Вы находитесь на странице: 1из 3

40918 Federal Register / Vol. 72, No.

142 / Wednesday, July 25, 2007 / Notices

particular, the requirements of Section 6 Amendment No. 2, Nasdaq clarified that upon filing with the Commission. The
of the Act.8 Specifically, the the proposed exception from the daily Commission is publishing this notice to
Commission finds that the proposal is OATS transmissions requirements for solicit comments on the proposed rule
consistent with Section 6(b)(5) of the Proprietary Trading Firms would not change from interested persons.
Act 9 in that the proposal is designed to extend to persons associated with
I. Self-Regulatory Organization’s
prevent fraudulent and manipulative Proprietary Trading Firms. The
Commission believes that this is a Statement of the Terms of Substance of
acts and practices, to promote just and
clarifying change to the scope of the the Proposed Rule Change
equitable principles of trade, to foster
cooperation and coordination with proposed rule change and raises no NASD is proposing to delay
persons engaged in regulating, clearing, significant regulatory issues. The implementation of certain NASD rule
settling, processing information with Commission therefore finds good cause changes approved in SR–NASD–2005–
respect to, and facilitating transactions exists to accelerate approval of the 146 until November 26, 2007.5 There are
in securities, to remove impediments to proposed change, as modified by no new changes to the text of NASD
and perfect the mechanism of a free and Amendment Nos. 1 and 2, pursuant to rules. The text of the proposed rule
open market and a national market Section 19(b)(2) of the Act. change is available at NASD,
system, and, in general, to protect http://www.nasd.com, and the
VI. Conclusion
investors and the public interest. Commission’s Public Reference Room.
It is therefore ordered, pursuant to
OATS was designed to provide an II. Self-Regulatory Organization’s
Section 19(b)(2) of the Act,12 that the
accurate, time-sequenced record of Statement of the Purpose of, and
proposed rule change (SR–NASDAQ–
orders and transactions, beginning with Statutory Basis for, the Proposed Rule
2007–037), as modified by Amendments
the receipt of an order at the first point Change
No. 1 and 2, is approved on
of contact between the broker-dealer anaccelerated basis. In its filing with the Commission,
and the customer or counterparty and
For the Commission, by the Division of NASD included statements concerning
further documenting the life of the order
Market Regulation, pursuant to delegated the purpose of and basis for the
through the process of execution. One of
authority.13 proposed rule change and discussed any
the principle objectives of OATS is
Florence E. Harmon, comments it received on the proposed
customer protection through the
Deputy Secretary. rule change. The text of these statements
transparency of the executions of
[FR Doc. E7–14356 Filed 7–24–07; 8:45 am] may be examined at the places specified
customer orders. The Commission does
in Item IV below. NASD has prepared
not believe that the proposed rule BILLING CODE 8010–01–P
summaries, set forth in Sections A, B,
change would impact this objective
and C below, of the most significant
since, by definition, Proprietary Trading
SECURITIES AND EXCHANGE aspects of such statements.
Firms do not handle customer orders.
Further, the Commission notes that COMMISSION A. Self-Regulatory Organization’s
Nasdaq believes that the current [Release No. 34–56103; File No. SR–NASD– Statement of the Purpose of, and
requirement for Proprietary Trading 2007–039] Statutory Basis for, the Proposed Rule
Firms to transmit all order data Change
information is onerous and is not offset Self-Regulatory Organizations:
National Association of Securities 1. Purpose
by an equivalent regulatory benefit. In
addition, the Commission notes that this Dealers, Inc.; Notice of Filing and On February 26, 2007, the
approach parallels the approach Immediate Effectiveness of Proposed Commission approved SR–NASD–2005–
undertaken by the New York Stock Rule Change To Delay Implementation 146, which, among other clarifying and
Exchange (‘‘NYSE’’) in NYSE Rule 132C, of Certain Changes to the Manning conforming changes, proposed
which requires NYSE members, upon Rule amendments to NASD IM–2110–2 6 to
request, to transmit order tracking data July 19, 2007. (1) expand the scope to apply to OTC
to the NYSE.10 Pursuant to Section 19(b)(1) of the Equity Securities; 7 (2) modify the
The Commission therefore believes Securities Exchange Act of 1934 minimum price-improvement standards
that it is consistent with the Act to (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 for securities trading in decimals; (3)
permit Proprietary Trading Firms to notice is hereby given that on June 20, adopt on a permanent basis the pilot
submit OATS data to Nasdaq only upon 2007, the National Association of price-improvement standards for
request. Securities Dealers, Inc. (‘‘NASD’’) filed 5 See Securities Exchange Act Release No. 55351
with the Securities and Exchange
V. Accelerated Approval (February 26, 2007), 72 FR 9810 (March 5, 2007)
Commission (‘‘Commission’’) the (order approving SR–NASD–2005–146).
The Commission finds good cause for proposed rule change as described in 6 Currently, NASD IM–2110–2 generally prohibits

approving the proposed rule change, as Items I, II and III below, which Items a member from trading for its own account in an
modified by Amendment Nos. 1 and 2, have been substantially prepared by exchange-listed security at a price that is equal to
or better than an unexecuted customer limit order
prior to the thirtieth day after NASD. NASD filed the proposed rule in that security, unless the member immediately
publishing notice of Amendment No. 2 change pursuant to Section 19(b)(3)(A) thereafter executes the customer limit order at the
in the Federal Register pursuant to of the Act 3 and Rule 19b–4(f)(6) price at which it traded for its own account or
Section 19(b)(2) of the Act.11 In thereunder,4 which renders it effective better. As part of SR–NASD–2005–146, NASD
replaced the term ‘‘exchange-listed security’’ with
the term ‘‘NMS stock,’’ which is defined as any
8 15 U.S.C. 78f. the date of publication of the notice thereof, unless
NMS security other than an option. See Rule
9 15 U.S.C. 78f(b)(5). the Commission finds good cause for so doing.
600(b)(47) of Regulation NMS. Although the
rwilkins on PROD1PC63 with NOTICES

12 15 U.S.C. 78s(b)(2).
10 See Securities Exchange Act Release No. 47689 replacement of the term would not become effective
13 17 CFR 200.30–3(a)(12).
(April 17, 2003), 68 FR 20200 (April 24, 2003) until the November 26, 2007 final implementation
1 15 U.S.C. 78s(b)(1).
(Order approving SR–NYSE–99–51). date, as stated in SR–NASD–2005–146, NASD IM–
2 17 CFR 240.19b–4.
11 15 U.S.C. 78s(b)(2). Pursuant to Section 19(b)(2) 2110–2 does not apply to options.
3 15 U.S.C. 78s(b)(3)(A).
of the Act, the Commission may not approve any 7 See NASD Rule 6610(d) (definition of ‘‘OTC

proposed rule change prior to the thirtieth day after 4 17 CFR 240.19b–4(f)(6). Equity Security’’).

VerDate Aug<31>2005 19:31 Jul 24, 2007 Jkt 211001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\25JYN1.SGM 25JYN1
Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Notices 40919

securities trading in decimals; and (4) minimum amount of price improvement Act 10 and Rule 19b–4(f)(6)
delete certain unnecessary text relating required is the lesser of $0.01 or one- thereunder.11 At any time within 60
to the minimum price-improvement half (1⁄2) of the current inside spread. days of the filing of the proposed rule
required for securities trading in This provision will go into effect on July change, the Commission may summarily
fractions. On April 27, 2007, NASD 26, 2007, as currently scheduled. abrogate such rule change if it appears
published Notice to Members 07–19, All other changes unrelated to the to the Commission that such action is
which announced the Commission’s expansion to OTC Equity Securities, necessary or appropriate in the public
approval of SR–NASD–2005–146 and including the deletion of certain interest, for the protection of investors,
established July 26, 2007 as the effective unnecessary text relating to the or otherwise in furtherance of the
date of the rule changes in SR–NASD– minimum price-improvement required purposes of the Act.
2005–146.8 for securities trading in fractions and In accordance with Rule 19b–4,12
Following Commission approval of the adoption on a permanent basis of NASD submitted written notice of its
SR–NASD–2005–146 and the the pilot price-improvement standards intent to file the proposed rule change,
publication of the Notice to Members, for securities trading in decimals that along with a brief description and text
several firms have requested that the were approved pursuant to SR–NASD– of the proposed rule change, at least five
effective date of the approved rule 2005–146 will become effective as business days prior to the date of filing.
changes be delayed to allow firms scheduled on July 26, 2007.
additional time to make necessary IV. Solicitation of Comments
NASD has filed the proposed rule
systems changes in light of other change for immediate effectiveness. Interested persons are invited to
competing technological demands NASD proposes to implement the submit written data, views, and
required by implementation of proposed rule change as described arguments concerning the foregoing,
Regulation NMS. In addition, some herein. including whether the proposed rule
broker-dealers raised concerns regarding change is consistent with the Act.
the application of the approved 2. Statutory Basis Comments may be submitted by any of
minimum price-improvement standards. NASD believes that the proposed rule the following methods:
NASD staff is currently revisiting the change is consistent with the provisions
Electronic Comments
amended price-improvement standards of Section 15A(b)(6) of the Act,9 which
in light of these concerns. If, based on requires, among other things, that NASD • Use the Commission’s Internet
this review, NASD concludes that rules be designed to prevent fraudulent comment form (http://www.sec.gov/
further rulemaking is warranted, NASD and manipulative acts and practices, to rules/sro.shtml); or
will file a separate rule change with the promote just and equitable principles of • Send an e-mail to rule-
Commission. trade, and, in general, to protect comments@sec.gov. Please include File
Therefore, to provide adequate time to investors and the public interest. NASD Number SR–NASD–2007–039 on the
firms to make technological changes believes that the proposed rule change subject line.
given competing technological demands will improve the treatment of customer Paper Comments
from Regulation NMS, and to consider limit orders and promote investor
and potentially act upon the concerns • Send paper comments in triplicate
protection.
regarding the minimum price- to Nancy M. Morris, Secretary,
improvement standards, NASD is B. Self-Regulatory Organization’s Securities and Exchange Commission,
proposing that the effective date of Statement on Burden on Competition 100 F Street, NE., Washington, DC
certain NASD rule changes approved in NASD does not believe that the 20549–1090.
SR–NASD–2005–146 as described proposed rule change will result in any All submissions should refer to File
herein be delayed until November 26, burden on competition that is not Number SR–NASD–2007–039. This file
2007. Specifically, NASD is proposing necessary or appropriate in furtherance number should be included on the
to delay the approved rule changes in of the purposes of the Act, as amended. subject line if e-mail is used. To help the
SR–NASD–2005–146 that relate solely Commission process and review your
C. Self-Regulatory Organization’s comments more efficiently, please use
to the expansion of the scope of NASD Statement on Comments on the
IM–2110–2 to OTC Equity Securities only one method. The Commission will
Proposed Rule Change Received From post all comments on the Commission’s
and the related deletion of NASD Rule Members, Participants, or Others
6541. Accordingly, the requirements in Internet Web site (http://www.sec.gov/
NASD Rule 6541 would continue to Written comments were neither rules/sro.shtml). Copies of the
apply to OTCBB securities until NASD solicited nor received. submission, all subsequent
IM–2110–2 is implemented for OTC amendments, all written statements
III. Date of Effectiveness of the with respect to the proposed rule
Equity Securities. Proposed Rule Change and Timing for
In addition, the amendments in SR– change that are filed with the
Commission Action Commission, and all written
NASD–2005–146 also make changes to
the minimum price-improvement Because the foregoing proposed rule communications relating to the
standards in NASD IM–2110–2, which, change does not: proposed rule change between the
as approved, would apply uniformly to (i) Significantly affect the protection Commission and any person, other than
both OTC Equity Securities and NMS of investors or the public interest; those that may be withheld from the
stocks. NASD is delaying these changes (ii) Impose any significant burden on public in accordance with the
as well, with one exception: For competition; and provisions of 5 U.S.C. 552, will be
customer limit orders in exchange-listed (iii) Become operative for 30 days available for inspection and copying in
from the date on which it was filed, or the Commission’s Public Reference
rwilkins on PROD1PC63 with NOTICES

securities priced less than $1.00 that are


at or inside the best inside market, the such shorter time as the Commission Room, 100 F Street, NE., Washington,
may designate, it has become effective
8 See NASD Notice to Members 07–19 (April pursuant to Section 19(b)(3)(A) of the 10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
2007) (announcing the effective date of the rule
changes in SR–NASD–2005–146). 9 15 U.S.C. 78o–3(b)(6). 12 17 CFR 240.19b–4.

VerDate Aug<31>2005 19:31 Jul 24, 2007 Jkt 211001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\25JYN1.SGM 25JYN1
40920 Federal Register / Vol. 72, No. 142 / Wednesday, July 25, 2007 / Notices

DC 20549, on official business days I. Self-Regulatory Organization’s the proposed rule change, and discussed
between the hours of 10 a.m. and 3 p.m. Statement of the Terms of Substance of any comments it received on the
Copies of such filing also will be the Proposed Rule Change proposed rule change. The text of these
available for inspection and copying at Phlx proposes to extend for a one-year statements may be examined at the
the principal office of NASD. All period, until July 31, 2008, its current places specified in Item IV below. The
comments received will be posted pilot program that provides for an Exchange has substantially prepared
without change; the Commission does option transaction charge credit of $0.21 summaries, set forth in Sections A, B,
not edit personal identifying per contract for Exchange options and C below, of the most significant
information from submissions. You specialist units 5 that incur Phlx option aspects of such statements.
should submit only information that transaction charges when a customer A. Self-Regulatory Organization’s
you wish to make available publicly. All order is delivered to the limit order Statement of the Purpose of, and
submissions should refer to File book via the Exchange’s Options Floor Statutory Basis for, the Proposed Rule
Number SR–NASD–2007–039 and Broker Management System (‘‘FBMS’’) 6 Change
should be submitted on or before and is then sent to an away market and
August 15, 2007. executed via the Intermarket Option 1. Purpose
For the Commission, by the Division of Linkage (‘‘Linkage’’) under the Plan for Currently, the Exchange provides an
Market Regulation, pursuant to delegated the Purpose of Creating and Operating option transaction charge credit of $0.21
authority.13 an Intermarket Option Linkage per contract for Exchange options
(‘‘Plan’’) 7 as a Principal Acting as Agent specialist units that incur Phlx option
Florence E. Harmon,
Order (‘‘P/A Order’’).8 The pilot transaction charges when a customer
Deputy Secretary. program in effect is currently scheduled order is delivered to the limit order
[FR Doc. E7–14359 Filed 7–24–07; 8:45 am] to expire on July 31, 2007.9 The text of book via FBMS and is then sent to an
BILLING CODE 8010–01–P the proposed rule change is available at away market and executed via Linkage
the Exchange, the Commission’s Public under the Plan as a P/A Order.
Reference Room, and http:// The purpose of this proposal is to
SECURITIES AND EXCHANGE www.phlx.com. continue to alleviate the potential
COMMISSION economic burden of multiple
II. Self-Regulatory Organization’s transaction charges imposed on
Statement of the Purpose of, and Exchange specialist units by
[Release No. 34–56101; File No. SR–Phlx– Statutory Basis for, the Proposed Rule
2007–50] establishing a credit for Exchange
Change option transaction charges incurred by
Self-Regulatory Organizations; In its filing with the Commission, the an Exchange specialist unit when a
Philadelphia Stock Exchange, Inc.; Exchange included statements customer limit order placed on the limit
Notice of Filing and Immediate concerning the purpose of, and basis for, order book by a Floor Broker 10 results
Effectiveness of a Proposed Rule in an execution of a P/A Order that is
Change Relating To Extending the
5 The terms ‘‘specialist’’ and ‘‘specialist unit’’ are
sent to another exchange via Linkage.
used interchangeably herein. The Exchange believes that continuing
Specialist Option Transaction Charge 6 The FBMS is designed to enable Floor Brokers
Credit Pilot Program and/or their employeesto enter, route and report
to give an options transaction charge
transactions stemming from options orders received credit of $0.21 per contract should
July 19, 2007. on the Exchange. The FBMS also is designed to encourage the use of Linkage and
establish an electronic audit trail for options orders should allow the Exchange to remain
Pursuant to Section 19(b)(1) of the represented and executed by Floor Brokers on the competitive with other exchanges with
Securities Exchange Act of 1934 Exchange, such that the audit trail provides an
accurate, time-sequenced record of electronic and respect to the assessment of Linkage-
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
other orders, quotations and transactions on the related fees.11
notice is hereby given that on June 22, Exchange, beginning with the receipt of an order by This proposal is to remain in effect as
2007, the Philadelphia Stock Exchange, the Exchange, and further documenting the life of a pilot program until July 31, 2008.12
Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the order through the process of execution, partial
the Securities and Exchange execution, or cancellation of that order. See Phlx 2. Statutory Basis
Rule 1080, Commentary .06.
Commission (‘‘Commission’’) the 7 See Securities Exchange Act Release Nos. 43086 The Exchange believes that the
proposed rule change as described in (July 28, 2000), 65 FR 48023 (August 4, 2000) and proposed rule change is consistent with
Items I, II, and III below, which Items 43573 (November 16, 2000), 65 FR 70851 Section 6(b) of the Act 13 in general, and
have been substantially prepared by the (November 28, 2000) (order approving Phlx as a Section 6(b)(4) of the Act 14 in
participant in the Plan).
Exchange. Phlx has designated this 8 A P/A order is an order for the principal account
proposal as one establishing or changing of a specialist (orequivalent entity on another
10 A Floor Broker who wishes to place a limit

a due, fee, or other charge imposed by participant exchange that is authorized to represent order on the limit orderbook must submit such a
limit order electronically through the FBMS. See
the Exchange under Section public customer orders), reflecting the terms of a
Exchange Rule 1063, Commentary .01. See also
related unexecuted public customer order for which
19(b)(3)(A)(ii) of the Act 3 and Rule 19b– the specialist is acting as agent. See Phlx Rule Phlx Rule 1080, Commentary .02(b).
4(f)(2) thereunder,4 which renders the 1083(k)(i).
11 See Securities Exchange Act Release No. 53866

proposal effective upon filing with the 9 See Securities Exchange Act Release No. 54257 (May 25, 2006), 71 FR 31237 (June 1, 2006) (SR–
CBOE–2006–44) (rebate of certain transaction fees
Commission. The Commission is (August 1, 2006), 71 FR 45089 (August 8, 2006)
to Designated Primary Market Makers related to the
publishing this notice to solicit (SR–Phlx–2006–46). This proposal is scheduled to
be in effect for the same time period as fees for execution of outbound P Orders and P/A Orders).
comments on the proposed rule change Linkage Principal Orders (‘‘P Orders’’) and P/A See also Footnote 8 and Section 21 of the CBOE
from interested persons. Orders. See Securities Exchange Act Release No. Fees Schedule.
12 This proposal is in connection with an existing
rwilkins on PROD1PC63 with NOTICES

54233 (July 27, 2006), 71 FR 44070 (August 3, 2006)


(SR–Phlx–2006–44). The Exchange intends to file a pilot program forLinkage P and P/A Orders and is
13 17 CFR 200.30–3(a)(12).
separate proposed rule change to extend, for a one- scheduled to be in effect for the same time period
1 15 U.S.C. 78s(b)(1). year period through July 31, 2008, the pilot relating as the pilot program for Linkage P and P/A Orders.
2 17 CFR 240.19b–4. See supra at note 9.
to transaction fees applicable to the execution of P/
3 15 U.S.C. 78s(b)(3)(A)(ii). 13 15 U.S.C. 78f(b).
A Orders and P Orders sent to the Exchange via
4 17 CFR 240.19b–4(f)(2). Linkage under the Plan. 14 15 U.S.C. 78f(b)(4).

VerDate Aug<31>2005 19:31 Jul 24, 2007 Jkt 211001 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 E:\FR\FM\25JYN1.SGM 25JYN1

Вам также может понравиться