Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change Related to Supplemental Market Participant Identifiers, 13596-13597 [E8-4984]

Download as PDF 13596 Federal Register / Vol. 73, No. 50 / Thursday, March 13, 2008 / Notices date of the Listing Council’s decision in the matter. As a result, while the maximum cumulative exception these bodies can grant under these provisions is 360 days from the date of the Staff Determination, Nasdaq notes in its filing that the actual amount of time can vary from issuer to issuer based on how quickly the issuer is scheduled for a hearing and the speed with which the Panel and Listing Council decisions are prepared. The Exchange believes that this variability may create uncertainty for Nasdaq-listed companies and their investors regarding the maximum amount of time available under an exception. Nasdaq therefore proposes to modify the computation of the maximum Exception Period permitted under Rule 4802(b). The proposed rule change would not, however, increase the maximum time available under the process. The Exchange proposes that the maximum Exception Period that a Panel could provide would be 180 days from the date of the Staff Determination, and the maximum Exception Period that the Listing Council could provide would be 360 days from the date of the Staff Determination. As under the current rules, these adjudicatory bodies would continue to be able to grant an issuer a shorter Exception Period, or no Exception Period at all, based on their analysis of the applicable facts and circumstances. III. Discussion mstockstill on PROD1PC66 with NOTICES 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 and, in particular, with Section 6(b)(5) of the Act,4 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.5 The Commission also finds that the proposal is consistent with Section 6(b)(7) of the Act,6 in that it provides a fair procedure for the prohibition or limitation by the Exchange of any person with respect to 4 15 U.S.C. 78f(b)(5). 5 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). 6 15 U.S.C. 78f(b)(7). VerDate Aug<31>2005 16:19 Mar 12, 2008 Jkt 214001 access to services offered by the Exchange. The Commission believes that it is essential for a national securities exchange to have an efficient and fair delisting process for issuers that are not in compliance with Exchange rules and/ or the Act. The Commission believes that the proposed rule change has the effect of providing for a maximum Exception Period that is consistent for all issuers and not dependent on the timing of the adjudicatory decision, while at the same time does not extend the overall maximum time allotted for a non-compliant issuer to go through the Nasdaq’s current delisting process. Specifically, under the proposal, rather than being dependent on variable events, such as how quickly an issuer is scheduled for a hearing and how promptly the Panel and Listing Counsel issue their decisions, the maximum allowable Exception Period will, in all cases, be based on the date of the Staff Determination. The Commission recognizes that certain individual issuers that have already gone through the Exchange delisting process might have been granted a longer Exception Period had they gone through the process under the proposed new rules. Nevertheless, the Commission emphasizes that the proposed rules do not in any way increase the maximum time that could potentially be available to issuers under Nasdaq’s existing delisting process. Further, the Commission believes the proposed rule change should help to ensure fair application of the rule to all issuers, consistent with Section 6(b)(7) of the Act,7 and should eliminate some uncertainty for issuers regarding the maximum time that may be available under an Exception Period. Finally, the Commission notes that the new rules provide that the Panel and Listing Counsel can allow an Exception Period not to exceed 180 days or 360 days from the Staff Determination, respectively. Thus, there may still be variation in the Exception Periods that are granted to issuers, because the Panel and Listing Counsel retain the authority to grant an issuer a shorter Exception Period than the maximum allowable period or no Exception Period at all. In this regard, the Commission expects the Panel and Listing Counsel to only grant an Exception Period to those issuers who are likely to regain compliance within the time frame allotted and notes that there is no particular right under Nasdaq rules for issuers to be allotted any particular Exception Period. The Commission expects Nasdaq to continue 7 15 PO 00000 U.S.C. 78f(b)(7). Frm 00073 Fmt 4703 Sfmt 4703 to delist issuers, who are not meeting Nasdaq continued listing standards, or complying with Nasdaq rules and/or the Act, in a prompt, efficient and fair manner in furtherance of Sections 6(b)(5) and 6(b)(7) of the Act.8 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,9 that the proposed rule change (SR–NASDAQ– 2007–096) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–4966 Filed 3–12–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57452; File No. SR– NASDAQ–2008–004] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change Related to Supplemental Market Participant Identifiers March 7, 2008. I. Introduction On January 9, 2008, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to make permanent the pilot program that allows market makers and Electronic Communication Networks (‘‘ECNs’’) to obtain supplemental market participant identifiers (‘‘MPIDs’’). In addition, Nasdaq proposes to remove any restrictions on the number of MPIDs a market participant may request for displaying attributable quotes or orders. The proposed rule change was published for comment in the Federal Register on February 1, 2008.3 The Commission received no comments on the proposed rule change. This order approves the proposed rule change. II. Description of Proposal Nasdaq proposes to make permanent the pilot program incorporated in 8 15 U.S.C. 78f(b)(5), 78f(b)(7). U.S.C. 78s(b)(2). 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57212 (January 28, 2008), 73 FR 6229 (‘‘Notice’’). 9 15 E:\FR\FM\13MRN1.SGM 13MRN1 Federal Register / Vol. 73, No. 50 / Thursday, March 13, 2008 / Notices Nasdaq Rule 4613(a)(2) that allows market makers and ECNs to obtain supplemental MPIDs. The rule has operated as a temporary pilot since it was first adopted in June 2003 and since that time, Nasdaq continued to apply the procedures set forth in the rule and the related interpretive material.4 In accordance with the pilot program, market makers and ECNs can be issued a maximum of nine supplemental MPIDs. Nasdaq proposes to remove the current restriction that limits the number of supplemental MPIDs that market makers and ECNs can request for displaying attributable quotes or orders. In addition, Nasdaq proposes to remove IM–4613, which sets forth the procedures for allocating supplemental MPIDs. Nasdaq’s proposal will prohibit market makers and ECNs from using a supplemental MPID to violate Exchange or Commission rules.5 If it is determined that a supplemental MPID is being used improperly, Nasdaq will withdraw its grant of the supplemental MPID for all purposes for all securities. In addition, if a market maker or ECN fails to fulfill the conditions appurtenant to its primary MPID (e.g., by being placed into an unexcused withdrawal), it will not be permitted to use any supplemental MPID for any purpose in that security. III. Discussion and Commission Findings The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange.6 In particular, the Commission believes that the proposed rule change is consistent with Section 6(b)(5) of the Act,7 in that it is designed 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 mstockstill on PROD1PC66 with NOTICES 4 See Securities Exchange Act Release No. 47954 (May 30, 2003), 68 FR 34017 (June 6, 2003). See also IM–4613—Procedures for Allocation of Second Displayable MPIDs. According to Nasdaq, the pilot inadvertently was permitted to lapse on November 30, 2006. 5 Members will be prohibited from using a supplemental MPID to avoid their Manning obligations under IM–2110–2, best execution obligations under Nasdaq Rule 2320, or their obligations under the Commission’s Order Handling Rules. Members will be required to continue to comply with the firm quote rule, the OATS rules, and the Commission’s order routing and execution quality disclosure rules. See Notice, supra note 3, at 6229–30. 6 In approving this rule, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 7 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 16:19 Mar 12, 2008 Jkt 214001 system, and, in general, to protect investors and the public interest. The Commission believes that the proposal to make permanent the pilot program that allows market makers and ECNs to obtain supplemental MPIDs is consistent with the Act. The proposal should provide market participants with flexibility to organize diverse order flows from customers and to route orders from different trading desks and units within their organizations. The Exchange also proposes to remove any restrictions on the number of MPIDs a market participant may request for displaying attributable quotes or orders. According to Nasdaq, this restriction was adopted due to technological limitations. The Exchange has represented that this technological limitation no longer exists.8 In addition, Nasdaq proposes to remove IM–4613, which sets forth the procedures for allocating supplemental MPIDs. This method of allocating supplemental MPIDs was necessary due to the limited number of available MPIDs. The removal of Nasdaq’s technological limitation on the number of MPIDs for a given security makes the procedures unnecessary. The Commission notes that Nasdaq represents that a supplemental MPID would be withdrawn for all purposes and for all securities if it were to be determined that such supplemental MPID was being used improperly.9 In addition, Nasdaq represents that a market maker or ECN will be prohibited from using any supplemental MPID for any purpose in a security, if it fails to fulfill the conditions appurtenant to its primary MPID for such security.10 In the Commission’s view, these procedures should ensure that market makers and ECNs utilize MPIDs in accordance with Exchange rules. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–NASDAQ– 2008–004) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–4984 Filed 3–12–08; 8:45 am] BILLING CODE 8011–01–P 8 See 9 See Notice, supra note 3, at 6229. Notice, supra note 3, at 6230. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57448; File No. SR–NSX– 2008–05] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Consolidating into a Single Rule Certain Requirements for Products Traded on the Exchange Pursuant to Unlisted Trading Privileges March 6, 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 March 6, 2008, the National Stock Exchange, Inc. (‘‘Exchange’’ or ‘‘NSX’’) 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. On March 6, 2008, the Exchange filed Amendment No. 1 to the proposed rule change. This order provides notice of the proposed rule change, as amended, and approves the proposal on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules to consolidate into a single rule certain requirements for products traded on the Exchange pursuant to unlisted trading privileges (‘‘UTP’’) that have been established in various new products proposals previously approved by the Commission. The text of the proposed rule change is available at the Exchange’s principal office, on the Exchange’s Web site (https:// www.nsx.com) 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 10 Id. 11 15 12 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00074 Fmt 4703 Sfmt 4703 13597 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\13MRN1.SGM 13MRN1

Agencies

[Federal Register Volume 73, Number 50 (Thursday, March 13, 2008)]
[Notices]
[Pages 13596-13597]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-4984]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57452; File No. SR-NASDAQ-2008-004]


 Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Order Granting Approval of Proposed Rule Change Related to Supplemental 
Market Participant Identifiers

March 7, 2008.

I. Introduction

    On January 9, 2008, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to make permanent the pilot program that allows 
market makers and Electronic Communication Networks (``ECNs'') to 
obtain supplemental market participant identifiers (``MPIDs''). In 
addition, Nasdaq proposes to remove any restrictions on the number of 
MPIDs a market participant may request for displaying attributable 
quotes or orders. The proposed rule change was published for comment in 
the Federal Register on February 1, 2008.\3\ The Commission received no 
comments on the proposed rule change. This order approves the proposed 
rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57212 (January 28, 
2008), 73 FR 6229 (``Notice'').
---------------------------------------------------------------------------

II. Description of Proposal

    Nasdaq proposes to make permanent the pilot program incorporated in

[[Page 13597]]

Nasdaq Rule 4613(a)(2) that allows market makers and ECNs to obtain 
supplemental MPIDs. The rule has operated as a temporary pilot since it 
was first adopted in June 2003 and since that time, Nasdaq continued to 
apply the procedures set forth in the rule and the related interpretive 
material.\4\ In accordance with the pilot program, market makers and 
ECNs can be issued a maximum of nine supplemental MPIDs. Nasdaq 
proposes to remove the current restriction that limits the number of 
supplemental MPIDs that market makers and ECNs can request for 
displaying attributable quotes or orders. In addition, Nasdaq proposes 
to remove IM-4613, which sets forth the procedures for allocating 
supplemental MPIDs.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 47954 (May 30, 
2003), 68 FR 34017 (June 6, 2003). See also IM-4613--Procedures for 
Allocation of Second Displayable MPIDs. According to Nasdaq, the 
pilot inadvertently was permitted to lapse on November 30, 2006.
---------------------------------------------------------------------------

    Nasdaq's proposal will prohibit market makers and ECNs from using a 
supplemental MPID to violate Exchange or Commission rules.\5\ If it is 
determined that a supplemental MPID is being used improperly, Nasdaq 
will withdraw its grant of the supplemental MPID for all purposes for 
all securities. In addition, if a market maker or ECN fails to fulfill 
the conditions appurtenant to its primary MPID (e.g., by being placed 
into an unexcused withdrawal), it will not be permitted to use any 
supplemental MPID for any purpose in that security.
---------------------------------------------------------------------------

    \5\ Members will be prohibited from using a supplemental MPID to 
avoid their Manning obligations under IM-2110-2, best execution 
obligations under Nasdaq Rule 2320, or their obligations under the 
Commission's Order Handling Rules. Members will be required to 
continue to comply with the firm quote rule, the OATS rules, and the 
Commission's order routing and execution quality disclosure rules. 
See Notice, supra note 3, at 6229-30.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange.\6\ In 
particular, the Commission believes that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\7\ in that it is designed 
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.
---------------------------------------------------------------------------

    \6\ In approving this rule, the Commission notes that it has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission believes that the proposal to make permanent the 
pilot program that allows market makers and ECNs to obtain supplemental 
MPIDs is consistent with the Act. The proposal should provide market 
participants with flexibility to organize diverse order flows from 
customers and to route orders from different trading desks and units 
within their organizations.
    The Exchange also proposes to remove any restrictions on the number 
of MPIDs a market participant may request for displaying attributable 
quotes or orders. According to Nasdaq, this restriction was adopted due 
to technological limitations. The Exchange has represented that this 
technological limitation no longer exists.\8\ In addition, Nasdaq 
proposes to remove IM-4613, which sets forth the procedures for 
allocating supplemental MPIDs. This method of allocating supplemental 
MPIDs was necessary due to the limited number of available MPIDs. The 
removal of Nasdaq's technological limitation on the number of MPIDs for 
a given security makes the procedures unnecessary.
---------------------------------------------------------------------------

    \8\ See Notice, supra note 3, at 6229.
---------------------------------------------------------------------------

    The Commission notes that Nasdaq represents that a supplemental 
MPID would be withdrawn for all purposes and for all securities if it 
were to be determined that such supplemental MPID was being used 
improperly.\9\ In addition, Nasdaq represents that a market maker or 
ECN will be prohibited from using any supplemental MPID for any purpose 
in a security, if it fails to fulfill the conditions appurtenant to its 
primary MPID for such security.\10\ In the Commission's view, these 
procedures should ensure that market makers and ECNs utilize MPIDs in 
accordance with Exchange rules.
---------------------------------------------------------------------------

    \9\ See Notice, supra note 3, at 6230.
    \10\ Id.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NASDAQ-2008-004) be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).

    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. E8-4984 Filed 3-12-08; 8:45 am]
BILLING CODE 8011-01-P
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