Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Step-Outs and Transfers of Sales Fees, 71176-71178 [E7-24201]
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71176
Federal Register / Vol. 72, No. 240 / Friday, December 14, 2007 / Notices
adjusted rate; (4) provide the range
maximum rate used to compute retained
rate adjustments is the normal range
maximum rate (including any locality
adjustment or special rate supplement);
and (5) provide when a frozen retained
rate for an employee with a rating of
record below Successful falls below the
applicable adjusted rate for the normal
grade maximum, the retained rate will
be terminated and the employee’s pay
will be set at an adjusted rate equal to
the retained rate).
Chapter 75, section 7512(4): Adverse
actions (only to the extent necessary to
provide that adverse actions do not
apply to reductions in rates of basic pay
to offset a locality pay or special rate
supplement increase as a result of
receiving a rating of record below
Successful).
rmajette on PROD1PC64 with NOTICES
Note: If any of the provisions of title 5,
United States Code, listed above are amended
during the period this demonstration project
is in effect, U.S. Department of Education/
Federal Student Aid may choose to terminate
the waiver of one or more such provisions
with respect to employees participating in
the project, without formally modifying the
project itself. U.S. Department of Education/
Federal Student Aid must notify OPM when
any such waiver is terminated.
B. Title 5, Code of Federal Regulations
Part 359, subpart G, section 359.705:
saved pay for former members of the
Senior Executive Service (only to the
extent necessary to (1) bar employees
with a rating of record below Successful
from receiving a saved rate increase
under 5 CFR 359.705(d)(1); and (2)
apply rules parallel to those governing
adjustment and termination of retained
rates under 5 U.S.C. part 536, as
modified under this plan).
Part 430, subpart B, section 430.203:
Definitions (only to the extent necessary
to allow an additional rating of record
to support a pay decision under sections
III.C.3 or 4 of this project plan).
Part 530, section 530.304: Establishing
or increasing special rates (only to the
extent necessary to (1) provide that if
the U.S. Department of Education/
Federal Student Aid extends the
maximum rate of a rate range by 5
percent above the normal maximum for
Outstanding performers, a special rate
may not exceed the rate for EX–IV, plus
5 percent) for employees in that range
extension; (2) to interpret the references
to the minimum and maximum rates of
a grade as references to the normal
minimum and maximum rates of a grade
under this plan; and (3) apply an
‘‘effective’’ special rate supplement
percentage for employees in the upper
range extension under circumstances
described in this plan.
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Part 531, subpart B: Determining Rate
of Basic Pay.
Part 531, subpart D: Within-Grade
Increases.
Part 531, subpart E: Quality Step
Increases.
Part 531, section 531.604:
Determining an employee’s locality rate
(only to the extent necessary to apply an
‘‘effective’’ locality pay percentage for
employees in the upper range extension
under circumstances described in this
plan).
Part 531, section 531.606: Maximum
limits on locality rates (only to the
extent necessary to provide that if the
U.S. Department of Education/Federal
Student Aid extends the maximum rate
of a rate range by 5 percent above the
normal maximum for Outstanding
performers, a locality rate may not
exceed the rate for EX–IV, plus 5
percent) for employees in that range
extension.
Part 536, subpart C: Pay Retention
(only to the extent necessary to (1) bar
employees with a less than Successful
rating of record from receiving retained
rate increases under 5 CFR 536.305; (2)
provide that if the U.S. Department of
Education/Federal Student Aid extends
the maximum rate of a rate range by 5
percent above the normal maximum for
Outstanding performers, a retained rate
may not exceed the rate for EX–IV, plus
5 percent; (3) provide the pay (including
any locality adjustment or special rate
supplement) of an employee in the
upper range extension who is rated
below Outstanding will be converted to
a retained rate before processing any
other actions; (4) provide a retained rate
that is less than the maximum rate
(including any locality adjustment or
special rate supplement) of the upper
range extension for an employee who
receives a rating of record of
Outstanding will be terminated and
converted to an equal adjusted rate; (5)
provide the range maximum rate used to
compute retained rate adjustments is the
normal range maximum rate (including
any applicable locality adjustment or
special rate supplement); and (6)
provide when a frozen retained rate for
an employee with a rating of record
below Successful falls below the
applicable adjusted rate for the normal
grade maximum, the retained rate will
be terminated and the employee’s pay
will be set at an adjusted rate equal to
the retained rate).
Part 752, section 752.401(a)(4):
Adverse actions (only to the extent
necessary to provide that adverse action
provisions do not apply to reductions in
rates of basic pay to offset a locality pay
or special rate supplement increase as a
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result of receiving a rating of record
below Successful).
Note: If any of the provisions of title 5,
Code of Federal Regulations, listed above are
revised during the period this demonstration
project is in effect, U.S. Department of
Education/Federal Student Aid may choose
to terminate the waiver of one or more such
provisions with respect to employees
participating in the project, without formally
modifying the project itself. U.S. Department
of Education/Federal Student Aid must
notify OPM when any such waiver is
terminated.
[FR Doc. E7–24259 Filed 12–13–07; 8:45 am]
BILLING CODE 6325–43–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56929; File No. SR–
NASDAQ–2007–086]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Regarding
Step-Outs and Transfers of Sales Fees
December 7, 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 October
31, 2007, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’) 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
prepared primarily by Nasdaq. Nasdaq
has filed the proposal pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 so that the
proposal was 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 the Substance
of the Proposed Rule Change
Nasdaq proposes to: (i) Offer, for a fee,
a match/compare service for Nasdaq
members to process step-outs between
themselves and (ii) allow the transfer of
Rule 7002 Sales Fees and similar fees of
other self-regulatory organizations
(‘‘SROs’’) without an agreement between
the transferring Nasdaq members when
such transfers are accompanied by a
transfer of the underlying shares.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
2 17
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Federal Register / Vol. 72, No. 240 / Friday, December 14, 2007 / Notices
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.
rmajette on PROD1PC64 with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Nasdaq Rule 7038 enables Nasdaq
members to utilize Nasdaq’s Automated
Confirmation Transaction Service
(‘‘ACT’’) to transfer all or a portion of
the member’s obligation to pay a NASD
Rule 7002 sale fee or similar fee of
another SRO (‘‘sales fees’’).5 In addition,
Nasdaq members may also use ACT to
process step-outs.6
Under the rule change, Nasdaq will
modify Nasdaq Rule 7038(c) to specify
that when members use ACT to transfer
sales fees but do not also transfer the
underlying shares, the clearing firms for
the trades in question must be party to
an agreement authorizing such transfers
between themselves or the firms on
whose behalf they clear trades.7
Nasdaq is also adding new paragraph
(f) to Nasdaq Rule 7038 that will enable
Nasdaq members to use ACT’s ‘‘match/
compare’’ functionality to process stepouts without an agreement between the
transferring Nasdaq members when
such transfers are accompanied by a
5 Nasdaq Rule 7038(a). Rule 7002 fees are
designed to defray the costs that Nasdaq pays to the
Commission under Section 31(b) of the Act. 15
U.S.C. 78ee(b).
6 Nasdaq Rule 7038(b). A ‘‘step-out’’ is a
mechanism for transferring a broker’s position in a
security in a manner that does not constitute a
trade. In one form of a step-out, a party to a
previously executed trade transfers its position in
the trade to one or more other parties. For example,
a broker that buys a large block of stock on behalf
of several broker-dealer customers may ‘‘step-out’’
of the trade in order to transfer and allocate its
position to its broker-dealer customers. Thus, under
this form of a step-out, there is a single trade on
a securities market coupled with an arrangement
between one of the trade counterparties and one or
more additional parties to shift the settlement
obligations for the trade to the additional parties.
In another form of step-out, a broker uses a clearingonly report to transfer its position from at one
clearing broker’s account to another clearing
broker’s account.
7 Examples of such an agreement include a
Nasdaq ‘‘Attachment 2’’ or the Financial Industry
Regulatory Authority’s (‘‘FINRA’’) new Uniform
Trade Reporting Facility Service Bureau/Executing
Broker Agreement.
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transfer of the underlying shares.
Nasdaq will assess a fee for this service
whereby each party to a matched/
compared transfer will be assessed
$0.0144 per 100 shares with a minimum
of 400 shares up to maximum of 7,500
shares except in cases where the same
participant is on both sides of a transfer
in which case the applicable per side fee
will be assessed once rather than twice.
Nasdaq states that it believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act 8
and specifically with Sections 6(b)(4)
and (5) of the Act 9 because the proposal
provides for the equitable allocation of
reasonable dues, fees, and other charges
among members and issuers and other
persons using any facility or system
which Nasdaq operates or controls and
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. Nasdaq believes that
offering match/compare functionality in
connection with step-outs and reducing
paperwork requirements for Sales Fee
transfers benefits its members by
enhancing the efficiency of their posttrade operations and that its proposed
fees are reasonable and comparable to
similar Financial Industry Regulatory
Authority (‘‘FINRA’’) fees for
comparison services.10
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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received from
Members, Participants, or Others
Nasdaq did not solicit or receive
written comments on the proposed rule
change.
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)
8 15
U.S.C. 78f.
U.S.C. 78f(b)(4) and (5).
10 See NASD Rule 7002B.
9 15
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Frm 00066
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Sfmt 4703
71177
of the Act 11 and Rule 19b–4(f)(6)
thereunder12 because it does not: (1)
Significantly affect the protection of
investors or the public interest; (2)
impose any significant burden on
competition; and (3) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate.
Nasdaq has requested that the
Commission waive the 30-day operative
delay pursuant to the Commission’s
authority under Rule 19b–4(f)(6)(iii) 13
to designate a shorter time when such
action is consistent with the protection
of investors and the public interest. The
Commission hereby grants the request.14
The Commission believes that waiving
the 30-day operative delay is consistent
with the protection of investors and the
public interest in light of a FINRA rule,
which became effective two business
days after Nasdaq filed its proposed rule
change that requires all shares that
underlie a step-out transaction have
been previously trade-reported to
FINRA-only facilities.15 In order to
ensure that firms can use the same
method to conduct step-out trades, it is
appropriate for Nasdaq to be able to
implement its match/compare
functionality on an accelerated basis so
that it can be in place for firms that wish
to do step-outs through the match and
compare functionality for shares that
were not exclusively reported over-thecounter before the FINRA restriction
became effective. Moreover, the
Commission notes that the match/
compare functionality has long existed
at Nasdaq and that the modifications
made by this rule change do not raise
any novel legal or policy concerns.
Accordingly, the Commission
designates the proposed rule change to
be operative upon filing with the
Commission.
Rule 19b–4(f)(6)(iii) requires Nasdaq
to notify the Commission of its intent to
file the proposed rule change, along
with a brief description and text of the
proposed rule change, at least five
business days prior to the date of filing
of the proposed rule change or such
shorter time as designated by the
Commission. Nasdaq has requested that
the Commission designate a shorter
11 15
U.S.C. 78s(b)(3)(A).
C.F.R. 240.19b–4(f)(6).
13 17 C.F.R. 240.19b–4(f)(6)(iii).
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).
15 Securities Exchange Act Release No. 55962
(Jun. 26, 2007), 72 FR 36536 (Jul. 3, 2007) [SR–
NASD–2007–040]. See also FINRA Regulatory
Notice 07–38 (Aug. 2007), available online at
https://www.finra.org/web/groups/rules_regs/
documents/notice_to_members/p036643.pdf.
12 17
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Federal Register / Vol. 72, No. 240 / Friday, December 14, 2007 / Notices
notification time. The Commission
hereby waives the five-day notice
period. As explained above, it was
necessary for Nasdaq to file its proposed
rule change expeditiously so as to avoid
any disruption in service to its
members.
At any time within 60 days of the
filing of such 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:
copying at Nasdaq’s principal office and
on Nasdaq’s Web site at https://
nasdaq.complinet.com/nasdaq/display/
display.html?rbid=1705&element_id=4.
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
submission should refer to File No. SR–
NASDAQ–2007–086 and should be
submitted on or before January 4, 2008.
For the Commission by the Division of
Trading and Markets pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–24201 Filed 12–12–07; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
rmajette on PROD1PC64 with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
No. SR–NASDAQ–2007–086 on the
subject line.
[Release No. 34–56932; File No. SR–
NYSEArca–2007–112]
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 No.
NASDAQ–2007–086. 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, 450 Fifth Street, NW.,
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
December 7, 2007
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Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and Order
Granting Accelerated Approval of a
Proposed Rule Change to List and
Trade Shares of the iShares S&P GSCI
Commodity-Indexed Trust
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 December
7, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’
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.
This order provides notice of the
proposed rule change, and approves the
proposed rule change on an accelerated
basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NYSE Arca, through its wholly owned
subsidiary NYSE Arca Equities, Inc.
(‘‘NYSE Arca Equities’’), proposes to list
and trade under NYSE Arca Equities
Rule 8.203 shares (‘‘Shares’’) of the
iShares S&P GSCITM CommodityIndexed Trust (‘‘Trust’’).3 The Trust
16 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 iShares is a registered trademark of Barclays
Global Investors, N.A. ‘‘S&P GSCI’’ is a trademark
of Standard & Poor’s (‘‘S&P’’ or ‘‘Index Sponsor’’),
a division of The McGraw-Hill Companies, Inc.
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issues units of beneficial interest (i.e.,
the Shares) representing fractional
undivided beneficial interests in the net
assets of the Trust. The text of the
proposed rule change is available on the
Exchange’s Web site at https://
www.nyse.com, at the Exchange’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, 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 III below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to list and
trade the Shares under NYSE Arca
Equities Rule 8.203. The objective of the
Trust is for the performance of the
Shares to correspond generally to the
performance of the S&P GSCITM Total
Return Index, before payment of the
Trust’s and the Investing Pool’s (as
described below) expenses and
liabilities (the ‘‘Total Return Index’’).
The Trust is currently listed on the New
York Stock Exchange LLC (‘‘NYSE’’) and
trades on NYSE Arca pursuant to
unlisted trading privileges. Following
Commission approval of this proposed
rule change, the Trust will transfer
listing from NYSE to NYSE Arca,4 and
will not trade on NYSE. The Exchange
represents that the Shares satisfy the
requirements of NYSE Arca Equities
Rule 8.203 and thereby qualify for
listing on the Exchange.
The commodity component of the
Total Return Index is comprised of a
group of commodities included in the
S&P GSCITM Commodity Index (‘‘S&P
GSCITM’’ or ‘‘Index’’), which is a
production-weighted index of the prices
4 See Securities Exchange Act Release No. 54013
(June 16, 2006), 71 FR 36372 (June 26, 2006) (SR–
NYSE–2006–17) (‘‘NYSE Order’’) (approving listing
and trading of the Shares on NYSE); Securities
Exchange Act Release No. 54025 (June 21, 2006), 71
FR 36856 (June 28, 2006) (SR–NYSEArca–2006–12)
(approving, among other things, the trading of the
Shares on NYSE Arca pursuant to unlisted trading
privileges).
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]]>Agencies
[Federal Register Volume 72, Number 240 (Friday, December 14, 2007)]
[Notices]
[Pages 71176-71178]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24201]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56929; File No. SR-NASDAQ-2007-086]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Regarding Step-Outs and Transfers of Sales Fees
December 7, 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 October 31, 2007, The NASDAQ Stock Market LLC (``Nasdaq'') 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 prepared primarily by Nasdaq. Nasdaq has filed the
proposal pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ so that the proposal was 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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes to: (i) Offer, for a fee, a match/compare service
for Nasdaq members to process step-outs between themselves and (ii)
allow the transfer of Rule 7002 Sales Fees and similar fees of other
self-regulatory organizations (``SROs'') without an agreement between
the transferring Nasdaq members when such transfers are accompanied by
a transfer of the underlying shares.
[[Page 71177]]
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
Nasdaq Rule 7038 enables Nasdaq members to utilize Nasdaq's
Automated Confirmation Transaction Service (``ACT'') to transfer all or
a portion of the member's obligation to pay a NASD Rule 7002 sale fee
or similar fee of another SRO (``sales fees'').\5\ In addition, Nasdaq
members may also use ACT to process step-outs.\6\
---------------------------------------------------------------------------
\5\ Nasdaq Rule 7038(a). Rule 7002 fees are designed to defray
the costs that Nasdaq pays to the Commission under Section 31(b) of
the Act. 15 U.S.C. 78ee(b).
\6\ Nasdaq Rule 7038(b). A ``step-out'' is a mechanism for
transferring a broker's position in a security in a manner that does
not constitute a trade. In one form of a step-out, a party to a
previously executed trade transfers its position in the trade to one
or more other parties. For example, a broker that buys a large block
of stock on behalf of several broker-dealer customers may ``step-
out'' of the trade in order to transfer and allocate its position to
its broker-dealer customers. Thus, under this form of a step-out,
there is a single trade on a securities market coupled with an
arrangement between one of the trade counterparties and one or more
additional parties to shift the settlement obligations for the trade
to the additional parties. In another form of step-out, a broker
uses a clearing-only report to transfer its position from at one
clearing broker's account to another clearing broker's account.
---------------------------------------------------------------------------
Under the rule change, Nasdaq will modify Nasdaq Rule 7038(c) to
specify that when members use ACT to transfer sales fees but do not
also transfer the underlying shares, the clearing firms for the trades
in question must be party to an agreement authorizing such transfers
between themselves or the firms on whose behalf they clear trades.\7\
---------------------------------------------------------------------------
\7\ Examples of such an agreement include a Nasdaq ``Attachment
2'' or the Financial Industry Regulatory Authority's (``FINRA'') new
Uniform Trade Reporting Facility Service Bureau/Executing Broker
Agreement.
---------------------------------------------------------------------------
Nasdaq is also adding new paragraph (f) to Nasdaq Rule 7038 that
will enable Nasdaq members to use ACT's ``match/compare'' functionality
to process step-outs without an agreement between the transferring
Nasdaq members when such transfers are accompanied by a transfer of the
underlying shares. Nasdaq will assess a fee for this service whereby
each party to a matched/compared transfer will be assessed $0.0144 per
100 shares with a minimum of 400 shares up to maximum of 7,500 shares
except in cases where the same participant is on both sides of a
transfer in which case the applicable per side fee will be assessed
once rather than twice.
Nasdaq states that it believes that the proposed rule change is
consistent with the provisions of Section 6 of the Act \8\ and
specifically with Sections 6(b)(4) and (5) of the Act \9\ because the
proposal provides for the equitable allocation of reasonable dues,
fees, and other charges among members and issuers and other persons
using any facility or system which Nasdaq operates or controls and 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. Nasdaq
believes that offering match/compare functionality in connection with
step-outs and reducing paperwork requirements for Sales Fee transfers
benefits its members by enhancing the efficiency of their post-trade
operations and that its proposed fees are reasonable and comparable to
similar Financial Industry Regulatory Authority (``FINRA'') fees for
comparison services.\10\
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4) and (5).
\10\ See NASD Rule 7002B.
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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.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
Nasdaq did not solicit or receive written comments on the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder\12\ because
it does not: (1) Significantly affect the protection of investors or
the public interest; (2) impose any significant burden on competition;
and (3) become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 C.F.R. 240.19b-4(f)(6).
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Nasdaq has requested that the Commission waive the 30-day operative
delay pursuant to the Commission's authority under Rule 19b-
4(f)(6)(iii) \13\ to designate a shorter time when such action is
consistent with the protection of investors and the public interest.
The Commission hereby grants the request.\14\ The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest in light of a FINRA
rule, which became effective two business days after Nasdaq filed its
proposed rule change that requires all shares that underlie a step-out
transaction have been previously trade-reported to FINRA-only
facilities.\15\ In order to ensure that firms can use the same method
to conduct step-out trades, it is appropriate for Nasdaq to be able to
implement its match/compare functionality on an accelerated basis so
that it can be in place for firms that wish to do step-outs through the
match and compare functionality for shares that were not exclusively
reported over-the-counter before the FINRA restriction became
effective. Moreover, the Commission notes that the match/compare
functionality has long existed at Nasdaq and that the modifications
made by this rule change do not raise any novel legal or policy
concerns. Accordingly, the Commission designates the proposed rule
change to be operative upon filing with the Commission.
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\13\ 17 C.F.R. 240.19b-4(f)(6)(iii).
\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).
\15\ Securities Exchange Act Release No. 55962 (Jun. 26, 2007),
72 FR 36536 (Jul. 3, 2007) [SR-NASD-2007-040]. See also FINRA
Regulatory Notice 07-38 (Aug. 2007), available online at https://
www.finra.org/web/groups/rules_regs/documents/notice_to_members/
p036643.pdf.
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Rule 19b-4(f)(6)(iii) requires Nasdaq to notify the Commission of
its intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule change
or such shorter time as designated by the Commission. Nasdaq has
requested that the Commission designate a shorter
[[Page 71178]]
notification time. The Commission hereby waives the five-day notice
period. As explained above, it was necessary for Nasdaq to file its
proposed rule change expeditiously so as to avoid any disruption in
service to its members.
At any time within 60 days of the filing of such 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 No. SR-NASDAQ-2007-086 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 No. NASDAQ-2007-086. 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, 450 Fifth Street, NW.,
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 Nasdaq's principal office and on Nasdaq's Web
site at https://nasdaq.complinet.com/nasdaq/display/
display.html?rbid=1705&element_id=4. 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 submission
should refer to File No. SR-NASDAQ-2007-086 and should be submitted on
or before January 4, 2008.
For the Commission by the Division of Trading and Markets
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24201 Filed 12-12-07; 8:45 am]
BILLING CODE 8011-01-P
