Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To Modify Order Audit Trail System Rules To Provide an Exemption From Transmission Requirements for Proprietary Orders, 40917-40918 [E7-14356]
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Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Notices
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 the filing also will be available
for inspection and copying at the
principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–Nasdaq–2007–042 and
should be submitted on or before
August 15, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–14315 Filed 7–24–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56096; File No. SR–
NASDAQ–2007–037]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing of Amendment No. 2 and Order
Granting Accelerated Approval of
Proposed Rule Change, as Modified by
Amendment Nos. 1 and 2, To Modify
Order Audit Trail System Rules To
Provide an Exemption From
Transmission Requirements for
Proprietary Orders
rwilkins on PROD1PC63 with NOTICES
July 18, 2007.
I. Introduction
On April 3, 2007, The NASDAQ Stock
Market LLC (‘‘Nasdaq’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
provide an exemption from OATS
transmission requirements for certain
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Aug<31>2005
19:31 Jul 24, 2007
Jkt 211001
proprietary orders. On June 4, 2007,
Nasdaq filed Amendment No. 1. The
proposed rule change, as amended, was
published for comment in the Federal
Register on June 6, 2007.3 The
Commission received one comment
letter expressing support for the
proposal.4 On July 17, 2007, Nasdaq
filed Amendment No. 2. This notice and
order notices Amendment No. 2; solicits
comments from interested persons on
Amendment No. 2; and approves the
proposed rule change, as amended, on
an accelerated basis.
II. Description of Proposal
Nasdaq proposes to modify its OATS
rules to adopt a limited exemption from
OATS 5 order data transmission
requirements for proprietary trading
firms. Nasdaq proposes to define a
‘‘Proprietary Trading Firm’’ as a Nasdaq
member that trades its own capital, with
all the trading being done in the firm’s
accounts by traders that are owners of,
employees of, or contractors to the firm.
A Proprietary Trading Firm would not
have ‘‘customers,’’ as that term is
defined in Nasdaq Rule 0120(g) and
would not be a member of the NASD.
Nasdaq proposes to amend Nasdaq
Rule 6955 regarding transmission of
OATS data to provide that a Proprietary
Trading Firm would be required to
transmit OATS order data information
to Nasdaq Regulation only upon
request.6 Although a Proprietary
Trading Firm would not be required to
transmit the order data information to
Nasdaq Regulation unless requested, it
still would be responsible for
maintaining and retaining the
information in a format that could be
easily integrated into the NASD’s OATS
system in the event Nasdaq Regulation
makes a request for such information.
III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning Amendment No.
2, including whether Amendment No. 2
is consistent with the Act. Comments
3 See Securities Exchange Act Release No. 55870,
72 FR 32692 (June 13, 2007).
4 See letter from Stephen Schuler, Managing
Member, Global Electronic Trading Company, LLC
to Nancy M. Morris, Secretary, Commission, dated
July 3, 2007.
5 OATS is an integrated audit trail of order, quote,
and trade information for Nasdaq securities used to
recreate events in the life cycle of orders and more
completely monitor the trading practices of member
firms.
6 Rule 0130 provides that the term Nasdaq
Regulation should be understood as also referring
to NASD staff, NASD Regulation staff, and NASD
departments acting on behalf of Nasdaq pursuant to
a regulatory services agreement between Nasdaq
and the NASD.
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
40917
may be submitted by any of the
following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2007–037 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2007–037. 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 Nasdaq. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NASDAQ–2007–037 and
should be submitted on or before
August 15, 2007.
IV. Discussion
After careful review, the Commission
finds that the proposed rule change, as
amended, is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange,7 and, in
7 The Commission has considered the amended
proposed rule change’s impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
E:\FR\FM\25JYN1.SGM
25JYN1
40918
Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Notices
particular, the requirements of Section 6
of the Act.8 Specifically, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act 9 in that the proposal is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest.
OATS was designed to provide an
accurate, time-sequenced record of
orders and transactions, beginning with
the receipt of an order at the first point
of contact between the broker-dealer
and the customer or counterparty and
further documenting the life of the order
through the process of execution. One of
the principle objectives of OATS is
customer protection through the
transparency of the executions of
customer orders. The Commission does
not believe that the proposed rule
change would impact this objective
since, by definition, Proprietary Trading
Firms do not handle customer orders.
Further, the Commission notes that
Nasdaq believes that the current
requirement for Proprietary Trading
Firms to transmit all order data
information is onerous and is not offset
by an equivalent regulatory benefit. In
addition, the Commission notes that this
approach parallels the approach
undertaken by the New York Stock
Exchange (‘‘NYSE’’) in NYSE Rule 132C,
which requires NYSE members, upon
request, to transmit order tracking data
to the NYSE.10
The Commission therefore believes
that it is consistent with the Act to
permit Proprietary Trading Firms to
submit OATS data to Nasdaq only upon
request.
V. Accelerated Approval
The Commission finds good cause for
approving the proposed rule change, as
modified by Amendment Nos. 1 and 2,
prior to the thirtieth day after
publishing notice of Amendment No. 2
in the Federal Register pursuant to
Section 19(b)(2) of the Act.11 In
rwilkins on PROD1PC63 with NOTICES
8 15
U.S.C. 78f.
U.S.C. 78f(b)(5).
10 See Securities Exchange Act Release No. 47689
(April 17, 2003), 68 FR 20200 (April 24, 2003)
(Order approving SR–NYSE–99–51).
11 15 U.S.C. 78s(b)(2). Pursuant to Section 19(b)(2)
of the Act, the Commission may not approve any
proposed rule change prior to the thirtieth day after
9 15
VerDate Aug<31>2005
19:31 Jul 24, 2007
Jkt 211001
Amendment No. 2, Nasdaq clarified that
the proposed exception from the daily
OATS transmissions requirements for
Proprietary Trading Firms would not
extend to persons associated with
Proprietary Trading Firms. The
Commission believes that this is a
clarifying change to the scope of the
proposed rule change and raises no
significant regulatory issues. The
Commission therefore finds good cause
exists to accelerate approval of the
proposed change, as modified by
Amendment Nos. 1 and 2, pursuant to
Section 19(b)(2) of the Act.
VI. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (SR–NASDAQ–
2007–037), as modified by Amendments
No. 1 and 2, is approved on
anaccelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–14356 Filed 7–24–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56103; File No. SR–NASD–
2007–039]
Self-Regulatory Organizations:
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Delay Implementation
of Certain Changes to the Manning
Rule
July 19, 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 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 filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
thereunder,4 which renders it effective
the date of publication of the notice thereof, unless
the Commission finds good cause for so doing.
12 15 U.S.C. 78s(b)(2).
13 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD is proposing to delay
implementation of certain NASD rule
changes approved in SR–NASD–2005–
146 until November 26, 2007.5 There are
no new changes to the text of NASD
rules. The text of the proposed rule
change is available at NASD,
https://www.nasd.com, and the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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
On February 26, 2007, the
Commission approved SR–NASD–2005–
146, which, among other clarifying and
conforming changes, proposed
amendments to NASD IM–2110–2 6 to
(1) expand the scope to apply to OTC
Equity Securities; 7 (2) modify the
minimum price-improvement standards
for securities trading in decimals; (3)
adopt on a permanent basis the pilot
price-improvement standards for
5 See Securities Exchange Act Release No. 55351
(February 26, 2007), 72 FR 9810 (March 5, 2007)
(order approving SR–NASD–2005–146).
6 Currently, NASD IM–2110–2 generally prohibits
a member from trading for its own account in an
exchange-listed security at a price that is equal to
or better than an unexecuted customer limit order
in that security, unless the member immediately
thereafter executes the customer limit order at the
price at which it traded for its own account or
better. As part of SR–NASD–2005–146, NASD
replaced the term ‘‘exchange-listed security’’ with
the term ‘‘NMS stock,’’ which is defined as any
NMS security other than an option. See Rule
600(b)(47) of Regulation NMS. Although the
replacement of the term would not become effective
until the November 26, 2007 final implementation
date, as stated in SR–NASD–2005–146, NASD IM–
2110–2 does not apply to options.
7 See NASD Rule 6610(d) (definition of ‘‘OTC
Equity Security’’).
E:\FR\FM\25JYN1.SGM
25JYN1
]]>Agencies
[Federal Register Volume 72, Number 142 (Wednesday, July 25, 2007)]
[Notices]
[Pages 40917-40918]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14356]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56096; File No. SR-NASDAQ-2007-037]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Amendment No. 2 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and
2, To Modify Order Audit Trail System Rules To Provide an Exemption
From Transmission Requirements for Proprietary Orders
July 18, 2007.
I. Introduction
On April 3, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
provide an exemption from OATS transmission requirements for certain
proprietary orders. On June 4, 2007, Nasdaq filed Amendment No. 1. The
proposed rule change, as amended, was published for comment in the
Federal Register on June 6, 2007.\3\ The Commission received one
comment letter expressing support for the proposal.\4\ On July 17,
2007, Nasdaq filed Amendment No. 2. This notice and order notices
Amendment No. 2; solicits comments from interested persons on Amendment
No. 2; and approves the proposed rule change, as amended, on an
accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 55870, 72 FR 32692
(June 13, 2007).
\4\ See letter from Stephen Schuler, Managing Member, Global
Electronic Trading Company, LLC to Nancy M. Morris, Secretary,
Commission, dated July 3, 2007.
---------------------------------------------------------------------------
II. Description of Proposal
Nasdaq proposes to modify its OATS rules to adopt a limited
exemption from OATS \5\ order data transmission requirements for
proprietary trading firms. Nasdaq proposes to define a ``Proprietary
Trading Firm'' as a Nasdaq member that trades its own capital, with all
the trading being done in the firm's accounts by traders that are
owners of, employees of, or contractors to the firm. A Proprietary
Trading Firm would not have ``customers,'' as that term is defined in
Nasdaq Rule 0120(g) and would not be a member of the NASD.
---------------------------------------------------------------------------
\5\ OATS is an integrated audit trail of order, quote, and trade
information for Nasdaq securities used to recreate events in the
life cycle of orders and more completely monitor the trading
practices of member firms.
---------------------------------------------------------------------------
Nasdaq proposes to amend Nasdaq Rule 6955 regarding transmission of
OATS data to provide that a Proprietary Trading Firm would be required
to transmit OATS order data information to Nasdaq Regulation only upon
request.\6\ Although a Proprietary Trading Firm would not be required
to transmit the order data information to Nasdaq Regulation unless
requested, it still would be responsible for maintaining and retaining
the information in a format that could be easily integrated into the
NASD's OATS system in the event Nasdaq Regulation makes a request for
such information.
---------------------------------------------------------------------------
\6\ Rule 0130 provides that the term Nasdaq Regulation should be
understood as also referring to NASD staff, NASD Regulation staff,
and NASD departments acting on behalf of Nasdaq pursuant to a
regulatory services agreement between Nasdaq and the NASD.
---------------------------------------------------------------------------
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning Amendment No. 2, including whether Amendment No. 2
is consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2007-037 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2007-037. 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 Nasdaq. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2007-037 and should
be submitted on or before August 15, 2007.
IV. Discussion
After careful review, the Commission finds that the proposed rule
change, as amended, is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange,\7\ and, in
[[Page 40918]]
particular, the requirements of Section 6 of the Act.\8\ Specifically,
the Commission finds that the proposal is consistent with Section
6(b)(5) of the Act \9\ in that the proposal is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\7\ The Commission has considered the amended proposed rule
change's impact on efficiency, competition and capital formation. 15
U.S.C. 78c(f).
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
OATS was designed to provide an accurate, time-sequenced record of
orders and transactions, beginning with the receipt of an order at the
first point of contact between the broker-dealer and the customer or
counterparty and further documenting the life of the order through the
process of execution. One of the principle objectives of OATS is
customer protection through the transparency of the executions of
customer orders. The Commission does not believe that the proposed rule
change would impact this objective since, by definition, Proprietary
Trading Firms do not handle customer orders. Further, the Commission
notes that Nasdaq believes that the current requirement for Proprietary
Trading Firms to transmit all order data information is onerous and is
not offset by an equivalent regulatory benefit. In addition, the
Commission notes that this approach parallels the approach undertaken
by the New York Stock Exchange (``NYSE'') in NYSE Rule 132C, which
requires NYSE members, upon request, to transmit order tracking data to
the NYSE.\10\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 47689 (April 17,
2003), 68 FR 20200 (April 24, 2003) (Order approving SR-NYSE-99-51).
---------------------------------------------------------------------------
The Commission therefore believes that it is consistent with the
Act to permit Proprietary Trading Firms to submit OATS data to Nasdaq
only upon request.
V. Accelerated Approval
The Commission finds good cause for approving the proposed rule
change, as modified by Amendment Nos. 1 and 2, prior to the thirtieth
day after publishing notice of Amendment No. 2 in the Federal Register
pursuant to Section 19(b)(2) of the Act.\11\ In Amendment No. 2, Nasdaq
clarified that the proposed exception from the daily OATS transmissions
requirements for Proprietary Trading Firms would not extend to persons
associated with Proprietary Trading Firms. The Commission believes that
this is a clarifying change to the scope of the proposed rule change
and raises no significant regulatory issues. The Commission therefore
finds good cause exists to accelerate approval of the proposed change,
as modified by Amendment Nos. 1 and 2, pursuant to Section 19(b)(2) of
the Act.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(2). Pursuant to Section 19(b)(2) of the
Act, the Commission may not approve any proposed rule change prior
to the thirtieth day after the date of publication of the notice
thereof, unless the Commission finds good cause for so doing.
---------------------------------------------------------------------------
VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-NASDAQ-2007-037), as
modified by Amendments No. 1 and 2, is approved on an accelerated
basis.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(2).
\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14356 Filed 7-24-07; 8:45 am]
BILLING CODE 8010-01-P
