Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Approving a Proposed Rule Change To Establish a PORTAL Reference Database and Related Fees, 66090-66091 [E8-26445]

Download as PDF 66090 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices longer available to regulators or the investing public. Under Rule 2130, FINRA must be named as a party when a respondent is seeking confirmation from a court of an expungement award. FINRA can waive its right to be named as a party in the court confirmation process, if it makes an affirmative determination consistent with Rule 2130.50 The Commission believes that FINRA should use its authority to review expungement requests to ensure that expungement is an extraordinary remedy.51 With respect to the issue of whether an associated person or member will be able to use the arbitrators’ written findings on expungement as collateral estoppel in a subsequent legal proceeding against the customer, FINRA believes that the high evidentiary standard that applies in such cases, and the fact that most customers are represented by legal counsel, should address this issue. The Commission believes that this is a reasonable assessment and conclusion regarding this potential situation. As discussed, the Commission believes that having accurate and complete information in the CRD is vital; information that has regulatory value or that could assist investors in protecting themselves should not be removed from CRD.52 Because of the central role that arbitrators have in the expungement process, the Commission believes that it is critical for arbitrators to be well-informed regarding FINRA’s rules governing expungement. FINRA stated that this proposal is part of its ‘‘continuing effort to ensure that arbitrators evaluate fully each request sroberts on PROD1PC70 with NOTICES 50 Rule 2130(b)(2), however, does allow for exceptions under extraordinary circumstances. 51 FINRA also provides the states with all requests for expungement and petitions so that the states have an opportunity to review them and/or participate in the hearing. The ability for FINRA and the states to participate in the expungement process is critical so that information that should remain in CRD is not expunged. The Commission expects that all regulators will take these responsibilities seriously and work cooperatively as the new rule is implemented, and thereafter. See, e.g., UBS Financial Services, Inc. v. Gibson, 851 N.Y.S.2d 75 (N.Y. Sup. Ct.)(consolidated with Johnson v. Summit Equities, Inc., 238 N.Y.L.J. 109 (Nov. 15, 2007)); Zaferiou v. Holgado, Index No. 102996/07 (N.Y. Sup. Ct. April 14, 2008); Matter of Kay v. Abrams, 853 N.Y.S.2d 862 (N.Y. Sup. Ct. Feb. 21, 2008); and Karsner v. Lothian, 532 F.3d 876 (D.C. Cir. July 15, 2008). 52 FINRA routinely advises investors to check CRD before they decide to do business with a firm or a broker. See e.g., https://www.finra.org/Investors/ SmartInvesting/GettingStarted/ SelectingInvestmentProfessional/index.htm; https:// www.finra.org/Investors/ProtectYourself/ InvestorAlerts/FraudsAndScams/P01492; and https://www.finra.org/Investors/ProtectYourself/ BeforeYouInvest/AvoidProblemswithYourBroker/ index.htm. VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 for expungement.’’ 53 The Commission believes that the training and education FINRA provides in conjunction with the proposed rule change will be critical to the implementation and proper application of the rules. Proper training of arbitrators should help make expungement the extraordinary remedy that it was meant to be and should convey to the arbitrators the importance of their role in maintaining the integrity of the CRD. FINRA noted that it has requested comment on amendments to address the issue of complaints that do not name a registered representative as a party. FINRA stated that it expects to file these changes with the Commission shortly.54 The Commission does not believe that it would be in the interest of investors to delay approval of the instant proposal while that rule change is being considered by FINRA; however given the interrelationship of the issues, the Commission urges FINRA to submit this filing as soon as possible so that this information will be recorded in CRD. In conclusion, the Commission believes that the proposed rule is consistent with the Act and will help assure that accurate information will remain in CRD and inaccurate information will be expunged. Given the importance of CRD for regulators and to customers who want to get information about registered persons or member firms before they do business with them, the Commission urges FINRA in its regulatory role to monitor how this rule is applied by arbitrators to assure that it is achieving its goals, and to propose additional changes, if needed. V. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to FINRA, and, in particular, with Section 15A(b)(6) of the Act.55 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,56 that the proposed rule change (SR–FINRA– 2008–010) is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.57 Florence E. Harmon, Acting Secretary. [FR Doc. E8–26442 Filed 11–5–08; 8:45 am] Second Response. 54 Id. 55 Id. 56 15 57 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00081 Fmt 4703 [Release No. 34–58891; File No. SR– NASDAQ–2008–072)] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Approving a Proposed Rule Change To Establish a PORTAL Reference Database and Related Fees October 30, 2008. I. Introduction On September 16, 2008, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’), filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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 establish a PORTAL Reference Database and related fees. The proposed rule change was published for comment in the Federal Register on September 30, 2008.3 The Commission received no comments on the proposal. This order approves the proposed rule change. II. Description of the Proposal Nasdaq has created, and has proposed to make publicly available, for a fee, a consolidated fully-electronic reference database of information culled from PORTAL offering documents and applications submitted to Nasdaq since 1990.4 Nasdaq has represented that access to the database would available to all market participants. The database would allow users to determine a PORTAL issue’s name and offering description, CUSIP, country of incorporation, security class, maturity class and date, currency denomination, applicable interest and credit rating, convertibility and call provisions, total number of shares offered, and date of PORTAL designation, in addition to other information. On an ongoing basis, data regarding securities that obtain PORTAL designation would be added to the database. Nasdaq has proposed that users of the PORTAL Reference Database would pay both an annual fee and an access fee per year of data desired. Annual fees would range between $20,000 and $100,000 and would be based on the number of users and are per calendar year. Access 1 15 U.S.C. 78s(b)(l). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 58622 (September 23, 2008), 73 FR 56876 (September 30, 2008)(the ‘‘Notice’’). 4 For more information related to the background of the PORTAL Market, see Securities Exchange Act Release No. 55669 (April 25, 2007), 72 FR 23874 (May 1, 2007). 2 17 BILLING CODE 8011–01–P 53 See SECURITIES AND EXCHANGE COMMISSION Sfmt 4703 E:\FR\FM\06NON1.SGM 06NON1 Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Notices fees, which also range from $20,000 to $100,000, would be tiered based on the number of users authorized for access and the number of the years for which data is requested. The total cost of access to the full database would be capped based on the number of users at a particular firm. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Acting Secretary. [FR Doc. E8–26445 Filed 11–5–08; 8:45 am] III. Discussion and Commission Findings SECURITIES AND EXCHANGE COMMISSION The Commission has carefully reviewed the proposed rule change and finds that it is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,6 which requires that an exchange have an equitable allocation of reasonable dues, fees and other charges among its members and other persons using any facility or system which the exchange operates or controls. Nasdaq represented that it incurred hardware and software costs, as well as personnel and other technology costs, to establish the PORTAL Reference Database. Establishing the database required the retrieval, review, conversion, and organization of large volumes of documents. Nasdaq stated that there will be ongoing costs to maintain and update the database, as well. The Commission notes that the pricing structure should allow users to align and control the costs of access with their data needs, and that the information will be available to any participant that pays the fees. The Commission believes that the PORTAL Reference Database will make historical information about issuances of restricted equity and debt more available, which should assist market participants to make better-informed investment decisions regarding such securities. IV. Conclusion sroberts on PROD1PC70 with NOTICES It is therefore ordered, pursuant to Section 19(b)(2) of the Act,7 that the proposed rule change, (SR–NASDAQ– 2008–072), be, and hereby is, approved. 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)(4). 7 15 U.S.C. 78s(b)(2). VerDate Aug<31>2005 19:11 Nov 05, 2008 Jkt 217001 BILLING CODE 8011–01–P [Release No. 34–58889; File No. SR–NYSE– 2008–110] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Implementing a Financial Rebate of $.0015 per Share to the SLP That Posts Liquidity in Its Assigned Securities That Results in an Execution, Provided the SLP Meets Its Monthly Quoting Requirement for Rebates Averaging at Least 3% at the National Best Bid or the National Best Offer in Its Assigned Securities in Round Lots October 30, 2008. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that, on October 28, 2008, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory organization. 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 proposes to offer a financial rebate of $.0015 per share to the SLP that posts liquidity in its assigned securities that results in an execution, provided the SLP meets its monthly quoting requirement for rebates averaging at least 3% at the National Best Bid (‘‘NBB’’) or the National Best Offer (‘‘NBO’’) in its assigned securities in round lots. The text of the proposed rule change is available on the Exchange’s Web site (https://www.nyse.com), at NYSE’s principal office, and at the Commission’s Public Reference Room. 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 66091 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 self-regulatory organization 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts 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 has proposed a sixmonth pilot program (‘‘Pilot’’ or ‘‘program’’) to establish a new class of NYSE market participants that will be referred to as ‘‘Supplemental Liquidity Providers’’ (‘‘SLPs’’) and will be designated as Exchange Rule 107B.4 The proposed pilot program will commence on the date upon which the SEC will approve the New Market Model and will continue for six months thereafter ending on April 30, 2009. During this proposed pilot program, the Exchange will offer a financial rebate of $.0015 per share to the SLP that posts liquidity in its assigned securities that results in an execution, provided the SLP meets its monthly quoting requirement for rebates averaging at least 3% at the National Best Bid (‘‘NBB’’) or the National Best Offer (‘‘NBO’’) in its assigned securities in round lots. SLP Obligations In a given calendar month, an SLP is required to maintain a bid or an offer at the NBB or NBO on the Exchange averaging at least 5% of the trading day in round lots for each assigned security (see Rule 107B(a)). If an SLP fails to meet the 5% quoting requirement for three consecutive calendar months in any assigned security, the SLP Liaison Committee may, in its discretion, take the following non-regulatory action: (1) Revoke the assignment of the affected security(ies); (2) revoke the assignment of an additional, unaffected security from an SLP; and (3) disqualify a member organization’s status as an SLP (see Rule 107B(i)(1)(B), (C)(i)–(iii)). In order for an SLP to be entitled to a rebate, an SLP must post liquidity on 1 15 PO 00000 Frm 00082 Fmt 4703 4 See SR–NYSE–2008–108 (NYSE Rule 107B. Supplemental Liquidity Providers). Sfmt 4703 E:\FR\FM\06NON1.SGM 06NON1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 216 (Thursday, November 6, 2008)]
[Notices]
[Pages 66090-66091]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26445]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58891; File No. SR-NASDAQ-2008-072)]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Approving a Proposed Rule Change To Establish a PORTAL Reference 
Database and Related Fees

October 30, 2008.

I. Introduction

    On September 16, 2008, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange''), filed with the Securities and Exchange Commission 
(``SEC'' or ``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 establish a PORTAL Reference 
Database and related fees. The proposed rule change was published for 
comment in the Federal Register on September 30, 2008.\3\ The 
Commission received no comments on the proposal. This order approves 
the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 58622 (September 23, 
2008), 73 FR 56876 (September 30, 2008)(the ``Notice'').
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II. Description of the Proposal

    Nasdaq has created, and has proposed to make publicly available, 
for a fee, a consolidated fully-electronic reference database of 
information culled from PORTAL offering documents and applications 
submitted to Nasdaq since 1990.\4\ Nasdaq has represented that access 
to the database would available to all market participants. The 
database would allow users to determine a PORTAL issue's name and 
offering description, CUSIP, country of incorporation, security class, 
maturity class and date, currency denomination, applicable interest and 
credit rating, convertibility and call provisions, total number of 
shares offered, and date of PORTAL designation, in addition to other 
information. On an ongoing basis, data regarding securities that obtain 
PORTAL designation would be added to the database.
---------------------------------------------------------------------------

    \4\ For more information related to the background of the PORTAL 
Market, see Securities Exchange Act Release No. 55669 (April 25, 
2007), 72 FR 23874 (May 1, 2007).
---------------------------------------------------------------------------

    Nasdaq has proposed that users of the PORTAL Reference Database 
would pay both an annual fee and an access fee per year of data 
desired. Annual fees would range between $20,000 and $100,000 and would 
be based on the number of users and are per calendar year. Access

[[Page 66091]]

fees, which also range from $20,000 to $100,000, would be tiered based 
on the number of users authorized for access and the number of the 
years for which data is requested. The total cost of access to the full 
database would be capped based on the number of users at a particular 
firm.

III. Discussion and Commission Findings

    The Commission has carefully reviewed the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\5\ In particular, the Commission finds that the proposed rule 
change is consistent with Section 6(b)(4) of the Act,\6\ which requires 
that an exchange have an equitable allocation of reasonable dues, fees 
and other charges among its members and other persons using any 
facility or system which the exchange operates or controls.
---------------------------------------------------------------------------

    \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)(4).
---------------------------------------------------------------------------

    Nasdaq represented that it incurred hardware and software costs, as 
well as personnel and other technology costs, to establish the PORTAL 
Reference Database. Establishing the database required the retrieval, 
review, conversion, and organization of large volumes of documents. 
Nasdaq stated that there will be ongoing costs to maintain and update 
the database, as well. The Commission notes that the pricing structure 
should allow users to align and control the costs of access with their 
data needs, and that the information will be available to any 
participant that pays the fees. The Commission believes that the PORTAL 
Reference Database will make historical information about issuances of 
restricted equity and debt more available, which should assist market 
participants to make better-informed investment decisions regarding 
such securities.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change, (SR-NASDAQ-2008-072), be, and 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-26445 Filed 11-5-08; 8:45 am]
BILLING CODE 8011-01-P

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