Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 2 Thereto To Amend Rule 4611 Relating to Sponsored Access, 16389-16391 [E7-6179]
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Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices
which has not been reported to the
Exchange.
III. Discussion
After careful consideration, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange 7 and, in
particular, the requirements of Section 6
of the Act.8 Specifically, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,9 which requires,
among other things, that the rules of a
national securities exchange be
designed 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.
Surveillance
The Commission notes that the
Exchange has represented that it has an
adequate surveillance program in place
for options based on Commodity Pool
ETFs. The Exchange may obtain trading
information via the Intermarket
Surveillance Group (‘‘ISG’’) from other
exchanges who are members or affiliates
of the ISG and have entered into
numerous comprehensive surveillance
sharing agreements with various
commodity futures exchanges
worldwide. Prior to listing and trading
options on Commodity Pool ETFs, the
Exchange represented that it will either
have the ability to obtain specific
trading information via ISG or through
a comprehensive surveillance sharing
agreement with the exchange or
exchanges where the particular
commodity futures and/or options on
commodity futures are traded. In
addition, the Exchange represented that
the addition of Commodity Pool ETF
options will not have any effect on the
rules pertaining to position and exercise
limits 10 or margin.11
jlentini on PROD1PC65 with NOTICES
Listing and Trading of Options on
Commodity Pool ETFs
The Commission notes that, pursuant
to the proposed rule change, a
Commodity Pool ETF will be subject to
the provisions of Amex Rules 915 and
916, as applicable. These provisions
include requirements regarding initial
and continued listing standards, the
7 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(5).
10 See Amex Rules 904 and 905.
11 See Amex Rule 462.
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17:57 Apr 03, 2007
Jkt 211001
creation/redemption process for ETFs,
and trading halts. All Commodity Pool
ETFs must be traded through a national
securities exchange or through the
facilities of a national securities
association, and must be ‘‘NMS stock’’
as defined under Rule 600 of Regulation
NMS.12
The Commission believes that this
proposal is necessary to enable the
Exchange to list and trade options on an
expanding range of Commodity Pool
ETFs currently approved for trading and
that it is reasonable to expect other
types of Commodity Pool ETFs to be
introduced for trading in the future.
This proposal would help ensure that
the Exchange will be able to list options
on Commodity Pool ETFs that have
been recently launched as well as any
other similar Commodity Pool ETFs that
may be listed and traded in the future 13
thereby offering investors greater option
choices.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change (SR–Amex–2006–
110), is hereby approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6200 Filed 4–3–07; 8:45 am]
16389
Items I and II below, which Items have
been substantially prepared by Nasdaq.
On February 23, 2007, Nasdaq filed
Amendment No. 1 to the proposed rule
change but subsequently withdrew it.
On February 23, 2007, Nasdaq filed
Amendment No. 2 to the proposed rule
change. The Exchange 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, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to amend the
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 available at
Nasdaq, the Commission’s Public
Reference Room, and https://
www.nasdaq.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55550; File No. SR–
NASDAQ–2007–010)
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change and
Amendment No. 2 Thereto To Amend
Rule 4611 Relating to Sponsored
Access
March 28, 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
16, 2007, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
12 17
CFR 242.600(b)(47).
CFR 240.19b–4(e).
14 15 U.S.C. 78s(b)(2).
15 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
13 17
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Frm 00065
Fmt 4703
Sfmt 4703
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 proposes to amend the
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. Currently,
Nasdaq members provide sponsored
access consistent with guidance set
forth in NASD Notice to Members 98–
66 as updated by the NASD in Notice
3 15
4 17
E:\FR\FM\04APN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
04APN1
16390
Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices
to Members 04–66.5 Consistent with its
status as an independent self-regulatory
organization and the need to establish
rules governing the use of its systems,
Nasdaq proposes to adopt a sponsored
access rule in the Nasdaq Rule Manual.
In recognition of the fact that Nasdaq
members are members of other
exchanges, that they use other
exchanges’ systems, and that they
provide or receive sponsored access on
other exchanges in the same manner as
on Nasdaq, Nasdaq is proposing to
adopt a sponsored access rule that is
identical to that of another exchange,
specifically NYSE Arca, Inc. (‘‘NYSE
Arca’’). The NYSE Arca sponsored
access rule has, by virtue of Commission
approval, been determined to be
consistent with the Act, including being
consistent with the public interest and
the protection of investors.
The proper usage of Nasdaq’s systems
and the protection of investors will be
achieved in several ways. Sponsored
participants must enter into and
maintain customer agreements with one
or more sponsoring members,
establishing proper relationships and
accounts through which the sponsored
participant may trade on the Nasdaq
Market Center. In such customer
agreements sponsored participant and
its sponsoring member must agree in
writing to ‘‘Sponsorship Provisions’’
that (1) obligates the sponsoring member
and sponsored participant to enter into
a contractual relationship with Nasdaq;
(2) ensures that orders and trades are
honored; (3) holds the sponsoring
member responsible for the conduct of
sponsored participants; (4) obligates
sponsored participants to comply with
all applicable Nasdaq rules; (5) restricts
access to Nasdaq systems to a limited
group of known and educated users, (6)
requires sponsoring members to have
procedures to monitor its employees,
agents, and customers in their access to
and use of Nasdaq systems; and (7)
ensures full payment of all applicable
Nasdaq fees.
The proposed rule change is intended
to codify practices currently in use in
existing sponsored access relationships.
2. Statutory Basis
jlentini on PROD1PC65 with NOTICES
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
Because the foregoing 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
this filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.10 However, Rule 19b–
4(f)(6)(iii) 11 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
Jkt 211001
U.S.C. 78f.
U.S.C. 78f(b)(5).
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to 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. Nasdaq has satisfied the five-day prefiling notice requirement.
11 Id.
7 15
5 Nasdaq established Rule 4611(d) in order to
codify the requirements set forth in the
aforementioned NASD Notices to Members. See
Securities Exchange Act Release No. 55061 (January
8, 2007), 72 FR 2052 (January 17, 2007) (SR–
NASDAQ–2006–061). Nasdaq is amending Rule
4611(d) in order to match the regulatory
requirements imposed by another exchange and,
thereby, to promote uniform regulation of
sponsored access relationships.
17:57 Apr 03, 2007
B. Self-Regulatory Organization’s
Statement on Burden on Competition
6 15
Nasdaq believes that the proposed
rule change is consistent with the
VerDate Aug<31>2005
provisions of Section 6 of the Act,6 in
general, and with Section 6(b)(5) of the
Act,7 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.
PO 00000
Frm 00066
Fmt 4703
Sfmt 4703
Commission waive the 30-day operative
delay. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver would permit
Nasdaq to immediately implement the
proposed rule change. For this reason,
the Commission designates the
proposed rule change to be operative
upon filing with the Commission.12
At any time within 60 days of the
filing of such proposed rule change the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–2007–010 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–2007–010. 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
12 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
E:\FR\FM\04APN1.SGM
04APN1
Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices
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 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–2007–010 and
should be submitted on or before April
25, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–6179 Filed 4–3–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55563; File No. SR–
NASDAQ–2007–031]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing of Proposed Rule Change
Relating to Trading Three-Character
Symbols
March 30, 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 March 29,
2007, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’) 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. The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons.
jlentini on PROD1PC65 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
Nasdaq proposes to allow any
company with a three-character symbol
that transfers its securities to Nasdaq
from another domestic market to
continue using the existing threecharacter symbol that identifies the
company’s securities.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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17:57 Apr 03, 2007
Jkt 211001
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
Historically, securities listed on
Nasdaq have traded using four or five
character symbols.3 In 2005, however,
Nasdaq announced its intent to allow
companies listed on Nasdaq to also use
one-, two-, or three-character symbols
beginning on January 31, 2007.4 This
announcement was designed to provide
market participants and vendors the
time needed to make required changes
to their own systems that may be
affected by the change. Nasdaq
announced a series of dates throughout
December 2006 and January and
February 2007 where market
participants could test trading Nasdaq
stocks using one-, two-, or threecharacter symbols on weekends, in after
hour sessions, and during full day
sessions.5 Beginning February 20, 2007,
3 This includes securities listed on Nasdaq’s
predecessor market, operated as a facility of the
NASD.
4 See Head Trader Alert 2005–133 (November 14,
2005), available at: https://www.nasdaqtrader.com/
Trader/News/2005/headtraderalerts/hta2005133.stm and Vendor Alert 2005–070 (November 14,
2005), available at: https://www.nasdaqtrader.com/
Trader/News/2005/vendoralerts/nva2005-070.stm.
See also Head Trader Alert 2006–144 (September
29, 2006), available at: https://
www.nasdaqtrader.com/Trader/News/2006/
headtraderalerts/hta2006-144.stm, Head Trader
Alert 2006–193 (November 16, 2006), available at:
https://www.nasdaqtrader.com/Trader/News/2006/
headtraderalerts/hta2006-193.stm and Vendor Alert
2006–065 (October 4, 2006), available at: https://
www.nasdaqtrader.com/Trader/News/2006/
vendoralerts/nva2006-065.stm.
5 See Head Trader Alert 2006-201 (December 6,
2006), available at: https://www.nasdaqtrader.com/
Trader/News/2006/headtraderalerts/hta2006201.stm, Head Trader Alert 2007–008 (January 25,
2007), available at: https://www.nasdaqtrader.com/
Trader/News/2007/headtraderalerts/hta2007008.stm, Head Trader Alert 2007–011 (January 30,
2007), available at: https://www.nasdaqtrader.com/
Trader/News/2007/headtraderalerts/hta2007011.stm, Head Trader Alert 2007–020 (February 7,
2007), available at: https://www.nasdaqtrader.com/
Trader/News/2007/headtraderalerts/hta2007020.stm, and Head Trader Alert 2007–034 (February
PO 00000
Frm 00067
Fmt 4703
Sfmt 4703
16391
Nasdaq had the ability to accept and
distribute Nasdaq-listed securities with
one-, two-, or three-character symbols.
Nasdaq reminded market participants
about this change again on March 1,
2007, stressing that ‘‘[a]ll customers
should have completed their coding and
testing efforts to ensure their readiness
to support 1-, 2- and 3-character
NASDAQ-listed issues.’’ 6 On March 22,
2007, Delta Financial Corporation
transferred the listing of its common
stock to Nasdaq from the American
Stock Exchange (‘‘Amex’’) and
maintained its three-character symbol,
DFC.7 Nasdaq represents that there have
been no trading problems reported to
Nasdaq as a result of trading that
security on Nasdaq with a threecharacter symbol.
Nasdaq now proposes to allow any
company with a three-character symbol
that transfers its securities to Nasdaq
from another domestic market to
continue using the existing threecharacter symbol that identifies the
company’s securities.8 Nasdaq believes
that this will promote competition
among exchanges and reduce investor
confusion. Specifically, Nasdaq believes
that issuers should have the freedom of
choice and competition. Nasdaq
believes that as issuers face the
important choice of where to list their
equities, the symbol an issuer currently
uses should not factor prominently in
the listing decision process. Similarly,
Nasdaq believes that the symbol that a
market assigns to an issuer should not
serve as an anchor if the issuer wishes
to transfer to a competing market.
Nasdaq believes that, as such,
permitting the portability of these
symbols will enhance competition
among exchanges and encourage issuers
to evaluate exchanges on the basis of
objective criteria, including the most
efficient trading platform for investors
and the lowest costs for shareholders.
Nasdaq believes that permitting
companies to continue to use their
historical symbol will also reduce
investor confusion associated with any
such transfer because investors will
continue to be able to obtain quotations
and execute trades using the same
familiar symbol and will allow the
issuer to maintain a symbol that has
16, 2007), available at: https://
www.nasdaqtrader.com/Trader/News/2007/
headtraderalerts/hta2007-034.stm.
6 Head Trader Alert 2007–050 (March 1, 2007),
available at: https://www.nasdaqtrader.com/Trader/
News/2007/headtraderalerts/hta2007-050.stm.
7 See Securities Exchange Act Release No. 55519
(March 26, 2007) (SR–NASDAQ–2007–025).
8 Nasdaq states that it remains committed to
working with the Commission and other markets to
establish an equitable and transparent symbol
assignment plan.
E:\FR\FM\04APN1.SGM
04APN1
]]>Agencies
[Federal Register Volume 72, Number 64 (Wednesday, April 4, 2007)]
[Notices]
[Pages 16389-16391]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6179]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55550; File No. SR-NASDAQ-2007-010)
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 2 Thereto To Amend Rule 4611 Relating to Sponsored
Access
March 28, 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 16, 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 Nasdaq. On
February 23, 2007, Nasdaq filed Amendment No. 1 to the proposed rule
change but subsequently withdrew it. On February 23, 2007, Nasdaq filed
Amendment No. 2 to the proposed rule change. The Exchange 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,
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)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to amend the 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 available at Nasdaq, the
Commission's Public Reference Room, and https://www.nasdaq.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, 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 proposes to amend the 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.
Currently, Nasdaq members provide sponsored access consistent with
guidance set forth in NASD Notice to Members 98-66 as updated by the
NASD in Notice
[[Page 16390]]
to Members 04-66.\5\ Consistent with its status as an independent self-
regulatory organization and the need to establish rules governing the
use of its systems, Nasdaq proposes to adopt a sponsored access rule in
the Nasdaq Rule Manual.
---------------------------------------------------------------------------
\5\ Nasdaq established Rule 4611(d) in order to codify the
requirements set forth in the aforementioned NASD Notices to
Members. See Securities Exchange Act Release No. 55061 (January 8,
2007), 72 FR 2052 (January 17, 2007) (SR-NASDAQ-2006-061). Nasdaq is
amending Rule 4611(d) in order to match the regulatory requirements
imposed by another exchange and, thereby, to promote uniform
regulation of sponsored access relationships.
---------------------------------------------------------------------------
In recognition of the fact that Nasdaq members are members of other
exchanges, that they use other exchanges' systems, and that they
provide or receive sponsored access on other exchanges in the same
manner as on Nasdaq, Nasdaq is proposing to adopt a sponsored access
rule that is identical to that of another exchange, specifically NYSE
Arca, Inc. (``NYSE Arca''). The NYSE Arca sponsored access rule has, by
virtue of Commission approval, been determined to be consistent with
the Act, including being consistent with the public interest and the
protection of investors.
The proper usage of Nasdaq's systems and the protection of
investors will be achieved in several ways. Sponsored participants must
enter into and maintain customer agreements with one or more sponsoring
members, establishing proper relationships and accounts through which
the sponsored participant may trade on the Nasdaq Market Center. In
such customer agreements sponsored participant and its sponsoring
member must agree in writing to ``Sponsorship Provisions'' that (1)
obligates the sponsoring member and sponsored participant to enter into
a contractual relationship with Nasdaq; (2) ensures that orders and
trades are honored; (3) holds the sponsoring member responsible for the
conduct of sponsored participants; (4) obligates sponsored participants
to comply with all applicable Nasdaq rules; (5) restricts access to
Nasdaq systems to a limited group of known and educated users, (6)
requires sponsoring members to have procedures to monitor its
employees, agents, and customers in their access to and use of Nasdaq
systems; and (7) ensures full payment of all applicable Nasdaq fees.
The proposed rule change is intended to codify practices currently
in use in existing sponsored access relationships.
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)(5) of the Act,\7\ 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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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(5).
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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
Because the foregoing 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 this filing, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii) \11\ 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 waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because such waiver
would permit Nasdaq to immediately implement the proposed rule change.
For this reason, the Commission designates the proposed rule change to
be operative upon filing with the Commission.\12\
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\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
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. Nasdaq has satisfied the five-day pre-filing notice
requirement.
\11\ Id.
\12\ For the purposes only of waiving the 30-day operative
delay, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-NASDAQ-2007-010 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-2007-010. 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
[[Page 16391]]
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 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-2007-010 and should
be submitted on or before April 25, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-6179 Filed 4-3-07; 8:45 am]
BILLING CODE 8010-01-P
