Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Technical Amendments to the Code of Mediation Procedure, 19223-19225 [E7-7222]
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Federal Register / Vol. 72, No. 73 / Tuesday, April 17, 2007 / Notices
2. Statutory Basis
The proposed rule change is consistent
with Section 6(b)(4) of the Act 6 in that
it provides for the equitable allocation
of reasonable dues, fees and other
charges among its members.
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.
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change establishes or changes a member
due, fee or other charge imposed by the
Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 7 and subparagraph (f)(2) of Rule
19b–4 thereunder.8 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.9
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-CHX–2007–11 on the
subject line.
Paper comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
6 15
U.S.C. 78f(b)(4).
U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4(f)(2).
9 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on April 10, 2007, the date
on which the CHX filed Amendment No. 1. See 15
U.S.C. 78s(b)(3)(C).
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Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CHX–2007–11. 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 CHX. 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–2007–11 and should
be submitted on or before May 8, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–7223 Filed 4–16–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55617; File No. SR–NASD–
2007–022]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Make Technical
Amendments to the Code of Mediation
Procedure
April 11, 2007.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
notice is hereby given that on March 16,
2007, the National Association of
Securities Dealers, Inc. (‘‘NASD’’),
through its wholly owned subsidiary,
NASD Dispute Resolution, Inc. (‘‘NASD
Dispute Resolution’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by NASD Dispute Resolution.
NASD has designated the proposed rule
change as concerned solely with the
administration of the self-regulatory
organization under Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(3) thereunder,4 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD Dispute Resolution is
proposing to amend the Code of
Mediation Procedure to re-number
Rules 10401 through 10410 and update
cross references within the re-numbered
rules. The text of the proposed rule
change is available on NASD’s Web site
(https://www.nasd.com), at NASD’s
principal office, 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,
NASD included statements concerning
the purpose of, and basis for, the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. NASD has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In 1998, the SEC launched an
initiative to encourage issuers and selfregulatory organizations to use ‘‘plain
English’’ in disclosure documents and
other materials used by investors. In
response, NASD undertook to rewrite
the NASD Code of Arbitration
Procedure (‘‘old Code’’) in ‘‘plain
10 17
1 15
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3 15
4 17
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U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(3).
17APN1
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Federal Register / Vol. 72, No. 73 / Tuesday, April 17, 2007 / Notices
English.’’ This undertaking became the
Code Revision Project (‘‘Project’’).
NASD began to implement the Project
in 2003 when it filed with the SEC a
proposed rule change to the old Code to
reorganize the rules, simplify the
language, codify current practices, and
implement several substantive changes.5
The proposal reorganized NASD’s old
dispute resolution rules (Rules 10000 et
seq.) into three separate procedural
codes: the NASD Code of Arbitration
Procedure for Customer Disputes
(‘‘Customer Code’’); the NASD Code of
Arbitration Procedure for Industry
Disputes (‘‘Industry Code’’); and the
NASD Code of Mediation Procedure
(‘‘Mediation Code’’).6 The three new
Codes would replace the old Code in its
entirety.
On October 31, 2005, the SEC
approved the Mediation Code.7 It
became effective on January 30, 2006.8
On January 24, 2007, the SEC approved
the Customer Code and Industry Code.9
The Customer and Industry Codes will
become effective on April 16, 2007.10
Because the Mediation Code became
effective before the Customer and
Industry Codes were approved, NASD
implemented the Mediation Code by
replacing the old rules governing
mediation (Rules 10400 et seq.) in the
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5 See
Exchange Act Release No. 51856 (June 15,
2005), 70 FR 36442 (June 23, 2005) (File No. SR–
NASD–2003–158) (Notice of Filing of Proposed
Rule Change and Amendment Nos. 1, 2, 3, and 4
Thereto to Amend NASD Arbitration Rules for
Customer Disputes).
6 In 2004, NASD filed separately with the SEC the
Industry and Mediation Codes. See Exchange Act
Release No. 51857 (June 15, 2005), 70 FR 36430
(June 23, 2005) (File No. SR–NASD–2004–011)
(Notice of Filing of Proposed Rule Change and
Amendment Nos. 1, 2, 3, and 4 Thereto to Amend
NASD Arbitration Rules for Industry Disputes); and
Exchange Act Release No. 51855 (June 15, 2005), 70
FR 36440 (June 23, 2005) (File No. SR–NASD–
2004–013) (Notice of Filing of Proposed Rule
Change and Amendments No. 1 and 2 Thereto to
Amend NASD Arbitration Rules for Mediation
Proceedings).
7 See Exchange Act Release No. 52705 (Oct. 31,
2005), 70 FR 67525 (Nov. 7, 2005) (File No. SR–
NASD–2004–013) (Order Granting Approval to
Proposed Rule Change and Amendments Nos. 1 and
2 Thereto, and Notice of Filing and Order Granting
Accelerated Approval to Amendment No. 3, to
Amend NASD Rules for Mediation Proceedings).
8 The changes were announced in Notice to
Members 05–85 (Dec. 2005).
9 See Exchange Act Release No. 55158 (Jan. 24,
2007), 72 FR 4574 (Jan. 31, 2007) (File Nos. SR–
NASD–2003–158 and SR–NASD–2004–011) (Order
Approving Proposed Rule Change and Amendments
1, 2, 3, and 4 to Amend NASD Arbitration Rules
for Customer Disputes and Notice of Filing and
Order Granting Accelerated Approval of
Amendments 5, 6, and 7 Thereto; Order Approving
Proposed Rule Change and Amendments 1, 2, 3,
and 4 to Amend NASD Arbitration Rules for
Industry Disputes and Notice of Filing and Order
Granting Accelerated Approval of Amendments 5,
6, and 7 Thereto).
10 The changes were announced in Notice to
Members 07–07 (Feb. 2007).
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old Code with the rules of the Mediation
Code. To minimize confusion and to
assist the users of the dispute resolution
forum, NASD re-numbered the rules of
the Mediation Code so that they would
be consistent with the numbering in the
old Code, which was still in effect at the
time the Mediation Code became
effective. In replacing the old rules with
those of the Mediation Code, NASD
changed cross-references to proposed
rules of the Customer and Industry
Codes to applicable rules of the old
Code, and removed rule language that
was based on the proposed codes.
Under this proposed rule change,
NASD is proposing to remove Rules
10401 through 10410 of the Mediation
Code from the old Code and re-number
them so that the Mediation Code
becomes a separate procedural code, as
proposed and approved by the SEC.11
NASD also is proposing to change crossreferences to applicable rules of the
Customer and Industry Codes, and reinsert definitions of ‘‘NASD Customer
Code’’ and ‘‘NASD Industry Code’’ in
Rules 14100(g) and Rules 14100(h)
respectively, which had been reserved
until the new Codes were approved.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,12 which
requires, among other things, that
NASD’s rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. NASD believes that the
proposed rule change is consistent with
the provision of the Act noted above
because it will provide useful guidance
to parties, mediators and staff, and will
help standardize the administration of
NASD mediations.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
NASD does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
11 See Id. at nn. 7 & 9. The Customer Code will
use the Rule 12000 series, the Industry Code will
use the Rule 13000 series, and the Mediation Code
will use the Rule 14000 series, all of which are
currently unused under the NASD numbering
system. Id.
12 15 U.S.C. 78o–3(b)(6).
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(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 by NASD.
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)(iii) of the Act and Rule 19b–
4(f)(3) thereunder because it is
concerned solely with the
administration of the self-regulatory
organization.13 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.
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–NASD–2007–022 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASD–2007–022. 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
13 17
E:\FR\FM\17APN1.SGM
CFR 240.19b–4(f)(3).
17APN1
Federal Register / Vol. 72, No. 73 / Tuesday, April 17, 2007 / Notices
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 at
the principal office of NASD. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to the File
Number SR–NASD–2007–022 and
should be submitted on or before May
8, 2007.
involve the related purchase or sale of
a ‘‘basket’’ or group of 15 or more
stocks, to substitute simplified audit
trail requirements, and to make
conforming amendments to Rule 410B.
The text of the proposed rule change is
available at NYSE, https://
www.nyse.com, and the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8010–01–P
In its filing with the Commission,
NYSE included statements concerning
the purpose of and basis for the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. NYSE
has prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
SECURITIES AND EXCHANGE
COMMISSION
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[Release No. 34–55615; File No. SR–NYSE–
2007–34]
1. Purpose
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.14
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–7222 Filed 4–16–07; 8:45 am]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change To
Amend NYSE Rule 80A.40(b) To
Update the Definition of ‘‘Program
Trading,’’ To Substitute Simplified
Audit Trail Requirements, and To Make
Conforming Amendments to NYSE
Rule 410B
April 11, 2007.
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Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 22,
2007, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘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 prepared substantially by
NYSE. The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NYSE proposes to amend NYSE Rule
80A.40(b) to update the definition of
‘‘program trading’’ by eliminating the
pre-determined minimum dollar value
requirement for trading strategies that
14 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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In order to improve the reporting and
monitoring of program trading by the
Exchange, NYSE proposes to clarify
what constitutes program trading and to
streamline the process for entering and
identifying program trades. To
accomplish this, the Exchange is
proposes (i) to amend NYSE Rule
80A.40 to eliminate the minimum dollar
value from the definition of program
trading, and (ii) to substitute simplified
audit trail requirements in place of the
more cumbersome reporting
requirements that currently apply to
program trading. The proposed
amendments also include certain
conforming amendments to NYSE Rule
410B. In connection with these changes,
the Exchange also intends to issue
guidance regarding the definition of a
‘‘coordinated strategy,’’ as that term is
used in Rule 80A.40.
Background. The Exchange adopted
Rule 80A in the wake of the 1987
market break to address various
coordinated professional trading
strategies, in particular, program trading
that was using the cash market to take
advantage of trading in the derivatives
market. To ensure that the rule would
encompass the various permutations
that such trading strategies might take,
the Exchange defined program trading
as either index arbitrage or ‘‘any trading
strategy involving the related purchase
or sale of a ’basket’ or group of 15 or
more stocks having a total market value
of $1 million or more.’’ The monetary
value was believed at the time to
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19225
capture program trading strategies that
would be significant in the context of
the market. Despite a significant
increase in the size and value of trading
in the market since 1987, however, this
monetary component of the definition
has not been updated since it was
adopted.
Proposed Redefinition of Program
Trading. Given the technical and
automated nature of the trading
environment that exists today, the
Exchange believes that the current
definition of ‘‘program trading’’ is no
longer workable, since, among other
things, it captures certain computerdriven or algorithmic trading strategies
that are not intended to be program
trades. At the same time, certain
strategies that could fairly be classified
as programs—that is, strategies
involving 15 or more stocks that are
intended to be coordinated, but which
do not meet the monetary threshold—
are not being captured.
In contrast to 1987, most firms today
employ algorithmic trading to manage
and carry out both plain-vanilla
execution strategies that are not
intended to be programs, including
public-customer driven parameter-based
trading (that is, trading in which the
customer specifies certain desired
execution conditions such as timing,
pricing, quantity, or marketplace
selection, and the algorithm evaluates
market information and generates orders
that best match the specified conditions
without further human intervention),
and more complex trading strategies
that are intended to be programs. The
Exchange therefore recognizes that not
all computer-driven trading strategies
constitute Program Trading. For
example, if they otherwise lack the
other definitional characteristics of
program trading, algorithmic trading,
volume-weighted average price
(‘‘VWAP’’) trading, statistical arbitrage,
and similar computer-driven trading
strategies may not need to be classified
or reported as a program simply because
the strategy is executed through a
computer model or ‘‘black box.’’
This has led to regulatory confusion;
indeed, member firms have informed
the Exchange that in order to ensure full
compliance with the rule, they feel
compelled to report computer-driven
trading strategies that meet the technical
definition of a program even though
they are not, in fact, intended as
program trading.
To address the issue of the overbroad
definition of program trading and to
improve the precision of program trade
reporting, the Exchange proposes to
amend the definition of program trading
under NYSE Rule 80A.40 to eliminate
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]]>Agencies
[Federal Register Volume 72, Number 73 (Tuesday, April 17, 2007)]
[Notices]
[Pages 19223-19225]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-7222]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55617; File No. SR-NASD-2007-022]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Make Technical Amendments to the Code of Mediation
Procedure
April 11, 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 16, 2007, the National Association of Securities Dealers, Inc.
(``NASD''), through its wholly owned subsidiary, NASD Dispute
Resolution, Inc. (``NASD Dispute Resolution'') filed with the
Securities and Exchange Commission (``SEC'' or ``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by NASD Dispute Resolution. NASD has
designated the proposed rule change as concerned solely with the
administration of the self-regulatory organization under Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(3) thereunder,\4\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(3).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD Dispute Resolution is proposing to amend the Code of Mediation
Procedure to re-number Rules 10401 through 10410 and update cross
references within the re-numbered rules. The text of the proposed rule
change is available on NASD's Web site (https://www.nasd.com), at NASD's
principal office, 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, NASD included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NASD has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects of such statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In 1998, the SEC launched an initiative to encourage issuers and
self-regulatory organizations to use ``plain English'' in disclosure
documents and other materials used by investors. In response, NASD
undertook to rewrite the NASD Code of Arbitration Procedure (``old
Code'') in ``plain
[[Page 19224]]
English.'' This undertaking became the Code Revision Project
(``Project'').
NASD began to implement the Project in 2003 when it filed with the
SEC a proposed rule change to the old Code to reorganize the rules,
simplify the language, codify current practices, and implement several
substantive changes.\5\ The proposal reorganized NASD's old dispute
resolution rules (Rules 10000 et seq.) into three separate procedural
codes: the NASD Code of Arbitration Procedure for Customer Disputes
(``Customer Code''); the NASD Code of Arbitration Procedure for
Industry Disputes (``Industry Code''); and the NASD Code of Mediation
Procedure (``Mediation Code'').\6\ The three new Codes would replace
the old Code in its entirety.
---------------------------------------------------------------------------
\5\ See Exchange Act Release No. 51856 (June 15, 2005), 70 FR
36442 (June 23, 2005) (File No. SR-NASD-2003-158) (Notice of Filing
of Proposed Rule Change and Amendment Nos. 1, 2, 3, and 4 Thereto to
Amend NASD Arbitration Rules for Customer Disputes).
\6\ In 2004, NASD filed separately with the SEC the Industry and
Mediation Codes. See Exchange Act Release No. 51857 (June 15, 2005),
70 FR 36430 (June 23, 2005) (File No. SR-NASD-2004-011) (Notice of
Filing of Proposed Rule Change and Amendment Nos. 1, 2, 3, and 4
Thereto to Amend NASD Arbitration Rules for Industry Disputes); and
Exchange Act Release No. 51855 (June 15, 2005), 70 FR 36440 (June
23, 2005) (File No. SR-NASD-2004-013) (Notice of Filing of Proposed
Rule Change and Amendments No. 1 and 2 Thereto to Amend NASD
Arbitration Rules for Mediation Proceedings).
---------------------------------------------------------------------------
On October 31, 2005, the SEC approved the Mediation Code.\7\ It
became effective on January 30, 2006.\8\ On January 24, 2007, the SEC
approved the Customer Code and Industry Code.\9\ The Customer and
Industry Codes will become effective on April 16, 2007.\10\
---------------------------------------------------------------------------
\7\ See Exchange Act Release No. 52705 (Oct. 31, 2005), 70 FR
67525 (Nov. 7, 2005) (File No. SR-NASD-2004-013) (Order Granting
Approval to Proposed Rule Change and Amendments Nos. 1 and 2
Thereto, and Notice of Filing and Order Granting Accelerated
Approval to Amendment No. 3, to Amend NASD Rules for Mediation
Proceedings).
\8\ The changes were announced in Notice to Members 05-85 (Dec.
2005).
\9\ See Exchange Act Release No. 55158 (Jan. 24, 2007), 72 FR
4574 (Jan. 31, 2007) (File Nos. SR-NASD-2003-158 and SR-NASD-2004-
011) (Order Approving Proposed Rule Change and Amendments 1, 2, 3,
and 4 to Amend NASD Arbitration Rules for Customer Disputes and
Notice of Filing and Order Granting Accelerated Approval of
Amendments 5, 6, and 7 Thereto; Order Approving Proposed Rule Change
and Amendments 1, 2, 3, and 4 to Amend NASD Arbitration Rules for
Industry Disputes and Notice of Filing and Order Granting
Accelerated Approval of Amendments 5, 6, and 7 Thereto).
\10\ The changes were announced in Notice to Members 07-07 (Feb.
2007).
---------------------------------------------------------------------------
Because the Mediation Code became effective before the Customer and
Industry Codes were approved, NASD implemented the Mediation Code by
replacing the old rules governing mediation (Rules 10400 et seq.) in
the old Code with the rules of the Mediation Code. To minimize
confusion and to assist the users of the dispute resolution forum, NASD
re-numbered the rules of the Mediation Code so that they would be
consistent with the numbering in the old Code, which was still in
effect at the time the Mediation Code became effective. In replacing
the old rules with those of the Mediation Code, NASD changed cross-
references to proposed rules of the Customer and Industry Codes to
applicable rules of the old Code, and removed rule language that was
based on the proposed codes.
Under this proposed rule change, NASD is proposing to remove Rules
10401 through 10410 of the Mediation Code from the old Code and re-
number them so that the Mediation Code becomes a separate procedural
code, as proposed and approved by the SEC.\11\ NASD also is proposing
to change cross-references to applicable rules of the Customer and
Industry Codes, and re-insert definitions of ``NASD Customer Code'' and
``NASD Industry Code'' in Rules 14100(g) and Rules 14100(h)
respectively, which had been reserved until the new Codes were
approved.
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\11\ See Id. at nn. 7 & 9. The Customer Code will use the Rule
12000 series, the Industry Code will use the Rule 13000 series, and
the Mediation Code will use the Rule 14000 series, all of which are
currently unused under the NASD numbering system. Id.
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2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\12\ which requires, among
other things, that NASD's rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. NASD believes that the proposed rule change is
consistent with the provision of the Act noted above because it will
provide useful guidance to parties, mediators and staff, and will help
standardize the administration of NASD mediations.
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\12\ 15 U.S.C. 78o-3(b)(6).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received by NASD.
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)(iii) of the Act and Rule 19b-4(f)(3) thereunder because it
is concerned solely with the administration of the self-regulatory
organization.\13\ At any time within 60 days of the filing of the
proposed rule change, the Commission may summarily abrogate such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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\13\ 17 CFR 240.19b-4(f)(3).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2007-022 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASD-2007-022. 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
[[Page 19225]]
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 at the principal office of NASD.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to the File Number SR-NASD-2007-
022 and should be submitted on or before May 8, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-7222 Filed 4-16-07; 8:45 am]
BILLING CODE 8010-01-P
