Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Certain FINRA Rules Relating to Trading Halts and Disclosure of Disciplinary Information, 45288-45290 [E7-15757]
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45288
Federal Register / Vol. 72, No. 155 / Monday, August 13, 2007 / Notices
currently requires that the number of
directors on the board of directors
(‘‘Board’’) of the Exchange be fixed at
15, to be comprised of: (i) Two ‘‘PMM
Directors’’ 4; (ii) two ‘‘CMM Directors’’ 5;
(iii) two ‘‘EAM Directors’’ 6; (iv) eight
‘‘Non-Industry Directors’’ 7—at least two
of whom must be ‘‘Public Directors’’ 8—
and (v) the person holding the office of
President and CEO.
The proposed rule change would
remove the requirement that the
President be the CEO, and amend the
ISE Constitution to require that the
director position described in
subparagraph (v) above be held by the
CEO. The proposal also would amend
the Constitution to establish the number
of directors at no less than 15 and no
more than 16.
In conjunction with these changes,
Sole LLC Member,9 in its sole and
jlentini on PROD1PC65 with NOTICES
4 As
set forth in Article III, Section 3.2(b)(i) of the
ISE Constitution, a PMM Director is an officer,
director, or partner of a Primary Market Maker
elected by a plurality of the holders of the PMM
Rights (see Article XII, Section 12.1 of the ISE
Constitution) voting together as a class.
5 As set forth in Article III, Section 3.2(b)(ii) of the
ISE Constitution, a CMM Director is an officer,
director, or partner of a Competitive Market Maker
elected by a plurality of the holders of the CMM
Rights (see Article XII, Section 12.2 of the ISE
Constitution) voting together as a class.
6 As set forth in Article III, Section 3.2(b)(iii) of
the ISE Constitution, an EAM Director is an officer,
director, or partner of an Electronic Access Member
elected by the plurality of the holders of the EAM
Rights (see Article XII, Section 12.3 of the ISE
Constitution) voting together as a class.
7 As set forth in Article III, Section 3.2(b)(iii) of
the ISE Constitution, a ‘‘Non-Industry Director’’ is
a director elected by the Sole LLC Member (see
infra, note 9) who meets the requirements to be a
‘‘non-industry representative.’’ A ‘‘non-industry
representative’’ is defined in Article XIII, Section
13.1(w) as any person that would not be considered
an ‘‘industry representative’’ (see below) as well as:
(i) a person affiliated with a broker or dealer that
operates solely to assist the securities-related
activities of the business of non-member affiliates,
(ii) an employee of an entity that is affiliated with
a broker or dealer that does not account for a
material portion of the revenues of the consolidated
entity, and who is primarily engaged in the
business of the non-member entity.
An ‘‘industry representative’’ is defined in Article
XIII, Section 13.1(t) as a person who is an officer,
director, or employee of a broker or dealer or who
has been employed in any such capacity at any time
within the prior three years, as well as a person
who has a consulting or employment relationship
with or has provided professional services to the
Exchange and a person who had any such
relationship or provided any such services to the
Exchange at any time within the prior three years.
8 As set forth in Article III, Section 3.2(b)(iv) of
the ISE Constitution, a ‘‘Public Director’’ must be
a ‘‘public representative,’’ defined in Article XIII,
Section 13.1(dd) as a non-industry representative
(see supra, note 7) who has no material business
relationship with a broker or dealer or the
Exchange.
9 As set forth in Article I, Section 1.1 of the ISE
Constitution, the ISE is a single member limited
liability company with one limited liability
company interest currently authorized (the ‘‘LLC
Interest’’). The holder of the LLC interest is
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absolute discretion, would be able to
elect one additional director (‘‘Former
Employee Director’’) who was employed
by the Exchange at any time during the
three-year period prior to his or her
initial election but otherwise meets the
definition of a Non-Industry Director
under the Exchange’s Constitution.10
The proposed rule change also would
make conforming amendments to the
ISE LLC Agreement.
According to the Exchange, the
proposed modifications to its
governance structure would provide it
with the flexibility to structure its board
of directors in a way that would enable
the ISE to attract and keep talented
individuals.
III. Discussion
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange. Specifically, the
Commission finds that the proposed
rule change is consistent with section
6(b)(1) of the Act,11 which requires,
among other things, that an exchange be
so organized and have the capacity to be
able to carry out the purposes of the Act;
and with section 6(b)(5) of the Act,12
which requires, among other things, that
the rules of a national securities
exchange be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, 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.13
The Commission notes that the
additional member that the Sole LLC
Member would be permitted to elect to
the Board, aside from having been an
Exchange employee within the prior
International Securities Exchange Holdings, Inc.,
which may assign the LLC Interest as provided in
the LLC Agreement (the ‘‘Sole LLC Member’’).
10 The term of a Former Employee Director would
expire at the annual meeting of holders of Exchange
Rights and the Sole LLC Member held in the second
year following the year of his or her election.
(Regarding Exchange Rights, see Article I, Section
1.2 of the ISE Constitution and Article VI of the ISE
LLC Agreement.) A Former Employee Director
would not be permitted to serve on the Board for
more than three consecutive terms, but would be
eligible for election as a director following a twoyear hiatus from service on the Board, provided that
he or she meets the relevant requirements. See
proposed new Section 3.2(e)(iv) to Article III of the
ISE Constitution.
11 15 U.S.C. 78f(b)(1).
12 15 U.S.C. 78f(b)(5).
13 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
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three years, otherwise would be
required to meet the qualifications of a
Non-Industry Director. Thus, the Former
Employee Director could not be a
person who is an officer, director, or
employee of a broker or dealer or who
has been employed in any such capacity
at any time within the prior three years.
Further, the Commission notes that,
under the proposed rule change, the ISE
Constitution would continue to provide
that eight of the members of the
Exchange’s board of directors—out of a
maximum total of 16 members—must be
non-industry representatives. The
Commission believes that this proposed
balance with respect to the composition
of the Exchange’s Board is consistent
with other self-regulatory organization
governance structures that were
approved by the Commission.14
IV. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,15 that the
proposed rule change (SR–ISE–2007–34)
be, and hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–15758 Filed 8–10–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56204; File No. SR–
NASDAQ–2007–070]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Adopt
Certain FINRA Rules Relating to
Trading Halts and Disclosure of
Disciplinary Information
August 3, 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 August 3,
2007, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’), 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 Nasdaq.
14 See, e.g., Securities Exchange Act Release No.
54494 (September 25, 2006), 71 FR 58023 (October
2, 2006).
15 15 U.S.C. 78s(b)(2).
16 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Federal Register / Vol. 72, No. 155 / Monday, August 13, 2007 / Notices
Nasdaq has designated the proposed
rule change as one constituting a noncontroversial rule change under Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposal 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
Nasdaq proposes this rule change to
add several rules, based on Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) rules, that were
inadvertently omitted from the Nasdaq
rulebook when Nasdaq became a
national securities exchange.
The text of the proposed rule change
is available on Nasdaq’s Web site at
https://www.nasdaq.com, at Nasdaq’s
principal office, 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,
Nasdaq included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
jlentini on PROD1PC65 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
To ensure that FINRA members did
not incur significant regulatory burdens
as a result of Nasdaq separating from
FINRA and registering as a national
securities exchange, Nasdaq based its
rules governing regulatory standards
and disciplinary processes on FINRA
rules, to a significant extent. Over the
past few months, however, it has come
to Nasdaq’s attention that several FINRA
rules that arguably should have been
copied into the Nasdaq rulebook were
inadvertently omitted during the
exchange registration process. Nasdaq
believes that adding these rules will
enhance Nasdaq’s regulatory programs
and enhance FINRA’s ability to serve as
Nasdaq’s regulatory services provider
3 15
U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
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under NASD Regulation’s regulatory
services agreement with Nasdaq.5
Accordingly, Nasdaq is adding new
Rule 3340, which explicitly prohibits
Nasdaq members and their associated
persons from trading during a trading
halt. The rule is written broadly to cover
effecting transactions or publishing
quotations, priced bids and/or offers,
unpriced indications of interest, or bids
or offers accompanied by a modifier to
reflect unsolicited customer interest, in
securities, single stock futures, and
futures on narrow indexes that could be
used as proxies for trading in the halted
stock. Although Nasdaq believes that
violations of a trading halt by a Nasdaq
member could currently be addressed as
violations of Rule 2110, which
mandates high standards of commercial
honor and just and equitable principles
of trade, adding the rule to its rulebook
will provide added clarity with regard
to the requirement.
Second, Nasdaq is adopting IM–8310–
3, which provides for release of
disciplinary complaints, decisions and
other information regarding Nasdaq
members and their associated persons.6
The Rule is drafted to be administered
by Nasdaq Regulation, which under
Rule 8001, is defined to include FINRA
staff, NASD Regulation staff, and FINRA
departments acting on Nasdaq’s behalf
pursuant to Nasdaq’s regulatory services
agreement.7 Nasdaq’s rule would
empower its Chief Regulatory Officer to
make certain determinations regarding
the scope of disclosure; the comparable
FINRA rule looks to the NASD
Regulation Board of Directors or the
President of FINRA Regulatory Policy
and Oversight to make comparable
decisions. In all other material respects,
however, Nasdaq’s IM–8310–3 will be
substantively similar to FINRA’s
comparable Interpretive Material.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of section 6 of the Act,8 in
general, and with sections 6(b)(5) of the
5 Notwithstanding the fact that Nasdaq has
entered into a regulatory services agreement with
NASD Regulation to perform some of Nasdaq’s
functions, Nasdaq retains ultimate legal
responsibility for, and control of, such functions.
6 Among other things, the Interpretive Material
contains descriptions of when particular decisions
become effective. In this regard, the Interpretive
Material is merely describing the parameters
otherwise established in the 9000 Series of the
Nasdaq Rules. Accordingly, Nasdaq believes that
including the descriptions in the Interpretive
Material enhances its clarity.
7 Nasdaq will amend its entire rulebook at a later
date to replace references to NASD with references
to FINRA.
8 15 U.S.C. 78f.
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45289
Act,9 in particular, 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq 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, as amended.
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 with respect to
the proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) of the Act 10 and Rule 19b–
4(f)(6) thereunder.11
Nasdaq has requested that the
Commission waive the 30-day preoperative period for ‘‘non-controversial’’
proposals because it adopts rules that
are already part of FINRA rules, and the
waiver will allow FINRA to process
disciplinary matters as Nasdaq’s
regulatory services provider in
accordance with the disclosure
standards provided in IM–8310–3
without delay. In light of the foregoing,
the Commission believes that waiver of
the 30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission has determined to waive
the operative delay, and the proposed
rule change has become effective
pursuant to section 19(b)(3)(A) of the
9 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
10 15
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45290
Federal Register / Vol. 72, No. 155 / Monday, August 13, 2007 / Notices
Act,12 and Rule 19b–4(f)(6)
thereunder,13 with no operative delay.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2007–070 on the
subject line.
jlentini on PROD1PC65 with NOTICES
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F. Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2007–070. 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
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
14 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
13 17
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16:19 Aug 10, 2007
Jkt 211001
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–2007–070 and
should be submitted on or before
September 4, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–15757 Filed 8–10–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56209; File No. SR–NYSE–
2007–65]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Rule 79A.30 (Miscellaneous
Requirements on Stock Market
Procedures)
August 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 24,
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 filed the
proposed rule change as a ‘‘noncontroversial’’ proposed rule change
pursuant to section 19(b)(3)(A) 3 of the
Act and Rule 19b–4(f)(6) thereunder,4
which renders the proposal 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 is proposing to amend
NYSE Rule 79A.30 to remove the
requirement to obtain Floor Official
15 17
CFR 200.30–3(a)(12).
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).
1 15
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Fmt 4703
Sfmt 4703
approval before trading more than one
or two dollars away from the last sale.
The proposed amendment would
preserve the requirement in situations:
(i) Where such trades are initiated by a
specialist in connection with certain
manual transactions when the NYSE
market is ‘‘slow’’; and (ii) where such
trades are initiated by the specialist
when reaching across the market when
the market is ‘‘fast.’’ The filing also
makes certain non-substantive changes
to the language of the rule in order to
clarify existing provisions and
procedures, and conforms the rule to
changes in Exchange rules made
subsequent to the last time NYSE Rule
79A.30 was amended.
The text of the proposed rule change
is available at the Exchange, the
Commission’s Public Reference Room,
and https://www.nyse.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, the
Exchange 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. NYSE
has substantially prepared summaries,
set forth in sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to amend
NYSE Rule 79A.30 to remove the
requirement that members obtain prior
approval from an Exchange Floor
Official for trades that are more than
$1.00 from the last sale when such
previous sale is under $20.00 per share,
or more than $2.00 from the last sale
when such previous sale is $20.00 per
share or more. The requirement to
obtain approval would continue to
apply in situations where: (i) The
market is ‘‘slow’’ 5 and a proposed trade
results from a pricing decision by the
specialist in connection with such
market events as, for example, the
opening or reopening of trading, the
resumption of trading after a gapped
quotation has been published, the
5 For purposes of the rule, the NYSE will be
considered to be a slow market when displaying a
bid or offer (or both) that is not entitled to
protection of Rule 611 under Regulation NMS.
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]]>Agencies
[Federal Register Volume 72, Number 155 (Monday, August 13, 2007)]
[Notices]
[Pages 45288-45290]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15757]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56204; File No. SR-NASDAQ-2007-070]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Adopt Certain FINRA Rules Relating to Trading Halts and Disclosure of
Disciplinary Information
August 3, 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 August 3, 2007, The NASDAQ Stock Market LLC (``Nasdaq''), 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 Nasdaq.
[[Page 45289]]
Nasdaq has designated the proposed rule change as one constituting a
non-controversial rule change under Section 19(b)(3)(A)(iii) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with 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)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes this rule change to add several rules, based on
Financial Industry Regulatory Authority, Inc. (``FINRA'') rules, that
were inadvertently omitted from the Nasdaq rulebook when Nasdaq became
a national securities exchange.
The text of the proposed rule change is available on Nasdaq's Web
site at https://www.nasdaq.com, at Nasdaq's principal office, 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, Nasdaq included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
To ensure that FINRA members did not incur significant regulatory
burdens as a result of Nasdaq separating from FINRA and registering as
a national securities exchange, Nasdaq based its rules governing
regulatory standards and disciplinary processes on FINRA rules, to a
significant extent. Over the past few months, however, it has come to
Nasdaq's attention that several FINRA rules that arguably should have
been copied into the Nasdaq rulebook were inadvertently omitted during
the exchange registration process. Nasdaq believes that adding these
rules will enhance Nasdaq's regulatory programs and enhance FINRA's
ability to serve as Nasdaq's regulatory services provider under NASD
Regulation's regulatory services agreement with Nasdaq.\5\
---------------------------------------------------------------------------
\5\ Notwithstanding the fact that Nasdaq has entered into a
regulatory services agreement with NASD Regulation to perform some
of Nasdaq's functions, Nasdaq retains ultimate legal responsibility
for, and control of, such functions.
---------------------------------------------------------------------------
Accordingly, Nasdaq is adding new Rule 3340, which explicitly
prohibits Nasdaq members and their associated persons from trading
during a trading halt. The rule is written broadly to cover effecting
transactions or publishing quotations, priced bids and/or offers,
unpriced indications of interest, or bids or offers accompanied by a
modifier to reflect unsolicited customer interest, in securities,
single stock futures, and futures on narrow indexes that could be used
as proxies for trading in the halted stock. Although Nasdaq believes
that violations of a trading halt by a Nasdaq member could currently be
addressed as violations of Rule 2110, which mandates high standards of
commercial honor and just and equitable principles of trade, adding the
rule to its rulebook will provide added clarity with regard to the
requirement.
Second, Nasdaq is adopting IM-8310-3, which provides for release of
disciplinary complaints, decisions and other information regarding
Nasdaq members and their associated persons.\6\ The Rule is drafted to
be administered by Nasdaq Regulation, which under Rule 8001, is defined
to include FINRA staff, NASD Regulation staff, and FINRA departments
acting on Nasdaq's behalf pursuant to Nasdaq's regulatory services
agreement.\7\ Nasdaq's rule would empower its Chief Regulatory Officer
to make certain determinations regarding the scope of disclosure; the
comparable FINRA rule looks to the NASD Regulation Board of Directors
or the President of FINRA Regulatory Policy and Oversight to make
comparable decisions. In all other material respects, however, Nasdaq's
IM-8310-3 will be substantively similar to FINRA's comparable
Interpretive Material.
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\6\ Among other things, the Interpretive Material contains
descriptions of when particular decisions become effective. In this
regard, the Interpretive Material is merely describing the
parameters otherwise established in the 9000 Series of the Nasdaq
Rules. Accordingly, Nasdaq believes that including the descriptions
in the Interpretive Material enhances its clarity.
\7\ Nasdaq will amend its entire rulebook at a later date to
replace references to NASD with references to FINRA.
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2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of section 6 of the Act,\8\ in general, and with
sections 6(b)(5) of the Act,\9\ in particular, 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.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq 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, as amended.
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 with respect
to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
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Nasdaq has requested that the Commission waive the 30-day pre-
operative period for ``non-controversial'' proposals because it adopts
rules that are already part of FINRA rules, and the waiver will allow
FINRA to process disciplinary matters as Nasdaq's regulatory services
provider in accordance with the disclosure standards provided in IM-
8310-3 without delay. In light of the foregoing, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Accordingly, the
Commission has determined to waive the operative delay, and the
proposed rule change has become effective pursuant to section
19(b)(3)(A) of the
[[Page 45290]]
Act,\12\ and Rule 19b-4(f)(6) thereunder,\13\ with no operative
delay.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2007-070 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F.
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2007-070. 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-2007-070 and should
be submitted on or before September 4, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-15757 Filed 8-10-07; 8:45 am]
BILLING CODE 8010-01-P
