70748 Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / Notices

17 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)(5).

5See Securities Exchange Act Release No. 42344

(January 14, 2000), 65 FR 3897.

6 15 U.S.C. 78o–3(b)(6).

7 15 U.S.C. 78s(b)(3)(A).

8 17 CFR 240.19b–4(f)(5).

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 N. SR–DTC–

00–09) be and hereby is approved.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.17

Jonathan G. Katz,

Secretary.

[FR Doc. 00–30137 Filed 11–24–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43575; File No. SR–NASD–

00–66]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. Relating to Maximum

Share Size Order Parameters for the

Nasdaq National Market Execution

System

November 16, 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 November

6, 2000, the National Association of

Securities Dealers, Inc., 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 with the proposed rule change

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

Act,3 and Rule 19b–4(f)(5) thereunder.4

Pursuant to Rule 19b–4(f)(5), Nasdaq

has designated this proposal as one

effecting a change in an existing orderentry or trading system of a selfregulatory organization that does not: (1)

Significantly affect the protection of

investors or the public interest, (2)

impose any significant burden on

competition, or (3) significantly have

the effect of limiting the access to or

availability of the system. As such, the

proposed rule change is immediately

effective upon the Commission’s receipt

of this filing. 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 Rule

4710(d) of the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), to expand the maximum

share size parameter for orders entered

into the Nasdaq National Market

Execution System (‘‘NNMS’’). Below is

the text of the proposed rule change.

Proposed new language is italicized;

proposed deletions are in brackets.

* * * * *

4710. Participant Obligations in NNMS

(a) through (c) No Change.

(d) Order Entry Parameters.

(1) No Change.

(2) No Change.

(3) NNMS will not accept orders that

exceed [9,900] 999,999 shares, and no

participant in the NNMS system shall

enter an order into the system that

exceeds [9,900] 999,999 shares.

(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 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

Nasdaq is proposing to expand the

maximum share size parameter for

single orders entered into the NNMS,

Currently, the maximum number of

shares that may be entered into NNMS

using a single order is 9,900. Under the

rule change proposed here, that single

order maximum share amount will be

increased to 999,999 shares. As outlined

in the Commission’s approval order of

the NNMS system, the smaller 9,900-

share order entry size was a response to

then existing technological system

constraints. 5 In the interim between the

Commission’s approval of NNMS and

the system’s upcoming implementation,

Nasdaq technology staff diligently

worked to modify and improve the

NNMS order processing and execution

platform to accommodate a larger single

order size maximum. As the result of

those efforts, Nasdaq is now prepared to

provide to NNMS participants a single

order share maximum entry capability

of 999,999 shares. Expansion of NNMS’s

automatic execution single order

maximum size parameter will give users

the optional ability to seek automatic

execution of larger orders in the NNMS

system than would be allowed under

current NNMS rules. In addition to

providing increased flexibility and

functionality to NNMS users, the

proposal also establishes uniformity in

maximum single-order size parameters

between Nasdaq’s automatic execution

and order delivery systems.

For the reasons set forth above,

Nasdaq believes that the proposed rule

change is consistent with the provisions

of Section 15A(b)(6) of the Act 6 in that

the proposal is designed to promote just

and equitable principles of trade, foster

cooperation and coordination with

persons engaged in processing

information with respect to and

facilitating transactions in securities, as

well as removing impediments to and

perfecting the mechanism of a free and

open market, 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

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A) 7of the Act and Rule 19b–

4(f)(5) 8 thereunder in that it constitutes

a change in an existing order-entry or

trading system of a self-regulatory

organization that does not: (1)

Significantly affect the protection of

investors or the public interest, (2)

Federal Register / Vol. 65, No. 228 / Monday, November 27, 2000 / Notices 70749

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

impose any significant burden on

competition, or (3) significantly have

the effect of limiting the access to or

availability of the system. 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 purpose 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 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 the file

number in the caption above and should

be submitted by December 18, 2000.

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority. 9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–30134 Filed 11–24–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43564; File No. SR–NASD–

00–61]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to the Penalty for

Market Makers That Voluntarily or

Accidentally Withdraw Their Quotes or

Fail To Refresh Their Quotes and the

Time Period Market Makers Have To

Apply To Reinstate Their Quotes

November 15, 2000.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Exchange Act’’),1 and Rule 19b–4

thereunder,2 notice is hereby given that

on October 18, 2000, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’), through its

wholly-owned subsidiary, 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. 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 filing this proposed rule

change to amend NASD Rules 4620 and

4730 to reduce the penalty for market

makers that voluntarily or accidentally

withdraw their quotes or fail to refresh

their quotes in a timely manner. The

proposal would also increase the time

period market makers have to apply to

reinstate their quotes.

The text of the proposed rule change

follows. Proposed new rule language is

in italics; proposed deletions are in

brackets.

4620. Voluntary Termination of Registration

(a) A market maker may voluntarily

terminate its registration in a security by

withdrawing its quotations from The Nasdaq

Stock Market. A market maker that

voluntarily terminates its registration in a

security may not re-register as a market

maker in that security for [twenty (20)] ten

(10) business days. Withdrawal from SOES

participation as a market maker in a Nasdaq

National Market security shall constitute

termination of registration as a market maker

in that security for purposes of this Rule;

provided, however, that a market maker that

fails to maintain a clearing arrangement with

a registered clearing agency or with a

member of such an agency and is withdrawn

from participation in the Automated

Confirmation Transaction System and

thereby terminates its registration as a market

maker in Nasdaq National Market issues may

register as a market maker at any time after

a clearing arrangement has been

reestablished and the market maker has

complied with ACT participant requirements

contained in Rule 6100.

(b) Notwithstanding the above, a market

maker that accidentally withdraws as a

market maker may be reinstated if:

(1) The market maker notified Market

Operations of the accidental withdrawal as

soon as practicable under the circumstances,

but no later than 7:00 p.m. Eastern Time on

the same day [within at least one hour] of

such withdrawal, and immediately thereafter

provided written notification of the

withdrawal and reinstatement request;

* * * * *

4730. Participant Obligations in SOES

* * * * *

(b) Market Makers

* * * * *

(6) In the case of an NNM security, a

Market Maker will be suspended from SOES

if its bid or offer has been decremented to

zero due to SOES executions and will be

permitted a standard grace period, the

duration of which will be established and

published by the Association, within which

to take action to restore a two-sided quotation

in the security for at least one normal unit

of trading. A Market Maker that fails to

reenter a two-sided quotation in a NNM

security within the allotted time will be

deemed to have withdrawn as a Market

Maker (‘‘SOESed out of the Box’’). Except as

provided below in this subparagraph and in

subparagraph (7), a Market Maker that

withdraws in an NNM security may not

reenter SOES as a Market Maker in the

security for [twenty (20)] ten (10) business

days.

(A) Notwithstanding the above, a market

maker can be reinstated if:

(i) the market maker makes a request for

reinstatement to Market Operations as soon

as practicable under the circumstances, but

no later than 7:00 p.m. Eastern Time on the

same day [within at least one hour] of having

been SOESed out of the Box, and

immediately thereafter provides written

notification of the reinstatement request;

* * * * *

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.