Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to the Restated Certificate of Incorporation of National Association of Securities Dealers, Inc., 42190-42192 [E7-14856]
Download as PDF
<![CDATA[
jlentini on PROD1PC65 with NOTICES
42190
Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Notices
49. Letter from Deborah Castiglioni,
Chief Executive Officer, Cutter &
Company, to Nancy M. Morris,
Secretary, Commission, dated April 16,
2007 (‘‘Castiglioni Letter’’).
50. Letter from Bonnie K. Wachtel,
dated April 16, 2007 (‘‘Wachtel Letter’’).
51. Letter from Lisa Roth, Chairman,
National Association of Independent
Broker/Dealers (‘‘NAIBD’’), to Nancy M.
Morris, Secretary, Commission, dated
April 16, 2007 (‘‘NAIBD Letter’’).
52. Letter from William C. Alsover,
Chairman, Centennial Securities
Company, LLC, to Nancy M. Morris,
Secretary, Commission, dated April 16,
2007 (‘‘Alsover Letter’’).
53. Letter from Craig M. Biddick,
President, Mission Securities Corp.,
dated April 16, 2007 (‘‘Biddick Letter’’).
54. Letter from Donald R. Penrod,
President, Penrod and Company, dated
April 16, 2007 (‘‘Penrod Letter’’).
55. Letter from Howard Spindel,
Senior Managing Director, Integrated
Management Solutions USA, LLC, to
Nancy M. Morris, Secretary,
Commission, dated April 16, 2007
(‘‘Spindel Letter’’).
56. Letter from William A. Johnstone,
President and CEO, D.A. Davidson &
Co., to Nancy M. Morris, Secretary,
Commission, dated April 16, 2007
(‘‘Johnstone Letter’’).
57. Letter from David Isolano, Chief
Executive Officer, Max International
Broker Dealer Corp., dated April 16,
2007 (‘‘Isolano Letter’’).
58. Letters from Kathryn L. Lundgren,
dated April 16, 2007 (‘‘Lundgren Letter
I’’) and April 17, 2007 (‘‘Lundgren Letter
II’’).
59. Letter from Gary L. Haney, Chief
Executive Officer, United Insurance
Group, Inc., dated April 14, 2007
(‘‘Haney Letter’’).
60. Letter from John E. Schooler,
President, WFP Securities, dated April
13, 2007 (‘‘Schooler Letter’’).
61. Letter from Corey N. Callaway,
President, Callaway Financial Services,
Inc., dated April 13, 2007 (‘‘Callaway
Letter’’).
62. Letters from Johnny Q. Member, to
Nancy M. Morris, Secretary,
Commission, dated April 16, 2007, with
attachments (‘‘Johnny Q. Member Letter
I’’ and ‘‘Johnny Q. Member Letter II,’’
respectively).
63. Letter from John Q., NASD
Member, dated April 13, 2007 (‘‘John Q.
Letter’’).
64. Letters from Mike Miller,
President, Miller Financial Corp., dated
April 15, 2007, with attachment (‘‘Miller
Letters’’ collectively).
65. Letter from Dale E. Brown,
Executive Director and CEO, Financial
Services Institute, to Nancy M. Morris,
VerDate Aug<31>2005
20:12 Jul 31, 2007
Jkt 211001
Secretary, Commission, dated April 16,
2007 (‘‘FSI Letter’’).
66. Letter from William R. Pictor,
President, Trubee, Collins & Co., Inc., to
Nancy M. Morris, Secretary,
Commission, dated April 16, 2007
(‘‘Pictor Letter’’).
67. Letter from Walter S. Robertson,
III, President and CEO, Scott &
Stringfellow, Inc., to Nancy M. Morris,
Secretary, Commission, dated April 16,
2007 (‘‘Robertson Letter’’).
68. Letter from M. LaRae Bakerink,
CEO, WBB Securities, LLC, to
Christopher Cox, Chairman,
Commission, dated April 16, 2007
(‘‘Bakerink Letter’’).
69. Letter from William F. Galvin,
Secretary of the Commonwealth,
Commonwealth of Massachusetts, to
Nancy M. Morris, Secretary,
Commission, dated April 18, 2007
(‘‘Massachusetts Letter’’).
70. Letter from Joseph P. Borg,
President, North American Securities
Administrators Association, Inc., and
Director, Alabama Securities
Commission, to Nancy M. Morris,
Secretary, Commission, dated April 17,
2007 (‘‘NASAA Letter’’).
71. Letter from Joan Hinchman,
Executive Director, President and CEO,
National Society of Compliance
Professional Inc., to Nancy M. Morris,
Secretary, Commission, dated April 26,
2007 (‘‘NSCP Letter’’).
72. Letter from Michael J. Mungenast,
CEO and President, Proequities, to
Nancy M. Morris, dated April 23, 2007
(‘‘Mungenast Letter’’).
[FR Doc. E7–14855 Filed 7–31–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56146; File No. SR–NASD–
2007–053]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Order Granting Accelerated Approval
of Proposed Rule Change Relating to
the Restated Certificate of
Incorporation of National Association
of Securities Dealers, Inc.
July 26, 2007.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 24,
2007, the National Association of
Securities Dealers, Inc. (‘‘NASD’’) filed
with the Securities and Exchange
PO 00000
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00149
Fmt 4703
Sfmt 4703
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change to amend the
Restated Certificate of Incorporation of
NASD (‘‘Certificate’’) as described in
Items I and II below, which Items have
been substantially prepared by NASD.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons and is simultaneously
approving the proposal on an
accelerated basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD proposes to amend its
Certificate to reflect the governance and
related changes proposed by NASD to
accommodate the consolidation of the
member firm regulatory functions of
NASD and NYSE Regulation, Inc. and to
conform the Certificate to the amended
NASD By-Laws. The proposed
amendments to the Certificate also
reflect NASD’s change in corporate
name to Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) as of the
closing of the Transaction (defined
below). The text of the proposed rule
change, including the Certificate, is
available at NASD, the Commission’s
Public Reference Room, and https://
nasd.complinet.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
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 III 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 November 28, 2006, NASD and
the NYSE Group, Inc. (‘‘NYSE Group’’)
announced a plan to consolidate their
member regulation operations into a
combined organization (‘‘Transaction’’)
that will be the sole U.S. private-sector
provider of member firm regulation for
securities firms that conduct business
with the public. This consolidation will
streamline the broker-dealer regulatory
system, combine technologies, permit
the establishment of a single set of rules
E:\FR\FM\01AUN1.SGM
01AUN1
Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Notices
and group examiners with
complementary areas of expertise in a
single organization—all of which will
serve to enhance oversight of U.S.
securities firms and help ensure
investor protection. Moreover, NASD
notes that the new organization will be
committed to reducing regulatory costs
and burdens for firms of all sizes
through greater regulatory efficiency.
On January 19, 2007, NASD held a
special meeting of the members of
NASD eligible to vote on amendments
to the NASD By-Laws. A quorum of
members entitled to vote on the matter
was present, in person or by proxy, at
such meeting, and a majority of the
quorum approved the amendments to
the NASD’s By-Laws. On March 19,
2007, NASD filed with the Commission
a proposed rule change to amend the
NASD By-Laws to implement the
governance and related changes to
accommodate the consolidation of the
member regulatory functions of NASD
and NYSE Regulation, Inc.3
The purpose of this proposed rule
change is to make the necessary
amendments to the Certificate to reflect
the governance and related changes in
connection with the Transaction, the
related changes to the NASD By-Laws,
and NASD’s change in corporate name
to FINRA as of the date of closing of the
Transaction.4
The effective date of the proposed
rule change will be the closing of the
Transaction. The proposed rule change
will not become effective if the
Transaction does not close.
jlentini on PROD1PC65 with NOTICES
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
3 See Securities Exchange Act Release No. 55495
(March 20, 2007), 72 FR 14149 (March 26, 2007)
(SR–NASD–2007–023). Today, the Commission
approved the amendments to NASD’s By-Laws
proposed in connection with the Transaction. See
Securities Exchange Act Release No. 56145 (July 26,
2007) (‘‘Release No. 34–56145’’).
4 Article XXII, Section 3 of the NASD By-Laws,
as amended in Release 34 –56145, supra note 3,
addresses the term of office of Governors for a
transitional period commencing on the date of
closing of the Transaction and ending on the third
anniversary of the date of closing. Among other
things, Article XXII, Section 3 provides that ‘‘* * *
in the event the remaining term of office of any
Large Firm, Mid Size Firm or Small Firm Governor
position that becomes vacant is for more than 12
months, nominations shall be made as set forth
above in this paragraph, but such vacancy shall be
filled by the members entitled to vote thereon at a
meeting thereof convened to vote thereon (emphasis
added).’’ Article Eleventh of the Certificate does not
reiterate the applicable nomination process in such
instances, insofar as the text solely restates those
persons entitled to make nominations as reflected
elsewhere in Article Eleventh. In short, in filling
any such vacancies, NASD represents that the
nominations will be made in accordance with the
provisions of Article XXII, Section 3 of the
amended NASD By-Laws.
VerDate Aug<31>2005
20:12 Jul 31, 2007
Jkt 211001
of section 15A of the Act,5 including
section 15A(b)(2) of the Act,6 in that it
will permit FINRA to carry out the
purposes of the Act, to comply with the
Act, and to enforce compliance by
FINRA members, and persons
associated with FINRA members, with
the Act, the rules and regulations
thereunder, and FINRA rules.
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.
42191
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–2007–053 and
should be submitted on or before
August 22, 2007.
IV. Commission Findings
After careful consideration, the
III. Solicitation of Comments
Commission finds that the proposed
Interested persons are invited to
rule change is consistent with the Act
submit written data, views, and
and the rules and regulations
thereunder applicable to a national
arguments concerning the foregoing,
securities association.7 Specifically, the
including whether the proposed rule
Commission believes that the proposal
change is consistent with the Act.
is consistent with section 15A(b)(2) of
Comments may be submitted by any of
the Act 8 in that it will permit FINRA to
the following methods:
be so organized to carry out the
Electronic Comments
purposes of the Act, to comply with the
• Use the Commission’s Internet
Act and to enforce compliance by
comment form (https://www.sec.gov/
FINRA members and persons associated
rules/sro.shtml); or
with members with the Act, the rules
• Send an e-mail to ruleand regulations thereunder, and FINRA
comments@sec.gov. Please include File
rules. Further, the Commission finds
Number SR–NASD–2007–053 on the
that the proposed rule change is
subject line.
consistent with section 15A(b)(6) of the
Act 9 in that it is designed to prevent
Paper Comments
fraudulent and manipulative acts and
• Send paper comments in triplicate
practices, to promote just and equitable
to Nancy M. Morris, Secretary,
principles of trade, and, in general, to
Securities and Exchange Commission,
protect investors and the public interest.
100 F Street, NE., Washington, DC
The proposed rule change amends the
20549–1090.
Certificate to conform to the changes in
the NASD By-Laws that the Commission
All submissions should refer to File
is approving today, and to reflect the
Number SR–NASD–2007–053. This file
NASD’s new name, FINRA.10
number should be included on the
subject line if e-mail is used. To help the Specifically, the amended Certificate
incorporates the governance structure in
Commission process and review your
FINRA’s By-Laws, as approved today,
comments more efficiently, please use
only one method. The Commission will including with respect to the three-year
post all comments on the Commission’s transitional period and thereafter. The
proposed revisions to the Certificate do
Internet Web site (https://www.sec.gov/
not make changes to the governance of
rules/sro.shtml). Copies of the
FINRA not already contemplated by the
submission, all subsequent
proposed changes to FINRA’s By-Laws,
amendments, all written statements
which were published for comment and
with respect to the proposed rule
change that are filed with the
7 In approving this proposed rule change, the
Commission, and all written
Commission has considered the proposed rule’s
communications relating to the
impact on efficiency, competition, and capital
proposed rule change between the
formation. 15 U.S.C. 78c(f).
PO 00000
8 15
U.S.C. 78o–3(b)(2).
U.S.C. 78o–3(b)(6).
10 See Release No. 34–56145, supra note 3.
5 15
U.S.C. 78o–3.
6 15 U.S.C. 78o–3(b)(2).
Frm 00150
Fmt 4703
9 15
Sfmt 4703
E:\FR\FM\01AUN1.SGM
01AUN1
42192
Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / Notices
approved by the Commission.11 The
Commission believes that the proposed
changes to the Certificate are consistent
with the Act.
The Commission finds good cause to
approve the proposal prior to the
thirtieth day after the proposal was
published for comment in the Federal
Register. This approval allows the
proposed rule change to take effect
without delay. The proposed revisions
to the Certificate do not make changes
to the governance of FINRA not already
contemplated by the proposed changes
to FINRA’s By-Laws, which were
published for comment and approved
by the Commission.12 Therefore,
interested persons were provided the
opportunity to submit comments on
essentially identical changes. For this
reason, the Commission finds good
cause, consistent with section 19(b)(2)
of the Act, to grant accelerated approval
to the proposed changes to the
Certificate.
The Commission finds good cause,
consistent with section 19(b)(2) of the
Act, to grant accelerated approval to the
proposed change of the NASD’s name to
FINRA because it is technical and does
not impact members or other market
participants.
V. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act, that the
proposed rule change (SR–NASD–2007–
053) is hereby approved on an
accelerated basis.13
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E7–14856 Filed 7–31–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56125; File No. SR–NSCC–
2007–09]
Self-Regulatory Organizations; The
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Use of the
National Settlement Service
jlentini on PROD1PC65 with NOTICES
July 24, 2007.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
May 1, 2007, The National Securities
Clearing Corporation (‘‘NSCC’’) filed
11 Id.
12 Id.
13 15
1 15
U.S.C. 78s(b)(2).
U.S.C. 78s(b)(1).
VerDate Aug<31>2005
20:12 Jul 31, 2007
Jkt 211001
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which items
have been prepared primarily by NSCC.
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 proposed rule change permits
NSCC to use the Federal Reserve Bank’s
National Settlement Service (‘‘NSS’’) for
the settlement of net-net credit balances.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NSCC 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. NSCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of such statements.2
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In 2003, as part of a larger initiative
to create a centralized settlement system
with its affiliate, The Depository Trust
Company (‘‘DTC’’), NSCC required the
use of NSS as the vehicle for all Settling
Banks to satisfy their end of day net-net
debits.3 In an effort to increase the
efficiencies afforded by NSS, NSCC in
conjunction with DTC is now modifying
its rules to permit NSCC’s use of NSS
to distribute net-net credits.4 Utilizing
NSS as the payment mechanism for netnet credits will eliminate the need for
NSCC to initiate wire payments for
settlement monies owed by NSCC.
However, should NSS not be available
for any reason, NSCC will retain the
capability to satisfy its settlement
obligations using wire transfer.
The proposed rule change is
consistent with the requirements of
section 17A of the Act and the rules and
2 The Commission has modified parts of these
statements.
3 Securities Exchange Act Release No. 48744
(November 10, 2003), 68 FR 63831 (November 4,
2003) (File Nos. SR–NSCC–2003–19 and SR–DTC–
2003–11).
4 DTC has submitted a similar proposed rule
change (File No. SR–DTC–2007–08) providing for
the use of NSS for the distribution of net credits.
PO 00000
Frm 00151
Fmt 4703
Sfmt 4703
regulations thereunder because it will
not affect the safeguarding of funds or
securities in NSCC’s custody and
control or for which it is responsible.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
NSCC does not believe that the
proposed rule change would have any
impact or impose any burden on
competition.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments relating to the
proposed rule change have not yet been
solicited or received. NSCC will notify
the Commission of any written
comments received by NSCC.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to section
19(b)(3)(A)(iii) of the Act 5 and Rule
19b–4(f)(4) 6 promulgated thereunder
because the proposal effects a change in
an existing service of NSCC that (A)
does not adversely affect the
safeguarding of securities or funds in
the custody or control of NSCC or for
which it is responsible and (B) does not
significantly affect the respective rights
or obligations of NSCC or persons using
the service. At any time within sixty
days of the filing of the proposed rule
change, the Commission could have
summarily abrogated such rule change if
it appeared to the Commission that such
action was 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–NSCC–2007–09 on the
subject line.
5 15
6 17
E:\FR\FM\01AUN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(4).
01AUN1
]]>Agencies
[Federal Register Volume 72, Number 147 (Wednesday, August 1, 2007)]
[Notices]
[Pages 42190-42192]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14856]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56146; File No. SR-NASD-2007-053]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Order Granting Accelerated Approval
of Proposed Rule Change Relating to the Restated Certificate of
Incorporation of National Association of Securities Dealers, Inc.
July 26, 2007.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 24, 2007, the National Association of Securities Dealers, Inc.
(``NASD'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change to amend the Restated
Certificate of Incorporation of NASD (``Certificate'') as described in
Items I and II below, which Items have been substantially prepared by
NASD. The Commission is publishing this notice to solicit comments on
the proposed rule change from interested persons and is simultaneously
approving the proposal on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD proposes to amend its Certificate to reflect the governance
and related changes proposed by NASD to accommodate the consolidation
of the member firm regulatory functions of NASD and NYSE Regulation,
Inc. and to conform the Certificate to the amended NASD By-Laws. The
proposed amendments to the Certificate also reflect NASD's change in
corporate name to Financial Industry Regulatory Authority, Inc.
(``FINRA'') as of the closing of the Transaction (defined below). The
text of the proposed rule change, including the Certificate, is
available at NASD, the Commission's Public Reference Room, and https://
nasd.complinet.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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 III 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 November 28, 2006, NASD and the NYSE Group, Inc. (``NYSE
Group'') announced a plan to consolidate their member regulation
operations into a combined organization (``Transaction'') that will be
the sole U.S. private-sector provider of member firm regulation for
securities firms that conduct business with the public. This
consolidation will streamline the broker-dealer regulatory system,
combine technologies, permit the establishment of a single set of rules
[[Page 42191]]
and group examiners with complementary areas of expertise in a single
organization--all of which will serve to enhance oversight of U.S.
securities firms and help ensure investor protection. Moreover, NASD
notes that the new organization will be committed to reducing
regulatory costs and burdens for firms of all sizes through greater
regulatory efficiency.
On January 19, 2007, NASD held a special meeting of the members of
NASD eligible to vote on amendments to the NASD By-Laws. A quorum of
members entitled to vote on the matter was present, in person or by
proxy, at such meeting, and a majority of the quorum approved the
amendments to the NASD's By-Laws. On March 19, 2007, NASD filed with
the Commission a proposed rule change to amend the NASD By-Laws to
implement the governance and related changes to accommodate the
consolidation of the member regulatory functions of NASD and NYSE
Regulation, Inc.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 55495 (March 20,
2007), 72 FR 14149 (March 26, 2007) (SR-NASD-2007-023). Today, the
Commission approved the amendments to NASD's By-Laws proposed in
connection with the Transaction. See Securities Exchange Act Release
No. 56145 (July 26, 2007) (``Release No. 34-56145'').
---------------------------------------------------------------------------
The purpose of this proposed rule change is to make the necessary
amendments to the Certificate to reflect the governance and related
changes in connection with the Transaction, the related changes to the
NASD By-Laws, and NASD's change in corporate name to FINRA as of the
date of closing of the Transaction.\4\
---------------------------------------------------------------------------
\4\ Article XXII, Section 3 of the NASD By-Laws, as amended in
Release 34 -56145, supra note 3, addresses the term of office of
Governors for a transitional period commencing on the date of
closing of the Transaction and ending on the third anniversary of
the date of closing. Among other things, Article XXII, Section 3
provides that ``* * * in the event the remaining term of office of
any Large Firm, Mid Size Firm or Small Firm Governor position that
becomes vacant is for more than 12 months, nominations shall be made
as set forth above in this paragraph, but such vacancy shall be
filled by the members entitled to vote thereon at a meeting thereof
convened to vote thereon (emphasis added).'' Article Eleventh of the
Certificate does not reiterate the applicable nomination process in
such instances, insofar as the text solely restates those persons
entitled to make nominations as reflected elsewhere in Article
Eleventh. In short, in filling any such vacancies, NASD represents
that the nominations will be made in accordance with the provisions
of Article XXII, Section 3 of the amended NASD By-Laws.
---------------------------------------------------------------------------
The effective date of the proposed rule change will be the closing
of the Transaction. The proposed rule change will not become effective
if the Transaction does not close.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of section 15A of the Act,\5\ including section 15A(b)(2) of
the Act,\6\ in that it will permit FINRA to carry out the purposes of
the Act, to comply with the Act, and to enforce compliance by FINRA
members, and persons associated with FINRA members, with the Act, the
rules and regulations thereunder, and FINRA rules.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78o-3.
\6\ 15 U.S.C. 78o-3(b)(2).
---------------------------------------------------------------------------
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. 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-2007-053 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-2007-053. 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-2007-053 and should be
submitted on or before August 22, 2007.
IV. Commission Findings
After careful consideration, the Commission finds that the proposed
rule change is consistent with the Act and the rules and regulations
thereunder applicable to a national securities association.\7\
Specifically, the Commission believes that the proposal is consistent
with section 15A(b)(2) of the Act \8\ in that it will permit FINRA to
be so organized to carry out the purposes of the Act, to comply with
the Act and to enforce compliance by FINRA members and persons
associated with members with the Act, the rules and regulations
thereunder, and FINRA rules. Further, the Commission finds that the
proposed rule change is consistent with section 15A(b)(6) of the Act
\9\ in that it is 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.
---------------------------------------------------------------------------
\7\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78o-3(b)(2).
\9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
The proposed rule change amends the Certificate to conform to the
changes in the NASD By-Laws that the Commission is approving today, and
to reflect the NASD's new name, FINRA.\10\ Specifically, the amended
Certificate incorporates the governance structure in FINRA's By-Laws,
as approved today, including with respect to the three-year
transitional period and thereafter. The proposed revisions to the
Certificate do not make changes to the governance of FINRA not already
contemplated by the proposed changes to FINRA's By-Laws, which were
published for comment and
[[Page 42192]]
approved by the Commission.\11\ The Commission believes that the
proposed changes to the Certificate are consistent with the Act.
---------------------------------------------------------------------------
\10\ See Release No. 34-56145, supra note 3.
\11\ Id.
---------------------------------------------------------------------------
The Commission finds good cause to approve the proposal prior to
the thirtieth day after the proposal was published for comment in the
Federal Register. This approval allows the proposed rule change to take
effect without delay. The proposed revisions to the Certificate do not
make changes to the governance of FINRA not already contemplated by the
proposed changes to FINRA's By-Laws, which were published for comment
and approved by the Commission.\12\ Therefore, interested persons were
provided the opportunity to submit comments on essentially identical
changes. For this reason, the Commission finds good cause, consistent
with section 19(b)(2) of the Act, to grant accelerated approval to the
proposed changes to the Certificate.
---------------------------------------------------------------------------
\12\ Id.
---------------------------------------------------------------------------
The Commission finds good cause, consistent with section 19(b)(2)
of the Act, to grant accelerated approval to the proposed change of the
NASD's name to FINRA because it is technical and does not impact
members or other market participants.
V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the Act,
that the proposed rule change (SR-NASD-2007-053) is hereby approved on
an accelerated basis.\13\
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(2).
By the Commission.
Nancy M. Morris,
Secretary.
[FR Doc. E7-14856 Filed 7-31-07; 8:45 am]
BILLING CODE 8010-01-P
