Self-Regulatory Organizations; National Association of Securities Dealers, Inc; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend the Customer and the Industry Codes of Arbitration Procedure To Clarify NASD's Jurisdiction Concerning Members of Other Self-Regulatory Organizations, 38641-38643 [E7-13599]
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Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices
exchanges, except Nasdaq,27 may list
securities using three-character ticker
symbols.28 Unlike one-character
symbols, three-character symbols are
not associated by investors with any one
market. The Commission also notes that
the transfer of securities listings with
three-character ticker symbols typically
occur among other exchanges without
any discernable confusion or disruption
to the marketplace.29
Another commenter asserted that
three-character symbols are exclusive
indicators of securities trading on
NYSE’s and Amex’s specialist-based
markets, and that it would cause
confusion if such symbols were used on
Nasdaq’s dealer market.30 However, as
the Commission noted above, exchanges
other than NYSE and Amex may list
securities with three-character
symbols.31
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C. National Market System Plan Process
Some of the commenters have
expressed concern that the proposed
rule change would disrupt or
circumvent ongoing efforts by the SROs
to develop a national market system
plan.32 The Commission recently
received two proposed national market
system plans for the selection and
reservation of ticker symbols submitted
by two separate groups of SROs.33 The
Commission is currently considering
these plans and intends to publish the
proposed plans for public comment.34
27 With the exception of the transfer of the DFC
listing, Nasdaq currently only lists securities of
companies using four- or five-character symbols.
See supra note 7 and accompanying text.
28 For example, as noted in the Angel Letter, the
NAIC Growth Fund lists on the Chicago Stock
Exchange, Inc. with the ticker symbol ‘‘GRF’’.
29 Nasdaq has also represented that its recent
listing of DFC occurred without any trading
problems. The Amex Letter tacitly agreed with this
view, but argued that the lack of trading problems
associated with DFC is not the best proxy for other
companies that may transfer their listings to Nasdaq
because it believed that DFC is a microcap
company. The Nasdaq Response Letter, however,
disputed this argument and the Amex Letter’s
labeling of DFC as a ‘‘microcap company,’’ citing
the fact that DFC has a market capitalization of over
$230 million, a figure that it contends is nearly
triple the $67 million market capitalization of the
median Amex issuer.
30 See Amex Letter.
31 For example, NYSE Arca lists three-character
symbols. See also supra note 27.
32 See Ward Letter, NYSE Letter, Amex Letter,
and RPM Letter.
33 See Proposed NMS Plan for the Selection and
Reservation of Securities Symbols by the Chicago
Stock Exchange, Inc., Nasdaq, National Association
of Securities Dealers, Inc., National Stock Exchange,
Inc. and Philadelphia Stock Exchange, Inc.
(available at https://www.sec.gov/rules/sro/4–
533revised.pdf) and Proposed NMS Plan for the
Selection and Reservation of Securities Symbols by
Amex, NYSE and NYSE Arca (available at https://
www.sec.gov/rules/sro/4–534.pdf).
34 See Press Release, Commission, SEC
Announces Process for Proposals on Securities
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The Commission believes that its
approval of the proposed rule change is
independent of its consideration of
these plans. The Commission under
Rule 608(b)(2) may declare effective any
national market system plan or plans for
the selection and reservation of ticker
symbols that is consistent with the
requirements of the Act. Participants in
any such plan would be required to
comply with its requirements, which
could necessitate changes to SRO
rules.35
D. Symbol Shortage
Two commenters argued that the
proposal could create a shortage of
available three-character ticker
symbols.36 Nasdaq’s proposal, however,
would only permit it to list securities
with three-character ticker symbols
when such issuer transfers its listing
from another exchange; the proposal
would not permit Nasdaq to list new
securities with three-character ticker
symbols. The Commission, therefore,
does not believe Nasdaq’s proposal
would have a negative impact on the
availability of three-character ticker
symbols.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,37 that the
proposed rule change (SR–NASDAQ–
2007–031) be, and hereby is, approved.
By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–13578 Filed 7–12–07; 8:45 am]
BILLING CODE 8010–01–P
38641
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56029; File No. SR–NASD–
2007–038]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Amend the Customer
and the Industry Codes of Arbitration
Procedure To Clarify NASD’s
Jurisdiction Concerning Members of
Other Self-Regulatory Organizations
July 9, 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 June 13,
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
(‘‘Commission’’), the proposed rule
change as described in Items I, II, and
III below, which Items have been
substantially prepared by NASD Dispute
Resolution. 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 of the self-regulatory
organization 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
‘Ticker’ Symbols (April 5, 2007) (available at
https://www.sec.gov/news/press/2007/2007–63.htm).
35 See 15 U.S.C. 78k–1(a)(3) and 17 CFR
242.608(b) and (c). The NYSE Letter referenced a
‘‘Symbol Reservation Plan,’’ which it stated has
operated to allocate and reserve symbols for over 30
years. The Commission notes, however, that no
such plan has been approved by the Commission.
36 See NYSE Letter and Amex Letter.
37 15 U.S.C. 78s(b)(2).
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NASD Dispute Resolution is
proposing to amend NASD Rules 12100
and 13100 of the NASD Codes of
Arbitration Procedure for Customer
Disputes (‘‘Customer Code’’) and for
Industry Disputes (‘‘Industry Code’’)
(together, the ‘‘Codes’’) to clarify that,
for purposes of the Codes, the term
‘‘member’’ includes any broker or dealer
admitted to membership in a selfregulatory organization that, with NASD
consent, has required its members to
arbitrate pursuant to the Codes and/or to
be treated as members of NASD for
purposes of the Codes. Below is the text
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(i).
4 17 CFR 240.19b–4(f)(1).
2 17
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38642
Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices
of the proposed rule change. Proposed
new language is in italics.
*
*
*
*
*
summaries, set forth in Sections (A), (B),
and (C) below, of the most significant
aspects of such statements.
Customer Code
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
12100. Definitions
Unless otherwise defined in the Code,
terms used in the Code and interpretive
material, if defined in the NASD ByLaws, shall have the meaning as defined
in the NASD By-Laws.
Paragraphs (a) through (n) unchanged.
(o) Member
For purposes of the Code, the term
‘‘member’’ means any broker or dealer
admitted to membership in NASD,
whether or not the membership has
been terminated or cancelled; and any
broker or dealer admitted to
membership in a self-regulatory
organization that, with NASD consent,
has required its members to arbitrate
pursuant to the Code and/or to be
treated as members of NASD for
purposes of the Code, whether or not the
membership has been terminated or
cancelled.
Remainder unchanged.
*
*
*
*
*
Industry Code
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13100. Definitions
Unless otherwise defined in the Code,
terms used in the Code and interpretive
material, if defined in the NASD ByLaws, shall have the meaning as defined
in the NASD By-Laws.
Paragraphs (a) through (n) unchanged.
(o) Member
For purposes of the Code, the term
‘‘member’’ means any broker or dealer
admitted to membership in NASD,
whether or not the membership has
been terminated or cancelled; and any
broker or dealer admitted to
membership in a self-regulatory
organization that, with NASD consent,
has required its members to arbitrate
pursuant to the Code and/or to be
treated as members of NASD for
purposes of the Code, whether or not the
membership has been terminated or
cancelled.
Remainder unchanged.
*
*
*
*
*
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
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19:05 Jul 12, 2007
Jkt 211001
1. Purpose
NASD is amending Rule 12100(o) of
its Customer Code and Rule 13100(o) of
its Industry Code to clarify that, for
purposes of the Codes, the term
‘‘member’’ includes any broker or dealer
admitted to membership in a selfregulatory organization that, with NASD
consent, has required its members to
arbitrate pursuant to the Codes and/or to
be treated as members of NASD for
purposes of the Codes. Such members
would, like NASD members, be treated
as members whether or not their
membership has been terminated or
cancelled.
The proposed rule change will codify
current practice under which NASD has
assumed, by agreement, the arbitration
and mediation functions of several selfregulatory organizations that closed
their dispute resolution forums.5
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,6 which
requires, among other things, that
NASD’s rules must be designed to
prevent fraudulent and manipulative
acts and practices, to remove
impediments to and perfect the
mechanism of a free and open market
5 The Codes apply not only to NASD members
and their associated persons, but also to members
and associated persons of the Municipal Securities
Rulemaking Board (‘‘MSRB’’), the Philadelphia
Stock Exchange (‘‘Phlx’’), the American Stock
Exchange (‘‘Amex’’), International Securities
Exchange (‘‘ISE’’), and The Nasdaq Stock Market
LLC (‘‘Nasdaq’’), pursuant to agreements under
which members of those self-regulatory
organizations for which the NASD administers the
arbitration process will be treated as ‘‘members’’ of
the NASD for purposes of the Codes. See Securities
Exchange Act Release No. 39378 (Dec. 1, 1997), 62
FR 64417 (Dec. 5, 1997) (SR–MSRB–97–4) (MSRB
approval order); Securities Exchange Act Release
No. 40517 (Oct. 1, 1998), 63 FR 54177 (Oct. 8, 1998)
(SR–Phlx–98–28) (Phlx approval order); Securities
Exchange Act Release No. 40622 (Oct. 30, 1998), 63
FR 59819 (Nov. 5, 1998) (SR–Amex–98–32) (Amex
approval order); Securities Exchange Act Release
45094 (Nov. 21, 2001), 66 FR 60230 (Dec. 3, 2001)
(File No. SR–ISE–00–17) (ISE approval order); and
Securities Exchange Act Release No. 53128 (Jan. 13,
2006), 71 FR 3550 (Jan. 23, 2006) (File No. 10–131)
(Nasdaq approval order). See also Securities
Exchange Act Release No. 55818 (May 25, 2007), 72
FR 30898 (June 4, 2007) (SR–NYSE–2007–048) (the
New York Stock Exchange LLC’s proposed rule
change to provide guidance regarding new and
pending arbitrations in light of the consolidation of
NYSE Regulation’s arbitration department with that
of NASD DisputeResolution.).
6 15 U.S.C. 78o–3(b)(6).
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Frm 00093
Fmt 4703
Sfmt 4703
and a national market system, 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 provisions of the
Act noted above because it will make
explicit NASD’s jurisdiction with
respect to members of other selfregulatory organizations that, with
NASD consent, have required their
members to arbitrate pursuant to the
Codes and/or to be treated as members
of NASD for purposes of the Codes. The
proposed rule change also will clarify
that one set of arbitration rules and
administration procedures will apply to
these other self-regulatory organizations.
(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)(i) of the Act and
subparagraph (f)(1) of Rule 19b–4
thereunder, because it constitutes a
stated policy, practice or interpretation
with respect to the meaning,
administration, or enforcement of an
existing rule.7 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:
7 17
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CFR 240.19b–4(f)(1).
13JYN1
Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2007–038 on the
subject line.
Paper Comments
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• 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–2007–038. 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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such 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–2007–038 and
should be submitted on or before
August 3, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–13599 Filed 7–12–07; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
of the most significant aspects of such
statements.
[Release No. 34–56024; File No. SR–NYSE–
2007–61]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Rule 97, Limitation on Members’
Trading Because of Block Positioning
July 6, 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 July 6,
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 and II below, which Items have
been substantially prepared by the
Exchange. The Exchange has designated
the proposed rule change as a ‘‘noncontroversial’’ rule change pursuant to
section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposed rule change 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
The Exchange proposes to amend
NYSE Rule 97 to permit members or
member organizations that hold long
positions as a result of block
transactions with customers to send
proprietary buy intermarket sweep
orders (‘‘ISOs’’) in the course of
facilitating another customer’s buy or
sell order. The text of the proposed rule
change is available on the NYSE’s Web
site (https://www.nyse.com), at the
NYSE, 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, the
Exchange 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.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
19:31 Jul 12, 2007
1. Purpose
The Exchange is proposing to amend
NYSE Rule 97 in order to permit
member organizations that hold long
positions as a result of a block
transaction with a customer to execute
proprietary ISOs on a plus tick during
the last 20 minutes of the trading day if
they are required under Regulation
NMS 5 to send a buy ISO in the course
of facilitating another customer’s buy or
sell order during that time period.
NYSE Rule 97 governs block
facilitation transactions by NYSE
member organizations on behalf of
customers. The rule states that if, as a
result of facilitating one or more
customer sell order(s) in a stock during
the trading day, a member organization
ends up holding a long position in the
stock in a proprietary account, then
during the last 20 minutes of trading,
the member organization is prohibited
from buying such stock as principal on
a ‘‘plus tick’’ if the transaction would
take place at a price above the lowest
price at which it acquired the long
position. The Exchange states that the
underlying purpose of Rule 97 was to
address concerns that a member firm
might engage in manipulative practices
by attempting to ‘‘mark-up’’ the price of
a stock to enable the position acquired
in the course of block positioning to be
liquidated at a profit, or to maintain the
market at the price at which the position
was acquired.
Under Regulation NMS, member
organizations may not trade through a
protected quotation in another market,
but may satisfy their obligation to the
protected order by sending ISOs to the
protected market at the same time that
they send orders to the inferior-priced
market. Depending on the size of the
block that is being facilitated and the
size of the protected quotes, block
customers may—pursuant to Rules
600(b)(30)(ii) and 611(b)(6) of
Regulation NMS 6—decline to take and
process better priced executions that
result from the sending of the ISO
orders. This may occur, for example,
where the ISO amounts are de minimis
in relation to the size of the block being
facilitated. In those situations, the firm
would be required—based on the
customer’s instructions—to print the
1 15
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38643
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5 17
CFR 242.600 et seq.
CFR 242.600(b)(30)(ii) and 17 CFR
242.611(b)(6).
6 17
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]]>Agencies
[Federal Register Volume 72, Number 134 (Friday, July 13, 2007)]
[Notices]
[Pages 38641-38643]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13599]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56029; File No. SR-NASD-2007-038]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change to Amend the Customer and the Industry Codes of Arbitration
Procedure To Clarify NASD's Jurisdiction Concerning Members of Other
Self-Regulatory Organizations
July 9, 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 June 13, 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 (``Commission''), the proposed rule
change as described in Items I, II, and III below, which Items have
been substantially prepared by NASD Dispute Resolution. 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 of the self-
regulatory organization 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).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD Dispute Resolution is proposing to amend NASD Rules 12100 and
13100 of the NASD Codes of Arbitration Procedure for Customer Disputes
(``Customer Code'') and for Industry Disputes (``Industry Code'')
(together, the ``Codes'') to clarify that, for purposes of the Codes,
the term ``member'' includes any broker or dealer admitted to
membership in a self-regulatory organization that, with NASD consent,
has required its members to arbitrate pursuant to the Codes and/or to
be treated as members of NASD for purposes of the Codes. Below is the
text
[[Page 38642]]
of the proposed rule change. Proposed new language is in italics.
* * * * *
Customer Code
12100. Definitions
Unless otherwise defined in the Code, terms used in the Code and
interpretive material, if defined in the NASD By-Laws, shall have the
meaning as defined in the NASD By-Laws.
Paragraphs (a) through (n) unchanged.
(o) Member
For purposes of the Code, the term ``member'' means any broker or
dealer admitted to membership in NASD, whether or not the membership
has been terminated or cancelled; and any broker or dealer admitted to
membership in a self-regulatory organization that, with NASD consent,
has required its members to arbitrate pursuant to the Code and/or to be
treated as members of NASD for purposes of the Code, whether or not the
membership has been terminated or cancelled.
Remainder unchanged.
* * * * *
Industry Code
13100. Definitions
Unless otherwise defined in the Code, terms used in the Code and
interpretive material, if defined in the NASD By-Laws, shall have the
meaning as defined in the NASD By-Laws.
Paragraphs (a) through (n) unchanged.
(o) Member
For purposes of the Code, the term ``member'' means any broker or
dealer admitted to membership in NASD, whether or not the membership
has been terminated or cancelled; and any broker or dealer admitted to
membership in a self-regulatory organization that, with NASD consent,
has required its members to arbitrate pursuant to the Code and/or to be
treated as members of NASD for purposes of the Code, whether or not the
membership has been terminated or cancelled.
Remainder unchanged.
* * * * *
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
NASD is amending Rule 12100(o) of its Customer Code and Rule
13100(o) of its Industry Code to clarify that, for purposes of the
Codes, the term ``member'' includes any broker or dealer admitted to
membership in a self-regulatory organization that, with NASD consent,
has required its members to arbitrate pursuant to the Codes and/or to
be treated as members of NASD for purposes of the Codes. Such members
would, like NASD members, be treated as members whether or not their
membership has been terminated or cancelled.
The proposed rule change will codify current practice under which
NASD has assumed, by agreement, the arbitration and mediation functions
of several self-regulatory organizations that closed their dispute
resolution forums.\5\
---------------------------------------------------------------------------
\5\ The Codes apply not only to NASD members and their
associated persons, but also to members and associated persons of
the Municipal Securities Rulemaking Board (``MSRB''), the
Philadelphia Stock Exchange (``Phlx''), the American Stock Exchange
(``Amex''), International Securities Exchange (``ISE''), and The
Nasdaq Stock Market LLC (``Nasdaq''), pursuant to agreements under
which members of those self-regulatory organizations for which the
NASD administers the arbitration process will be treated as
``members'' of the NASD for purposes of the Codes. See Securities
Exchange Act Release No. 39378 (Dec. 1, 1997), 62 FR 64417 (Dec. 5,
1997) (SR-MSRB-97-4) (MSRB approval order); Securities Exchange Act
Release No. 40517 (Oct. 1, 1998), 63 FR 54177 (Oct. 8, 1998) (SR-
Phlx-98-28) (Phlx approval order); Securities Exchange Act Release
No. 40622 (Oct. 30, 1998), 63 FR 59819 (Nov. 5, 1998) (SR-Amex-98-
32) (Amex approval order); Securities Exchange Act Release 45094
(Nov. 21, 2001), 66 FR 60230 (Dec. 3, 2001) (File No. SR-ISE-00-17)
(ISE approval order); and Securities Exchange Act Release No. 53128
(Jan. 13, 2006), 71 FR 3550 (Jan. 23, 2006) (File No. 10-131)
(Nasdaq approval order). See also Securities Exchange Act Release
No. 55818 (May 25, 2007), 72 FR 30898 (June 4, 2007) (SR-NYSE-2007-
048) (the New York Stock Exchange LLC's proposed rule change to
provide guidance regarding new and pending arbitrations in light of
the consolidation of NYSE Regulation's arbitration department with
that of NASD DisputeResolution.).
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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,\6\ which requires, among
other things, that NASD's rules must be designed to prevent fraudulent
and manipulative acts and practices, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, 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 provisions of the
Act noted above because it will make explicit NASD's jurisdiction with
respect to members of other self-regulatory organizations that, with
NASD consent, have required their members to arbitrate pursuant to the
Codes and/or to be treated as members of NASD for purposes of the
Codes. The proposed rule change also will clarify that one set of
arbitration rules and administration procedures will apply to these
other self-regulatory organizations.
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\6\ 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)(i) of the Act and subparagraph (f)(1) of Rule 19b-4
thereunder, because it constitutes a stated policy, practice or
interpretation with respect to the meaning, administration, or
enforcement of an existing rule.\7\ 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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\7\ 17 CFR 240.19b-4(f)(1).
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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:
[[Page 38643]]
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-2007-038 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-2007-038. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such 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-2007-038 and should be
submitted on or before August 3, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
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\8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E7-13599 Filed 7-12-07; 8:45 am]
BILLING CODE 8010-01-P
