[Federal Register: January 13, 2004 (Volume 69, Number 8)]
[Notices]
[Page 2034-2035]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13ja04-119]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-49021; File No. SR-NASD-2003-197]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. To Delay the Implementation Date of Amendments
to Article VIII (District Committees and District Nominating
Committees) of the By-Laws of NASD Regulation, Inc.
January 5, 2004.
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 29, 2003, the National Association of Securities Dealers,
Inc. (``NASD'') 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 NASD. NASD filed
the proposal pursuant to Section 19(b)(3)(A)(i) of the Act,\3\ and Rule
19b-4(f)(1) \4\ thereunder, in that the proposed rule change
constitutes a stated policy, practice, or interpretation with respect
to the meaning, administration, or enforcement of an existing rule,
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.
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\1\ 15 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is filing with the Commission a proposed rule change to delay,
until February 1, 2004, the implementation date of amendments to
Article VIII (District Committees and District Nominating Committees)
of the By-Laws of NASD Regulation, Inc. that were established by SR-
NASD-2003-55.\5\ NASD filed SR-NASD-2003-55 to streamline the
nomination and election processes governing NASD District Committees
and District Nominating Committees (``Committees''), modernize
communication procedures, and improve the consistency among the
Committees across all districts. There is no change to the rule text
associated with this rule filing. NASD subsequently filed SR-NASD-2003-
107 to delay the implementation date of the amendments to January 1,
2004 to avoid disrupting the 2004 election cycle, which was already
underway.\6\
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\5\ See Securities Exchange Act Release No. 48105 (June 11,
2003), 68 FR 35926 (June 17, 2003).
\6\ See Securities Exchange Act Release No. 48259 (July 30,
2003), 68 FR 46673 (August 6, 2003).
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD 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. NASD 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
The purpose of the proposed rule change is to notify the Commission
and other interested parties of the delay in implementation of
amendments to Article VIII of the By-Laws of NASD Regulation, Inc.
(``Article VIII'') established by SR-NASD-2003-55 until February 1,
2004. On March 21, 2003, NASD filed a proposed rule change to
streamline the nomination and election processes governing District
Committees and District Nominating Committees, modernize communication
procedures, and improve the consistency among the Committees across all
districts. On June 11, 2003, the SEC published a notice of filing and
immediate effectiveness of the proposed rule change.\7\ The amendments
were to become effective 30 days later. NASD submitted a subsequent
rule filing to extend the implementation date of the amendments to
January 1, 2004 because NASD's election cycle for District Committees
and District Nominating Committees for 2004 was already underway and
NASD did not want new rules to become effective in the middle of such
election cycle.\8\
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\7\ See Securities Exchange Act Release No. 48015 (June 11,
2003), 68 FR 35926 (June 17, 2003).
\8\ See Securities Exchange Act Release No. 48259 (July 30,
2003), 68 FR 46673 (August 6, 2003).
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In this rule filing, NASD is proposing to extend the implementation
date of the amendments to February 1, 2004. As the amendments to
Article VIII were not effective prior to the start of the 2004 election
cycle, NASD is conducting these elections in accordance with the
existing provisions of Article VIII. NASD believed that the 2004
election cycle would be completed by December 2003. However, a
contested election in one of the Districts has resulted in a delay in
the 2004 election cycle. NASD expects to have the 2004 District
Committee and District Nominating Committee elections completed and
certified by the end of January 2004 and, therefore, proposes to delay
the implementation date of the amendments to Article VIII until
February 1, 2004 in order to avoid any confusion among participants and
to prevent any disruption in the election procedures that could be
brought on by adopting amendments in the middle of the election cycle.
1. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\9\ which require, among
other things, that NASD rules be 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. In addition, the proposed rule change is effective
upon filing pursuant to Section 19(b)(3)(A)(i) of the Act \10\ and
paragraph (f)(1) of Rule 19b-4\11\ thereunder, in that the proposed
rule change constitutes a stated policy, practice, or interpretation
with respect to the meaning, administration, or enforcement of an
existing rule. NASD believes that delaying the implementation date of
the amendments to Article VIII of the By-Laws of NASD Regulation, Inc.
until February 1, 2004 will permit this year's Committee elections to
proceed in an orderly fashion under existing procedures. Any change to
existing procedures in the middle of the current Committee election
cycle may cause unnecessary confusion to participants and disrupt the
election process.
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\9\ 15 U.S.C. 78o-3(b)(6).
\10\ 15 U.S.C. 78s(b)(3)(A)(i).
\11\ 17 CFR 240.19b-4(f)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD 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.\12\
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\12\ Telephone conversation between Kosha Dalal, Assistant
General Counsel, Office of General Counsel, NASD and Leah Mesfin,
Attorney, Division of Market Regulation, Commission on January 2,
2004.
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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
The proposed rule change has been filed by NASD 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 \13\ and Rule 19b-4(f)(1) thereunder,\14\
which renders the proposal effective upon receipt of this filing by the
Commission.
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\13\ 15 U.S.C. 78s(b)(3)(A)(i).
\14\ 17 CFR 240.19b-4(f)(1).
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At any time within 60 days of this filing, the Commission may
summarily abrogate this proposal 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 proposal 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. Comments
may also be submitted electronically at the following e-mail address:
rule-comments@sec.gov. All comment letters should refer to File No. SR-
NASD-2003-197. This file number should be included on the subject line
if e-mail is used. To help the Commission process and review comments
more efficiently, comments should be sent in hardcopy or by e-mail but
not by both methods. 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 number SR-NASD-2003-197 and should be
submitted by February 3, 2004.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-612 Filed 1-12-04; 8:45 am]
BILLING CODE 8010-01-U