Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Notices 57853

9 15 U.S.C. 78s(b)(3)(A).

10 17 CFR 240.19b–4(f)(6).

11For purposes only of accelerating the operative

date of this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

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

12 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).

5Nasdaq 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).

6Nasdaq changed the name of its Third Market

to Nasdaq Intermarket, See Nasdaq Press Release,

June 13, 2000 at <http://www.nasdaqnews.com>.

information with respect to, and

facilitating transactions in securities.

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 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, or

such shorter time as the Commission

may designate, it has become effective

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

Act9 and Rule 19b–4(f)(6) thereunder.10

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.

Nasdaq has requested that the

Commission waive the 30-day preoperative waiting period. The

Commission finds good cause to

designate the proposal to become

immediately operative upon filing,

because such designation is consistent

with the protection of investors and the

public interest. Acceleration of the

operative date will allow the pilot to

continue without interruption through

March 1, 2001. The Commission

believes the pilot provides beneficial

information and services to investors,

and that acceleration of the operative

date will ensure that those benefits do

not lapse. For these reasons, the

Commission finds good cause to waive

the 30-day operative waiting period, and

to designate that the proposal become

operative immediately.11

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, N.W., Washington, D.C.

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–00–56 and should be

submitted by October 17, 2000.

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority.12

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24640 Filed 9–25–00; 8:45 am]

BILLING CODE 8010–01–M

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.

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.

* * * * *

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:

57854 Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Notices

(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 SmallCapSM 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-THECOUNTER 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

Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Notices 57855

7See 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). 8See 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). 9See 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.

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.

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

57856 Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Notices

10See Rules 4632(b), 4642(b), 4652(b), 6420(b),

and 6620(b).

11Securities Exchange Act Release No. 41208

(Mar. 24, 1999), 64 FR 15386 (Mar. 31, 1999).

12 15 U.S.C. 78o–3(b)(6).

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:

• 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 brokerdealer sends the order for execution.

• 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.

• 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, nonclearing report. This submission is not

entered for reporting purposes and thus

there will be no public trade report for

this leg of the transaction.

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, nonclearing 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

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,

Federal Register / Vol. 65, No. 187 / Tuesday, September 26, 2000 / Notices 57857

13The 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). 16 17 CFR 200.30–3(a)(12).

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.

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.

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

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–24642 Filed 9–25–00; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Coast Guard

[CGD09–00–101]

Great Lakes Regional Waterways

Management Forum

AGENCY: Coast Guard, DOT.

ACTION: Notice of meeting and request

for comments.

SUMMARY: ‘‘The Great Lakes Regional

Waterways Management Forum’’ will

hold a meeting to discuss various

waterways management issues. Agenda

items will include updates on Great

Lakes dredging and aquatic nuisance

species issues; progress reports from

Forum Subcommittees on

Communications, Navigation

Technologies, Outreach, Cruise Ships;

reports from Forum members on

Waterway User Conflicts, and

discussions about the agenda for the

next meeting. The meeting will be open

to the public.

DATES: The meeting will be held

October 10, 2000 from 1 p.m. to 4 p.m.

Comments must be submitted on or

before October 9, 2000 to be considered

at the meeting.

ADDRESSES: The meeting will be held in

the U.S. Coast Guard Club located on

the U.S. Coast Guard Moorings, 1055

East Ninth Street, Cleveland, OH 44199.

Any written comments and materials

should be submitted to Commander

(map), Ninth Coast Guard District, 1240

E. 9th Street, Room 2069, Cleveland, OH

44199.

FOR FURTHER INFORMATION CONTACT: CDR

Patrick Gerrity (map), Ninth Coast

Guard District, OH 44199, telephone

(216) 902–6049. Persons with

disabilities requiring assistance to

attend this meeting should contact CDR

Gerrity.

SUPPLEMENTARY INFORMATION: The Great

Lakes Waterways Management Forum

identifies and resolves waterways

management issues that involve the

Great Lakes region. The forum meets

twice a year to assess the Great Lakes

region, assign priorities to areas of

concern and identify issues for

resolution. The forum membership has

identified agenda items for this meeting

that include: updates on Great Lakes

dredging and aquatic nuisance species

issues; progress reports from Forum

Subcommittees on Communications,

Navigation Technologies, Outreach,

Cruise Ships; reports from Forum

members on Waterway User Conflicts,

and discussions about the agenda for the

next meeting. Additional topics of

discussion are solicited from the public.

Dated: September 7, 2000.

G.S. Cope,

Captain, U.S. Coast Guard, Acting

Commander, Ninth Coast Guard District.

[FR Doc. 00–24597 Filed 9–25–00; 8:45 am]

BILLING CODE 4910–15–U

DEPARTMENT OF TRANSPORTATION

Surface Transportation Board

[STB Ex Parte No. 290 (Sub No. 5) (2000–

4)]

Quarterly Rail Cost Adjustment Factor

AGENCY: Surface Transportation Board.

ACTION: Approval of rail cost adjustment

factor.

SUMMARY: The Board has approved the

fourth quarter 2000 rail cost adjustment

factor (RCAF) and cost index filed by

the Association of American Railroads.

The fourth quarter 2000 RCAF

(Unadjusted) is 1.062. The fourth

quarter 2000 RCAF (Adjusted) is 0.589.

The fourth quarter 2000 RCAF–5 is

0.567.

EFFECTIVE DATE: October 1, 2000.

FOR FURTHER INFORMATION CONTACT: H.

Jeff Warren, (202) 565–1533. TDD for

the hearing impaired: 1–800–877–8339.

SUPPLEMENTARY INFORMATION:

Additional information is contained in

the Board’s decision. To purchase a

copy of the full decision, write to, call,

or pick up in person from: DA∑ TO∑ DA

OFFICE SOLUTIONS, Room 405, 1925

K Street, NW, Washington, DC 20423–

0001, telephone (202) 466–5530.