[Federal Register Volume 65, Number 187 (Tuesday, September 26, 2000)]
[Notices]
[Pages 57853-57857]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24642]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43303; File No. SR-NASD-00-52]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to an Alternative Method of Reporting 
Riskless Principal Trades

    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 August 30, 2000, the National Association of Securities Dealers, 
Inc. (``NASD'' or ``Association''), through its wholly owned 
subsidiary, The Nasdaq Stock Market, Inc. (``Nasdaq'') filed with the 
Securities and Exchange Commission (``Commission'' or ``SEC'') the 
proposed rule change as described in Items I, II and III below, which 
Items have been prepared by Nasdaq. Nasdaq 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.\5\ The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \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).
    \5\Nasdaq provided written notice to the Commission on August 
21, 2000, that it intended to file this proposal. See Rule 19b-
4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq proposes to amend NASD Rules 4632, 4642, 4652, 6130, 6420, 
and 6620, regarding Nasdaq, non-Nasdaq over-the-counter (``OTC'') 
equity, and Nasdaq InterMarket\6\ riskless principal trade-reporting, 
to provide members with an alternative method for complying with the 
riskless principal trade reporting rules, to add a new ``riskless 
principal'' capacity indicator symbol, and to make technical changes to 
NASD Rule 6420. The text of the proposed rule change is below. Proposed 
new language is in italics.
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    \6\Nasdaq changed the name of its Third Market to Nasdaq 
Intermarket, See Nasdaq Press Release, June 13, 2000 at http://www.nasdaqnews.com>.
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* * * * *

Rule 4630. Reporting Transactions in Nasdaq National Market 
Securities

Rule 4632. Transaction Reporting

    (a) through (c) No Change.
    (d) Procedures for Reporting Price and Volume. Members which are 
required to report pursuant to paragraph (b) above shall transmit last 
sale reports for all purchases and sales in designated securities in 
the following manner:
    (1) through (3)(A) No Change.
    (3)(B) Exception. A ``riskless'' principal transaction in which a 
member, after having received an order to buy a security, purchases the 
security as principal at the same price to satisfy the order to buy or, 
after having received an order to sell, sells the security as principal 
at the same price to satisfy the order to sell, shall be reported as 
one transaction in the same manner as an agency transaction, excluding 
the mark-up or mark-down, commission-equivalent, or other fee. 
Alternatively, a member may report a riskless principal transaction by 
submitting the following report(s) to ACT:

[[Page 57854]]

    (i) The member with the obligation to report the transaction 
pursuant to paragraph (b) above must submit a last sale report for the 
initial leg of the transaction.
    (ii) Regardless of whether a member has a reporting obligation 
pursuant to paragraph (b) above, the firm must submit, for the 
offsetting, ``riskless'' portion of the transaction, either:
    a. a clearing-only report with a capacity indicator of ``riskless 
principal,'' if a clearing report is necessary to clear the 
transaction; or
    b. a non-tape, non-clearing report with a capacity indicator of 
``riskless principal,'' if a clearing report is not necessary to clear 
the transaction.

    Example:   
    SELL as a principal 100 shares to another member at 40 to fill 
an existing order;
    BUY as principal 100 shares from a customer at 40 minus a mark-
down of $12.50;
    REPORT 100 shares at 40 by submitting to ACT either a single 
trade report marked with a ``riskless principal'' capacity indicator 
or by submitting the following reports:
    (1) where required by this Rule, a tape report marked with a 
``principal'' capacity indicator; and
    (2) either a non-tape, non-clearing report or a clearing-only 
report marked with a ``riskless principal'' capacity indicator.

    (e) through (f) No Change.
* * * * *

Rule 4640. Reporting Transactions in Nasdaq SmallCap<SUP>SM</SUP> 
Market Securities

Rule 4642. Transaction Reporting

    (a) through (c) No Change.
    (d) Procedures for Reporting Price and Volume. Members which are 
required to report pursuant to paragraph (b) above shall transmit last 
sale reports for all purchases and sales in designated securities in 
the following manner:
    (1) through (3)(A) No Change.
    (3)(B) Exception. A ``riskless'' principal transaction in which a 
member, after having received an order to buy a security, purchases the 
security as principal at the same price to satisfy the order to buy or, 
after having received an order to sell, sells the security as principal 
at the same price to satisfy the order to sell, shall be reported as 
one transaction in the same manner as an agency transaction, excluding 
the mark-up or mark-down, commission-equivalent, or other fee. 
Alternatively, a member may report a riskless principal transaction by 
submitting the following report(s) to ACT:
    (i) The member with the obligation to report the transaction 
pursuant to paragraph (b) above must submit a last sale report for the 
initial leg of the transaction.
    (ii) Regardless of whether a member has a reporting obligation 
pursuant to paragraph (b) above, the firm must submit, for the 
offsetting, ``riskless'' portion of the transaction, either:
    a. a clearing-only report with a capacity indicator of ``riskless 
principal,'' if a clearing report is necessary to clear the 
transaction; or
    b. a non-tape, non-clearing report with a capacity indicator of 
``riskless principal,'' if a clearing report is not necessary to clear 
the transaction.

    Example:   
    SELL as a principal 100 shares to another member at 40 to fill 
an existing order;
    BUY as principal 100 shares from a customer at 40 minus a mark-
down of $12.50;
    REPORT 100 shares at 40 by submitting to ACT either a single 
trade report marked with a ``riskless principal'' capacity indicator 
or by submitting the following reports:
    (1) where required by this Rule, a tape report marked with a 
``principal'' capacity indicator; and
    (2) either a non-tape, non-clearing report or a clearing-only 
report marked with a ``riskless principal'' capacity indicator.

    (e) through (f) No Change.
* * * * *

Rule 4650. Reporting Transactions in Nasdaq Convertible Debt 
Securities

Rule 4652. Transaction Reporting

    (a) through (c) No Change.
    (d) Procedures for Reporting Price and Volume. Members which are 
required to report pursuant to paragraph (b) above shall transmit last 
sale reports for all purchases and sales in designated securities in 
the following manner:
    (1) through (3)(A) No Change.
    (3)(B) Exception. A ``riskless'' principal transaction in which a 
member, after having received an order to buy a security, purchases the 
security as principal at the same price to satisfy the order to buy or, 
after having received an order to sell, sells the security as principal 
at the same price to satisfy the order to sell, shall be reported as 
one transaction in the same manner as an agency transaction, excluding 
the mark-up or mark-down, commission-equivalent, or other fee. 
Alternatively, a member may report a riskless principal transaction by 
submitting the following report(s) to ACT:
    (i) The member with the obligation to report the transaction 
pursuant to paragraph (b) above must submit a last sale report for the 
initial leg of the transaction.
    (ii) Regardless of whether a member has a reporting obligation 
pursuant to paragraph (b) above, the firm must submit, for the 
offsetting, ``riskless'' portion of the transaction, either:
    a. a clearing-only report with a capacity indicator of ``riskless 
principal,'' if a clearing report is necessary to clear the 
transaction; or
    b. a non-tape, non-clearing report with a capacity indicator of 
``riskless principal,'' if a clearing report is not necessary to clear 
the transaction.

    Example:   
    SELL as a principal 100 shares to another member at 40 to fill 
an existing order;
    BUY as principal 100 shares from a customer at 40 minus a mark-
down of $12.50;
    REPORT 100 shares at 40 by submitting to ACT either a single 
trade report marked with a ``riskless principal'' capacity indicator 
or by submitting the following reports:
    (1) where required by this Rule, a tape report marked with a 
``principal'' capacity indicator; and
    (2) either a non-tape, non-clearing report or a clearing-only 
report marked with a ``riskless principal'' capacity indicator.

    (e) through (f) No Change.
* * * * *

Rule 6600. REPORTING TRANSACTIONS IN OVER-THE-COUNTER EQUITY 
SECURITIES

Rule 6620. Transaction Reporting

    (a) through (c) No Change.
    (d) Procedures for Reporting Price and Volume. Members which are 
required to report pursuant to paragraph (b) above shall transmit last 
sale reports for all purchases and sales in designated securities in 
the following manner:
    (1) through (3)(A) No Change.
    (3)(B) Exception. A ``riskless'' principal transaction in which a 
member, after having received an order to buy a security, purchases the 
security as principal at the same price to satisfy the order to buy or, 
after having received an order to sell, sells the security as principal 
at the same price to satisfy the order to sell, shall be reported as 
one transaction in the same manner as an agency transaction, excluding 
the mark-up or mark-down, commission-equivalent, or other fee. 
Alternatively, a member may report a riskless principal transaction by 
submitting the following report(s) to ACT:
    (i) The member with the obligation to report the transaction 
pursuant to paragraph (b) above must submit a last sale report for the 
initial leg of the transaction.
    (ii) Regardless of whether a member has a reporting obligation 
pursuant to paragraph (b) above, the firm must submit, for the 
offsetting, ``riskless'' portion of the transaction, either:
    a. a clearing-only report with a capacity indicator of ``riskless 
principal,'' if a clearing report is necessary to clear the 
transaction; or

[[Page 57855]]

    b. a non-tape, non-clearing report with a capacity indicator of 
``riskless principal,'' if a clearing report is not necessary to clear 
the transaction.

    Example:   
    SELL as a principal 100 shares to another member at 40 to fill 
an existing order;
    BUY as principal 100 shares from a customer at 40 minus a mark-
down of $12.50;
    REPORT 100 shares at 40 by submitting to ACT either a single 
trade report marked with a ``riskless principal'' capacity indicator 
or by submitting the following reports:
    (1) where required by this Rule, a tape report marked with a 
``principal'' capacity indicator; and
    (2) either a non-tape, non-clearing report or a clearing-only 
report marked with a ``riskless principal'' capacity indicator.

    (e) through (f) No Change.
* * * * *

Rule 6400. REPORTING TRANSACTIONS IN LISTED SECURITIES

Rule 6420. Transaction Reporting

    (a) through (c) No Change.
    (d) Procedures for Reporting Price and Volume. Members which are 
required to report pursuant to paragraph (b) above shall transmit last 
sale reports for all purchases and sales in designated securities in 
the following manner:
    (1) through (3)(A) No Change.
    (3)(B) Exception. A ``riskless'' principal transaction in which a 
member, after having received [from a customer] an order to buy a 
security, purchases to security as principal [from another member or 
customer] at the same price to satisfy the order to buy or, after 
having received [from a customer] an order to sell, sells the security 
as principal [to another member] at the same price to satisfy the order 
to sell, shall be reported as one transaction in the same manner as an 
agency transaction, excluding the mark-up or mark-down, commission-
equivalent, or other fee. Alternatively, a member may report a riskless 
principal transaction by submitting the following report(s) to ACT:
    (i) The member with the obligation to report the transaction 
pursuant to paragraph (b) above must submit a last sale report for the 
initial leg of the transaction.
    (ii) Regardless of whether a member has a reporting obligation 
pursuant to paragraph (b) above, the firm must submit, for the 
offsetting, ``riskless'' portion of the transaction, either:
    a. a clearing-only report with a capacity indicator of ``riskless 
principal,'' if a clearing report is necessary to clear the 
transaction; or
    b. a non-tape, non-clearing report with a capacity indicator of 
``riskless principal,'' if a clearing report is not necessary to clear 
the transaction.
    A riskless principal transaction in which a member purchases or 
sells the security on an exchange to satisfy a customer's order will be 
reported by the exchange and the member shall not report.

    Example:   
    BUY as principal 100 shares from another member at 40 to fill an 
existing order;
    SELL as principal 100 shares to a customer at 40 plus mark-up of 
$12.50;
    REPORT 100 shares at 40 by submitting, to ACT either a single 
trade report marked with a ``riskless principal'' capacity indicator 
or by submitting the following reports:
    (1) where required by this Rule, a tape report marked with a 
``principal'' capacity indicator; and
    (2) either a non-tape, non-clearing report or a clearing-only 
report marked with a ``riskless principal'' capacity indicator.
    Example:   
    BUY as principal 100 shares on an exchange at 40 to fill an 
existing order;
    SELL as principal 100 shares to a customer at 40 plus a mark-up 
of $12.50;
    DO NOT REPORT (will be reported by exchange).

    (e) No Change.

* * * * *

Rule 6000. NASD SYSTEMS AND PROGRAMS

Rule 6100. AUTOMATED CONFIRMATION TRANSACTION SERVICE (ACT)

Rule 6130. Trade Report Input

    (a) through (c) No Change.
    (d) Trade Report To Be Input--
    (7) A symbol indicating whether the trade is as principal, riskless 
principal, or agent.
    (e) No Change.
* * * * *

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 its proposal and discussed any 
comments it received regarding the proposal. 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
    On March 24, 1999 and July 8, 1999, the SEC approved proposals to 
amend the NASD trade reporting rules relating to riskless principal 
transactions in Nasdaq National Market, Nasdaq SmallCap Market, Nasdaq 
convertible debt, non-Nasdaq OTC equity securities, and exchange-listed 
securities traded in the Nasdaq InterMarket (``Riskless Principal Trade 
Reporting Rules'').\7\ Under the new Riskless Principal Trade Reporting 
Rules, a ``riskless'' principal transaction is one where an NASD 
member, after having received an order to buy (sell) a security, 
purchases (sells) the security as principal at the same price to 
satisfy the order to buy (sell). The Rules require a firm to report a 
riskless principal trade as one transaction.
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    \7\See Securities Exchange Act Release Nos. 41208 (Mar. 24, 
1999), 64 FR 15386 (Mar. 31, 1999) (SR-98-59) and 41606 (July 8, 
1999), 64 FR 38226 (July 15, 1999) (SR-NASD-98-08).
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    Notices to Members 99-65 (discussing the trade reporting rules for 
riskless principal transactions in Nasdaq and OTC securities) and 99-66 
(discussing, among other things, the trade reporting rules for the 
Nasdaq InterMarket) were published in August 1999. The Notices provided 
guidance on compliance with the new Rules, stating that market makers 
must report the initial leg of a riskless principal transaction to ACT 
and mark the ACT report ``riskless principal'' and must not report to 
ACT the offsetting transaction with the customer. The Notices announced 
that the Riskless Principal Trade Reporting Rules would become 
effective on September 30, 1999.
    The implementation date of the new Riskless Principal Trade 
Reporting Rules has been delayed three times, most recently until 
November 1, 2000.\8\ One of the reasons for delaying the implementation 
date was to allow Nasdaq an opportunity to respond to concerns raised 
by a number of NASD member firms about trade reporting problems 
presented by the Rules.\9\ The firms represented that the approach to 
riskless principal trade reporting described in Notice to Members 99-65 
and 99-66, which requires firms to report the first leg of a riskless 
principal

[[Page 57856]]

transaction to ACT and mark the report ``riskless principal'', would be 
problematic and would result in inaccurate reporting of the initial leg 
of a riskless principal transaction. The firms indentified the 
following problems:
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    \8\See Securities Exchange Act Release Nos. 41974 (Oct. 4, 
1999), 64 FR 55508 (Oct. 13, 1999) (SR-99-52); 42494 (Mar. 3, 2000), 
65 FR 13069 (Mar. 10, 2000) (SR-NASD-00-04); and 43103 (August 1, 
2000), 65 FR 48774 (August 9, 2000) (SR-NASD-00-44).
    \9\See letter to Belinda Blaine, Associate Director, SEC, dated 
February 18, 2000 from Automated Securities Clearance, Ltd. and the 
following NASD member firms: Bernard L. Madoff Securities; CIBC 
World Markets; Credit Suisse First Boston; Deutsche Banc Alex. 
Brown; Donaldson, Lufkin & Jenrette; Goldman Sachs & Co.; Jefferies 
& Company, Inc.; Lehman Bros.; Merrill Lynch, Pierce, Fenner & 
Smith, Inc.; Morgan Stanley Dean Witter; and Salomon Smith Barney 
Inc.

    <bullet> Trades reported by a third party (e.g., an ECN) on 
behalf of a broker-dealer can not be properly marked ``riskless 
principal'' because market makers do not know whether a particular 
order will trigger a riskless principal execution at the time the 
broker-dealer sends the order for execution.
    <bullet> To the extent SOES and SelectNet executions trigger a 
riskless principal execution (for example, as result of Manning 
protection), the principal capacity assumed by Nasdaq's systems will 
be inaccurate.
    <bullet> Systemic delay would be introduced into the trade 
reporting process for trades executed within a market maker's own 
trading system, because the system would be required to determine if 
Manning protection is owed to any orders on the books before the 
first trade is reported as riskless principal.

    Nasdaq believes it has arrived at a workable approach to riskless 
principal trade reporting that can be used as an alternative to the 
original approach set forth in the new Riskless Principal Trade 
Reporting Rules and announced in the Notices. Under the alternative 
approach, member firms may report a riskless principal transaction by 
submitting either one or two reports to ACT. The first report would be 
required only if the member is the party with a reporting obligation 
under the relevant Rule. The second report, representing the 
offsetting, ``riskless'' portion of the transaction, must be submitted 
by all members electing to use the alternative method for riskless 
principal trade reporting, regardless of whether the firm has a 
reporting obligation. The report will be either a non-tape, non-
clearing report (if there is no need to submit clearing information to 
ACT) or a clearing-only report. In either case, the report must be 
marked with a capacity indicator of ``riskless principal.'' Because 
this is not a last sale report, it does not have to be submitted within 
90 seconds after the transaction is executed.
    The effect of the proposed rule change can be illustrated by the 
following examples. A market maker (MMI) holds a customer limit order 
to sell 1000 shares of ABCD, a Nasdaq National Market security, at $10 
that is displayed in its quote. MMI sells 1000 shares to a second 
market maker (MM2) at $10. When there is a trade between two market 
makers, the Nasdaq transaction reporting rules require the member 
representing the sell side to report the transaction.\10\ MM1 reports 
the sale of 1000 shares by submitting a last sale report to ACT marked 
``principal.'' MM1 then fills its customer order for 1000 shares. MM1 
submits to ACT one of two reports marked ``riskless principal'' for the 
offsetting, riskless portion of the transaction: either a clearing-only 
report if necessary to complete the transaction with the customer or, 
if a clearing entry is not necessary, a non-tape, non-clearing report. 
This submission is not entered for reporting purposes and thus there 
will be no public trade report for this leg of the transaction.
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    \10\See Rules 4632(b), 4642(b), 4652(b), 6420(b), and 6620(b).
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    In another example, both MM1 and MM2 hold customer limit orders: 
MM1 holds a customer limit order to sell 1000 shares of ABCD and MM2 
holds a customer limit order to buy 1000 shares of ABCD, both of which 
are displayed in the market makers' quotes. MM1 sells 1000 shares to 
MM2 at $10. MM1 and MM2 then fill both of their customer orders. MM1 
reports the two transactions as described above. MM2 does not have a 
reporting obligation under the Nasdaq transaction reporting rules 
because it is the member representing the buy side. Therefore, it does 
not submit a last sale report for the transaction with MM1. However, 
for the transaction with its customer, MM2 is obligated to submit to 
ACT either a clearing-only entry or a non-tape, non-clearing report 
marked ``riskless principal.''
    Firms can elect to use either the original approach described in 
Notices to Members 99-65 and 99-66 or this alternative approach for 
reporting riskless principal trades. Also, firms can elect a given 
approach either for all trades or on a trade by trade basis. While the 
new alternative method is voluntary, firms that elect not to use this 
method must comply with the original method or will be violation of the 
trade reporting rules. It should be noted that the alternative approach 
is available for all Nasdaq and OTC transactions, and for transactions 
in listed securities executed off an exchange, but is not available for 
transactions in listed securities executed on an exchange, which are 
reported by the exchange under either approach. Nasdaq proposes to make 
the alternative approach to riskless principal trade reporting 
effective on November 1, 2000.
    No ACT fee will be assessed for the non-tape, non-clearing report. 
An ACT fee will be assessed for the clearing-only report, however, 
because the firm is receiving clearing services in connection with the 
report.
    The guidance provided in Notices to Members 99-65 and 99-66 is 
still valid for firms that elect to use the original approach to 
riskless principal trade reporting. Furthermore, the guidance provided 
in the Notices with respect to compliance with SEC Rule 10b-10 is valid 
for either the original or the alternative approach.
    Nasdaq also proposes a technical change to Rule 6130(d)(7) to 
explicitly include in the risk ``riskless principal'' as a symbol on an 
ACT trade report, in addition to the principal and agent capacity 
indicators. The riskless principal symbol already is utilized in Nasdaq 
systems and in ACT trade reports, so this is not a new requirement; 
this is merely a technical change that adds this capacity indicator to 
the current list of symbols in the rule.
    Finally, Nasdaq proposes to make technical changes to Rule 
6420(d)(3)(B) to conform the language in that rule to language in Rules 
4632(d)(3)(B), 4642(d)(3)(B), 4652(d)(3)(B), and 6620(d)(3)(B). In 
particular, Nasdaq proposes to delete language from Rule 6420(d)(3)(B) 
to ensure consistent application of the Riskless Principal Trade 
Reporting Rules to any order received by a member, regardless of the 
person or entity from which it was received. Specially, while the 
current rule refers to orders received from a ``customer,'' the 
proposed rule simply refers to ``an order.'' Thus, a transaction can be 
defined as riskless when the market maker is holding an order from a 
customer, another member, the customer of another member, or any other 
entity including non-member broker-dealers. Furthermore, the text of 
the rule is being amended to more clearly provide that such trades are 
reported exclusive of any fee. Identical revisions were made to Rules 
4632(d)(3)(B), 4642(d)(3)(B), 4652(d)(3)(B), and 6620(d)(3)(B) in SR-
NASD-98-59.\11\
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    \11\Securities Exchange Act Release No. 41208 (Mar. 24, 1999), 
64 FR 15386 (Mar. 31, 1999).
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2. Statutory Basis
    Nasdaq believes that the proposal is consistent with the provisions 
of Section 15A(b)(6) of the Act,\12\ and that it will result in more 
accurate and reliable information regarding last sale transaction 
reports. Section 15A(b)(6) requires that the rules of a registered 
securities association be 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, settling,

[[Page 57857]]

processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect to mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, and not be designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \12\15 U.S.C. 78o-3(b)(6).
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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

    Because the foregoing proposed rule change 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,\13\ or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act\14\ and 
Rule 19b-4(f)(6) thereunder.\15\ 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.
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    \13\The Commission notes that the proposed rule change will not 
be effective until November 1, 2000. See footnote 8 and accompanying 
discussion
    \14\15 U.S.C. 78s(b)(3)(A).
    \15\17 CFR 240.19b-4(f)(6).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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-00-52 and should be 
submitted by October 17, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-24642 Filed 9-25-00; 8:45 am]
BILLING CODE 8010-01-M