[Federal Register Volume 67, Number 212 (Friday, November 1, 2002)]
[Notices]
[Pages 66695-66696]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27804]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-46732; File No. SR-NASD-2002-137]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by
the National Association of Securities Dealers, Inc. Relating to
Technical Corrections to the Trade or Move Process in the Nasdaq Order
Collection and Display Facility (``SuperMontage'')
October 28, 2002.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on October 4, 2002, the National Association of Securities
Dealers, Inc. (``NASD''), through its subsidiary, the Nasdaq Stock
Market, Inc. (``Nasdaq''), submitted to 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 Nasdaq.
On October 21, 2002, Nasdaq filed an amendment to the proposed rule
change.\3\ The proposed rule change, as amended, has been filed by
Nasdaq as a ``non-controversial'' rule change under Rule 19b-4(f)(6)
\4\ under the Act. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See letter from Jeffrey S. Davis, Associate General Counsel,
Nasdaq to Terri Evans, Assistant Director, Division of Market
Regulation, Commission dated October 18, 2002 (``Amendment No. 1'').
In Amendment No. 1, Nasdaq redesignated certain provisions in NASD
Rule 4613(e)(1) to correct erroneous references to NASD Rule
4613(e)(2). In addition, the rule text was amended to replace all
uses of the word ``message'' with the word ``order'' to eliminate
inadvertent inconsistencies within Rule 4613(e)(1).
\4\ 17 CFR 240.19b-4(f)(6). For purposes of determining the
effective date and calculating the 60-day period within which the
Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers that period
to commence on October 21, 2002, the date Nasdaq filed Amendment No.
1. See 15 U.S.C. 78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq is filing with the Commission technical rule changes to NASD
Rule 4613(e)(1) to harmonize the language with recent approved rule
proposals.
The text of the proposed rule change is available at the Office of
the Secretary, the Nasdaq and at the Commission.
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, as
amended, and discussed any comments it received on the proposed rule
change. The text of these statements may be examined at the places
specified in Item IV below. Nasdaq has prepared summaries, set forth in
Sections A, B and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq has filed numerous rule proposals relating to NASD Rule
4613(e), and also has filed numerous rule proposals relating to
SuperMontage. In the process of compiling the changes to Rule 4613(e),
Nasdaq has discovered several
[[Page 66696]]
grammatical and technical errors in Rule 4613(e) that must be fixed.
First, Nasdaq is changing the acronym ``MMID'' to ``MPID'' to be
consistent with its use of those terms throughout the rules governing
usage of the SuperMontage system. Second, Nasdaq is replacing
references to ``messages'' to ``orders'' or ``Directed Orders,'' as
appropriate. This change makes consistent the use of such terms across
NASD Rule 4613(e)(1). In addition, Nasdaq is adding the word ``for''
when describing the minimum number of shares for which a Trade or Move
Directed Order is required to be sent. Finally, Nasdaq is changing Rule
4613(e)(1)(c)(ii)(a) to reflect that an ECN that wishes to lock or
cross the market between 9:20:00 and 9:29:29 must send a Trade or Move
Directed Order. The current rule language erroneously indicates that
ECNs are obligated to send such Directed Orders up until 9:29:59. This
technical change conforms the rule to the clear intent of SR-NASD-2002-
56, which was approved on August 23, 2002.\5\
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\5\ See Securities Exchange Act Release No. 46410 (August 23,
2002), 67 FR 55897 (August 30, 2002).
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2. Statutory Basis
Nasdaq believes that the proposed rule change, as amended, is
consistent with section 15A of the Act in general,\6\ and section
15A(b)(6) of the Act in particular,\7\ in that the proposal is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, and, in general, to protect
investors and the public interest. Nasdaq believes that the proposed
rule change, as amended, should enhance the interaction of the Trade or
Move Rule with the SuperMontage opening, and that such enhancements
would ensure a smooth opening of daily trading for the ultimate benefit
of investors.
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\6\ 15 U.S.C. 78o-3.
\7\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq does not believe that the proposed rule change, as amended,
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
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change, as amended, (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms, does not become operative until 30 days from the
date on which it was filed, or such shorter time as the Commission may
designate. The proposed rule change, as amended, has therefore become
effective pursuant to section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) \9\ thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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Nasdaq has requested that the Commission waive the usual five-day
notice and 30-day pre-operative waiting periods. The Commission
believes that it is consistent with the protection of investors and the
public interest to accelerate the operative date and to waive the five-
day notice period since the proposed rule change, as amended, makes
only technical corrections to the rule text. For these reasons, the
Commission designates the proposal, as amended, to be effective and
operative upon filing with the Commission.\10\
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\10\ For purposes of determining the effective date and
calculating the 60-day period within which the Commission may
summarily abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers that period to
commence on October 21, 2002, the date Nasdaq filed Amendment No. 1.
See 15 U.S.C. 78s(b)(3)(C). For purposes only of accelerating the
operative date of this proposal, the Commission has considered the
proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, as amended, 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.\11\
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\11\ 17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, is consistent with the Act. Persons making written
submissions should file six copies thereof with the Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20549-0609. 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. Copies of such
filing will also be available for inspection and copying at the
principal office of the NASD. All submissions should refer to File No.
SR-NASD-2002-137 and should be submitted by November 22, 2002.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-27804 Filed 10-31-02; 8:45 am]
BILLING CODE 8010-01-P