[Federal Register: November 28, 2007 (Volume 72, Number 228)]
[Notices]
[Page 67326-67328]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28no07-75]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56822; File No. SR-FINRA-2007-023]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Delay Implementation of Certain Rule Changes
Approved in SR-NASD-2005-146
November 20, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November
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16, 2007, Financial Industry Regulatory Authority, Inc. (``FINRA'') (f/
k/a 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 substantially prepared by FINRA. FINRA filed the
proposal as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders it effective upon filing with the
Commission.\5\ 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)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ FINRA has requested that the Commission waive the 5 day pre-
filing notice and 30-day operative delay required by Rule 19b-
4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii). See discussion infra
Section III.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to establish January 14, 2008 as the final
implementation date of the rule changes approved in SR-NASD-2005-
146.\6\ There are no new changes to the text of FINRA rules.
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\6\ See Securities Exchange Act Release No. 55351 (February 26,
2007), 72 FR 9810 (March 5, 2007) (order approving SR-NASD-2005-
146). See also NASD Notice to Members 07-19 (April 2007) (announcing
the effective date of the rule changes in SR-NASD-2005-146).
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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, FINRA 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. FINRA 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
On February 26, 2007, the Commission approved SR-NASD-2005-146,
which, among other things, amended IM-2110-2 \7\ to expand the scope to
apply to OTC equity securities and modify the minimum price-improvement
standards for securities trading in decimals. The amendments relating
to OTC equity securities and the minimum price-improvement provisions
are scheduled to become effective on November 26, 2007.\8\
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\7\ Currently, IM-2110-2 generally prohibits a member from
trading for its own account in an exchange-listed security at a
price that is equal to or better than an unexecuted customer limit
order in that security, unless the member immediately thereafter
executes the customer limit order at the price at which it traded
for its own account or better.
\8\ See Securities Exchange Act Release No. 56103 (July 19,
2007), 72 FR 40918 (July 25, 2007) (notice of filing and immediate
effectiveness of SR-NASD-2007-039). See also Member Alert, dated
June 20, 2007 (announcing a revised implementation date of certain
rule changes approved in SR-NASD-2005-146 until November 26, 2007).
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On June 27, 2007, FINRA filed a proposed rule change (SR-NASD-2007-
041) to amend the minimum price-improvement standards in IM-2110-2 that
were approved as part of SR-NASD-2005-146.\9\ FINRA has proposed to
implement the changes in SR-NASD-2007-041 on the final implementation
date of SR-NASD-2005-146. SR-NASD-2007-041 remains pending at the
Commission.
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\9\ See File No. SR-NASD-2007-041.
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To provide additional time for the Commission to consider and act
upon the proposed changes in SR-NASD-2007-041 and, if SR-NASD-2007-041
is approved, allow firms sufficient time to make the required
technological changes to implement the proposed changes in SR-NASD-
2007-041, FINRA is proposing that the final implementation date of SR-
NASD-2005-146 currently scheduled for November 26, 2007 be delayed
until January 14, 2008.\10\ In doing so, the proposed minimum price-
improvement provisions in SR-NASD-2007-041, if approved, would become
effective on January 14, 2008. FINRA has filed the proposed rule change
for immediate effectiveness. FINRA proposes to implement the proposed
rule change as described herein.
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\10\ Certain other rule changes that were approved as part of
SR-NASD-2005-146 became effective on July 26, 2007 and are not
effected by this proposed rule change. See supra note 8.
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2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among
other things, that FINRA 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. FINRA believes that the proposed rule change is
consistent with the provisions of the Act noted above because extending
the final implementation date of SR-NASD-2005-146 will ensure that the
Commission has adequate time to act on the proposed changes in SR-NASD-
2007-041 and, if SR-NASD-2007-041 is approved, ensure firms have
sufficient time to make the necessary changes to comply with the new
price-improvement standards.
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\11\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA 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
Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for thirty days from the date on which it was filed,
or such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) \13\ thereunder.\14\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ FINRA has requested that the Commission waive the
requirement that it provide 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 on which FINRA filed the proposed
rule change pursuant to Rule 19b-4(f)(6)(iii). The Commission hereby
grants this request. See 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under Commission Rule 19b-4(f)(6) \15\
normally does not become operative prior to thirty days after the date
of filing. FINRA requests that the Commission waive the 30-day
operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate
the proposed rule change to become operative immediately to allow FINRA
to delay the implementation date of SR-NASD-2005-146 currently
scheduled for November 26, 2007 until January 14, 2008. The Commission
believes that waiving the 30-day operative delay is
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consistent with the protection of investors and the public interest
because if SR-NASD-2007-041 is approved by the Commission, it would
allow firms sufficient time to make the required technological changes.
For these reasons, the Commission designates the proposed rule change
as operative upon filing.\16\
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ For the purposes only of waiving 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 such 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 the 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 (http://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-FINRA-2007-023 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2007-023. 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, 100 F Street,
NE., Washington, DC 20549, 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 FINRA. 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-FINRA-2007-023 and
should be submitted on or before December 19, 2007.
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\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-23113 Filed 11-27-07; 8:45 am]
BILLING CODE 8011-01-P