56202 Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 

31, 2007, the Exchange intends to submit another 

filing under Rule 19b–4(f)(6) extending this rule 

and system process. 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14For purposes only of waiving the 30-day 

operative period for this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 15 17 CFR 200.30–3(a)(12). 

2. Statutory Basis 

The amended rule is designed to 

clarify the information contained in a 

Directed Order. This proposed rule 

filing seeks to extend the amended 

rule’s effectiveness from September 30, 

2006 to January 31, 2007. This extension 

will afford the Commission the 

necessary time to consider the 

Exchange’s corresponding proposal to 

amend its rule to permit EPs to choose 

the firms from whom they will accept 

Directed Orders while providing 

complete anonymity of the firm entering 

a Directed Order. Accordingly, the 

Exchange believes that the proposal is 

consistent with the requirements of 

Section 6(b) of the Act,9 in general, and 

Section 6(b)(5) of the Act,10 in 

particular, in that it is designed to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transaction in 

securities, to remove impediments to 

and perfect the mechanism for a free 

and open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

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 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule does not (i) 

significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

for 30 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, provided that the 

Exchange has given the Commission 

written notice of its intent to file the 

proposed rule change prior to the date 

of filing of the proposed rule change or 

such shorter time as designated by the 

Commission, the proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 11 and 

Rule 19b–4(f)(6) thereunder.12

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 furtherance of the 

purposes of the Act. 

Under Rule 19b–4(f)(6)(iii) of the 

Act,13 the proposal does not become 

operative for 30 days after the date of its 

filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest. The Exchange has 

requested that the Commission waive 

the five day pre-filing requirement and 

the 30-day operative delay, which 

would make the rule change effective 

and operative upon filing. The 

Commission, consistent with the 

protection of investors and the public 

interest, has determined to waive the 

five day pre-filing requirement and the 

30-day operative delay because such 

waiver would continue to conform the 

BOX rules with BOX’s current practice 

and clarify that Directed Orders on BOX 

are not anonymous.14 Accordingly, the 

Commission designates the proposed 

rule change effective and operative 

upon filing with the Commission. 

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 rulecomments@sec.gov. Please include File 

Number SR–BSE–2006–38 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–BSE–2006–38. 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 

Section, 100 F Street, NE., Washington, 

DC 20549. Copies of such filing also will 

be available for inspection and copying 

at the principal office of the BSE. 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–BSE–2006–38 and should 

be submitted on or before October 17, 

2006. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

Nancy M. Morris, 

Secretary. 

[FR Doc. 06–8244 Filed 9–25–06; 8:45 am] 

BILLING CODE 8010–01–U 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54471; File No. SR–NASD–

2006–081] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Order Approving 

Proposed Rule Change To Adopt New 

NASD Rule 5150 Relating to TradeThroughs 

September 19, 2006. 

On July 11, 2006, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to Section 19(b)(1) of the 


pwalker on PRODPC60 with NOTICES
Federal Register / Vol. 71, No. 186 / Tuesday, September 26, 2006 / Notices 56203 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 3See Securities Exchange Act Release No. 54186 

(July 20, 2006), 71 FR 42698. 4The term ‘‘ITS Security’’ is defined in NASD 

Rule 5210(c) as ‘‘any security which may be traded 

through the [ITS] System by an ITS/CAES Market 

Maker.’’

5See Securities Exchange Act Release No. 53128 

(January 13, 2006), 71 FR 3550 (January 23, 2006); 

and 54085 (June 30, 2006), 71 FR 38910 (July 10, 

2006). Currently, the Nasdaq Exchange operates as 

a national securities exchange for securities listed 

on the Nasdaq Exchange and reported to the Joint 

Self-Regulatory Organization Plan Governing the 

Collection, Consolidation and Dissemination of 

Quotation and Transaction Information for NasdaqListed Securities on Exchanges on an Unlisted 

Trading Privileges Basis (‘‘Nasdaq-Listed 

Securities’’). 

6 15 U.S.C. 78o–3. 

7 15 U.S.C. 78o–3(b)(6). 

8 15 U.S.C. 78f(b)(5). 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Amendment No. 1 and Amendment No. 2. 

Amendment No. 2 replaced and superceded the 

original rule filing and Amendment No. 1 in their 

entirety. 

4Exchange Act Release No. 54265 (August 2, 

2006), 71 FR 45879 (August 10, 2006). 

5See letter from Dennis A. Young, Vice President, 

Treasurer, Cosse International Securities, Inc., to 

Nancy Morris, Secretary, Commission, dated 

August 31, 2006. 

6See letter from Kathryn M. Moore, Assistant 

General Counsel, Regulatory Policy and Oversight, 

to Nancy M. Morris, Secretary, Commission, dated 

September 13, 2006. 

7See 12 CFR 220.1, et. seq. 8See Exchange Act Release No. 34073 (May 17, 

1994), 59 FR 26826 (May 24, 1994) (SR–NYSE–88–

35); see also NYSE Information Memo 94–22 (June 

10, 1994). 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to adopt a new 

NASD rule relating to trade-throughs. 

The proposed rule change was 

published for comment in the Federal 

Register on July 27, 2006.3 The 

Commission received no comment 

letters on the proposal. 

Proposed rule NASD Rule 5150 would 

require an NASD member that is 

registered as a market maker with the 

Nasdaq Stock Market LLC (‘‘Nasdaq 

Exchange’’) in an ITS Security 4 to 

comply with the provisions of NASD 

Rule 5262 relating to trade-throughs 

with respect to that security for trades 

reported to the NASD. Accordingly, the 

NASD’s proposed rule will not take 

effect until the Nasdaq Exchange begins 

operations as an exchange in such 

securities.5 The proposed rule further 

defines the term ‘‘block transaction’’ for 

purposes of the rule. 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of Section 15A of the 

Act,6 in general, and with Section 

15A(b)(6) of the Act,7 in particular, in 

that it is 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. 

Proposed NASD Rule 5150 will 

maintain, after the Nasdaq Exchange 

begins operations as a national 

securities exchange for ITS Securities, 

the application of the NASD’s tradethrough rule, Rule 5162, to NASD 

members that are also Nasdaq market 

makers in ITS Securities to the extent 

such market makers report transactions 

in ITS Securities to the NASD. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,8 that the 

proposed rule change (SR–NASD–2006–

081) be, and hereby is, approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.9

Nancy M. Morris, 

Secretary. 

[FR Doc. 06–8238 Filed 9–25–06; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–54456; File No. SR–NASD–

2006–064] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Order Approving a 

Proposed Rule Change and 

Amendment Nos. 1 and 2 Thereto 

Relating to Extension of Time 

Requests 

September 15, 2006. 

I. Introduction 

On May 15, 2006, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 2 thereunder, a proposed 

rule change seeking to adopt new Rule 

3160 (‘‘Extensions of Time under 

Regulation T and SEC Rule 15c3–3’’). 

NASD filed Amendment Nos. 1 and 2 to 

the proposed rule change on May 25, 

2006 and July 25, 2006, respectively.3

The proposed rule change, as amended, 

was published in the Federal Register 

on August 10, 2006.4 The Commission 

received one comment letter in response 

to the proposal.5 On September 13, 

2006, the NASD filed a response to the 

comment letter.6 This order approves 

the proposed rule change, as amended. 

II. Description 

NASD is proposing to adopt new Rule 

3160 to require (1) All clearing firm 

members for which NASD is the 

designated examining authority 

(‘‘DEA’’) pursuant to Rule 17d–1 under 

the Act to submit to NASD requests for 

extensions of time under Regulation T7

promulgated by the Federal Reserve 

Board, or pursuant to Rule 15c3–3(n) 

under the Act; and (2) each clearing firm 

member for which NASD is the DEA to 

file a monthly report with NASD 

indicating all broker-dealers for which it 

clears that have overall ratios of 

requested extensions of time to total 

transactions for the month that exceed 

a percentage specified by NASD. 

Extension of Time Requests 

As stated above, proposed NASD Rule 

3160(a) would require all clearing firm 

members for which NASD is DEA to 

submit to NASD requests for extensions 

of time under Regulation T and 

Exchange Act Rule 15c3–3(n). The 

Commission previously approved NYSE 

Rule 434 requiring each carrying firm 

for which the NYSE is the DEA to 

submit extensions requests to the 

NYSE.8 The SRO designated as a 

member’s DEA has responsibility for 

examining its members that are also 

members of another SRO for compliance 

with applicable financial responsibility 

rules such as Regulation T and 

Exchange Act Rule 15c3–3. NASD 

believes that requiring a member to 

submit extension requests to its DEA 

helps to ensure that the DEA receives 

complete extension information to assist 

it in performing this function and would 

ensure uniform application of standards 

to all customers of firms for which 

NASD is the DEA. 

Monthly Reporting Requirement 

Proposed NASD Rule 3160(b) would 

require each clearing firm member for 

which NASD is the DEA to file a 

monthly report with NASD, in such 

format as NASD may require, indicating 

all broker-dealers for which it clears that 

have overall ratios of requests for 

extensions of time under Regulation T 

and Rule 15c3–3(m) to total transactions 

for the month that exceed a percentage 

specified by NASD. The monthly report 

would require clearing firms subject to 

proposed NASD Rule 3160(b) to 

identify, among other things: (1) The 

broker-dealer’s name; (2) the number of 

transactions by the broker-dealer for the 

month; (3) the number of extension 

requests for the month; and (4) the ratio 

of the number of extensions requested to 

total transactions. The rule proposal 

would require that the reports be 

submitted no later than five business 

days following the end of each reporting 

month. The requirements of the 


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