Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices 16389 

7 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(5). 

10See Amex Rules 904 and 905. 

11See Amex Rule 462. 

12 17 CFR 242.600(b)(47). 

13 17 CFR 240.19b–4(e). 

14 15 U.S.C. 78s(b)(2). 

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). 

which has not been reported to the 

Exchange. 

III. Discussion 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange 7 and, in 

particular, the requirements of Section 6 

of the Act.8 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,9 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed 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. 

Surveillance 

The Commission notes that the 

Exchange has represented that it has an 

adequate surveillance program in place 

for options based on Commodity Pool 

ETFs. The Exchange may obtain trading 

information via the Intermarket 

Surveillance Group (‘‘ISG’’) from other 

exchanges who are members or affiliates 

of the ISG and have entered into 

numerous comprehensive surveillance 

sharing agreements with various 

commodity futures exchanges 

worldwide. Prior to listing and trading 

options on Commodity Pool ETFs, the 

Exchange represented that it will either 

have the ability to obtain specific 

trading information via ISG or through 

a comprehensive surveillance sharing 

agreement with the exchange or 

exchanges where the particular 

commodity futures and/or options on 

commodity futures are traded. In 

addition, the Exchange represented that 

the addition of Commodity Pool ETF 

options will not have any effect on the 

rules pertaining to position and exercise 

limits 10 or margin.11

Listing and Trading of Options on 

Commodity Pool ETFs 

The Commission notes that, pursuant 

to the proposed rule change, a 

Commodity Pool ETF will be subject to 

the provisions of Amex Rules 915 and 

916, as applicable. These provisions 

include requirements regarding initial 

and continued listing standards, the 

creation/redemption process for ETFs, 

and trading halts. All Commodity Pool 

ETFs must be traded through a national 

securities exchange or through the 

facilities of a national securities 

association, and must be ‘‘NMS stock’’

as defined under Rule 600 of Regulation 

NMS.12

The Commission believes that this 

proposal is necessary to enable the 

Exchange to list and trade options on an 

expanding range of Commodity Pool 

ETFs currently approved for trading and 

that it is reasonable to expect other 

types of Commodity Pool ETFs to be 

introduced for trading in the future. 

This proposal would help ensure that 

the Exchange will be able to list options 

on Commodity Pool ETFs that have 

been recently launched as well as any 

other similar Commodity Pool ETFs that 

may be listed and traded in the future 13

thereby offering investors greater option 

choices. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–Amex–2006–

110), is hereby approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–6200 Filed 4–3–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55550; File No. SR–

NASDAQ–2007–010) 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change and 

Amendment No. 2 Thereto To Amend 

Rule 4611 Relating to Sponsored 

Access 

March 28, 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’’ 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. 

On February 23, 2007, Nasdaq filed 

Amendment No. 1 to the proposed rule 

change but subsequently withdrew it. 

On February 23, 2007, Nasdaq filed 

Amendment No. 2 to the proposed rule 

change. 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, as amended, from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq proposes to amend the 

Nasdaq Rule 4611 to update and codify 

the requirements applicable to Nasdaq 

members that provide sponsored access 

to other firms and customers to the 

Nasdaq execution system. 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 amend the 

Nasdaq Rule 4611 to update and codify 

the requirements applicable to Nasdaq 

members that provide sponsored access 

to other firms and customers to the 

Nasdaq execution system. Currently, 

Nasdaq members provide sponsored 

access consistent with guidance set 

forth in NASD Notice to Members 98–

66 as updated by the NASD in Notice 


jlentini on PROD1PC65 with NOTICES
16390 Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices 

5Nasdaq established Rule 4611(d) in order to 

codify the requirements set forth in the 

aforementioned NASD Notices to Members. See 

Securities Exchange Act Release No. 55061 (January 

8, 2007), 72 FR 2052 (January 17, 2007) (SR–

NASDAQ–2006–061). Nasdaq is amending Rule 

4611(d) in order to match the regulatory 

requirements imposed by another exchange and, 

thereby, to promote uniform regulation of 

sponsored access relationships. 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10 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. Nasdaq has satisfied the five-day prefiling notice requirement. 

11 Id. 

12For 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). 

to Members 04–66.5 Consistent with its 

status as an independent self-regulatory 

organization and the need to establish 

rules governing the use of its systems, 

Nasdaq proposes to adopt a sponsored 

access rule in the Nasdaq Rule Manual. 

In recognition of the fact that Nasdaq 

members are members of other 

exchanges, that they use other 

exchanges’ systems, and that they 

provide or receive sponsored access on 

other exchanges in the same manner as 

on Nasdaq, Nasdaq is proposing to 

adopt a sponsored access rule that is 

identical to that of another exchange, 

specifically NYSE Arca, Inc. (‘‘NYSE 

Arca’’). The NYSE Arca sponsored 

access rule has, by virtue of Commission 

approval, been determined to be 

consistent with the Act, including being 

consistent with the public interest and 

the protection of investors. 

The proper usage of Nasdaq’s systems 

and the protection of investors will be 

achieved in several ways. Sponsored 

participants must enter into and 

maintain customer agreements with one 

or more sponsoring members, 

establishing proper relationships and 

accounts through which the sponsored 

participant may trade on the Nasdaq 

Market Center. In such customer 

agreements sponsored participant and 

its sponsoring member must agree in 

writing to ‘‘Sponsorship Provisions’’

that (1) obligates the sponsoring member 

and sponsored participant to enter into 

a contractual relationship with Nasdaq; 

(2) ensures that orders and trades are 

honored; (3) holds the sponsoring 

member responsible for the conduct of 

sponsored participants; (4) obligates 

sponsored participants to comply with 

all applicable Nasdaq rules; (5) restricts 

access to Nasdaq systems to a limited 

group of known and educated users, (6) 

requires sponsoring members to have 

procedures to monitor its employees, 

agents, and customers in their access to 

and use of Nasdaq systems; and (7) 

ensures full payment of all applicable 

Nasdaq fees. 

The proposed rule change is intended 

to codify practices currently in use in 

existing sponsored access relationships. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,6 in 

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

Act,7 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. 

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 foregoing 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 8 and Rule 19b–

4(f)(6) thereunder.9

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.10 However, Rule 19b–

4(f)(6)(iii) 11 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 

consistent with the protection of 

investors and the public interest 

because such waiver would permit 

Nasdaq to immediately implement the 

proposed rule change. For this reason, 

the Commission designates the 

proposed rule change to be operative 

upon filing with the Commission.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. 

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–2007–010 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–2007–010. 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 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 72, No. 64 / Wednesday, April 4, 2007 / Notices 16391 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This includes securities listed on Nasdaq’s 

predecessor market, operated as a facility of the 

NASD. 

4See Head Trader Alert 2005–133 (November 14, 

2005), available at: http://www.nasdaqtrader.com/ 

Trader/News/2005/headtraderalerts/hta2005- 

133.stm and Vendor Alert 2005–070 (November 14, 

2005), available at: http://www.nasdaqtrader.com/ 

Trader/News/2005/vendoralerts/nva2005-070.stm. 

See also Head Trader Alert 2006–144 (September 

29, 2006), available at: http:// 

www.nasdaqtrader.com/Trader/News/2006/ 

headtraderalerts/hta2006-144.stm, Head Trader 

Alert 2006–193 (November 16, 2006), available at: 

http://www.nasdaqtrader.com/Trader/News/2006/ 

headtraderalerts/hta2006-193.stm and Vendor Alert 

2006–065 (October 4, 2006), available at: http:// 

www.nasdaqtrader.com/Trader/News/2006/ 

vendoralerts/nva2006-065.stm. 

5See Head Trader Alert 2006-201 (December 6, 

2006), available at: http://www.nasdaqtrader.com/ 

Trader/News/2006/headtraderalerts/hta2006- 

201.stm, Head Trader Alert 2007–008 (January 25, 

2007), available at: http://www.nasdaqtrader.com/ 

Trader/News/2007/headtraderalerts/hta2007- 

008.stm, Head Trader Alert 2007–011 (January 30, 

2007), available at: http://www.nasdaqtrader.com/ 

Trader/News/2007/headtraderalerts/hta2007- 

011.stm, Head Trader Alert 2007–020 (February 7, 

2007), available at: http://www.nasdaqtrader.com/ 

Trader/News/2007/headtraderalerts/hta2007- 

020.stm, and Head Trader Alert 2007–034 (February 

16, 2007), available at: http:// 

www.nasdaqtrader.com/Trader/News/2007/ 

headtraderalerts/hta2007-034.stm. 6Head Trader Alert 2007–050 (March 1, 2007), 

available at: http://www.nasdaqtrader.com/Trader/ 

News/2007/headtraderalerts/hta2007-050.stm. 

7See Securities Exchange Act Release No. 55519 

(March 26, 2007) (SR–NASDAQ–2007–025). 

8Nasdaq states that it remains committed to 

working with the Commission and other markets to 

establish an equitable and transparent symbol 

assignment plan. 

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–2007–010 and 

should be submitted on or before April 

25, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E7–6179 Filed 4–3–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55563; File No. SR–

NASDAQ–2007–031] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change 

Relating to Trading Three-Character 

Symbols 

March 30, 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 March 29, 

2007, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’) 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 substantially prepared by 

Nasdaq. 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 proposes to allow any 

company with a three-character symbol 

that transfers its securities to Nasdaq 

from another domestic market to 

continue using the existing threecharacter symbol that identifies the 

company’s securities. 

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 

Historically, securities listed on 

Nasdaq have traded using four or five 

character symbols.3 In 2005, however, 

Nasdaq announced its intent to allow 

companies listed on Nasdaq to also use 

one-, two-, or three-character symbols 

beginning on January 31, 2007.4 This 

announcement was designed to provide 

market participants and vendors the 

time needed to make required changes 

to their own systems that may be 

affected by the change. Nasdaq 

announced a series of dates throughout 

December 2006 and January and 

February 2007 where market 

participants could test trading Nasdaq 

stocks using one-, two-, or threecharacter symbols on weekends, in after 

hour sessions, and during full day 

sessions.5 Beginning February 20, 2007, 

Nasdaq had the ability to accept and 

distribute Nasdaq-listed securities with 

one-, two-, or three-character symbols. 

Nasdaq reminded market participants 

about this change again on March 1, 

2007, stressing that ‘‘[a]ll customers 

should have completed their coding and 

testing efforts to ensure their readiness 

to support 1-, 2- and 3-character 

NASDAQ-listed issues.’’ 6 On March 22, 

2007, Delta Financial Corporation 

transferred the listing of its common 

stock to Nasdaq from the American 

Stock Exchange (‘‘Amex’’) and 

maintained its three-character symbol, 

DFC.7 Nasdaq represents that there have 

been no trading problems reported to 

Nasdaq as a result of trading that 

security on Nasdaq with a threecharacter symbol. 

Nasdaq now proposes to allow any 

company with a three-character symbol 

that transfers its securities to Nasdaq 

from another domestic market to 

continue using the existing threecharacter symbol that identifies the 

company’s securities.8 Nasdaq believes 

that this will promote competition 

among exchanges and reduce investor 

confusion. Specifically, Nasdaq believes 

that issuers should have the freedom of 

choice and competition. Nasdaq 

believes that as issuers face the 

important choice of where to list their 

equities, the symbol an issuer currently 

uses should not factor prominently in 

the listing decision process. Similarly, 

Nasdaq believes that the symbol that a 

market assigns to an issuer should not 

serve as an anchor if the issuer wishes 

to transfer to a competing market. 

Nasdaq believes that, as such, 

permitting the portability of these 

symbols will enhance competition 

among exchanges and encourage issuers 

to evaluate exchanges on the basis of 

objective criteria, including the most 

efficient trading platform for investors 

and the lowest costs for shareholders. 

Nasdaq believes that permitting 

companies to continue to use their 

historical symbol will also reduce 

investor confusion associated with any 

such transfer because investors will 

continue to be able to obtain quotations 

and execute trades using the same 

familiar symbol and will allow the 

issuer to maintain a symbol that has 


jlentini on PROD1PC65 with NOTICES