Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Trade Reporting Obligations for Transactions in Foreign Equity Securities, 27891-27893 [E7-9471]
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27891
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Federal Register / Vol. 72, No. 95 / Thursday, May 17, 2007 / Notices
class or type of security to which the
exchange extends UTP. The Exchange
has represented that it meets this
requirement because it deems the
MACRO Tradeable Shares to be equity
securities, thus rendering trading in the
MACRO Tradeable Shares subject to the
Exchange’s existing rules governing the
trading of equity securities.
The Commission further believes that
the proposal is consistent with Section
11A(a)(1)(C)(iii) of the Act,15 which sets
forth Congress’ finding that it is in the
public interest and appropriate for the
protection of investors and the
maintenance of fair and orderly markets
to assure the availability to brokers,
dealers, and investors of information
with respect to quotations for and
transactions in securities. Quotations for
and last sale information regarding the
MACRO Tradeable Shares are
disseminated through the facilities of
the CTA and the Consolidated
Quotation System. Furthermore, the IIV,
updated to reflect changes in currency
exchange rates, is calculated by Amex
and published via the facilities of the
Consolidated Tape Association on a 15second delayed basis throughout the
trading hours for the MACRO Tradeable
Shares. In addition, if the listing market
halts trading when the IIV is not being
calculated or disseminated, the
Exchange would halt trading in the
MACRO Tradeable Shares.
The Commission notes that, if the
MACRO Tradeable Shares should be
delisted by the listing exchange, the
Exchange would no longer have
authority to trade the MACRO Tradeable
Shares pursuant to this order.
In support of this proposal, the
Exchange has represented that its
surveillance procedures are adequate to
properly monitor Exchange trading of
the MACRO Tradeable Shares. This
approval order is conditioned on the
Exchange’s adherence to this
representation.
In addition, the Commission recently
approved the trading of the MACRO
Tradeable Shares on the Exchange
pursuant to UTP for a pilot period of
three months.16 In the Pilot Order, the
Commission noted that exchanges that
trade commodity-related securities
generally have in place surveillance
arrangements with markets that trade
the underlying securities. In its proposal
to trade the MACRO Tradeable Shares
for a pilot period, the Exchange
represented that it was in the process of
completing these surveillance
arrangements and expected to do so ‘‘in
the near future.’’ The Exchange recently
provided the Commission with evidence
that it has completed these surveillance
arrangements.
The Commission finds good cause for
approving this proposal before the
thirtieth day after the publication of
notice thereof in the Federal Register.
As noted previously, the Commission
previously found that the listing and
trading of the MACRO Tradeable Shares
on Amex and the trading of the MACRO
Tradeable Shares on NYSE Arca
pursuant to UTP are consistent with the
Act. The Commission presently is not
aware of any regulatory issue that
should cause it to revisit those findings
or would preclude the continued
trading of the MACRO Tradeable Shares
on the Exchange pursuant to UTP.
Therefore, accelerating approval of this
proposal should benefit investors by
continuing the additional competition
in the market for the MACRO Tradeable
Shares.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–NASDAQ–
2007–048), be and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.18
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E7–9467 Filed 5–16–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55745; File No. SR–NASD–
2007–030]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Trade
Reporting Obligations for Transactions
in Foreign Equity Securities
May 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 April 20,
2007, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
15 15
17 15
16 See
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD is proposing to adopt a new
paragraph (g) to Rule 6620 to codify a
member’s trade reporting obligations
with respect to transactions in foreign
equity securities. Below is the text of the
proposed rule change. Proposed new
language is in italics; proposed
deletions are in brackets.
*
*
*
*
*
6600. OVER–THE–COUNTER EQUITY
SECURITIES
*
*
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6620. Transaction Reporting
(a) through (f) No change.
(g) Transactions in Foreign Equity
Securities
(1) For purposes of this paragraph, the
term ‘‘foreign equity security’’ means
any OTC Equity Security that is issued
by a corporation or other entity
incorporated or organized under the
laws of any foreign country.
(2) Transactions in foreign equity
securities shall be reported to the OTC
Reporting Facility unless:
(A) The transaction is executed on
and reported to a foreign securities
exchange; or
(B) the transaction is executed over
the counter in a foreign country and is
reported to the regulator of securities
markets for that country.
*
*
*
*
*
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
18 17
U.S.C. 78k–1(a)(1)(C)(iii).
Securities Exchange Act Release No. 55386
(March 2, 2007), 72 FR 10801 (March 9, 2007) (SR–
NASDAQ–2007–016) (the ‘‘Pilot Order’’).
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
proposed rule change as described in
Items I, II, and III below, which Items
have been substantially prepared by
NASD. NASD has designated the
proposed rule change as ‘‘constituting a
stated policy, practice, or interpretation
with respect to the meaning,
administration, or enforcement of an
existing rule’’ under Section
19(b)(3)(A)(i) of the Act3 and Rule 19b–
4(f)(1) thereunder,4 which renders the
proposal effective upon receipt of this
filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
3 15
4 17
U.S.C. 78s(b)(3)(A)(i).
CFR 240.19b–4(f)(1).
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Federal Register / Vol. 72, No. 95 / Thursday, May 17, 2007 / Notices
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
The purpose of the proposed rule
change is to codify existing NASD
guidance regarding an NASD member’s
trade reporting obligations in
transactions involving foreign equity
securities.
NASD Rule 6620 requires members to
transmit to the OTC Reporting Facility
last sale reports of transactions in OTC
Equity Securities. For purposes of a
member’s trade reporting obligations
under Rule 6620, an OTC Equity
Security is ‘‘any non-exchange-listed
security and certain exchange-listed
securities that do not otherwise qualify
for real-time trade reporting.’’5 This
broad definition of OTC Equity Security,
by its terms, would include foreign
equity securities that are not listed on a
U.S. securities exchange and that trade
exclusively in foreign markets.
The proposed rule filing would codify
the long-held interpretive position taken
by NASD that transactions in foreign
equity securities6 are not subject to the
trade reporting requirements if (1) the
transaction is executed on and reported
to a foreign securities exchange or (2)
the transaction is executed over the
counter in a foreign country and is
reported to the regulator of securities
markets for that country.7 Transactions
in foreign equity securities that are not
reported to a foreign securities exchange
or, if executed over the counter in a
foreign country, to a foreign securities
regulator, must be reported to NASD.8
5 See
NASD Rule 6610(d).
proposed rule change defines ‘‘foreign
equity security’’ as any OTC Equity Security that is
issued by a corporation or other entity incorporated
or organized under the laws of any foreign country.
7 This position was originally taken with respect
to the end-of-day reporting requirements of nonNasdaq, over-the-counter securities under former
Schedule H to NASD’s By-Laws. See NASD Notice
to Members 90–58 (September 1990). It was
reaffirmed when end-of-day reporting was changed
to 90-second transaction reporting. See OTC
Bulletin Board Update (December 1993).
8 It is important to note, however, that separate
legs of a riskless principal transaction may be
subject to different reporting requirements. For
example, if a member executes a transaction in a
foreign equity security for a customer on a foreign
exchange on a riskless principal basis, with the
initial leg reported by the foreign exchange, the
member would not be required to report that leg of
the riskless principal transaction to NASD.
However, the second leg (i.e., the transaction
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Although many members are aware of
and continue to rely on this guidance,
NASD recently has received a number of
inquiries relating to foreign equity trade
reporting requirements. To ensure that
all members are aware of their trade
reporting obligations regarding foreign
equity securities, NASD is proposing to
codify this guidance so that, going
forward, the rules themselves
specifically address foreign equity
securities.9
NASD has filed the proposed rule
change for immediate effectiveness. The
effective date and the implementation
date will be the date of filing, April 20,
2007.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,10 which
requires, among other things, that NASD
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 provides needed clarification to
NASD members regarding their trade
reporting obligations with respect to
foreign equity securities.
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.
between the member and the customer) would have
to be reported to NASD on a non-tape basis.
9 NASD also notes that trades reported in the U.S.
must be reported in U.S. dollars, regardless of the
currency in which the trade occurred. The
methodology employed by the member for currency
conversion is left to the NASD member; however,
the member should document its practice and
employ the same method consistently. See OTC
Bulletin Board Update (December 1993) and Notice
to Members 90–58 (September 1990). See also
Notice to Members 06–70, at note 5 (December
2006) (noting that, for purposes of reporting to the
Order Audit Trail System, members are ‘‘permitted
to use reasonable business practices for the
[currency] conversion; however, members should
document their practice regarding currency
conversion and should be consistent in their
methodology’’).
10 15 U.S.C. 78o–3(b)(6).
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and paragraph (f) of Rule
19b–4 thereunder11 because the
proposed rule change constitutes a
stated policy, practice, or interpretation
with respect to the meaning,
administration, or enforcement of an
existing rule of NASD. 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–2007–030 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–2007–030. 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
11 17
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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 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 File
Number SR–NASD–2007–030 and
should be submitted on or before June
7, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E7–9471 Filed 5–16–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–55742; File No. SR–NYSE–
2007–19]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Amendment No. 1 and Order
Granting Accelerated Approval to a
Proposed Rule Change as Modified by
Amendment No. 1 Relating to the
Waiver of Certain Listing Fees
May 10, 2007.
I. Introduction
On February 22, 2007, the New York
Stock Exchange LLC (‘‘NYSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposal to
waive certain listing fees. The proposal
was published for comment in the
Federal Register on March 14, 2007.3
The Commission received no comments
on the proposal. The Exchange filed
Amendment No. 1 with the Commission
on April 27, 2007.4 This order provides
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 55421
(March 14, 2007), 72 FR 1350 (the ‘‘Notice’’).
4 Amendment No. 1 (i) Proposed a clarifying
change to the proposed rule text and (ii) added
language to the purpose section to clarify the effect
of the waiver of listing fees for a company listing
its primary class of common stock that is not listed
on a national securities exchange but is registered
under the Act. The text of Amendment No. 1 is
available on the Exchange’s Web site (https://
www.nyse.com), at the Exchange’s Office of the
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notice of and solicits comment on the
proposed rule change as modified by
Amendment No. 1 and approves the
proposal on an accelerated basis.
II. Description of the Proposal
The Exchange proposes to amend
Section 902.02 of its Listed Company
Manual (the ‘‘Manual’’) to provide that
there shall be no initial listing fee
applicable to (i) Any company listing
upon emergence from bankruptcy, or (ii)
any company listing its primary class of
common stock that is not listed on a
national securities exchange but is
registered under the Act.
The Exchange also proposes a
temporary cap on fees payable by
companies listing upon emergence from
bankruptcy. Annual fees for such
issuers will be billed at a rate of onefourth of the applicable annual fee rate
for the fiscal quarter the issuer lists and
for each of the succeeding 12 full fiscal
quarters. Further, the total fees
(including initial listing fees and annual
fees) that may be billed to such an issuer
during this period would be subject to
a $25,000 cap in the fiscal quarter in
which the issuer lists and in each of the
succeeding 12 full fiscal quarters. The
exclusions applicable to the standard
fee cap, set forth in Section 902.02
under the heading ‘‘Total Maximum Fee
Payable in a Calendar Year,’’ would also
apply to issuers listing upon emergence
from bankruptcy.
The Exchange believes that the initial
listing fee waiver and fee cap for
companies listing upon emergence from
bankruptcy are justified by the unique
circumstances of those issuers, which,
according to the NYSE, among other
things, tend to be more sensitive to the
initial and continued costs associated
with listing because of the desire in
bankruptcy proceedings to ensure
creditors are paid as much as possible.
According to the Exchange, because
bankrupt companies face unique
challenges in the listing process, the
number of companies that will benefit
from the fee waiver and lower fee cap
applicable to bankrupt companies will
be very limited, and the fee cap will
apply only during a three-year
transitional period, the Exchange does
not believe that the treatment this
proposal would afford to bankrupt
companies constitutes an inequitable or
unfairly discriminatory allocation of
fees.
In addition, the Exchange believes
that waiving initial listing fees for a
company listing its primary class of
common stock which is registered under
Secretary, and at the Commission’s Public
Reference Room.
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27893
that Act but not listed on a national
securities exchange is appropriate and
does not constitute an inequitable or
unfairly discriminatory allocation of
fees. The Exchange anticipates that most
companies taking advantage of this
waiver will be formerly-listed
companies that were delisted as a result
of a failure to timely file annual reports
with the Commission.5 The Exchange
notes that these companies usually seek
to re-list on the Exchange as soon as
their filings are up to date.6 According
to the Exchange, because such
companies had previously paid initial
listing fees to the Exchange or to another
national securities exchange, the
Exchange believes that to make them
pay these fees again would further
penalize them unnecessarily.
The Exchange has represented that
the proposed rule change would not
affect its commitment of resources to its
regulatory oversight of the listing
process or its regulatory programs.
Companies that benefit from one of the
proposed waivers would be reviewed
for compliance with Exchange listing
standards in the same manner as any
other company that applies to be listed
on the Exchange. The Exchange would
conduct a full and independent review
of each issuer’s compliance with the
Exchange’s listing standards.
The Exchange also has represented
that it does not expect the financial
impact of this proposed rule change to
be material, either in terms of increased
levels of annual fees from transferring
issuers or in terms of diminished initial
listing fee revenues. A limited number
of companies are qualified and seek to
list on the Exchange that are either
emerging from bankruptcy or have a
registered class of common stock but are
not currently listed on another market.
Accordingly, the proposed rule change
will not impact the Exchange’s resource
commitment to its regulatory oversight
5 In Amendment No. 1, the Exchange stated that
there may occasionally be an initial listing on the
Exchange of a company which is trading in the
over-the-counter market immediately prior to listing
and which was not previously delisted as a result
of a failure to timely file annual reports with the
Commission. However, in the Exchange’s
experience, very few such companies meet the
Exchange’s listing requirements and, therefore, the
Exchange expects the number of such listings and
the related loss of fee revenue to be immaterial.
6 In its filing, the Exchange stated that typically,
such companies are otherwise in good standing
with the Exchange or with another national
securities exchange, but fell behind on their
reporting obligations under the Act because their
auditors or the Commission required restatements
of their financial statements. The Commission notes
that the timely filing of accurate financial reports
under the Act is critical to investors and our
national market and assures that investors receive
up to date financial information about listed
companies.
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]]>Agencies
[Federal Register Volume 72, Number 95 (Thursday, May 17, 2007)]
[Notices]
[Pages 27891-27893]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-9471]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55745; File No. SR-NASD-2007-030]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Trade Reporting Obligations for Transactions in
Foreign Equity Securities
May 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 April 20, 2007, the National Association of Securities Dealers, Inc.
(``NASD'') 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 NASD.
NASD has designated the proposed rule change as ``constituting a stated
policy, practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule'' under Section
19(b)(3)(A)(i) of the Act\3\ and Rule 19b-4(f)(1) thereunder,\4\ which
renders the proposal effective upon receipt of this filing by 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)(i).
\4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to adopt a new paragraph (g) to Rule 6620 to
codify a member's trade reporting obligations with respect to
transactions in foreign equity securities. Below is the text of the
proposed rule change. Proposed new language is in italics; proposed
deletions are in brackets.
* * * * *
6600. OVER-THE-COUNTER EQUITY SECURITIES
* * * * *
6620. Transaction Reporting
(a) through (f) No change.
(g) Transactions in Foreign Equity Securities
(1) For purposes of this paragraph, the term ``foreign equity
security'' means any OTC Equity Security that is issued by a
corporation or other entity incorporated or organized under the laws of
any foreign country.
(2) Transactions in foreign equity securities shall be reported to
the OTC Reporting Facility unless:
(A) The transaction is executed on and reported to a foreign
securities exchange; or
(B) the transaction is executed over the counter in a foreign
country and is reported to the regulator of securities markets for that
country.
* * * * *
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
[[Page 27892]]
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
The purpose of the proposed rule change is to codify existing NASD
guidance regarding an NASD member's trade reporting obligations in
transactions involving foreign equity securities.
NASD Rule 6620 requires members to transmit to the OTC Reporting
Facility last sale reports of transactions in OTC Equity Securities.
For purposes of a member's trade reporting obligations under Rule 6620,
an OTC Equity Security is ``any non-exchange-listed security and
certain exchange-listed securities that do not otherwise qualify for
real-time trade reporting.''\5\ This broad definition of OTC Equity
Security, by its terms, would include foreign equity securities that
are not listed on a U.S. securities exchange and that trade exclusively
in foreign markets.
---------------------------------------------------------------------------
\5\ See NASD Rule 6610(d).
---------------------------------------------------------------------------
The proposed rule filing would codify the long-held interpretive
position taken by NASD that transactions in foreign equity
securities\6\ are not subject to the trade reporting requirements if
(1) the transaction is executed on and reported to a foreign securities
exchange or (2) the transaction is executed over the counter in a
foreign country and is reported to the regulator of securities markets
for that country.\7\ Transactions in foreign equity securities that are
not reported to a foreign securities exchange or, if executed over the
counter in a foreign country, to a foreign securities regulator, must
be reported to NASD.\8\ Although many members are aware of and continue
to rely on this guidance, NASD recently has received a number of
inquiries relating to foreign equity trade reporting requirements. To
ensure that all members are aware of their trade reporting obligations
regarding foreign equity securities, NASD is proposing to codify this
guidance so that, going forward, the rules themselves specifically
address foreign equity securities.\9\
---------------------------------------------------------------------------
\6\ The proposed rule change defines ``foreign equity security''
as any OTC Equity Security that is issued by a corporation or other
entity incorporated or organized under the laws of any foreign
country.
\7\ This position was originally taken with respect to the end-
of-day reporting requirements of non-Nasdaq, over-the-counter
securities under former Schedule H to NASD's By-Laws. See NASD
Notice to Members 90-58 (September 1990). It was reaffirmed when
end-of-day reporting was changed to 90-second transaction reporting.
See OTC Bulletin Board Update (December 1993).
\8\ It is important to note, however, that separate legs of a
riskless principal transaction may be subject to different reporting
requirements. For example, if a member executes a transaction in a
foreign equity security for a customer on a foreign exchange on a
riskless principal basis, with the initial leg reported by the
foreign exchange, the member would not be required to report that
leg of the riskless principal transaction to NASD. However, the
second leg (i.e., the transaction between the member and the
customer) would have to be reported to NASD on a non-tape basis.
\9\ NASD also notes that trades reported in the U.S. must be
reported in U.S. dollars, regardless of the currency in which the
trade occurred. The methodology employed by the member for currency
conversion is left to the NASD member; however, the member should
document its practice and employ the same method consistently. See
OTC Bulletin Board Update (December 1993) and Notice to Members 90-
58 (September 1990). See also Notice to Members 06-70, at note 5
(December 2006) (noting that, for purposes of reporting to the Order
Audit Trail System, members are ``permitted to use reasonable
business practices for the [currency] conversion; however, members
should document their practice regarding currency conversion and
should be consistent in their methodology'').
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NASD has filed the proposed rule change for immediate
effectiveness. The effective date and the implementation date will be
the date of filing, April 20, 2007.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among
other things, that NASD 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 provides
needed clarification to NASD members regarding their trade reporting
obligations with respect to foreign equity securities.
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\10\ 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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f) of Rule 19b-4 thereunder\11\
because the proposed rule change constitutes a stated policy, practice,
or interpretation with respect to the meaning, administration, or
enforcement of an existing rule of NASD. 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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\11\ 17 CFR 240.19b-4.
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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-2007-030 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-2007-030. 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
[[Page 27893]]
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 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 File Number SR-
NASD-2007-030 and should be submitted on or before June 7, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E7-9471 Filed 5-16-07; 8:45 am]
BILLING CODE 8010-01-P
