
only one method. The Commission will thereunder,4 which renders the proposal
post all comments on the Commission’s effective upon filing with the
Internet Web site (https://www.sec.gov/
Commission. On March 1, 2007, the
rules/sro.shtml). Copies of the
Exchange filed Amendment No. 1 to the
submission, all subsequent
proposed rule change. The Commission
amendments, all written statements
is publishing this notice to solicit
with respect to the proposed rule
change that are filed with the
17 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Commission, and all written
2 17
CFR 240.19b–4.
U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
15 15
U.S.C. 78s(b)(3)(A).
16 17 CFR 19b-4(f)(2).
VerDate Aug<31>2005
14:58 Mar 12, 2007
3 15
Jkt 211001
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
11413
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to assess a fee for
unsuccessful appeals under Rule 11890.
Nasdaq expects to implement the
proposed rule change as of March 1,
2007.
The text of the proposed rule change
is available on the Nasdaq’s Web site at
https://www.nasdaq.com, at Nasdaq’s
Office of the Secretary, 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
In its filing with the Commission,
Nasdaq included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq is amending Rule 11890,
which covers the breaking of trades
determined to be clearly erroneous, to
add a new Rule 11890(c)(4) that would
assess a fee of $500.00 for unsuccessful
appeals of clearly erroneous
adjudications.
Rule 11890(c) provides that the losing
party may appeal decisions made by
Nasdaq officers on whether or not to
break trades. Appeals are heard by the
Market Operations Review Committee
(‘‘MORC’’), a committee of up to 15
volunteers who are not affiliated with
Nasdaq. Each appeal is heard by a panel
of two or three MORC members who
must take time from their work or
personal activities to prepare for and
hear the appeal. In addition, appeals
take significant staff time to perform a
number functions including: processing
the appeal, contacting the
counterparties, communicating with
MORC members to determine
availability, preparing briefing materials
on the circumstances of the trade(s) and
communicating the MORC’s decision to
the parties. Nasdaq estimates that on
average the appeals process takes from
four to five person-hours to complete
including staff and panel time.
E:\FR\FM\13MRN1.SGM
13MRN1
11414
Federal Register / Vol. 72, No. 48 / Tuesday, March 13, 2007 / Notices
Nasdaq is concerned that some
members have abused the appeals
process by appealing all decisions in
which they are involved regardless of
merit or the value of shares at issue.
During December 2006 and January
2007, five firms were responsible for
44% of all appeals. Two appeals were
for odd lot amounts, including one
appeal for just 50 shares. Of the appeals
during this two-month period, 77% of
appeals were upheld by the MORC and
23% resulted in trade adjustments.
These statistics suggest that parties are
overusing and abusing the appellate
system because there is no downside
risk. A number of the appeals involve
trades that do not meet the numerical
thresholds and other factors used in
adjudicating clearly erroneous filings set
forth in IM–11890–4 and IM–11890–5.
As a result, the MORC is often serving
as a redundant decision maker in cases
where the outcome is not legitimately in
question. This is not the role Nasdaq
intended when it established the
appeals process using the MORC.
In order to reduce the number of
frivolous appeals and to preserve
Nasdaq’s ability to attract qualified
persons to serve on the MORC, Nasdaq
is proposing a modest fee of $500.00
that will be levied only in cases where
the MORC upholds the Nasdaq officer’s
decision. Firms would not be charged
for successful appeals. Nasdaq believes
that this fee will encourage members to
consider whether the facts and
economic value at stake merit appellate
consideration. Nasdaq notes that NYSE
Arca Equities, Inc. (‘‘NYSE Arca’’)
recently adopted a similar $500.00
appellate fee in order to reduce apparent
abuses of the appeals process on that
exchange.5
cprice-sewell on PROD1PC66 with NOTICES
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,6 in
general, and with Section 6(b)(4) of the
Act,7 in particular, in that the proposed
rule change provides for the equitable
allocation of reasonable dues, fees, and
other charges among members and
issuers and other persons using any
facility or system which Nasdaq
operates or controls. Nasdaq believes
that the modest fee of $500 for an
unsuccessful appeal under Rule 11890
will be equitably assessed against
members that impose burdens on the
time of Nasdaq staff and MORC
members by filing appeals that lack
merit.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 8 and paragraph
(f)(2) of Rule 19b–49 thereunder. At any
time within 60 days of the filing of the
proposed rule change, the Commission
may summarily abrogate such rule
change if it appears to the Commission
that such action is necessary or
appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.10
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–NASDAQ–2007–013 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–2007–013. This
file number should be included on the
subject line if e-mail is used. To help the
8 15
5 Securities
Exchange Act Release No. 54655
(October 26, 2006), 71 FR 64596 (November 2, 2006)
(SR–NYSEArca–2006–48).
6 15 U.S.C. 78f.
7 15 U.S.C. 78f(b)(4).
VerDate Aug<31>2005
14:58 Mar 12, 2007
Jkt 211001
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
10 For the purposes of calculating the 60-day
abrogation period, the Commission considers the
proposed rule change to have been filed on March
1, 2007, when Amendment No. 1 was filed.
9 17
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
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 the Nasdaq. 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–2007–013 and
should be submitted on or before April
3, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–4506 Filed 3–12–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55412; File No. SR–NASD–
2007–015]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend NASD Rules
1012 (General Provisions) and 1013
(New Member Application and
Interview) To Require an Applicant for
Membership To Submit an Application
in the Manner Prescribed by NASD
March 7, 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
20, 2007, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\13MRN1.SGM
13MRN1
]]>Agencies
[Federal Register Volume 72, Number 48 (Tuesday, March 13, 2007)]
[Notices]
[Pages 11413-11414]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4506]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55413; File No. SR-NASDAQ-2007-013]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change as
Modified by Amendment No. 1 to Assess a Fee for Unsuccessful Appeals
Under Rule 11890
March 7, 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 27, 2007, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') 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 Nasdaq.
Nasdaq 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. On March 1, 2007,
the Exchange filed Amendment No. 1 to the proposed rule change. The
Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, 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)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to assess a fee for unsuccessful appeals under Rule
11890. Nasdaq expects to implement the proposed rule change as of March
1, 2007.
The text of the proposed rule change is available on the Nasdaq's
Web site at https://www.nasdaq.com, at Nasdaq's Office of the Secretary,
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
In its filing with the Commission, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq is amending Rule 11890, which covers the breaking of trades
determined to be clearly erroneous, to add a new Rule 11890(c)(4) that
would assess a fee of $500.00 for unsuccessful appeals of clearly
erroneous adjudications.
Rule 11890(c) provides that the losing party may appeal decisions
made by Nasdaq officers on whether or not to break trades. Appeals are
heard by the Market Operations Review Committee (``MORC''), a committee
of up to 15 volunteers who are not affiliated with Nasdaq. Each appeal
is heard by a panel of two or three MORC members who must take time
from their work or personal activities to prepare for and hear the
appeal. In addition, appeals take significant staff time to perform a
number functions including: processing the appeal, contacting the
counterparties, communicating with MORC members to determine
availability, preparing briefing materials on the circumstances of the
trade(s) and communicating the MORC's decision to the parties. Nasdaq
estimates that on average the appeals process takes from four to five
person-hours to complete including staff and panel time.
[[Page 11414]]
Nasdaq is concerned that some members have abused the appeals
process by appealing all decisions in which they are involved
regardless of merit or the value of shares at issue. During December
2006 and January 2007, five firms were responsible for 44% of all
appeals. Two appeals were for odd lot amounts, including one appeal for
just 50 shares. Of the appeals during this two-month period, 77% of
appeals were upheld by the MORC and 23% resulted in trade adjustments.
These statistics suggest that parties are overusing and abusing the
appellate system because there is no downside risk. A number of the
appeals involve trades that do not meet the numerical thresholds and
other factors used in adjudicating clearly erroneous filings set forth
in IM-11890-4 and IM-11890-5. As a result, the MORC is often serving as
a redundant decision maker in cases where the outcome is not
legitimately in question. This is not the role Nasdaq intended when it
established the appeals process using the MORC.
In order to reduce the number of frivolous appeals and to preserve
Nasdaq's ability to attract qualified persons to serve on the MORC,
Nasdaq is proposing a modest fee of $500.00 that will be levied only in
cases where the MORC upholds the Nasdaq officer's decision. Firms would
not be charged for successful appeals. Nasdaq believes that this fee
will encourage members to consider whether the facts and economic value
at stake merit appellate consideration. Nasdaq notes that NYSE Arca
Equities, Inc. (``NYSE Arca'') recently adopted a similar $500.00
appellate fee in order to reduce apparent abuses of the appeals process
on that exchange.\5\
---------------------------------------------------------------------------
\5\ Securities Exchange Act Release No. 54655 (October 26,
2006), 71 FR 64596 (November 2, 2006) (SR-NYSEArca-2006-48).
---------------------------------------------------------------------------
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and with Section
6(b)(4) of the Act,\7\ in particular, in that the proposed rule change
provides for the equitable allocation of reasonable dues, fees, and
other charges among members and issuers and other persons using any
facility or system which Nasdaq operates or controls. Nasdaq believes
that the modest fee of $500 for an unsuccessful appeal under Rule 11890
will be equitably assessed against members that impose burdens on the
time of Nasdaq staff and MORC members by filing appeals that lack
merit.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\ and paragraph (f)(2) of Rule 19b-4\9\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission may summarily abrogate such rule change if
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.\10\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
\10\ For the purposes of calculating the 60-day abrogation
period, the Commission considers the proposed rule change to have
been filed on March 1, 2007, when Amendment No. 1 was filed.
---------------------------------------------------------------------------
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-NASDAQ-2007-013 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-2007-013.
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 the Nasdaq. 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-2007-013 and should be submitted on or before
April 3, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-4506 Filed 3-12-07; 8:45 am]
BILLING CODE 8010-01-P
