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6304 Federal Register / Vol. 71, No.

25 / Tuesday, February 7, 2006 / Notices

available for inspection and copying in listed on the Nasdaq Stock Market A. Self-Regulatory Organization’s
the Commission’s Public Reference where such quotes are priced less than Statement of the Purpose of, and
Room. Copies of such filing also will be $1.00 per share, and in any other Statutory Basis for, the Proposed Rule
available for inspection and copying at security approved by the Commission Change
the principal office of NASD. All for sub-penny quoting. Exchange Rule
comments received will be posted 11.3 currently prohibits, and will 1. Purpose
without change; the Commission does continue to prohibit, sub-penny quoting Exchange Rule 11.3 currently
not edit personal identifying in securities whose quotes are at $1.00 provides that bids or offers in stocks
information from submissions. You or more per share, except to the extent traded on the Exchange shall not be
should submit only information that otherwise approved by the Commission. made at a smaller variation than $0.01
you wish to make available publicly. All The text of the proposed rule change is per share. Rule 612 of Regulation NMS
submissions should refer to File below. Proposed new language is under the Act provides, in relevant part,
Number SR–NASD–2006–004 and italicized. Proposed deletions are that no national securities exchange
should be submitted on or before indicated in [brackets].5 shall ‘‘display, rank, or accept from any
February 28, 2006. RULES OF NATIONAL STOCK person a bid or offer, an order, or an
For the Commission, by the Division of EXCHANGE indication of interest in any NMS stock
Market Regulation, pursuant to delegated priced in an increment smaller than
authority.18 * * * * *
$0.01 if that bid or offer, order, or
Nancy M. Morris, CHAPTER XI indication of interest is priced equal to
Secretary. or greater than $1.00 per share.’’ 6 Rule
Trading Rules
[FR Doc. E6–1617 Filed 2–6–06; 8:45 am] 612 also prohibits national securities
BILLING CODE 8010–01–P
* * * * * exchanges from displaying, ranking or
Rule 11.3 Price Variations accepting bids, offers, orders, or
indications of interest priced in
SECURITIES AND EXCHANGE Bids, [or] offers, orders or indications
increments smaller than $0.0001 if the
COMMISSION of interests in [stocks] securities traded
bid, offer, order, or indication of interest
on the Exchange shall not be made [at
[Release No. 34–53195; File No. SR–NSX– is priced less than $1.00 per share.7
a] in an increment smaller [variation]
2006–02] than: Finally, Rule 612(c) of Regulation NMS
(i) $0.01 [per share; and in bonds at provides that the Commission may grant
Self-Regulatory Organizations; a smaller variation than 1⁄8 of 1% of the exemptions from the minimum price
National Stock Exchange; Notice of principal amount.] if those bids, offers increment requirements of Rule 612(a)
Filing and Immediate Effectiveness of or indications of interests are priced and 612(b) ‘‘if the Commission
Proposed Rule Change To Amend equal to or greater than $1.00 per share; determines that such exemption is
Exchange Rule 11.3 To Allow for Sub- or necessary or appropriate in the public
Penny Quoting in Certain Securities (ii) $0.0001 if those bids, offers or interest, and is consistent with the
indications of interests are priced less protection of investors.’’ 8 The
January 30, 2006.
than $1.00 per share and the security is compliance date for Rule 612 is January
Pursuant to Section 19(b)(1) of the 31, 2006 (the ‘‘Compliance Date’’).9
Securities Exchange Act of 1934 listed on the Nasdaq Stock Market and
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 is trading on the Exchange; or The Exchange is now proposing to
(iii) Any other increment established prohibit the submission of bids, offers,
notice is hereby given that on January
by the Commission for any security orders, or indications of interest priced
30, 2006, the National Stock
which has been granted an exemption in increments smaller than (i) $0.0001 if
Exchange SM (‘‘NSX’’ or the ‘‘Exchange’’)
from the minimum price increments the bid, offer, order, or indication of
filed with the Securities and Exchange
requirements of SEC Rule 612(a) or interest is priced less than $1.00 per
Commission (‘‘Commission’’) the
612(b). share on securities that are listed in the
proposed rule change as described in
Items I and II below, which Items have * * * * * Nasdaq Stock Market and traded on the
been prepared by the Exchange. The II. Self-Regulatory Organization’s Exchange, or (ii) the minimum price
Exchange has filed this proposal Statement of the Purpose of, and increment established by the
pursuant to Section 19(b)(3)(A) of the Statutory Basis for, the Proposed Rule Commission for any security that has
Act 3 and Rule 19b–4(f)(6) thereunder,4 Change been granted an exemption from the
which renders the proposal effective minimum price increment requirement
In its filing with the Commission, the of Rule 612(a) or 612(b) of Regulation
upon filing with the Commission. The Exchange included statements
Commission is publishing this notice to NMS. Exchange Rule 11.3 currently
concerning the purpose of, and basis for, prohibits, and will continue to prohibit,
solicit comments on the proposed rule the proposed rule change and discussed
change from interested persons. sub-penny orders and quotes priced at
any comments it received on the $1.00 or more per share, except to the
I. Self-Regulatory Organization’s proposed rule change. The text of these extent otherwise approved by the
Statement of the Terms of the Substance statements may be examined at the Commission, and will maintain a
of the Proposed Rule Change places specified in Item IV below. The minimum increment of $0.01 for any
The Exchange is proposing to amend Exchange has prepared summaries, set security traded on the Exchange and
Exchange Rule 11.3 to allow for sub- forth in Sections A, B, and C below, of listed by the New York Stock Exchange
the most significant aspects of such or American Stock Exchange.
penny quoting in securities that are
statements.
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18 17 CFR 200.30–3(a)(12). 6 17
5 Certain technical changes to the rule text have CFR 242.612(a).
1 15 U.S.C. 78s(b)(1). 7 17
been made pursuant to a telephone conversation CFR 242.612(b).
2 17 CFR 240.19b–4. 8 17 CFR 242.612(c).
between James C. Yong, Chief Regulatory Officer,
3 15 U.S.C. 78s(b)(3)(A). 9 See Securities Exchange Act Release No. 52196
NSX and Sara Gillis, Attorney, Division of Market
4 17 CFR 240.19b–4(f)(6). Regulation, Commission on January 30, 2006. (Aug. 2, 2005), 70 FR 45529 (Aug. 8, 2005).

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Federal Register / Vol. 71, No. 25 / Tuesday, February 7, 2006 / Notices 6305

In connection with these revisions to day operative delay and allow the post all comments on the Commission’s
Exchange Rule 11.3, the Exchange is proposed rule change to become Internet Web site (http://www.sec.gov/
also removing the language in Exchange operative on January 31, 2006, the rules/sro.shtml). Copies of the
Rule 11.3 relating to minimum price compliance date for Rule 612. The submission, all subsequent
variations in bonds. The Exchange does Commission hereby grants that amendments, all written statements
not trade bonds and has not traded request.14 The Commission believes that with respect to the proposed rule
bonds for several years. waiving the operative delay is change that are filed with the
consistent with the protection of Commission, and all written
2. Statutory Basis
investors and the public interest. The communications relating to the
The Exchange believes that the Commission previously has considered proposed rule change between the
proposed rule change is consistent with whether, for NMS stocks, quoting below Commission and any person, other than
the provisions of Section 6(b) of the $1.00 in sub-penny increments should those that may be withheld from the
Act,10 in general, and Section 6(b)(5) of be permitted. The Commission public in accordance with the
the Act,11 in particular, in that it is determined that it should and codified provisions of 5 U.S.C. 552, will be
designed to promote just and equitable that view in Rule 612(b) of Regulation available for inspection and copying in
principles of trade and to remove NMS.15 The Exchange’s proposal to the Commission’s Public Reference
impediments to, and perfect the permit its members to make bids or Room. Copies of such filing will also be
mechanism of, a free and open market offers—in NMS stocks that are listed on available for inspection and copying at
and a national market system and, Nasdaq—priced below $1.00 in the principal office of the Exchange. All
generally, in that it protects investors increments as small as $0.0001 is comments received will be posted
and the public interest. The Exchange consistent with Rule 612(b) and raises without change; the Commission does
also believes that the proposal is no new regulatory issues. not edit personal identifying
consistent with the quoting restrictions At any time within 60 days of the information from submissions. You
of Rule 612 of Regulation NMS. filing of the proposed rule change, the should submit only information that
Commission may summarily abrogate you wish to make available publicly. All
B. Self-Regulatory Organization’s
such rule change if it appears to the submissions should refer to File
Statement on Burden on Competition
Commission that such action is Number SR–NSX–2006–02 and should
The Exchange does not believe that necessary or appropriate in the public be submitted on or before February 28,
the proposed rule change will impose interest, for the protection of investors, 2006.
any inappropriate burden on or otherwise in furtherance of the
competition. purposes of the Act. For the Commission, by the Division of
Market Regulation, pursuant to delegated
C. Self-Regulatory Organization’s IV. Solicitation of Comments authority.16
Statement on Comments on the Nancy M. Morris,
Interested persons are invited to
Proposed Rule Change Received From Secretary.
submit written data, views, and
Members, Participants, or Others [FR Doc. E6–1615 Filed 2–6–06; 8:45 am]
arguments concerning the foregoing,
The Exchange has neither solicited including whether the proposed rule BILLING CODE 8010–01–P
nor received written comments on the change is consistent with the Act.
proposed rule change. Comments may be submitted by any of
the following methods: SECURITIES AND EXCHANGE
III. Date of Effectiveness of the
COMMISSION
Proposed Rule Change and Timing for Electronic Comments
Commission Action
• Use the Commission’s Internet [Release No. 34–53197; File No. SR–Phlx–
Because the proposed rule change: (i) comment form (http://www.sec.gov/ 2006–08]
Does not significantly affect the rules/sro.shtml); or
protection of investors or the public • Send an e-mail to rule- Self-Regulatory Organizations;
interest; (ii) does not impose any comments@sec.gov. Please include File Philadelphia Stock Exchange, Inc.;
significant burden on competition; and Number SR–NSX–2006–02 on the Notice of Filing and Immediate
(iii) does not become operative for 30 subject line. Effectiveness of Proposed Rule
days after the date of the filing, or such Change Relating to Exchange Rule 715
shorter time as the Commission may Paper Comments
designate if consistent with the • Send paper comments in triplicate January 31, 2006.
protection of investors and the public to Nancy M. Morris, Secretary, Pursuant to Section 19(b)(1) of the
interest, the proposed rule change has Securities and Exchange Commission, Securities Exchange Act of 1934
become effective pursuant to Section 100 F Street, NE., Washington, DC (‘‘Act’’),1 and Rule 19b–4 thereunder,2
19(b)(3)(A) of the Act 12 and Rule 19b– 20549–1090. notice is hereby given that on January
4(f)(6) thereunder.13 The Exchange has All submissions should refer to File 26, 2006, the Philadelphia Stock
asked the Commission to waive the 30- Number SR–NSX–2006–02. This file Exchange, Inc. (‘‘Phlx’’ or ‘‘Exchange’’)
number should be included on the filed with the Securities and Exchange
10 15 U.S.C. 78f(b). subject line if e-mail is used. To help the Commission (‘‘Commission’’) the
11 15 U.S.C. 78f(b)(5). Commission process and review your proposed rule change as described in
12 15 U.S.C. 78s(b)(3)(A).
comments more efficiently, please use Items I, II and III below, which Items
13 17 CFR 240.19b–4(f)(6). Pursuant to Rule 19b–

4(f)(6)(iii) under the Act, the Exchange is required


only one method. The Commission will have been prepared by the Phlx. The
Phlx filed the proposed rule change
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to give the Commission written notice of its intent


14 For purposes only of waiving the 30-day
to file the proposed rule change, along with a brief pursuant to Section 19(b)(3)(A) of the
description and text of the proposed rule change, operative delay, the Commission has considered the
at least five business days prior to the date of filing proposed rule’s impact on efficiency, competition,
16 17 CFR 200.30–3(a)(12).
of the proposed rule change, or such shorter time and capital formation. See 15 U.S.C. 78c(f).
1 15 U.S.C. 78s(b)(1).
as designated by the Commission. The Commission 15 See Securities Exchange Act Release No. 51808

has determined to waive this requirement. (June 9, 2005), 70 FR 37496, 37555 (June 29, 2005). 2 17 CFR 240.19b–4.

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