[Federal Register: October 16, 2006 (Volume 71, Number 199)]
[Notices]
[Page 60783-60784]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16oc06-110]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54581; File No. SR-NASDAQ-2006-039]
Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Modify
the Reporting Required When Nasdaq Lists the Security of an Affiliate
October 6, 2006.
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 September 28, 2006, the NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') 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 Nasdaq. Pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\
Nasdaq has designated this proposal as ``non-controversial,'' which
renders the proposed rule change 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).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq is proposing a proposed rule change to modify the reporting
required when Nasdaq lists the security of an affiliate. The text of
the proposed rule change is available on Nasdaq's Web site (http://www.nasdaq.com
), at Nasdaq'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, Nasdaq 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. 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 is proposing to revise Rule 4370 to file on a quarterly
basis, rather than on a monthly basis, the report detailing Nasdaq's
monitoring of (1) the Nasdaq Affiliate's compliance with the provisions
of Rule 4200, 4300 and 4400 Series (which include quantitative and
qualitative listing requirements) and (2) the trading of the Affiliate
Security, including summaries of all related surveillance alerts,
complaints, regulatory referrals, busted or adjusted trades,
investigations, examinations, formal and informal disciplinary actions,
exception reports and trading data.
The proposed rule change is similar to a recent New York Stock
Exchange rule filing.\5\ Additionally, Nasdaq notes that providing
these reports on a quarterly rather than monthly basis will not affect
the compliance monitoring done by Nasdaq and NASD, but will make the
reporting less burdensome.\6\ Further, by adopting a quarterly
reporting cycle, the reports will be more closely aligned with the
issuer's financial reporting cycle and NASD's review and surveillance
cycle.
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\5\ See Securities Exchange Act Release No. 53382 (February 27,
2006), 71 FR 11270 (March 6, 2006) (SR-NYSE-2005-77), adopting NYSE
Rule 497.
\6\ The NASD performs regulatory services on behalf of Nasdaq
pursuant to a regulatory services contract. Telephone conversation
between Jonathan Cayne, Associate General Counsel, Nasdaq, and
Rebekah Liu, Special Counsel, Division of Market Regulation,
Commission, on October 6, 2006.
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In addition, the proposed rule change would permit Nasdaq to file a
report with the Commission within five business days of providing
notice to the Nasdaq Affiliate of its non-compliance with Nasdaq's
listing requirements rather than at the same time that Nasdaq notifies
the Nasdaq Affiliate. This proposed change is also similar to language
in the recent New York Stock Exchange rule filing referenced above.
Finally, the proposed rule change would clarify that the applicable
provisions of the Rule 4200, 4300, and 4400 Series that are the subject
of Nasdaq's reports are those related to the listing requirements.
Nasdaq will implement the proposed rule change 30 days after
filing.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act \7\ in
[[Page 60784]]
general, and with Section 6(b)(5) of the Act \8\ in particular, in that
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, remove
impediments to a free and open market and a national market system,
and, in general, to protect investors and the public interest.
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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
Nasdaq 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.
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
This proposed rule change is filed pursuant to paragraph (A) of
Section 19(b)(3) of the Act \9\ and Rule 19b-4(f)(6) \10\ thereunder.
The proposed rule change does not significantly affect the protection
of investors or the public interest, does not impose any significant
burden on competition, and, by its terms, does not become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate. Nasdaq provided the Commission written
notice of its intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least five
business days prior to the date of filing the proposed rule change. 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.\11\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ See 15 U.S.C. 78(b)(3)(C).
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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 is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2006-039 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2006-039. 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 (http://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. 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-2006-039 and
should be submitted on or before November 6, 2006
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-17081 Filed 10-13-06; 8:45 am]
BILLING CODE 8011-01-P