Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Recipients of Certain Risk Disclosures, 5248-5249 [E8-1463]

Download as PDF 5248 Federal Register / Vol. 73, No. 19 / Tuesday, January 29, 2008 / Notices Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION 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–ISE–2008–07 on the subject line. [Release No. 34–57175; File No. SR– NASDAQ–2008–006) Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify the Recipients of Certain Risk Disclosures January 18, 2008. Paper Comments Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 17, 2007, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) filed with the Securities All submissions should refer to File and Exchange Commission Number SR–ISE–2008–07. This file (‘‘Commission’’) the proposed rule number should be included on the change as described in Items I and II subject line if e-mail is used. To help the below, which Items have been prepared Commission process and review your substantially by Nasdaq. Nasdaq filed comments more efficiently, please use the proposed rule change as a ‘‘nononly one method. The Commission will controversial’’ proposed rule change post all comments on the Commission’s pursuant to Section 19(b)(3)(A) of the Internet Web site (https://www.sec.gov/ Act 3 and Rule 19b–4(f)(6) thereunder,4 rules/sro.shtml). Copies of the which renders it effective upon filing submission, all subsequent with the Commission. The Commission amendments, all written statements is publishing this notice to solicit with respect to the proposed rule comments on the proposed rule change change that are filed with the from interested persons. Commission, and all written I. Self-Regulatory Organization’s communications relating to the Statement of the Terms of Substance of proposed rule change between the Commission and any person, other than the Proposed Rule Change those that may be withheld from the Nasdaq proposes to amend Rule 4631 public in accordance with the to clarify to whom members must provisions of 5 U.S.C. 552, will be provide disclosures pursuant to the available for inspection and copying in Rule. Nasdaq proposes to implement the the Commission’s Public Reference proposed rule change immediately. Room, 100 F Street, NE., Washington, The text of the proposed rule change DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. is available at https:// nasdaq.complinet.com, the principal Copies of such filing also will be office of Nasdaq, and the Commission’s available for inspection and copying at Public Reference Room. the principal office of the ISE. All comments received will be posted II. Self-Regulatory Organization’s without change; the Commission does Statement of the Purpose of, and not edit personal identifying Statutory Basis for, the Proposed Rule information from submissions. You Change should submit only information that you wish to make available publicly. All In its filing with the Commission, submissions should refer to File Nasdaq included statements concerning Number SR–ISE–2008–07 and should be the purpose of and basis for the submitted on or before February 19, proposed rule change. The text of these 2008. statements may be examined at the places specified in Item IV below. For the Commission, by the Division of Nasdaq has prepared summaries, set Trading and Markets, pursuant to delegated forth in Sections A, B, and C below, of authority.18 the most significant aspects of such Florence E. Harmon, statements. sroberts on PROD1PC70 with NOTICES • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. Deputy Secretary. [FR Doc. E8–1482 Filed 1–28–08; 8:45 am] BILLING CODE 8011–01–P 18 17 22:52 Jan 28, 2008 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 1 15 Jkt 214001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Nasdaq proposes to amend Rule 4631, which covers the disclosures required of members when accepting certain orders for trades outside the regular market session, to clarify to whom members must provide these disclosures. Rule 4631 requires members to provide certain risk disclosures to non-members prior to accepting orders for the pre- or post-market sessions. The term ‘‘nonmember’’ may be interpreted to include a broker-dealer who is not a member of Nasdaq. In the approval order for the Rule,5 however, the discussion of Nasdaq’s purpose for Rule 4631 is framed in terms of disclosures to ‘‘nonmember customers.’’ Nasdaq Rule 0120(g) defines the term ‘‘customer’’ to exclude a broker or dealer.6 The differing terminology used in the Rule and in the approval order has caused some confusion among members. Nasdaq notes that, as currently written, Rule 4631 could be interpreted to require members to make the risk disclosures to non-member brokerdealers, but not to member brokerdealers. Nasdaq believes that such a technical distinction is not meaningful nor was it Nasdaq’s intention to make such a distinction when proposing the Rule. By clarifying that the Rule applies to members’ disclosures to customers, as defined by Rule 0120(g), Nasdaq would avoid further member confusion surrounding the reading of the Rule and its associated approval order, while remaining consistent with the rule’s intent. Accordingly, Nasdaq believes it is necessary to amend Rule 4631 to make clear that the disclosures required by the Rule apply to members when accepting orders from customers, not ‘‘non-members.’’ 2. Statutory Basis The proposed rule change is consistent with the provisions of Section 6 of the Act,7 in general, and with Sections 6(b)(1) and (b)(5) of the Act,8 in particular, in that the proposal enables Nasdaq to be so organized as to have the capacity to be able to carry out the purposes of the Act and to comply with and enforce compliance by 5 Securities Exchange Act Release No. 56985 (December 18, 2007), 72 FR 73388 (December 27, 2007) (SR–NASDAQ–2007–098). 6 Rule 0120(g) states: The term ‘‘customer’’ shall not include a broker or dealer. 7 15 U.S.C. 78f. 8 15 U.S.C. 78f(b)(1) and (b)(5). E:\FR\FM\29JAN1.SGM 29JAN1 Federal Register / Vol. 73, No. 19 / Tuesday, January 29, 2008 / Notices members and persons associated with members with provisions of the Act, the rules and regulations thereunder, and self-regulatory organization rules, 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 the clarification of Rule 4631 is needed to avoid further confusion surrounding its applicability. Currently, members may be interpreting the Rule inconsistently, thus providing disclosures to parties that were not contemplated as requiring the protections of the Rule. Nasdaq believes that the proposed amendment will ensure that members are aware of their obligations under the rule and thus foster consistent member compliance. B. Self-Regulatory Organization’s Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will impose 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. 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 9 and Rule 19b– 4(f)(6) thereunder.10 Nasdaq has requested that the Commission waive the 30-day preoperative period. The Commission sroberts on PROD1PC70 with NOTICES 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. The Commission has determined to waive the five-day pre-filing period in this case. 10 17 VerDate Aug<31>2005 22:52 Jan 28, 2008 Jkt 214001 believes that conforming the language of the Rule to Nasdaq’s intent in establishing it is consistent with the protection of investors and the public interest. The Rule was designed to ensure that customers receive appropriate disclosures of the risks of trading outside of regular trading hours, not non-member broker-dealers. The Commission hereby grants Nasdaq’s request and designates the proposal as operative upon filing.11 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 No. SR–NASDAQ–2008–006 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–2008–006. 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 11 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 5249 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, 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–2008–006 and should be submitted on or before February 19, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–1463 Filed 1–28–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57183; File No. SR– NASDAQ–2008–007] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay Implementation of Certain Fee Changes January 22, 2008. 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 January 17, 2008, 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 substantially by Nasdaq. Nasdaq has designated this proposal as constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule under Section 19(b)(3)(A)(i) of the Act 3 and Rule 19b–4(f)(1) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to 12 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)(i). 4 17 CFR 240.19b–4(f)(1). 1 15 E:\FR\FM\29JAN1.SGM 29JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 19 (Tuesday, January 29, 2008)]
[Notices]
[Pages 5248-5249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1463]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57175; File No. SR-NASDAQ-2008-006)


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Clarify the Recipients of Certain Risk Disclosures

January 18, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 17, 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 prepared substantially by Nasdaq. Nasdaq filed the proposed 
rule change as a ``non-controversial'' proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders it effective 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to amend Rule 4631 to clarify to whom members must 
provide disclosures pursuant to the Rule. Nasdaq proposes to implement 
the proposed rule change immediately.
    The text of the proposed rule change is available at https://
nasdaq.complinet.com, the principal office of Nasdaq, and the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. 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
    Nasdaq proposes to amend Rule 4631, which covers the disclosures 
required of members when accepting certain orders for trades outside 
the regular market session, to clarify to whom members must provide 
these disclosures. Rule 4631 requires members to provide certain risk 
disclosures to non-members prior to accepting orders for the pre- or 
post-market sessions. The term ``non-member'' may be interpreted to 
include a broker-dealer who is not a member of Nasdaq. In the approval 
order for the Rule,\5\ however, the discussion of Nasdaq's purpose for 
Rule 4631 is framed in terms of disclosures to ``non-member 
customers.'' Nasdaq Rule 0120(g) defines the term ``customer'' to 
exclude a broker or dealer.\6\ The differing terminology used in the 
Rule and in the approval order has caused some confusion among members.
---------------------------------------------------------------------------

    \5\ Securities Exchange Act Release No. 56985 (December 18, 
2007), 72 FR 73388 (December 27, 2007) (SR-NASDAQ-2007-098).
    \6\ Rule 0120(g) states: The term ``customer'' shall not include 
a broker or dealer.
---------------------------------------------------------------------------

    Nasdaq notes that, as currently written, Rule 4631 could be 
interpreted to require members to make the risk disclosures to non-
member broker-dealers, but not to member broker-dealers. Nasdaq 
believes that such a technical distinction is not meaningful nor was it 
Nasdaq's intention to make such a distinction when proposing the Rule. 
By clarifying that the Rule applies to members' disclosures to 
customers, as defined by Rule 0120(g), Nasdaq would avoid further 
member confusion surrounding the reading of the Rule and its associated 
approval order, while remaining consistent with the rule's intent.
    Accordingly, Nasdaq believes it is necessary to amend Rule 4631 to 
make clear that the disclosures required by the Rule apply to members 
when accepting orders from customers, not ``non-members.''
2. Statutory Basis
    The proposed rule change is consistent with the provisions of 
Section 6 of the Act,\7\ in general, and with Sections 6(b)(1) and 
(b)(5) of the Act,\8\ in particular, in that the proposal enables 
Nasdaq to be so organized as to have the capacity to be able to carry 
out the purposes of the Act and to comply with and enforce compliance 
by

[[Page 5249]]

members and persons associated with members with provisions of the Act, 
the rules and regulations thereunder, and self-regulatory organization 
rules, 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 the clarification of Rule 4631 is needed to avoid 
further confusion surrounding its applicability. Currently, members may 
be interpreting the Rule inconsistently, thus providing disclosures to 
parties that were not contemplated as requiring the protections of the 
Rule. Nasdaq believes that the proposed amendment will ensure that 
members are aware of their obligations under the rule and thus foster 
consistent member compliance.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(1) and (b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change will impose 
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. 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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
The Commission has determined to waive the five-day pre-filing 
period in this case.
---------------------------------------------------------------------------

    Nasdaq has requested that the Commission waive the 30-day pre-
operative period. The Commission believes that conforming the language 
of the Rule to Nasdaq's intent in establishing it is consistent with 
the protection of investors and the public interest. The Rule was 
designed to ensure that customers receive appropriate disclosures of 
the risks of trading outside of regular trading hours, not non-member 
broker-dealers. The Commission hereby grants Nasdaq's request and 
designates the proposal as operative upon filing.\11\
---------------------------------------------------------------------------

    \11\ For purposes only of waiving the 30-day operative delay of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 No. SR-NASDAQ-2008-006 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-2008-006. 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, 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-2008-006 and should be submitted on or before 
February 19, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-1463 Filed 1-28-08; 8:45 am]
BILLING CODE 8011-01-P

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