8818 Federal Register / Vol. 72, No. 38 / Tuesday, February 27, 2007 / Notices 

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

12 17 CFR 240.19b–4(f)(5). 

13For the purposes of calculating the 60-day 

abrogation period, the Commission considers the 

proposed rule change to have been filed on 

February 20, 2007, when Amendment No. 1 was 

filed. 

14 17 CFR 200.30–3(a)(12). 

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). 

5See, e.g., Securities Exchange Act Release No. 

55210 (January 31, 2007), 72 FR 5777 (February 7, 

2007) (SR–NYSE–2007–08). Nasdaq notes that its 

proposed rule change is identical to the New York 

Stock Exchange LLC’s rule change. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the 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) have the 

effect of limiting the access to or 

availability of an existing order entry or 

trading system of the Exchange, the 

foregoing rule change has become 

effective immediately pursuant to 

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

Rule 19b–4(f)(5) 12 thereunder. 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.13

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–CHX–2007–01 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–CHX–2007–01. 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 offices of CHX. 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–CHX–2007–01 and should 

be submitted on or before March 20, 

2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3290 Filed 2–26–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55323; File No. SR–

NASDAQ–2007–009] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Regarding 

Intermarket Sweep Orders 

February 21, 2007. 

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 February 

16, 2007, the NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

below, which Items have been 

substantially prepared by Nasdaq. 

Nasdaq has designated the proposed 

rule change as constituting a ‘‘noncontroversial’’ rule change under 

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

19b–4(f)(6) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

Nasdaq is proposing to modify Rule 

4759 to permit Nasdaq members to 

submit Intermarket Sweep Orders 

(‘‘ISOs’’) to Nasdaq if they have 

simultaneously sent an ISO (or 

comparable order) for the full displayed 

size of the top of the book of every other 

ITS participant displaying a betterpriced quotation. The text of the 

proposed rule change is available at 

Nasdaq, the Commission’s Public 

Reference Room, and http:// 

nasdaq.complinet.com. 

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 

As part of its rollout of its new Single 

Book execution system, Nasdaq is 

preparing to launch additional features 

of its compliance with Regulation NMS 

(‘‘Reg. NMS’’). Specifically, Nasdaq is 

preparing to accept ISOs. Like other 

markets, Nasdaq is proposing to accept 

ISOs prior to the Trading Phase Date, 

currently March 5, 2007, in order to 

ensure a smooth transition to the Single 

Book System functionality for 

compliance with Reg. NMS. 

Like other markets that have received 

approval to accept ISOs prior to the 

Trading Phase Date,5 Nasdaq seeks to 


cprice-sewell on PROD1PC62 with NOTICES
Federal Register / Vol. 72, No. 38 / Tuesday, February 27, 2007 / Notices 8819 

6 17 CFR 242.600(b)(30). 

7 15 U.S.C. 78f. 

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

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11Rule 19b–4(f)(6)(iii) under the Act requires that 

a self-regulatory organization submit to 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 of the 

proposed rule change, or such shorter time as 

designated by the Commission. Nasdaq has satisfied 

the pre-filing requirement. 

12For purposes only of waiving the 30-day 

operative delay of the proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

13See supra note 5 (citing to SR–NYSE–2007–08). 

14See 15 U.S.C. 78s(b)(3)(C). 

amend its rules to require member 

organizations that send ISOs to Nasdaq 

prior to the Trading Phase Date of Reg. 

NMS to simultaneously send an ISO (or 

comparable order) for the full displayed 

size of the top of the book of every other 

ITS participant displaying a betterpriced quotation. The proposed 

temporary rule is intended to mirror the 

requirement, which will be operative 

after the Trading Phase Date, that all 

incoming ISOs meet the requirements as 

described in Rule 600(b)(30) of Reg. 

NMS,6 and is designed to ensure that 

member organizations honor betterpriced quotes of other ITS participants 

when submitting ISOs to Nasdaq prior 

to the Trading Phase Date. Nasdaq 

expects that this temporary rule will be 

in effect only until the Trading Phase 

Date, at which time it will be deleted 

from its rulebook. Nasdaq represents 

that, during the applicability of this 

rule, Nasdaq will conduct surveillance 

to assure that its Participants are in 

compliance with its rules on the use of 

ISOs. 

In addition, Nasdaq notes that it has 

requested an exemption from certain 

provisions of the Intermarket Trading 

System Plan and Nasdaq Rules 4756 and 

4759 to allow Nasdaq to implement the 

Reg. NMS compliance aspects of the 

Single Book rollout prior to the Trading 

Phase Date. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,7 in 

general, and with Section 6(b)(5) of the 

Act,8 in particular, in that the proposal 

is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The proposed rule 

change is designed to permit Nasdaq to 

implement functionality required for 

compliance with Regulation NMS in an 

orderly fashion and to permit Nasdaq 

members to gain experience with that 

functionality prior to its full 

implementation. 

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, as amended. 

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 

The proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 9 and Rule 19b–4(f)(6) 

thereunder 10 because the proposal 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.11

Nasdaq has requested that the 

Commission waive the 30-day operative 

delay and designate the proposed rule 

change to be operative upon filing with 

the Commission. The Commission 

hereby grants the request.12 The 

Commission believes that such waiver is 

consistent with the protection of 

investors and the public interest 

because immediate effectiveness of the 

proposed rule change will assist Nasdaq 

in its efforts to ensure that its member 

organizations honor better-priced 

quotations of other ITS participants 

when they send ISOs to Nasdaq for 

execution and also will allow Nasdaq 

members to gain experience with the 

new ISO order type and functionality 

prior to its full implementation on the 

Trading Phase date. In addition, the 

Commission notes that the Nasdaq’s 

proposal is based upon a proposed rule 

change recently adopted by the New 

York Stock Exchange LLC.13

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.14

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–NASDAQ–2007–009 in 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–NASDAQ–2007–009. 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 Room. Copies 

of the 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 


cprice-sewell on PROD1PC62 with NOTICES
8820 Federal Register / Vol. 72, No. 38 / Tuesday, February 27, 2007 / Notices 

15 17 CFR 200.30–3(a)(12). 

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). 

5NYSE Market, Inc. is the entity to which the 

New York Stock Exchange LLC, a self-regulatory 

organization, has delegated all non-regulatory 

functions involved in conducting the activities of a 

national securities exchange, including the trading 

functions, the listings functions, and market data. 

6See Securities Exchange Act Release Nos. 54084 

(June 30, 2006), 71 FR 38935 (July 10, 2006) (order 

approving File No. SR–NASD–2005–087) (the 

‘‘NASD/Nasdaq TRF Approval Order’’); 54715 

(November 6, 2006), 71 FR 66354 (November 14, 

2006) (order approving File No. SR–NASD–2006–

108); and 54931 (December 13, 2006), 71 FR 76409 

(December 20, 2006) (order approving File No. SR–

NASD–2006–115). See also Securities Exchange Act 

Release No. 54798 (November 21, 2006), 71 FR 

69156 (November 29, 2006) (order approving File 

No. SR–NASD–2006–104) (the ‘‘Phase II Approval 

Order’’). 

7The NASD/NYSE TRF will have controls in 

place to ensure that transactions that are reported 

to the NASD/NYSE TRF, but that are priced 

significantly away from the current market, will not 

be submitted to the SIP. The NASD represents that 

this is consistent with current practice, in that 

neither the NASD’s Alternative Display Facility nor 

the Approved NASD Trade Reporting Facilities 

currently submit such trades to the SIP. According 

to the NASD, this practice is designed to preserve 

the integrity of the tape. 

8See NASD/Nasdaq TRF Approval Order, supra 

note 6. 

9The Commission approved a proposed rule 

change that expanded the ADF’s functionality to all 

exchange-listed securities. See Securities Exchange 

Act Release No. 54537 (September 28, 2006), 71 FR 

59173 (October 6, 2006) (order approving File No. 

SR–NASD–2006–091). 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–

NASDAQ–2007–009 and should be 

submitted on or before March 20, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3293 Filed 2–26–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55325; File No. SR–NASD–

2007–011] 

Self-Regulatory Organizations; 

National Association of Securities 

Dealers, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to a New NASD 

Trade Reporting Facility Established in 

Conjunction with NYSE Market, Inc. 

February 21, 2007. 

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 February 

1, 2007, the 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 prepared substantially by the 

NASD. The NASD has filed the proposal 

pursuant to Section 19(b)(3)(A) of the 

Act,3 and Rule 19b-4(f)(6) thereunder,4

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The NASD proposes to adopt rules 

relating to a new Trade Reporting 

Facility (the ‘‘NASD/NYSE TRF’’) to be 

established by the NASD in conjunction 

with NYSE Market, Inc. (‘‘NYSE’’),5 that 

will provide members with an 

additional mechanism for reporting 

trades in exchange-listed securities 

effected otherwise than on an exchange. 

The proposed NASD/NYSE TRF 

functionality and rules are substantially 

similar to the functionality and rules of 

the Trade Reporting Facilities 

established by the NASD and the 

Nasdaq Stock Market, Inc. (the ‘‘NASD/ 

Nasdaq TRF’’), the NASD and the 

National Stock Exchange, Inc. (the 

‘‘NASD/NSX TRF’’), and the NASD and 

the Boston Stock Exchange, Inc. (the 

‘‘NASD/BSE TRF’’) (collectively, the 

‘‘Approved NASD Trade Reporting 

Facilities’’), which were subject to 

notice and comment and approved by 

the Commission.6 The text of the 

proposed rule change is available at the 

NASD, in the Commission’s Public 

Reference Room, and at http:// 

www.nasd.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

NASD 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. The NASD 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 

The proposed rule change would 

establish the new NASD/NYSE TRF on 

substantially the same terms as the 

Approved NASD Trade Reporting 

Facilities. The NASD/NYSE TRF will 

provide members with an additional 

mechanism, which has been developed 

by the NYSE, for reporting locked-in 

transactions in exchange-listed 

securities executed otherwise than on 

an exchange. Members will match and/ 

or execute orders internally or through 

proprietary systems and submit these 

trades to the NASD/NYSE TRF with the 

appropriate information and modifiers. 

All trades submitted to the NASD/NYSE 

TRF must be locked-in prior to entry 

into the system and the NASD/NYSE 

TRF will have no trade comparison 

functionality. Participants wishing to 

report to the NASD/NYSE TRF on 

behalf of another NASD member may do 

so only pursuant to a valid give-up 

agreement, as specified in the proposed 

rules. 

The NASD/NYSE TRF will report the 

trades to the appropriate exclusive 

securities information processor 

(‘‘SIP’’).7 As with trades reported to the 

Approved NASD Trade Reporting 

Facilities, NASD/NYSE TRF 

transactions disseminated to the media 

will include a modifier indicating the 

source of such transactions that would 

distinguish them from transactions 

executed on or through the NYSE or 

another NASD Trade Reporting Facility. 

In addition, the NASD/NYSE TRF will 

provide the NASD with a real-time copy 

of each trade report for regulatory 

review purposes. Unlike the Approved 

NASD Trade Reporting Facilities, the 

NASD/NYSE TRF will not at this time 

submit transactions to clearing. 

Like the Approved NASD Trade 

Reporting Facilities, the NASD/NYSE 

TRF will be a facility of the NASD, 

subject to regulation by the NASD and 

the NASD’s registration as a national 

securities association. It will not be a 

service ‘‘for the purpose of effecting or 

reporting a transaction’’ on the NYSE; 

rather, it will be a service for the 

purpose of reporting over-the-counter 

(‘‘OTC’’) transactions in exchange-listed 

securities to the NASD.8 Thus, members 

that meet all applicable requirements 

will have the option of reporting 

transactions in exchange-listed 

securities executed otherwise than on 

an exchange to the NASD/NYSE TRF, 

one of the Approved NASD Trade 

Reporting Facilities, the NASD’s 

Alternative Display Facility (‘‘ADF’’),9

or the NASD’s Intermarket Trading 


cprice-sewell on PROD1PC62 with NOTICES