Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Require That Companies Submit Material News to Nasdaq Using Nasdaq's Electronic Disclosure System, Except in Emergency Situations, 24349-24350 [E7-8313]

Download as PDF Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Notices $50 to $10 a month. The Commission notes that the NQDS feature provides a mechanism to allow access to market data that is relevant to investors when they make financial decisions and that it does not unfairly discriminate between customers, issuers, brokers or dealers. Accordingly, the Commission finds good cause for approving this proposed rule change before the 30th day after the date of publication of notice of filing thereof in the Federal Register pursuant to Section 19(b)(2) of the Act.10 V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–NASDAQ– 2007–030), be, and it hereby is, approved on an accelerated basis, as a pilot, scheduled to expire on December 31, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–8310 Filed 5–1–07; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–55672; File No. SR– NASDAQ–2007–029] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To Require That Companies Submit Material News to Nasdaq Using Nasdaq’s Electronic Disclosure System, Except in Emergency Situations mmaher on DSK3CLS3C1PROD with $$_JOB April 26, 2007. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 27, 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 prepared substantially by Nasdaq. Nasdaq filed Amendment No. 1 to the proposed rule change on April 25, 2007. The Commission is publishing this notice to solicit comments on the 15 U.S.C. 78s(b)(2). See id. 12 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 11 VerDate Mar 15 2010 03:08 Aug 19, 2011 Jkt 223001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to amend Nasdaq Rule 4120, ‘‘Trading Halts,’’ and IM– 4120–1, ‘‘Disclosure of Material Information,’’ to require Nasdaq-listed companies to submit material news to Nasdaq using Nasdaq’s electronic disclosure submission system, except in emergency situations. To allow Nasdaq sufficient time to communicate with listed companies about the new requirement, Nasdaq will not implement the proposed rule change until approximately 90 days after the proposal is approved. Nasdaq’s communication with companies regarding this proposed change will provide notice of the implementation date. The text of the proposed rule change is available at Nasdaq, in the Commission’s Public Reference Room, and at 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 10 proposed rule change, as amended, from interested persons. 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 Pursuant to Nasdaq Rules 4310(c)(16) and 4320(e)(14), a Nasdaq-listed company is required, except in unusual circumstances, to make prompt disclosure to the public through any Regulation FD compliant method (or combination of methods) of disclosure of any material information that would reasonably be expected to affect the value of its securities or influence investors’ decisions. These rules also require that the company provide prior notice of certain disclosures to Nasdaq’s MarketWatch Department (‘‘MarketWatch’’). Current methods to provide prior notification to MarketWatch include electronic submission using Nasdaq’s Electronic Disclosure submission PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 24349 service, fax, and phone. While the Electronic Disclosure submission service was introduced to companies in 2004, the majority of companies still rely primarily on fax submission to MarketWatch.3 The material information from fax-delivered documents and telephonic notifications must be manually retyped into MarketWatch’s database systems. Nasdaq notes that this uses staff time with no added regulatory benefit, introduces error risk, and results in a less robust audit trail. To reduce this administrative burden, Nasdaq has recently taken steps to make the Electronic Disclosure submission system more accessible to listed companies 4 and is now proposing to require that companies submit material news to Nasdaq using the Electronic Disclosure submission system, except in emergency situations. Using the Electronic Disclosure submission system, company employees and representatives can transmit disclosures to Nasdaq using a secure, encrypted connection. Upon receipt, Nasdaq reviews these disclosures to determine if a trading halt is appropriate. If Nasdaq believes that a halt may be appropriate, Nasdaq will confirm all disclosures with a company source before taking any action. Nasdaq does not disseminate any information received over the Electronic Disclosure submission system. Companies would still be required to notify Nasdaq before disseminating material news, even if an emergency situation prevented them from accessing the Electronic Disclosure submission system. Nasdaq would accept notification by phone or fax in these situations. Examples of the types of situations where Nasdaq believes this could occur include: Lack of computer or internet access; a technical problem on either the issuer or Nasdaq system, or an incompatibility between those systems; and a material development such that no draft disclosure document exists, but immediate notification to MarketWatch is important based on the event. Nasdaq believes that companies should be familiar with electronic submission of documents, given that most reports to the Commission must be 3 Nasdaq notes, for example, that of approximately 4,200 material news notifications submitted to MarketWatch in January 2007, over 70% were submitted by fax. 4 According to Nasdaq, although the system was previously on a portion of the Nasdaq Online issuer Web site that offered limited access, it now resides on an area of Nasdaq Online that can be more easily and directly accessed by companies and their representatives. E:\FEDREG\02MYN1.LOC 02MYN1 24350 Federal Register / Vol. 72, No. 84 / Wednesday, May 2, 2007 / Notices submitted electronically over the Commission’s EDGAR system. Furthermore, the Electronic Disclosure submission system has been designed to be simple to operate. As such, Nasdaq does not believe that the required use of the Electronic Disclosure submission system will be a burden on companies. If a company repeatedly fails to either notify Nasdaq prior to the distribution of material news, or to use the electronic disclosure submission system when Nasdaq finds no emergency situation existed, Nasdaq may issue a Staff Determination, pursuant to the Nasdaq Rule 4800 Series,5 that is a public reprimand letter or, in extreme situations, a Staff Determination to delist the company’s securities. In determining whether to issue a public reprimand letter, Nasdaq will consider whether the issuer has demonstrated a pattern of failures, whether the issuer has been contacted concerning previous violations, and whether the issuer has taken steps to assure that future violations will not occur. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with Section 6(b) of the Act,6 in general, and furthers the objectives of Section 6(b)(5) of the Act,7 in particular. Nasdaq believes that the proposed rule change would enhance its ability to timely review issuer disclosures, thereby facilitating the operation of a free and open market and protecting investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will impose 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. mmaher on DSK3CLS3C1PROD with $$_JOB 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 See Amendment No. 1. 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 5 6 VerDate Mar 15 2010 03:08 Aug 19, 2011 Jkt 223001 publishes its reasons for so finding or (ii) as to which Nasdaq 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. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–8313 Filed 5–1–07; 8:45 am] IV. Solicitation of Comments SECURITIES AND EXCHANGE COMMISSION Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments <bullet≤ Use the Commission’s Internet comment form https:// www.sec.gov/rules/sro.shtml; or <bullet≤ Send an e-mail to rulecomments@sec.gov. Please include File No. SR–NASDAQ–2007–029 on the subject line. BILLING CODE 8010–01–P [Release No. 34–55670; File No. SR–NYSE– 2007–41) Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate the Securities Manager Examination (‘‘Series 12’’) April 25, 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 April 19, 2007, the New York Stock Exchange LLC Paper Comments (‘‘NYSE’’ or ‘‘Exchange’’) filed with the <bullet≤ Send paper comments in Securities and Exchange Commission triplicate to Nancy M. Morris, Secretary, (‘‘Commission’’) the proposed rule Securities and Exchange Commission, change as described in Items I, II, and 100 F Street, NE, Washington, DC III below, which Items have been 20549–1090. substantially prepared by the Exchange. All submissions should refer to File No. The Exchange has designated the proposed rule change as constituting a SR–NASDAQ–2007–029. This file stated policy, practice, or interpretation number should be included on the subject line if e-mail is used. To help the with respect to the meaning, administration, or enforcement of an Commission process and review your existing rule pursuant to Section comments more efficiently, please use only one method. The Commission will 19(b)(3)(A)(i) of the Act 3 and Rule 19b– post all comments on the Commission’s 4(f)(1) thereunder,4 which renders the Internet Web site at https://www.sec.gov/ proposal effective upon filing with the Commission. The Commission is rules/sro.shtml. Copies of the publishing this notice to solicit submission, all subsequent comments on the proposed rule change amendments, all written statements from interested persons. with respect to the proposed rule change that are filed with the I. Self-Regulatory Organization’s Commission, and all written Statement of the Terms of Substance of communications relating to the the Proposed Rule Change proposed rule change between the The Exchange is filing this proposal to Commission and any person, other than eliminate the Securities Manager those that may be withheld from the qualification examination (‘‘Series 12’’). public in accordance with the provisions of 5 U.S.C. 552, will be II. Self-Regulatory Organization’s available for inspection and copying in Statement of the Purpose of, and the Commission’s Public Reference Statutory Basis for, the Proposed Rule Room. Copies of the filing also will be Change available for inspection and copying at In its filing with the Commission, the the principal office of Nasdaq. All Exchange included statements comments received will be posted concerning the purpose of and basis for without change; the Commission does the proposed rule change and discussed not edit personal identifying any comments it received on the information from submissions. You should submit only information that 8 17 CFR 200.30–3(a)(12). you wish to make available publicly. All 1 15 U.S.C. 78s(b)(1). submissions should refer to File No. 2 17 CFR 240.19b–4. SR–NASDAQ–2007–029 and should be 3 15 U.S.C. 78s(b)(3)(A)(i). submitted on or before May 23, 2007. 4 17 CFR 240.19b–4(f)(1). PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FEDREG\02MYN1.LOC 02MYN1

Agencies

[Federal Register Volume 72, Number 84 (Wednesday, May 2, 2007)]
[Notices]
[Pages 24349-24350]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8313]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55672; File No. SR-NASDAQ-2007-029]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto To 
Require That Companies Submit Material News to Nasdaq Using Nasdaq's 
Electronic Disclosure System, Except in Emergency Situations

April 26, 2007.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 27, 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 prepared substantially by Nasdaq. Nasdaq filed Amendment No. 
1 to the proposed rule change on April 25, 2007. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to amend Nasdaq Rule 4120, ``Trading Halts,'' and 
IM-4120-1, ``Disclosure of Material Information,'' to require Nasdaq-
listed companies to submit material news to Nasdaq using Nasdaq's 
electronic disclosure submission system, except in emergency 
situations. To allow Nasdaq sufficient time to communicate with listed 
companies about the new requirement, Nasdaq will not implement the 
proposed rule change until approximately 90 days after the proposal is 
approved. Nasdaq's communication with companies regarding this proposed 
change will provide notice of the implementation date. The text of the 
proposed rule change is available at Nasdaq, in the Commission's Public 
Reference Room, and at 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
    Pursuant to Nasdaq Rules 4310(c)(16) and 4320(e)(14), a Nasdaq-
listed company is required, except in unusual circumstances, to make 
prompt disclosure to the public through any Regulation FD compliant 
method (or combination of methods) of disclosure of any material 
information that would reasonably be expected to affect the value of 
its securities or influence investors' decisions. These rules also 
require that the company provide prior notice of certain disclosures to 
Nasdaq's MarketWatch Department (``MarketWatch'').
    Current methods to provide prior notification to MarketWatch 
include electronic submission using Nasdaq's Electronic Disclosure 
submission service, fax, and phone. While the Electronic Disclosure 
submission service was introduced to companies in 2004, the majority of 
companies still rely primarily on fax submission to MarketWatch.\3\ The 
material information from fax-delivered documents and telephonic 
notifications must be manually retyped into MarketWatch's database 
systems. Nasdaq notes that this uses staff time with no added 
regulatory benefit, introduces error risk, and results in a less robust 
audit trail. To reduce this administrative burden, Nasdaq has recently 
taken steps to make the Electronic Disclosure submission system more 
accessible to listed companies \4\ and is now proposing to require that 
companies submit material news to Nasdaq using the Electronic 
Disclosure submission system, except in emergency situations.
---------------------------------------------------------------------------

    \3\ Nasdaq notes, for example, that of approximately 4,200 
material news notifications submitted to MarketWatch in January 
2007, over 70% were submitted by fax.
    \4\ According to Nasdaq, although the system was previously on a 
portion of the Nasdaq Online issuer Web site that offered limited 
access, it now resides on an area of Nasdaq Online that can be more 
easily and directly accessed by companies and their representatives.
---------------------------------------------------------------------------

    Using the Electronic Disclosure submission system, company 
employees and representatives can transmit disclosures to Nasdaq using 
a secure, encrypted connection. Upon receipt, Nasdaq reviews these 
disclosures to determine if a trading halt is appropriate. If Nasdaq 
believes that a halt may be appropriate, Nasdaq will confirm all 
disclosures with a company source before taking any action. Nasdaq does 
not disseminate any information received over the Electronic Disclosure 
submission system.
    Companies would still be required to notify Nasdaq before 
disseminating material news, even if an emergency situation prevented 
them from accessing the Electronic Disclosure submission system. Nasdaq 
would accept notification by phone or fax in these situations. Examples 
of the types of situations where Nasdaq believes this could occur 
include: Lack of computer or internet access; a technical problem on 
either the issuer or Nasdaq system, or an incompatibility between those 
systems; and a material development such that no draft disclosure 
document exists, but immediate notification to MarketWatch is important 
based on the event.
    Nasdaq believes that companies should be familiar with electronic 
submission of documents, given that most reports to the Commission must 
be

[[Page 24350]]

submitted electronically over the Commission's EDGAR system. 
Furthermore, the Electronic Disclosure submission system has been 
designed to be simple to operate. As such, Nasdaq does not believe that 
the required use of the Electronic Disclosure submission system will be 
a burden on companies.
    If a company repeatedly fails to either notify Nasdaq prior to the 
distribution of material news, or to use the electronic disclosure 
submission system when Nasdaq finds no emergency situation existed, 
Nasdaq may issue a Staff Determination, pursuant to the Nasdaq Rule 
4800 Series,\5\ that is a public reprimand letter or, in extreme 
situations, a Staff Determination to delist the company's securities. 
In determining whether to issue a public reprimand letter, Nasdaq will 
consider whether the issuer has demonstrated a pattern of failures, 
whether the issuer has been contacted concerning previous violations, 
and whether the issuer has taken steps to assure that future violations 
will not occur.
---------------------------------------------------------------------------

    \5\ See Amendment No. 1.
---------------------------------------------------------------------------

2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
Section 6(b) of the Act,\6\ in general, and furthers the objectives of 
Section 6(b)(5) of the Act,\7\ in particular. Nasdaq believes that the 
proposed rule change would enhance its ability to timely review issuer 
disclosures, thereby facilitating the operation of a free and open 
market and protecting investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will impose 
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

    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 Nasdaq 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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 No. SR-NASDAQ-2007-029 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 No. SR-NASDAQ-2007-029. 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 at https://www.sec.gov/rules/sro.shtml. Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room. Copies of the filing 
also will be available for inspection and copying at the principal 
office of 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 No. SR-NASDAQ-
2007-029 and should be submitted on or before May 23, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-8313 Filed 5-1-07; 8:45 am]
BILLING CODE 8010-01-P
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