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[Federal Register Volume 63, Number 1 (Friday, January 2, 1998)]
[Notices]
[Pages 117-118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-34193]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39483; File No. SR-NASD-97-90]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by National Association of 
Securities Dealers, Inc. (``NASD'') Relating to Change of Effective 
Date of Certain Amendments to the Corporate Governance Documents of the 
NASD, NASD Regulation, Inc., and the Nasdaq Stock Market, Inc.

December 22, 1997.
    Pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 
1934 (``Act'') \1\ notice is hereby given that on December 18, 1997, 
the National Association of Securities Dealers, Inc. (``NASD'' or 
``Association'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change to the corporate 
governance documents of the NASD, NASD Regulation, Inc. (``NASD 
Regulation'') and The Nasdaq Stock Market, Inc. (``Nasdaq''), as 
described in Items I, II, and III below, which Items have been prepared 
by the Association. This filing was amended on December 19, 1997 and 
December 22, 1997.\2\ The Association has designated this proposal as 
one that is concerned solely with the administration of the self-
regulatory organization under Section 19(b)(3)(A)(iii) of the Act, and 
constituting a stated policy, practice, or interpretation with respect 
to the meaning of an existing rule under Section 19(b)(3)(A)(i) of the 
Act, which renders the rule effective upon the Commission's receipt of 
this filing. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(3).
    \2\ See Letter from Robert E. Aber, Vice President and General 
Counsel, Nasdaq to Katherine A. England, Assistant Director, 
Division of Market Regulation, Securities and Exchange Commission, 
dated December 19, 1997 and Letter from Alden Adkins, Vice President 
and General Counsel, NASD Regulation to Katherine A. England, 
Assistant Director, Division of Market Regulation, Securities and 
Exchange Commission, dated December 22, 1997. The changes contained 
in Amendments Nos. One and Two are consolidated into this Notice. 
Several additional technical amendments are also included in this 
Notice. Telephone Conversation between Sharon Zackula, Office of 
General Counsel, NASD Regulation and Mandy S. Cohen, Office of 
Market Supervision, Commission (December 22, 1997).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(e)(1) and 
(3) thereunder, the Association is filing a proposed rule change to 
adjust the effective date of its corporate governance documents 
(excepting those applicable to nomination and elections procedures), as 
recently approved by the Commission.\3\
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    \3\See Securities Exchange Act Release No. 39326 (November 14, 
1997), 62 FR 25226 (November 21, 1997) (File No. SR-NASD-97-71). The 
provisions excluded from the amended effective date set forth in 
this filing are:
    NASD By-Laws Article VII, Sections 9(a), 9(e), and 10 through 
14;
    NASD By-Laws Articles XX and XXI;
    NASD Regulations * * * By-Laws Article IV, Section 4.16; and
    Nasdaq By-Laws Article IV, Section 4.15.
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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 Association 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

[[Page 118]]

Association 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 of Rule Change
    The Association is filing this rule-filing pursuant to Section 
19(b)(3)(A) of the Act and Rule 19b-4(e) (1) and (3) thereunder, to 
provide that those amendments to the corporate governance documents 
currently scheduled to become effective on ``the date of the first 
meeting of the NASD Board of Governors in 1998'' \4\ be changed to 
become effective ``at the conclusion of the annual meeting of the NASD, 
which is currently scheduled for January 1998.'' The annual meeting is 
currently expected to be held earlier in January 1998 than the meeting 
of the Board of Governors. This change will allow the corporate 
governance documents to become effective shortly before the NASD Board 
meeting, rather than the day of the such meeting. The proposed 
amendments are necessary to allow for the expedited and smooth 
transition from the Association's current corporate structure to the 
new corporate structure recently approved by the Commission.\5\
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    \4\ See Letter from T. Grant Callery, Senior Vice President and 
General Counsel, NASD to Katherine A. England, Assistant Director, 
Division of Market Regulation, Securities and Exchange Commission, 
dated November 12, 1997 (``November 12 Letter''). The November 12 
Letter requested various effective dates for the corporate 
governance amendments contained in Release No. 34-39326.
    \5\ See Release No. 34-39326
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(2) Statutory Basis of Rule Change
    The Association believes that the proposed rule change is 
consistent with Section 15A(b)(4) of the Act \6\ in that it assures a 
fair representation of its members in the selection of its directors 
and administration of its affairs and provides that one or more 
directors shall be representative of issuers and investors and not be 
associated with a member of the Association, a broker, or a dealer.
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    \6\ 15 U.S.C. 78o-3.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Association 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 foregoing rule change to amend the effective date of the 
Association's corporate governance documents was effective upon filing 
pursuant to section 19(b)(3)(A) (i) and (iii) of the Act and 
subparagraph (e)(1) and (e)(3) of Rule 19b-4 thereunder in that it 
constitutes a stated policy, practice, or interpretation with respect 
to the meaning of an existing rule and is concerned solely with the 
administration of the self-regulatory organization.
    At any time within 60 days of the final amendment to a rule change 
pursuant to Section 19(b)(3)(A) of the Act, the Commission may 
summarily abrogate the 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. For the purposes of this rule filing, the abrogation period 
commenced as of December 22, 1997, the date of filing of Amendment No. 
2 hereto.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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 will also be 
available for inspection and copying at the principal office of the 
NASD. All submissions should refer to file number SR-NASD-97-90 and 
should be submitted by January 23, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 97-34193 Filed 12-31-97; 8:45 am]
BILLING CODE 8010-01-M
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