Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Notices 9369 

23 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 Securities Exchange Act Release No. 55160 

(January 24, 2007), 72 FR 4202 (January 30, 2007). 

6 Id. 

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). 

11 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) 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. The Commission has decided to waive 

the five-day pre-filing notice requirement. 

12 Id. 

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 the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. 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–ISE–2006–59 and should be 

submitted on or before March 22, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.23

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3558 Filed 2–28–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55335; File No. SR–

NASDAQ–2007–005] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify the 

Date for Compliance With Regulation 

NMS 

February 23, 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 

2, 2007, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 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. 

The Exchange has filed the proposal as 

a ‘‘non-controversial’’ rule change 

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

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

which renders it 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 

Nasdaq proposes to modify certain of 

its rules that become effective upon the 

compliance date for Regulation NMS 

under the Act. The Commission has 

established March 5, 2007, as the date 

of compliance for all automated trading 

centers such as Nasdaq.5 Accordingly, 

Nasdaq proposes to modify its approved 

rules to demonstrate compliance with 

Regulation NMS by March 5, 2007, to 

conform with the Commission’s 

scheduled compliance date. The text of 

the proposed rule change is available at 

Nasdaq, the Commission’s Public 

Reference Room, and http:// 

www.nasdaq.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 

Nasdaq proposes to modify certain of 

its rules that become effective upon the 

compliance date for Regulation NMS 

under the Act. The Commission has 

established March 5, 2007, as the date 

of compliance for all automated trading 

centers such as Nasdaq.6 Accordingly, 

Nasdaq proposes to modify its approved 

rules to demonstrate compliance with 

Regulation NMS by March 5, 2007, to 

conform with the Commission’s 

scheduled compliance 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 clarifies certain terms in 

Nasdaq’s rules. 

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. 

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 forgoing 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 30 days after the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 9 and Rule 19b–

4(f)(6) thereunder.10

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.11 However, Rule 19b–

4(f)(6)(iii) 12 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission believes that 

waiving the 30-day operative delay is 


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9370 Federal Register / Vol. 72, No. 40 / Thursday, March 1, 2007 / Notices 

13For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 54592 

(October 12, 2006), 71 FR 61524. 

4See letter from George Rutherfurd, Consultant, 

dated April 24, 2006 to Commission’s rulecomments e-mail. 

5A specialist may only stop stock when requested 

to by another member if certain other conditions are 

met. See Exchange Rule 116.30(3). 

6See note 4 supra. 

7See letter from Mary Yeager, Assistant Secretary, 

NYSE, to Nancy M. Morris, Secretary, Commission, 

dated January 19, 2007. 

consistent with the protection of 

investors and the public interest 

because such waiver would permit the 

Exchange to immediately update its 

rules to reflect that the compliance date 

for Regulation NMS has been changed to 

March 5, 2007. For this reason, the 

Commission designates the proposed 

rule change to be operative upon filing 

with the Commission.13

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. 

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–2007–005 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–NASDAQ–2007–005. 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 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 information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2007–005 and 

should be submitted on or before March 

22, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–3554 Filed 2–28–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55337; File No. SR–NYSE–

2006–04] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving Proposed Rule Change as 

Modified by Amendment Nos. 1 and 2 

Thereto Relating to NYSE Rule 116 

(‘‘Stop’’ Constitutes Guarantee) and 

NYSE Rule 123B (Exchange Automated 

Order Routing Systems) 

February 23, 2007. 

I. Introduction 

On February 9, 2006, the New York 

Stock Exchange LLC (f/k/a New York 

Stock Exchange, Inc.) (‘‘NYSE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’)1 and Rule 19b–4 

thereunder,2 a proposal to amend NYSE 

Rule 116 (‘‘Stop’’ Constitutes Guarantee) 

and NYSE Rule 123B (Exchange 

Automated Order Routing Systems) 

regarding a specialist’s ability to ‘‘stop’’

stock and report such a transaction. On 

April 5, 2006, NYSE filed Amendment 

No. 1 to the proposed rule change. On 

September 8, 2006, NYSE filed 

Amendment No. 2 to the proposed rule 

change. The proposed rule change was 

published for comment in the Federal 

Register on October 18, 2006.3 The 

Commission received one comment 

regarding the proposal.4 This order 

approves the proposed rule change, as 

modified by Amendment Nos. 1 and 2. 

II. Description of the Proposal 

NYSE Rule 116 provides that an 

agreement by a member to ‘‘stop’’ stock 

at a specified price constitutes a 

guarantee of a purchase or sale by the 

member of the security at that price. 

Paragraph .30 in the Rule’s 

Supplementary Material provides three 

circumstances in which a specialist may 

stop stock, including: (i) At the opening 

or reopening of trading in a stock; (ii) 

when a broker in the trading crowd is 

representing another order at the stop 

price; or (iii) when requested to by 

another member.5 The practice of 

stopping stock by specialists on the 

Exchange refers to a guarantee by a 

specialist that an order he or she 

receives will be executed at no worse a 

price than the contra side price in the 

market at the time the order was 

stopped, with the understanding that 

the order may in fact receive a better 

price. 

The Exchange proposes to remove the 

provisions in NYSE Rule 116.30 that 

permit a specialist to ‘‘stop’’ stock. 

According to the Exchange, the practice 

of specialists stopping stock makes less 

sense in the Hybrid Market, primarily 

due to the dynamics of increased speed 

of trading and automated functioning of 

the market. The Exchange further stated 

that the procedures in NYSE Rule 

116.30(3) for granting stops are not an 

efficient mechanism for seeking price 

improvement an automated market due 

to the time required to perform the 

current manual procedures. 

III. Comment Summary 

The Commission received one 

comment letter on the proposal,6 to 

which NYSE has filed a response letter.7

In the comment letter, the commenter 

argued the proposal is not in the public 

interest because the Hybrid Market, and 

specifically NYSE’s Auction Market and 

Auction Limit Orders, do not provide 

investors with the price improvement 

opportunities that the NYSE’s auction 

market did. The commenter stated that 

he believed that specialists in the 

Hybrid Market have been relieved of 


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