Federal Register / Vol. 65, No. 222 / Thursday, November 16, 2000 / Notices 69357

4The proposed rule change also makes a

technical modification to Article III, Rule 5 of

MBSCC’s Rules to correct the reference contained

within such rule from ‘‘Rule 4’’ to ‘‘Rule 5.’’

5 15 U.S.C. 78q–1(b)(3)(F).

6 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).

participants fund be issued by an

approved letter of credit other than the

participant or an affiliate of the

participant.4

II. Discussion

Section 17A(b)(3)(F) 5 of the Act

requires that the rules of a clearing

agency be designed to assure the

safeguarding of securities and funds

which are in the custody or control of

the clearing agency or for which it is

responsible. As set forth below, the

Commission believes that MBSCC’s rule

change is consistent with this

obligation.

Letters of credit are used at MBSCC

and at other clearing agencies as

collateral to meet clearing fund

obligations. MBSCC’s clearing fund is

intended to provide liquidity and

protection to MBSCC and its members

in the event a MBSCC member defaults

on its obligation. If a member were

allowed to issue a letter of credit to

itself (or an affiliate of the member to

the member), the letter of credit would

probably not be honored in a default

situation.

Because the rule change will prohibit

a participant from providing a letter of

credit for itself or from an affiliated

entity, the rule change helps ensure that

MBSCC can draw upon a letter of credit

used as clearing fund collateral if

MBSCC ever had the need to do so. This

should assist MBSCC in safeguarding

securities and funds in its possession or

control or for which it is responsible.

III. Conclusion

On the basis of the foregoing, the

Commission finds that the proposal is

consistent with the requirements of the

Act and in particular with the

requirements of Section 17A of the Act

and the rules and regulations

thereunder.

It is therefore ordered, pursuant to

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

proposed rule change (File No. SR–

MBSCC–00–01) be, and hereby is,

approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29286 Filed 11–15–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43533; File No. SR–NASD–

00–63]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. Amending NASD Rule

4611 Relating to Registration As a

Nasdaq Market Maker in a Security

November 8, 2000.

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 October

20, 2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’),

through its wholly-owned subsidiary

The Nasdaq Stock Market, Inc.,

(‘‘Nasdaq’’) filed with the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by Nasdaq. Nasdaq filed the

proposed rule change pursuant to

Section 19(b)(3)(A) of the Act,3 and Rule

19b–4(f)(6) thereunder,4 which renders

the proposal effective upon filing with

the Commission. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

Nasdaq is proposing to amend NASD

Rule 4611 to allow an application for

registration as a market maker in a

security to become effective on the same

day the application is filed. Nasdaq is

also proposing a corresponding

technical change to Rule 4720 regarding

SOES Participation Registration. Below

is the text of the proposed rule change;

proposed deletions are in brackets and

proposed additions are underlined.

4611. Registration as a Nasdaq Market

Maker

* * * * *

[(c) A Nasdaq market maker may

become registered in a newly authorized

issued by contacting Nasdaq Market

Operations. If registration is requested

within five (5) business days after the

issue is authorized, registration shall

become effective at the time the

registration request is entered.]

[(d)] (c) A Nasdaq market maker may

become registered in an issue [already

included in Nasdaq] by entering a

registration request via a Nasdaq

terminal or other Nasdaq approved

electronic interface with Nasdaq’s

system or by contacting Nasdaq Market

Operations. If [registration is requested

in an issue that has been included in

Nasdaq for more than five (5) days, and]

the requirements of paragraph (b) above

are satisfied, registration shall become

effective on the day [after] the

registration request is entered.

[Provided, however, that same day

registration is permissible for:

(1) a Nasdaq market maker, registered

in a security that is the subject of a

publicly announced merger or

acquisition offer with another Nasdaq

issue, who seeks registration in the

other merger or acquisition issue; and

(2) a manager or co-manger of an

underwriting syndicate for a secondary

offering of a security on the day of the

secondary offering of that security.]

[(e)] (d) A Nasdaq market maker’s

registration in an issue shall be

terminated by the Association if the

market maker fails to enter quotations in

the issue within five (5) business days

after the market maker’s registration in

the issue becomes effective.

[(f)](e) Unless otherwise specified by

the Association, each Nasdaq market

maker that is registered as a market

maker in a Nasdaq National Market

security shall also at all times be

registered as a market maker in the

Small Order Execution System (SOES)

with respect to that security and be

subject to the SOES Rules as set forth in

the Rule 4700 Series.

[(g)](f) In cases where a market

making member has more than one

trading location, a fifth character

geographic indicator shall be appended

to the market marker’s identifier for that

security to identify the branch location

where the security is traded. The fifthcharacter branch indicators are

established by the Association and

published from time to time in the

Nasdaq/CQS symbol directory.

4720. SOES Participant Registration

* * * * *

(b) Pursuant to Rule 4611[(f)],

participation as a SOES Market Maker is

required for any Nasdaq market maker

registered to make a market in an NNM

security.

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

69358 Federal Register / Vol. 65, No. 222 / Thursday, November 16, 2000 / Notices

5 15 U.S.C. 780–3(b)(6).

6 15 U.S.C. 78k–1.

7 5 U.S.C. 78s(b)(3)(A).

8 17 CFR 204.19b–4(f)(6).

9For purposes only of accelerating the operative

date of this proposal, the Commission has

considered its impact on efficiency, competition,

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

10 15 U.S.C. 78s(b)(3)(A).

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

Presently, NASD Rule 4611 states that

a request to become registered as a

market maker in a security that has been

trading on Nasdaq for more than five (5)

days is effective on the day following

the request. If a security has been

trading on Nasdaq for five days or less,

the market maker’s request becomes

effective immediately. In contrast,

market makers utilizing Electronic

Communication Networks/Alternative

Trading Systems (‘‘ECNs/ATSs’’) may

immediately upon request begin

displaying quotes/orders for any

security trading on Nasdaq, regardless of

how long the security has been trading.

To eliminate the disparate treatment of

market makers, Nasdaq is proposing to

allow market makers to begin trading in

an issue on the same day they apply for

registration.

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(6) of the

Act 5 in that it is designed to promote

just and equitable principles of trade; 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. In addition, the proposal

is not designed to permit unfair

discrimination between brokers and

dealers, but instead is designed to

eliminate the disparate treatment of

market makers.

Nasdaq also believes the proposed

rule change is consistent with Section

11A of the Act.6 Section 11A set forth

Congress’s findings that it is in the

public interest and appropriate for the

protection of investors and the

maintenance of fair and orderly markets

to assure, among other things, fair

competition among brokers and dealers.

The proposal is consistent with this goal

because it will allow market makers to

begin quoting in a security in the same

timeframe as that which is applicable to

ECNs/ATSs.

(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

The foregoing rule change has become

effective upon filing pursuant to Section

19(b)(3)(A) of the Act, 7 and Rule 19b–

4(f)(6) 8 thereunder because the

proposed rule change does not

significantly affect the protection of

investors or the public interest; does not

impose any significant burden on

competition; and does not become

operative for 30 days from the date on

which the proposed rule change was

filed, or such shorter time as the

Commission may designate. The

proposal is designed to eliminate the

disparate treatment of market makers in

that the proposal is designed to

eliminate the disparate treatment of

market makers and will permit both

market makers and those utilizing

ECNs/ATSs to begin trading in an issue

on the same day they apply for

registration.

In addition, Nasdaq provided the

Commission with written notice of its

intent to file this proposed rule change,

and the written notice included a

description of the proposal and the text

of the proposed rule change. Nasdaq

also requested that the Commission

accelerate the operative date. 9 The

Commission believes that the proposal

is consistent with the protection of

investors and the public interest and

finds good cause to designate the

proposal immediately operative upon

filing. At any time within 60 days of the

filing of a rule change pursuant to

Section 19(b)(3)(A) of the Act, 10 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.

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 the file

number in the caption above and should

be submitted by December 7, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority, 17 CFR 200.30–3(a)(12).

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–29287 Filed 11–15–00; 8:45 am]

BILLING CODE 8010–01–M

SOCIAL SECURITY ADMINISTRATION

Privacy Act of 1974 as Amended;

Computer Matching Program (SSA)

Internal Revenue Service (IRS) Match

Number 1016

AGENCY: Social Security Administration

(SSA).

ACTION: Notice of Computer Matching

Program.

SUMMARY: In accordance with the

provisions of the Privacy Act, as

amended, this notice announces a

computer matching program that SSA

plans to conduct with IRS.

DATES: SSA will file a report of the

subject matching program with the

Committee on Governmental Affairs of

the Senate, the Committee on

Government Reform and Oversight of

the House of Representatives, and the

Office of Information and Regulatory

Affairs, Office of Management and

Budget (OMB). The matching program

will be effective as indicated below.

ADDRESSES: Interested parties may

comment on this notice by either telefax

to (410) 966–2935 or writing to the

Associate Commissioner, Office of