Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend Rule 2240 and 2250 To Reflect Changes to Corresponding FINRA Rules, 3774-3776 [2010-1140]
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Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Notices
of the Act 6 and subparagraph (f)(2) of
Rule 19b–4 7 thereunder. 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:
erowe on DSK5CLS3C1PROD 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
Number SR–CBOE–2010–001 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–CBOE–2010–001. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available
for inspection and copying at the
principal office of the Exchange. All
comments received will be posted
6 15
7 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
VerDate Nov<24>2008
14:43 Jan 21, 2010
Jkt 220001
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–CBOE–2010–001 and
should be submitted on or before
February 12, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–1142 Filed 1–21–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61323; File No. SR–
NASDAQ–2009–116]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing of Proposed Rule Change To
Amend Rule 2240 and 2250 To Reflect
Changes to Corresponding FINRA
Rules
January 11, 2010.
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
30, 2009, The NASDAQ Stock Market
LLC (the ‘‘Exchange’’ or ‘‘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 by the Exchange.
The Exchange has designated the
proposed rule change as constituting a
non-controversial rule change under
Rule 19b–4(f)(6) under the Act,3 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),4 and Rule 19b–4
thereunder,5 The NASDAQ Stock
Market LLC (the ‘‘Exchange’’ or
‘‘NASDAQ’’) is filing with the Securities
and Exchange Commission
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
4 15 U.S.C. 78s(b)(1).
5 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
(‘‘Commission’’) a proposed rule change
to amend NASDAQ Rule 2240 and 2250
to reflect recent changes to
corresponding rules of the Financial
Industry Regulatory Authority
(‘‘FINRA’’). The text of the proposed rule
change is below. Additions are in
italics; deletions are in brackets.
NASDAQ Stock Market Rules
*
*
*
*
*
[2240. Disclosure of Control
Relationship with Issuer
Nasdaq Members shall comply with
NASD Rule 2240 as if such Rule were
part of Nasdaq’s Rules.]
*
*
*
*
*
[2250. Disclosure of Participation or
Interest in Primary or Secondary
Distribution
Nasdaq Members shall comply with
NASD Rule 2250 as if such Rule were
part of Nasdaq’s Rules.]
*
*
*
*
*
2262. Disclosure of Control Relationship
with Issuer
Nasdaq Members shall comply with
FINRA Rule 2262 as if such Rule were
part of Nasdaq’s Rules.
*
*
*
*
*
2269. Disclosure of Participation or
Interest in Primary or Secondary
Distribution
Nasdaq Members shall comply with
FINRA Rule 2269 as if such Rule were
part of Nasdaq’s Rules.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. 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
Many of NASDAQ’s rules are based
on rules of FINRA (formerly the
National Association of Securities
Dealers (‘‘NASD’’)). During 2008, FINRA
embarked on an extended process of
moving rules formerly designated as
‘‘NASD Rules’’ into a consolidated
FINRA rulebook. In most cases, FINRA
E:\FR\FM\22JAN1.SGM
22JAN1
erowe on DSK5CLS3C1PROD with NOTICES
Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Notices
has renumbered these rules, and in
some cases has substantively amended
them. Accordingly, NASDAQ also
proposes to initiate a process of
modifying its rulebook to ensure that
NASDAQ rules corresponding to
FINRA/NASD rules continue to mirror
them as closely as practicable. In some
cases, it will not be possible for the rule
numbers of NASDAQ rules to mirror
corresponding FINRA rules, because
existing or planned NASDAQ rules
make use of those numbers. However,
wherever possible, NASDAQ plans to
update its rules to reflect changes to
corresponding FINRA rules.
This filing addresses NASDAQ Rule
2240 entitled ‘‘Disclosure of Control
Relationship with Issuer’’ and 2250
entitled ‘‘Disclosure of Participation or
Interest in Primary or Secondary
Distribution.’’ NASDAQ Rule 2262
makes reference to NASD 2240 entitled
‘‘Disclosure of Control Relationship with
Issuer.’’ FINRA filed a proposed rule
change to adopt NASD Rule 2240 as
FINRA Rule 2262, NASD Rule 2250 as
FINRA Rule 2269 and NASD Rule 3340
as FINRA Rule 5260.6
FINRA transferred NASD Rule 2240
unchanged into the Consolidated FINRA
Rulebook as FINRA Rule 2262. FINRA
Rule 2262 provides that a member
controlled by, controlling, or under
common control with the issuer of any
security must, before entering into any
contract with or for a customer for the
purchase or sale of such security,
disclose to the customer the existence of
such control; if such disclosure is not
made in writing, it must be
supplemented by written disclosure at
or before the completion of the
transaction.
FINRA transferred NASD Rule 2250
unchanged into the Consolidated FINRA
Rulebook as FINRA Rule 2269. FINRA
Rule 2269 provides that if a member is
acting as a broker for a customer, or is
acting for both the customer and some
other person, or is acting as a dealer and
receives or has promise of receiving a
fee from a customer for advising the
customer with respect to securities, then
the member must, at or before the
completion of any transaction for or
with the customer in any security in the
primary or secondary distribution of
which the member is participating or is
otherwise financially interested, give
the customer written notification of the
existence of such participation or
interest.
FINRA transferred NASD Rule 3340
without material change into the
6 Securities Exchange Act Release No. 60659
(September 11, 2009), 74 FR 48117 (September 21,
2009) (SR–FINRA–2009–044).
VerDate Nov<24>2008
14:43 Jan 21, 2010
Jkt 220001
Consolidated FINRA Rulebook as
FINRA Rule 5260. FINRA Rule 5260
prohibits members from, directly or
indirectly, effecting transactions or
publishing quotations or indications of
interest (‘‘IOIs’’) in (1) any security with
respect to which a trading halt is in
effect; or (2) any security future when
there is a regulatory trading halt in
effect with respect to the underlying
security. The trading and quoting
conduct prohibited by Rule 3340 is
triggered only when a trading halt is in
effect. The rule also provides that, in the
event that FINRA halts over-the-counter
trading and quoting in NMS stocks
because the Alternative Display Facility
(‘‘ADF’’) or a Trade Reporting Facility
(‘‘TRF’’) is unable to transmit real-time
information to the applicable Securities
Information Processor, members are not
prohibited from trading through other
markets for which trading is not halted.
NASDAQ is proposing to amend
NASDAQ Rule 2240 by renaming Rule
2240 to new Rule 2262. Also, NASDAQ
is proposing to amend NASDAQ Rule
2250 by renaming Rule 2250 to new
Rule 2269. NASDAQ would delete
current Rules 2240 and 2250. NASDAQ
also proposes to amend the references to
NASD Rule 2240 and 2250 to instead
state FINRA Rules 2262 and 2269 in the
new Rules 2262 and 2269, respectively.
No changes are necessary to Rule 3340.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,7
in general, and with Sections 6(b)(5) of
the Act,8 in particular, in that the
proposal is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
proposed changes will conform
NASDAQ Rules 2240 and 2250 to recent
changes made to corresponding FINRA
rules and rename Rules 2240 and 2250
to new Rules 2262 and 2269
respectively.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
7 15
8 15
PO 00000
U.S.C. 78f.
U.S.C. 78f(b)(5).
Frm 00080
Fmt 4703
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
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
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2009–116 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2009–116. 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
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17
Sfmt 4703
3775
E:\FR\FM\22JAN1.SGM
22JAN1
3776
Federal Register / Vol. 75, No. 14 / Friday, January 22, 2010 / Notices
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–2009–116 and should be
submitted on or before February 12,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–1140 Filed 1–21–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing of Proposed Rule Change To
Amend Rule 2810 To Reflect Changes
to Corresponding FINRA Rule
erowe on DSK5CLS3C1PROD with NOTICES
January 8, 2010.
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 5,
2010, The NASDAQ Stock Market LLC
(the ‘‘Exchange’’ or ‘‘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 by the Exchange.
The Exchange has designated the
proposed rule change as constituting a
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange is filing this proposed
rule change to amend NASDAQ Rule
2810 to reflect recent changes to a
corresponding rule of the Financial
Industry Regulatory Authority
(‘‘FINRA’’). NASDAQ will implement
the proposed rule change thirty days
after the date of the filing. The text of
the proposed rule change is available at
https://nasdaqomxbx.cchwallstreet.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 IV 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
[Release No. 34–61321; File No. SR–
NASDAQ–2010–002]
11 17
non-controversial rule change under
Rule 19b–4(f)(6) under the Act,3 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1. Purpose
Many of NASDAQ’s rules are based
on rules of FINRA (formerly the
National Association of Securities
Dealers (‘‘NASD’’)). During 2008, FINRA
embarked on an extended process of
moving rules formerly designated as
‘‘NASD Rules’’ into a consolidated
FINRA rulebook. In most cases, FINRA
has renumbered these rules, and in
some cases has substantively amended
them. Accordingly, NASDAQ also
proposes to initiate a process of
modifying its rulebook to ensure that
NASDAQ rules corresponding to FINRA
rules continue to mirror them as closely
as practicable. In some cases, it will not
be possible for the rule numbers of
NASDAQ rules to mirror corresponding
FINRA rules, because existing or
planned NASDAQ rules make use of
1 15
VerDate Nov<24>2008
14:43 Jan 21, 2010
3 17
Jkt 220001
PO 00000
CFR 240.19b–4(f)(6).
Frm 00081
Fmt 4703
Sfmt 4703
those numbers. However, wherever
possible, NASDAQ plans to update its
rules to reflect changes to corresponding
FINRA rules.
This filing addresses NASDAQ Rule
2810, which formerly corresponded to
NASD 2810, and which addresses
underwriting terms and arrangements in
public offerings of direct participation
programs and unlisted real estate
investments trusts (collectively,
‘‘Investment Programs’’). In SR–FINRA–
2009–016,4 FINRA redesignated NASD
Rule 2810 as FINRA Rule 2310 with no
material change. FINRA Rule 2310
requires that members participating in a
public offering of an Investment
Program meet certain requirements
regarding underwriting compensation,
fees and expenses, perform due
diligence on the Investment Program,
follow specific guidelines on suitability,
and adhere to limits on non-cash
compensation.
NASDAQ is adopting the new FINRA
rule in full, and because the NASDAQ
Rules currently contain a Rule 2310,
will redesignate Rule 2810 as NASDAQ
Rule 2310A, so as to closely correspond
to the new FINRA rule number.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,5
in general, and with Sections 6(b)(5) of
the Act,6 in particular, in that the
proposal is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
proposed changes will conform
NASDAQ Rule 2810 to recent changes
made to a corresponding FINRA rule, to
promote application of consistent
regulatory standards.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
4 Securities Exchange Act Release No. 34–59987
(May 27, 2009), 74 FR 106 [sic] (June 4, 2009) (SR–
FINRA–2009–016).
5 15 U.S.C. 78f.
6 15 U.S.C. 78f(b)(5).
E:\FR\FM\22JAN1.SGM
22JAN1
]]>Agencies
[Federal Register Volume 75, Number 14 (Friday, January 22, 2010)]
[Notices]
[Pages 3774-3776]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-1140]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61323; File No. SR-NASDAQ-2009-116]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Proposed Rule Change To Amend Rule 2240 and 2250 To
Reflect Changes to Corresponding FINRA Rules
January 11, 2010.
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 30, 2009, The NASDAQ Stock Market LLC (the ``Exchange'' or
``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 by the Exchange. The
Exchange has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ The
NASDAQ Stock Market LLC (the ``Exchange'' or ``NASDAQ'') is filing with
the Securities and Exchange Commission (``Commission'') a proposed rule
change to amend NASDAQ Rule 2240 and 2250 to reflect recent changes to
corresponding rules of the Financial Industry Regulatory Authority
(``FINRA''). The text of the proposed rule change is below. Additions
are in italics; deletions are in brackets.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
NASDAQ Stock Market Rules
* * * * *
[2240. Disclosure of Control Relationship with Issuer
Nasdaq Members shall comply with NASD Rule 2240 as if such Rule were
part of Nasdaq's Rules.]
* * * * *
[2250. Disclosure of Participation or Interest in Primary or Secondary
Distribution
Nasdaq Members shall comply with NASD Rule 2250 as if such Rule were
part of Nasdaq's Rules.]
* * * * *
2262. Disclosure of Control Relationship with Issuer
Nasdaq Members shall comply with FINRA Rule 2262 as if such Rule were
part of Nasdaq's Rules.
* * * * *
2269. Disclosure of Participation or Interest in Primary or Secondary
Distribution
Nasdaq Members shall comply with FINRA Rule 2269 as if such Rule were
part of Nasdaq's Rules.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. 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
Many of NASDAQ's rules are based on rules of FINRA (formerly the
National Association of Securities Dealers (``NASD'')). During 2008,
FINRA embarked on an extended process of moving rules formerly
designated as ``NASD Rules'' into a consolidated FINRA rulebook. In
most cases, FINRA
[[Page 3775]]
has renumbered these rules, and in some cases has substantively amended
them. Accordingly, NASDAQ also proposes to initiate a process of
modifying its rulebook to ensure that NASDAQ rules corresponding to
FINRA/NASD rules continue to mirror them as closely as practicable. In
some cases, it will not be possible for the rule numbers of NASDAQ
rules to mirror corresponding FINRA rules, because existing or planned
NASDAQ rules make use of those numbers. However, wherever possible,
NASDAQ plans to update its rules to reflect changes to corresponding
FINRA rules.
This filing addresses NASDAQ Rule 2240 entitled ``Disclosure of
Control Relationship with Issuer'' and 2250 entitled ``Disclosure of
Participation or Interest in Primary or Secondary Distribution.''
NASDAQ Rule 2262 makes reference to NASD 2240 entitled ``Disclosure of
Control Relationship with Issuer.'' FINRA filed a proposed rule change
to adopt NASD Rule 2240 as FINRA Rule 2262, NASD Rule 2250 as FINRA
Rule 2269 and NASD Rule 3340 as FINRA Rule 5260.\6\
---------------------------------------------------------------------------
\6\ Securities Exchange Act Release No. 60659 (September 11,
2009), 74 FR 48117 (September 21, 2009) (SR-FINRA-2009-044).
---------------------------------------------------------------------------
FINRA transferred NASD Rule 2240 unchanged into the Consolidated
FINRA Rulebook as FINRA Rule 2262. FINRA Rule 2262 provides that a
member controlled by, controlling, or under common control with the
issuer of any security must, before entering into any contract with or
for a customer for the purchase or sale of such security, disclose to
the customer the existence of such control; if such disclosure is not
made in writing, it must be supplemented by written disclosure at or
before the completion of the transaction.
FINRA transferred NASD Rule 2250 unchanged into the Consolidated
FINRA Rulebook as FINRA Rule 2269. FINRA Rule 2269 provides that if a
member is acting as a broker for a customer, or is acting for both the
customer and some other person, or is acting as a dealer and receives
or has promise of receiving a fee from a customer for advising the
customer with respect to securities, then the member must, at or before
the completion of any transaction for or with the customer in any
security in the primary or secondary distribution of which the member
is participating or is otherwise financially interested, give the
customer written notification of the existence of such participation or
interest.
FINRA transferred NASD Rule 3340 without material change into the
Consolidated FINRA Rulebook as FINRA Rule 5260. FINRA Rule 5260
prohibits members from, directly or indirectly, effecting transactions
or publishing quotations or indications of interest (``IOIs'') in (1)
any security with respect to which a trading halt is in effect; or (2)
any security future when there is a regulatory trading halt in effect
with respect to the underlying security. The trading and quoting
conduct prohibited by Rule 3340 is triggered only when a trading halt
is in effect. The rule also provides that, in the event that FINRA
halts over-the-counter trading and quoting in NMS stocks because the
Alternative Display Facility (``ADF'') or a Trade Reporting Facility
(``TRF'') is unable to transmit real-time information to the applicable
Securities Information Processor, members are not prohibited from
trading through other markets for which trading is not halted.
NASDAQ is proposing to amend NASDAQ Rule 2240 by renaming Rule 2240
to new Rule 2262. Also, NASDAQ is proposing to amend NASDAQ Rule 2250
by renaming Rule 2250 to new Rule 2269. NASDAQ would delete current
Rules 2240 and 2250. NASDAQ also proposes to amend the references to
NASD Rule 2240 and 2250 to instead state FINRA Rules 2262 and 2269 in
the new Rules 2262 and 2269, respectively. No changes are necessary to
Rule 3340.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\7\ in general, and with
Sections 6(b)(5) of the Act,\8\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The proposed
changes will conform NASDAQ Rules 2240 and 2250 to recent changes made
to corresponding FINRA rules and rename Rules 2240 and 2250 to new
Rules 2262 and 2269 respectively.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
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\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2009-116 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2009-116. 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
[[Page 3776]]
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-2009-116 and should be submitted
on or before February 12, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-1140 Filed 1-21-10; 8:45 am]
BILLING CODE 8011-01-P
