[Federal Register Volume 65, Number 228 (Monday, November 27, 2000)]
[Notices]
[Pages 70748-70749]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-30134]


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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 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) 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.
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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)(5).
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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.
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    \5\ See Securities Exchange Act Release No. 42344 (January 14, 
2000), 65 FR 3897.
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    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.
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    \6\ 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.

(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) \7\of 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)

[[Page 70749]]

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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(5).
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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 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\
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    \9\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-30134 Filed 11-24-00; 8:45 am]
BILLING CODE 8010-01-M