586 Federal Register / Vol. 63, No. 3 / Tuesday, January 6, 1998 / Notices

1 15 U.S.C. 78s(b)(3)(a).

2Conversation between Arnold Golub, Office of

General Counsel, Nasdaq with Mandy Cohen,

Division of Market Regulation, Commission

(December 24, 1995).

3 17 CFR 240.19b–4(e)(6).

4The Association has represented that this

proposed rule change: (1) Will not significantly

affect the protection of investors or the public

interest; (ii) will not impose any significant burden

on competition, and (iii) will not become operative

for 30 days after the date of this filing, unless

otherwise accelerated by the Commission. The

Association also has provided at least five business

days notice to the Commission of its intent to file

this proposed rule change, as required by Rule 19b–

4(e)(6) under the Act. Id.

5See Securities Exchange Act Release No. 39326

(November 14, 1997), 62 FR 62385 (November 21,

1997) (File No. SR–NASD–97–71).

6See Id.

7Proposed new language is underline, proposed

deletions are in brackets.

degree of price transparency in the

municipal securities market and will

provide a surveillance audit trail that

may be used by market regulators in

furtherance of their regulatory purposes.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Board does not believe that the

proposed rule change will impose any

burden on competition not necessary or

appropriate in furtherance of the

purposes of the Act since it would apply

equally to all brokers, dealers and

municipal securities dealers and merely

delays the start-up date for a program

that previously has been approved by

the Commission.

C. Self-Regulatory Organization’s

Statement of 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 proposed rule change is

merely a technical correction of rule

language, the Board has designated this

proposed rule change as constituting a

stated policy, practice, or interpretation

with respect to the meaning,

administration, or enforcement or an

existing Board rule under Section

19(b)(3)(A) of the Act, which renders the

proposed rule change effective upon

receipt of this filing by the Commission.

At any time within sixty 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.

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 the filing will also be

available for inspection and copying at

the Board’s principal offices. All

submissions should refer to File No.

SR–MSRB–97–18 and should be

submitted by January 27, 1998.

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. 98–159 Filed 1–5–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39494; File No. SR–NASD–

97–97]

Self-Regulatory Organizations; Notice

of Filing, Immediate Effectiveness and

Designation of Accelerated Operative

Date of Proposed Rule Change by

National Association of Securities

Dealers, Inc., Relating to Conforming,

Technical Amendments to Certain

Rules Relating to Procedures on

Grievances Concerning The

Automated Systems

December 29, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

December 24, 1997, 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 (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by Nasdaq. Several

technical amendments were made to the

proposal on the same date.2 The

Association has designated the

proposed rule change as constituting a

‘‘non-controversial’’ rule change under

paragraph (e)(6) of Rule 19b–4 under the

Act 3 which renders the proposal

effective upon receipt of this filing by

the Commission.4 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

The Association is filing the proposed

rule change to make conforming

technical changes to the Rule 9700

Series to substitute the ‘‘Nasdaq Hearing

Review Committee,’’ whose tenure will

terminate next month, with the ‘‘Nasdaq

Listing and Hearing Council,’’ which

will perform similar functions

thereafter. These changes are necessary

to conform the Rule 9700 Series to the

recently approved revisions to the

Nasdaq By-Laws that will take effect in

January 1998.5 In addition, the text of

new rule 4880 has been revised to

reflect recent changes in the review

process approved by the Commission at

the same time as the by-laws.6 Finally,

for ease of reference, the Rule 9700

Series has been renumbered as the Rule

4800 Series, since the rules contained

therein relate to other rules within the

Rule 4000 Series. The text of the

proposed rule change follows: 7

* * * * *

Rules of the Association

* * * * *

4000. The Nasdaq Stock Market

* * * * *

[9700] 4800. Procedures on Grievances

Concerning the Automated Systems

[9710] 4810. Purpose

The purpose of this Rule [9700] 4800

Series is to provide, where justified,

redress for persons aggrieved by the

operations of any automated quotation,

execution, or communication system

owned or operated by the Association,

or any subsidiary thereof, and approved

by the Commission, not otherwise

provided for by the [this] Code of

Procedure as set forth in the Rule 9000

Series or the Uniform Practice Code as

set forth in the Rule 11000 Series, and

to provide procedures for the handling

of qualification matters pursuant to The

Nasdaq Stock Market Rules, as set forth

in the Rule 4000 Series.
Federal Register / Vol. 63, No. 3 / Tuesday, January 6, 1998 / Notices 587

8See Release No. 34–39326.

9See id.

[9720] 4820. Form of Application

All applications shall be in writing,

and shall specify in reasonable detail

the nature of and basis for the redress

requested. If the application consists of

several allegations, each allegation shall

be stated separately. All applications

must be signed and shall be directed to

[the Association] Nasdaq.

[9730] 4830. Request for Hearing

Upon request, the applicant shall be

granted a hearing after reasonable

notice. In the absence of such request

for a hearing, [the Association] Nasdaq

may, in its discretion, have any

application set down for hearing or

consider the matter on the basis of the

application and supporting documents.

[9740] 4840. Consideration of

Applications

All applications shall be considered

by a hearing panel designated by the

Board of Governors. The applicant shall

be entitled to be hear in person and by

counsel and to submit any relevant

matter. In any such proceeding a record

shall be kept.

[9750] 4850. Decision

Decisions on applications shall be in

writing and a copy shall be sent by mail

to the applicant. The hearing panel may

communicate its determination to the

applicant prior to the issuance of a

written decision, which shall be

effective as of the time of such

communication. The written decision

shall contain the reasons supporting the

hearing panel’s conclusions.

[9760] 4860. Review by the Nasdaq

Listing and Hearing Review

[Committee] Council

The decision shall be subject to

review by the Nasdaq Listing and

Hearing Review [Committee] Council on

its own motion within 45 calendar days

after issuance of the written decision.

Any such decision shall also be subject

to review upon application of any

person aggrieved thereby, filed within

15 calendar days after issuance. The

institution of a review, whether on

application or on the initiative of the

Nasdaq Listing and Hearing Review

[Committee] Council, shall not operate

as a stay of the decision.

[9770] 4870. Findings of the Nasdaq

Listing and Hearing Review

[Committee] Council on Review

Upon consideration of the record, and

after such further hearings as it shall

order, the Nasdaq Listing and Hearing

Review [Committee] Council shall

affirm, modify, reverse, dismiss, or

remand the decision. The Nasdaq

Listing and Hearing Review [Committee]

Council shall set forth specific grounds

upon which its determination is based.

[9780] 4880. Discretionary Review by

the Board

Determinations of the Nasdaq Listing

and Hearing Review [Committee]

Council may be reviewed by the NASD

Board of Governors solely upon the

request of one or more Governors not

later than the NASD Board meeting next

following the Nasdaq Listing and

Hearing Review Council’s decision but

which is 15 calendar days or more

following the decision of the Nasdaq

Listing and Hearing Review Council.

Notwithstanding the preceding

sentence, the NASD Board may

determine it is advisable to call for

review any decision of the Nasdaq

Listing and Hearing Review Council

within the 15 calendar day period

following the decision of the Nasdaq

Listing and Hearing Review Council.

Such review, which may be undertaken

solely at the discretion of the Board,

shall be in accordance with resolutions

of the Board governing the review of

Nasdaq Listing and Hearing Review

[Committee] Council determinations.

The Board shall affirm, modify or

reverse the determinations of the

Nasdaq Listing and Hearing Review

[Committee] Council or remand the

matter to the Nasdaq Listing and

Hearing Review [Committee] Council

with appropriate instructions. The

institution of discretionary review by

the Board shall not operate as a stay of

the decision.

[9790] 4890. Application to Commission

for Review

Any decision not appealed under

Rule 4860 or called for review under

Rule 4860 or Rule 4880 shall become

the final action of the Association upon

expiration of the time allowed for

appeal or call for review. In any case

where a person feels aggrieved by any

final action of the Association [decision]

issued pursuant to Rule [9770] 4870 or

Rule [9780] 4880, the person may make

application for review to the

Commission in accordance with the Act.

* * * * *

In addition to the specific changes set

forth above, the following conforming

amendments are also necessary to

ensure conformance to the corporate

governance documents:

• In Rules 4480(e), 4530, 5360, and

9511(a)(3), all references to Rule 9700

Series should be changed to refer to the

Rule 4800 Series.

• In Rule 4330(a), the reference to the

Rule 9000 Series should be changed to

refer to the Rule 4800 Series.

• In Rule 9110(a), the last sentence

should be amended to read ‘‘The Rule

9100 Series is of general applicability to

all proceedings set forth in Rule 9000

Series, [except the proceedings set forth

in the Rule 9700 Series,] unless a Rule

specifically provides otherwise.’’

* * * * *

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis For, the Proposed Rule

Change

In its filing with the Commission, the

Association 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. The

Association 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 of the Rule Change

The purpose of the proposed rule

change is to technically conform the

Rule 9700 Series (as renumbered the

Rule 4800 Series), to the recently

revised Nasdaq By-Laws that will

become effective upon conclusion of the

NASD annual meeting in January 1998.

The proposed changes are necessary to

allow for the expedited and smooth

transition from the Association’s current

corporate structure to the new corporate

structure recently approved by the

Commission.8

To conform the Rule 9700 Series to

the Nasdaq By-Laws, as revised, the

term ‘‘Nasdaq Hearing Review

Committee,’’ is being replaced by the

term, ‘‘Nasdaq Listing and Hearing

Review Council.’’ Additionally, the

Association is conforming proposed

Rule 4880 (currently Rule 9780) to

parallel the review process changes

recently approved by the Commission at

the same time the Nasdaq By-Laws

revisions were approved.9 As revised,

proposed Rule 4880 establishes a period

of at least 15 calendar days between the

date of the decision of the Nasdaq

Listing and Hearing Review Council

decision and the meeting at which the

NASD Board may consider whether to

call a decision for review. Relocation to

the Rule 4800 Series is proposed

because the 9700 Series relates to the
588 Federal Register / Vol. 63, No. 3 / Tuesday, January 6, 1998 / Notices

10 15 U.S.C. 78o-3(b)(4).

11 17 CFR 240.19b–4(e)(6).

12 15 U.S.C. 78s(b)(3)(A)(iii).

13 17 CFR 240.19b–4(e)(6).

1The NASD filed Amendment Nos. 1, 2, 3 and

4 to the proposed rule change on July 15, 1997, July

21, 1997, December 3, 1997, and December 19,

1997, respectively, the substance of which is

incorporated into the notice. See letters from to

Elliot R. Curzon, Assistant General Counsel, NASD

Regulation, to Katherine A. England, Assistant

Director, Market Regulation, Commission, dated

July 14, 1997 (‘‘Amendment No. 1’’), July 18, 1997

(‘‘Amendment No. 2’’), and December 18, 1997

(‘‘Amendment No. 4’’); and letter from Joan C.

Conley, Secretary, NASD Regulation, to Katherine

A. England, Assistant Director, Market Regulation,

Commission, dated December 3, 1997 (and

attachments) (‘‘Amendment No. 3’’).

grievance procedures currently set forth

in the Rule 4000 Series. Finally, other

conforming changes are being made to

correct existing cross references to the

Rule 9700 Series to those of the new

Rule 4800 Series.

2. Statutory Basis of Rule Change

The Association believes that the

proposed rule change is consistent with

Section 15A(b)(4) of the Act 10 in that it

assures a fair representation of its

members in the selection of its directors

and administration of its affairs and

provides that one or more directors shall

be representatives of issuers and

investors and not be associated with a

member of the Association, a broker, or

a dealer.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Association 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 proposed rule change has been

filed by the Association as a ‘‘noncontroversial’’ rule change under Rule

19b–4(e)(6).11 Consequently, the rule

change shall become operative 30 days

after the date of this filing, or such

shorter time as the Commission may

designate if the change: (i) Will not

significantly affect the protection of

investors or the public interest; and (ii)

will not impose any significant burden

on competition, pursuant to Section

19(b)(3)(A)(iii) of the Act 12 and

subparagraph (e)(6) of Rule 19b–4

thereunder.13 To ensure conformity

with the revised Nasdaq By-Laws,

however, which are scheduled to

become effective at the conclusion of

the January 1998 annual meeting of the

NASD, the Association requests

acceleration of the operative date of the

changes contained in this rule filing, so

that the revised Rules of the Association

and related corporate governance

documents will be in force

simultaneously.

At any time within 60 days of this

filing, the Commission may summarily

abrogate this proposal 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.

For the reasons stated, and since such

action is in the public interest, does not

significantly affect the protection of

investors or impose any significant

burden on competition, and because the

changes in this rule filing conform the

Rules of the Association to the by-laws

recently approved by the Commission

(which will become effective at the

conclusion of the NASA’s annual

meeting), the Commission finds good

cause to accelerate the operative date of

the changes contained herein, and

designate such changes to become

operative at the conclusion of the

annual meeting of the NASD.

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 January 27, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–161 Filed 1–5–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39487; File No. SR–NASD–

97–44]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to the Eligibility

of Claims for Arbitration

December 23, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on June 24, 1997,1 the

National Association of Securities

Dealers, Inc. (‘‘NASD’’ or ‘‘Association’’)

filed with the Securities Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I, II, and III below, which Items

have been prepared by the selfregulatory organization. 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

NASD Regulation is proposing to

amend Rules 10304, 10307 and 10324 of

the NASD’s Code of Arbitration

Procedure (‘‘Code’’) to establish that all

arbitration claims are eligible unless

challenged, and to establish a procedure

for challenging the eligibility of claims.

Below is the text of the proposed rule

change. Proposed new language is in

italics; proposed deletions are in

brackets.

10304. Time Limit on Eligibility of

Claims for Arbitration; Procedures for

Determining Eligibility Under This Rule

[Time Limitation Upon Submission]

This rule describes when a claim must

be filed in order to be eligible for

arbitration, how and when parties may

challenge the eligibility of claims, and

the Director’s role in determining

eligibility.

[No dispute, claim, or controversy

shall be eligible for submission to

arbitration under this Code where six (6)

years have elapsed from the occurrence