Federal Register / Vol. 72, No. 47 / Monday, March 12, 2007 / Notices 11071 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). When filing a proposed 

rule change pursuant to Rule 19b–4(f)(6) under the 

Act, an exchange is required to give 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 Exchange has 

requested that the Commission waive the 5-day prefiling notice requirement. The Commission has 

determined to grant this request. 

18 17 CFR 19b–4(f)(6)(iii). 

19For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3NASD Rule 3360 provides that the term ‘‘OTC 

Equity Securities’’ refers to any equity security that 

is not listed on The Nasdaq Stock Market or a 

national securities exchange. 

4Non-self-clearing broker-dealers generally are 

considered to have satisfied their reporting 

requirement by making appropriate arrangements 

with their respective clearing organizations. See 

NASD Notice to Members 03–08 (January 2003). 

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) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act 16 and 

Rule 19b–4(f)(6) thereunder.17

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. 

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b–

4(f)(6)(iii) 18 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 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest.19 The 

Commission believes that the proposed 

rule change will facilitate the ability of 

Nasdaq members to utilize Nasdaq’s 

automated system to comply with their 

respective obligations under Regulation 

NMS. 

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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2007–020 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–2007–020. 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 filings will also 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–NASDAQ–2007–020 and should be 

submitted on or before April 2, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4328 Filed 3–9–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55406; File Nos. SR–

NASD–2006–131; SR–NYSE–2006–111; SR–

Amex–2007–05] 

Self-Regulatory Organizations: 

National Association of Securities 

Dealers, Inc.; New York Stock 

Exchange LLC; American Stock 

Exchange LLC; Order Approving 

Proposed Rule Changes To Increase 

the Frequency of the Short Interest 

Reporting Requirements 

March 6, 2007. 

On December 4, 2006, December 7, 

2006, and January 10, 2007, 

respectively, the National Association of 

Securities Dealers, Inc. (‘‘NASD’’), the 

New York Stock Exchange LLC 

(‘‘NYSE’’), and the American Stock 

Exchange LLC (‘‘Amex’’) (collectively, 

the ‘‘SROs’’), pursuant to Section 

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

of 1934 (the ‘‘Act’’ or the ‘‘Exchange 

Act’’) 1 and Rule 19b–4 thereunder,2

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule changes as described 

below: 

Æ NASD proposed to increase the 

frequency of the short interest reporting 

requirements under NASD Rule 3360 

from monthly to twice per month. 

Currently, NASD Rule 3360, ShortInterest Reporting, requires members to 

maintain a record of total short 

positions in all customer and 

proprietary firm accounts in OTC Equity 

Securities 3 and securities listed on a 

national securities exchange if not 

reported to another self-regulatory 

organization and to regularly report 

such information in the manner 

prescribed by NASD.4 Thus, no changes 

to the text of NASD rules are required 

by this proposed rule change. 

Æ NYSE proposed an amendment to 

NYSE Rule 421.10 (Short Positions), 

which would increase the frequency of 

the short interest reporting requirements 

under Rule 421.10 from monthly to 

twice per month. In addition, NYSE 

proposed additional amendments to the 

Rule 421.10’s text in light of recent 

changes to NYSE organizational 


pwalker on PROD1PC71 with NOTICES
11072 Federal Register / Vol. 72, No. 47 / Monday, March 12, 2007 / Notices 

5 17 CFR 242.200 through 242.203. 

6Securities Exchange Act Release No. 55170 

(January 26, 2007), 72 FR 4756 (February 1, 2007). 

7Letter from Carol McCrory, Visitiing Assistant 

Professor of Legal Skils, Stetson University College 

of Law (Jan. 30, 2007) (commenting on SR–NASD–

2006–131 and SR–NYSE–2006–111). 

8See id. The letter did not comment on the Amex 

proposal. 

9Comments were received from the following: 

Lisa Morel-Misener of Cognos Incorporated, dated 

October 27, 2005 and Christopher Charles of Wulff 

Hansen & Co., dated November 15, 2005. 

10See supra note 9, Wulff Hansen & Co. letter. 

11See supra note 9, Cognos Incorporated letter. 

12 Id. 

13 17 CFR 242.200. 

14 17 CFR 240.10a–1. NASD Rule 3360(b)(1) 

excludes positions that meet the requirements of 

subsections (e)(1), (6), (7), (8), and (10) of Rule 10a–

1 and NYSE Rule 421.10 currently excludes 

positions resulting from sales specified in 

subsections (1), (6), (7), (8), (9) and (10) of 

paragraph (e) of Rule 10a–1. NYSE’s proposal 

removes subsection (9). To conform with the NASD 

and NYSE rules, Amex Rule 30A as proposed 

excludes positions resulting from sales specified in 

Rule 10a–1(e) (1), (6), (7), (8) or (10). 

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

16 15 U.S.C. 78o–3(b)(6). 

17 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

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

18 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). 

structure and to reflect the adoption of 

the Commission’s Regulation SHO.5

Æ Amex proposed to increase the 

frequency of the short interest reporting 

requirements from monthly to twice a 

month, and to codify the short interest 

reporting requirement authorized by 

Amex Rule 30. The proposed 

amendment would incorporate the short 

interest reporting requirements into new 

Amex Rule 30A. 

The SROs proposed an 

implementation date of 180 days (six 

months) following Commission 

approval of the filing in order to allow 

firms sufficient time to make any 

systems changes necessary to comply 

with the new requirements. 

The proposed rule changes were 

published in the Federal Register on 

February 1, 2007.6 The Commission 

received one comment, which was 

submitted in support of this proposal. 

Prior to the proposal, NASD had 

received two comments that also 

supported the proposal. This order 

approves the rule change. 

Discussion and Commission Findings 

A. Comments 

The Commission specifically asked 

whether the proposed 180 day 

implementation period should be 

shortened. The Commission received 

one comment letter.7 The commenter 

supported the NYSE and NASD 

proposals 8 because she favored 

regulation of short sales generally. 

However, the commenter believed that 

the implementation period should be 

shortened. 

Prior to filing with the Commission, 

NASD solicited comments on its 

proposed rule change in NASD Notice 

to Members 05–63 (September 2005) 

and received two comments.9 Of the 

two comment letters received, both were 

in favor of the proposed rule change. 

One commenter noted that minimal 

programming and costs would be 

required to implement this proposal, but 

recommended six months for 

implementation of the proposal.10 The 

other commenter indicated that 

increases or decreases in short interest 

positions are significant indicators of 

investor sentiment.11 As such, the 

commenter stated that timelier reporting 

of short interest data provides 

additional relevant information and 

more accurate indications of changes in 

investor outlook.12

In response to these comments and in 

recognition of technological and 

systems changes that may be required to 

implement the proposed rule change, 

the Commission finds that the 180 day 

implementation period proposed by the 

SROs will provide members adequate 

time to make any necessary changes. 

B. Related Issues 

Short positions required to be 

reported under the SROs’ rules are those 

resulting from ‘‘short sales’’ as the term 

is defined in Rule 200 of Regulation 

SHO,13 with certain exceptions related 

to Exchange Act Rule 10a–1.14

Commission staff has instructed the 

SROs to review these exceptions to 

short interest reporting to determine 

whether further rulemaking is 

appropriate. 

C. Commission Findings 

After a review of the rule proposals 

and the comments, the Commission 

finds that the proposed rule changes are 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to national 

securities exchanges and national 

securities associations, and in particular 

Sections 6(b)(5) 15 and 15A(b)(6) 16 of 

the Act, which require, among other 

things, that NASD, NYSE, and Amex 

rules must be 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. 

The Commission believes that the 

proposed rule changes will provide 

additional and more timely information 

related to short selling.17

It is therefore ordered, pursuant to 

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

proposed rule changes (SR–NASD–

2006–131; SR–NYSE–2006–111; SR–

Amex–2007–05) be, and it hereby 

are,approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–4293 Filed 3–9–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55398; File No. SR–NYSE–

2007–25] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Rule 123D (Openings and Halts In 

Trading) 

March 5, 2007. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on March 2, 

2007, the New York Stock Exchange 

LLC (‘‘NYSE’’ 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 prepared substantially by the 

Exchange. The Exchange 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 Exchange is proposing to amend 

Exchange Rule 123D to add new section 

(3) to enable the Exchange to halt 

trading in a security whose price may be 

about to fall below $1.00 per share, 

without delisting the security, so that 

the security may continue to trade on 

other markets that deal in bids, offers, 

orders, or indications of interest in subpenny prices, until the price of the 

security has recovered sufficiently to 


pwalker on PROD1PC71 with NOTICES