26892 Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Notices

of GLBA and effective on May 12, 2001. See note,

3, supra.)

11See note 10, supra.

12 15 U.S.C. 78s(b)(2).

13 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3The Commission notes that NASD’s proposal, as

published in the Federal Register for notice and

public comment, contained an erroneous filing

date. The correct date on which NASD filed File

No. SR–NASD–2001–06 with the Commission, as

noted above, was January 18, 2001.

4Letter from T. Grant Callery, Senior Vice

President and General Counsel, NASD, to Katherine

A. England, Assistant Director, Division of Market

Regulation (‘‘Division’’), Commission, dated

February 2, 2001 (‘‘Amendment No. 1’’). In

Amendment No. 1 the NASD provided the final

ballot summary of the membership vote regarding

the proposed amendments to the NASD By-Laws,

indicating that the NASD membership approved the

proposed amendments.

5Letter from T. Grant Callery, Senior Vice

President and General Counsel, NASD, to Katherine

A. England, Assistant Director, Division,

Commission, dated February 23, 2001

(‘‘Amendment No. 2’’). In Amendment No. 2 the

NASD amended proposed Article VII, Section

10(a)(ii) of the By-Laws to state ‘‘(ii) in the case of

petitions in support of more than one person,

petitions in support of the nominations of such

persons duly executed by ten percent of the

members.’’

6Securities Exchange Act Release No. 44004

(February 26, 2001), 66 FR 13601 (March 6, 2001).

7Letter from T. Grant Callery, Senior Vice

President and General Counsel, NASD, to Katherine

A. England, Assistant Director, Division,

Commission, dated April 19, 2001 (‘‘Amendment

No. 3’’). In Amendment No. 3 the NASD amended

proposed Article VII, Section 11(b) of the By-Laws

to clarify its proposed rules regarding National

Nominating Committee (‘‘NNC’’) participation in

contested Board elections by stating that the NNC

may support its nominees by sending up to two

mailings on their behalf ‘‘in lieu of mailings sent

by its candidates under Article VII, Section 12.’’

8Letter from T. Grant Callery, Senior Vice

President and General Counsel, NASD, to Katherine

A. England, Assistant Director, Division,

Commission, dated May 7, 2001 (‘‘Amendment No.

4’’). In Amendment No. 4, the NASD amended the

following sections of its By-laws to remove

proposed deletions to the term ‘‘Nasdaq’’ contained

in its original filing: Article IV, Section 1(a)(1);

Article V, Section 2(a)(1); Article VI, Section 1;

Article VII, Section 1(c); Article XIII, Section 1(b);

and Article XV, Section 4(b), In addition, NASD

withdrew its proposed modification to Article VII,

Section 3(a) in its entirety.

9The Commission was forwarded one item of

email correspondence relating to the substance of

this proposal. See email from Robert Glauber, CEO

and President, NASD to Arthur Levitt, Chairman,

Commission, on December 26, 2000, incorporating

email from Alan Davidson, President, Independent

Broker-Dealer Association, dated December 21,

2000, responding to the NASD’s correspondence to

its members about the proposed changes to its ByLaws referenced in this proposal. The commenter

opposed the NASD’s proposed rule change, as

originally proposed, specifically the portion of the

proposal allowing limited NNC participation in

contested elections. The commenter argued that the

purpose of the NNC is to nominate, not to use its

official capacity to support candidates for the NASD

Board. The commenter argued that the NASD Board

was effectively manipulating the election process

by allowing an appointed (as opposed to an elected)

committee to campaign in favor of certain

candidates.

requires, in relevant part, that the rules

of a registered securities association be

designated to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, and to protect investors and the

public interest. Section 15A(g)(3)

provides that a registered securities

association may deny membership to, or

condition the membership of, a

registered broker or dealer if such broker

or dealer does not meet the requisite

levels of knowledge and competence.

Section 15A(j) (as enacted) 11 provides

that a registered securities association

shall create a limited qualification

category for any associated person of a

member who effects sales as part of a

primary offering of securities not

involving a public offering, pursuant to

Section 3(b), 4(2), or 4(6) of the

Securities Act of 1933 and the rules and

regulations thereunder, and shall deem

qualified in such limited qualification

category, without testing, any bank

employee who, within the six month

period preceding the date of the

enactment of the GLBA, engaged in

effecting such sales.

IV. Conclusion

For the above reasons, the

Commission finds that the proposed

rule change is consistent with the

provisions of the Act, in general, and

with Sections 15A(b)(6), 15A(g)(3), and

15A(j) in particular.

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,12 that the

proposed rule change, SR–NASD–00–

69, be and hereby is, approved.

For the Commission, by the Division

of Market Regulation, pursuant to

delegated authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–12134 Filed 5–14–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44280; File No. SR–NASD–

2001–06]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendments

No. 3 and No. 4 by the National

Association of Securities Dealers, Inc.

Amending the NASD By-Laws

May 8, 2001.

I. Introduction

On January 18, 2001, the National

Association of Securities Dealers, Inc.

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

Exchange Commission (‘‘Commission’’),

pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’)1 and Rule 19b-4 thereunder,2 a

proposed rule change amending the

NASD By-Laws.3 On February 5, 2001,

the NASD submitted Amendment No. 1

to the proposed rule change.4 On

February 26, 2001, the NASD submitted

Amendment No. 2 to the proposed rule

change.5 The proposed rule change was

published for comment in the Federal

Register on March 6, 2001.6 On April

20, 2001, the NASD submitted

Amendment No. 3 to the proposed rule

change.7 On May 7, the NASD

submitted Amendment No. 4 to the

proposed rule change.8

The Commission received no

comments on the proposal.9 This order

approves the proposed rule change, as

amended. In addition, the Commission

is publishing this notice to solicit

comments on Amendments No. 3 and

No. 4 and is simultaneously approving

Amendments No. 3 and No. 4 on an

accelerated basis.

II. Description of the Proposal

In its proposed rule change, NASD

proposed amendments to its By-Laws to

address several corporate governance

issues, including the treatment of staff

Governors as ‘‘neutral’’ for purposes of

Industry/Non-Industry balancing on the

NASD’s Board of Governors (the

‘‘Board’’); the role of the national

Nominating Committee (‘‘NNC’’) in

contested elections; the petition process

by which individuals and slates can be

included in the election process; the

Industry classifications that must be

represented on the Board; and other

clarifying amendments, including the

addition of certain definitions and

changes to conform certain provisions of

the NASD By-Laws to Delaware law and

the deletion of terms that are no longer

applicable. Additionally, the

amendments reflect the new NASD

corporate structure, including the

creation of NASD Dispute Resolution,

Inc., a wholly owned subsidiary of the

NASD.

Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Notices 26893

10On June 26, 2000, the Commission approved a

number of related changes to the Nasdaq By-Laws

necessary to implement the restructuring and the

recapitalization of Nasdaq. See Securities Exchange

Act Release No. 42983 (June 26, 2000), 65 FR 41116

(July 3, 2000).

11Concurrent with the ongoing restructuring of

Nasdaq, Nasdaq submitted an application to the

Commission to register as a national securities

exchange (‘‘Form 1’’) under Section 6 of the Act.

Prior to its registration as a national securities

exchange, however, Nasdaq will continue to operate

under the Plan of Allocation and Delegation of

Functions by the NASD to its Subsidiaries (the

‘‘Delegation Plan’’), as approved by the

Commission. See Securities Exchange Act Release

No. 37107 (April 11, 1996), 61 FR 16948 (April 16,

1996).

12See Order Instituting Public Proceedings

Pursuant to Section 19(h)(1) of the Securities

Exchange Act of 1934, Making Findings and

Imposing Remedial Sanctions, Securities Exchange

Act Release No. 37538 (August 8, 1996).

13The Commission notes that Article VII, Section

12 of the current NASD By-Laws permits

candidates themselves to distribute two such

mailings using certain NASD administrative

support services and indicating their NNC backing,

if applicable. Under the NASD proposed

amendment to Article VII, Section 11, NASD

proposes to allow the NNC to initiate similar

mailings on their candidates’ behalf ‘‘in lieu of

mailings sent by its candidates pursuant to Article

VII, Section 12.’’ Although the provision

authorizing candidates’ mailings, Section 12,

remains, these two types of mailings are mutually

exclusive (i.e., each candidate—or, alternatively,

the NNC on the candidate’s behalf—may initiate a

maximum of two mailings.) See Amendment No. 3,

supra note. 7.

14The Commission notes that the NASD has

proposed deletions of the term ‘‘Nasdaq’’ from

several provisions of its By-Laws, including the

definitions of ‘‘Industry Director,’’ ‘‘Non-Industry

Director,’’ ‘‘Non-Industry Governor,’’ and ‘‘Public

Director’’ contained in Article I of the NASD ByLaws; for the purposes of this filing, however, the

NASD has withdrawn its deletion of ‘‘Nasdaq’’ in

certain other sections of its By-Laws (proposed in

its original filing), as enumerated in Amendment

No. 4. See note 8, supra.

The proposed rule change further

implements the Restructuring Plan

approved by NASD members on April

14, 2000.10 The restructuring broadens

the ownership in Nasdaq through a twophase private placement of common

stock and warrants to NASD members,

Nasdaq issuers, and certain others. Prior

to the private placement, the NASD

owned 100 percent of Nasdaq. Now,

after the closing of the second phase of

the private placement, Nasdaq has

numerous shareholders, but the NASD

retains voting control over Nasdaq.11

Regardless of the restructuring, the

NASD and Nasdaq continue to be

subject to the provisions and

requirements of the NASD’s August 8,

1996 settlement order with the

Commission (‘‘1996 Order’’).12

Summary of Amendments

First, the NASD has proposed to

reclassify the NASD Chief Executive

Officer (‘‘CEO’’) and President of

National Association of Securities

Dealers Regulation, Inc. (‘‘NASDR’’)

Governor positions as ‘‘neutral’’

Governors for Industry classification

and compositional purposes. That is,

under the proposal, the NASD CEO and

the President of NASDR are neither

Industry nor Non-Industry Governors.

According to the NASD, the

reclassification of these Governor

positions as ‘‘neutral’’ is consistent with

the neutrality classification other selfregulatory organizations assign to their

Board staff members and allows the two

Industry seats the staff occupy to now

be available to Industry candidates

elected by the NASD membership. In

addition, the NASD believes that the

reclassification of two staff Governor

positions as ‘‘neutral’’ allows for a

smaller, more efficient Board without

compromising either the fair

representation of NASD members or an

appropriate balance of Industry and

Non-Industry members.

Second, the proposed By-Law

amendments allows limited National

Nominating Committee participation in

contested elections. Under the current

By-Laws, the NASD, NASD staff, the

NNC and other corporate committees

are prohibited from taking a position in

contested elections. As a result of this

prohibition, in contested elections the

NNC has been unable to explain the

reasons a NNC nominated candidate is

worthy of support and has been unable

to respond to statements made by other

candidates or parties about the NNC

nominees. The NASD believes that the

NNC’s current inability to support its

candidates in contested elections is a

deterrent to qualified individuals

accepting nominations. To remedy this,

the NASD has proposed allowing the

NNC to provide limited support to NNC

nominated candidates. Specifically, the

NASD proposal will allow the NNC to

distribute two mailing to NASD voting

members in support of its candidates.13

The revised By-Laws also allow the

NNC to respond in-kind to vote

solicitations and additional mailings by

other candidates. In this way, the NASD

will allow the NNC to support its

candidates but not allow the NNC to

unilaterally wage an electoral campaign

on behalf of those candidates.

Next, the NASD has elected to revise

the NASD By-Laws with regard to

inclusion on the ballot by petition.

Under the current ballot by petition

process, the By-Laws provide that a

candidate—including slates of

candidates—needs to obtain a petition

signed by only three percent of the

NASD membership. By presenting a

slate of candidates to the NASD

membership, one of the candidates on

the slate can in effect ‘‘coattail’’ on the

endorsement obtained by the other

members of the slate. This result both

frustrates the purpose of the petitionmaking process (to gauge the support of

an individual NASD candidate) and

treats individual candidates seeking

nomination through petitions the same

as a slate of candidates. Under NASD’s

proposed amendments, the NASD

specifically recognizes the validity of

slate petitions, but requires that the slate

be endorsed by ten percent of NASD’s

voting members; individual candidates

may continue to be nominated by

obtaining a petition of three percent of

the NASD membership. The NASD

believes that NASD’s adoption of

separate thresholds for petition

candidates and slate petitions is

reasonable given the size and diversity

of NASD’s membership.

Fourth, to more accurately represent

the full range of relevant Industry

constituents, the NASD has proposed to

add three Industry segments to the

Board: a national retail firm, a regional

retail or independent financial planning

member firm, and a clearing firm. These

segments are in addition to required

representation by an investment

company, an insurance affiliate, and a

small firm. The Board will periodically

adopt resolutions establishing the

criteria for national and regional firm

representatives in accordance with

changes in the Industry structure and

demographics.

Finally, to conform the NASD ByLaws to the new NASD corporate

structure and the change in the NASDNasdaq relationship, the NASD has

determined to make three categories of

additional changes to the By-Laws. Frst,

the NASD has proposed amendments

reflecting the new corporate

relationship between NASD and

Nasdaq. For example, NASD’s proposed

changes to Article VII, Section 9 of its

By-Laws reflect that the NASD

Regulation and Nasdaq Boards no longer

will propose candidates to the NASD

Board for appointment to the NNC.

Second, the NASD has proposed adding

references to the newly formed NASD

Dispute Resolution subsidiary and

deleting references to Nasdaq where

they are no longer applicable.14 For

example, in Article IV, Section 1 (which

governs applications for membership),

NASD has proposed to require that new

members sign an agreement to comply

with the By-Laws of ‘‘NASD Dispute

Resolution,’’ among other laws, rules

and By-Laws subject to the provision.

Third, the NASD has suggested changes

to conform the By-Laws to Delaware

26894 Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Notices

15 15 U.S.C. 78o–3.

16 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition and capital formation. 15

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

17 15 U.S.C. 78o-3(b)(4), and (b)(6).

18 15 U.S.C. 78o–3(b)(4).

19 15 U.S.C. 78o–3(b)(6)

20 15 U.S.C. 78o-3(b)(4).

21The Commission notes that currently two other

SROs, the New York Stock Exchange and the

American Stock Exchange, operate pursuant to a

similar ‘‘neutral’’ classification with regard to

certain executives on their respective boards.

22 15 U.S.C. 78o–3(b)(4).

23See note 13, supra.

law. For example, in Article VIII,

Section 6, the NASD has proposed an

amendment stating that a resolution for

removal of officers of the NASD need

not be in writing, consistent with

Delaware law.

III. Commission’s Findings and Order

Granting Approval of the Proposed

Rule Change

The Commission has reviewed the

NASD’s proposed rule change and finds,

for the reasons set forth below, that the

proposal is consistent with the

requirements of section 15A of the

Act 15 and the rules and regulations

thereunder applicable to a national

securities association.16 Specifically, the

Commission believes the proposal is

consistent with sections 15A(b)(4) and

(b)(6) of the Act.17 Section 15A(b)(4)

provides that the rules of an association

must assure 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 representative of issuers and

investors and not be associated with a

member of the association, broker or

dealer.18 Section 15A(b)(6) requires,

among other things, that the rules of an

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, clearing, settling,

processing information with respect to,

and facilitating transactions in

securities, 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.19

NASD’s Proposed Reclassification of

Two NASD Board Members as

‘‘Neutral’’ and Reduced Board Size

The NASD has proposed an

amendment to its By-Laws to reclassify

the NASD CEO and President of NASDR

Governor positions as ‘‘neutral’’

governors; that is, neither Industry nor

Non-Industry Governors. Section

15A(b)(4) of the Act 20 requires fair

representation of an association’s

members in the selection of its directors

and administration of its affairs, and

provides that one or more directors shall

be representative of issuers and

investors and not be associated with a

member of the association, broker or

dealer. The fair representation

requirement of section 15A(b)(4) helps

to ensure that no particular constituency

is subject to the unfair, unfettered

actions of another constituency, and

helps to ensure that the NASD is

administered in a way that is equitable

to NASD members.

The Commission finds that the

proposed reclassification of the NASD

CEO and NASDR Governor as ‘‘neutral’’

for Industry classification and

compositional purposes is consistent

with section 15A(b)(4) and with the

1996 Order. In particular, the

Commission notes that the remainder of

the NASD Board will continue to

maintain a majority of Non-Industry/

Public representation.21 Moreover, as

staff representatives of the NASD, the

NASD CEO and NASDR Governor

should represent the interest of the

entire NASD organization, which

includes Industry, Non-Industry, and

Public representatives.

According to the NASD, reclassifying

the NASD CEO and NASDR Governor

also allows the NASD to reduce the size

of the NASD board, and thus operate

more efficiently, while continuing to

satisfy the fair representation

requirements of section 15A(b)(4) of the

Act and the 1996 Order. The NASD has

represented that by virtue of the

corporate restructuring necessitated by

the NASD’s 1998 acquisition of the

American Stock Exchange LLC, the

NASD moved to an overlapping board

structure whereby the members of the

Nasdaq and NASDR Boards become

members of the NASD Board, resulting

in an increase in the number of

‘‘Industry’’ Governors (by virtue of their

status as staff) on the NASD Board.

Therefore, according to the NASD, it

was forced to increase the number of

‘‘Non-Industry’’ seats as well in order to

ensure fair representation of all

constituencies; this ultimately resulted

in a large, inefficient Board structure.

The Commission believes that the

NASD’s proposed reclassification of two

of its Governors as ‘‘neutral’’ is

reasonable and may permit the NASD to

reduce the size and increase the

efficiency of the Board consistent with

the requirements of the Act.

Nominating Committee Participation in

Contested Elections

The NASD has proposed an

amendment to its By-Laws lifting its

current restriction on NNC participation

in contested elections and allowing the

NNC to provide limited support to NNC

nominated candidates. Specifically, the

NASD proposal would allow the NNC to

distribute two mailings to NASD voting

members in support of its candidates

and to respond to contesting candidates’

communications.

The Commission finds that the

proposed amendment permitting the

NNC to participate in contested

elections under the limited terms

proposed by the NASD is consistent

with section 15A(b)(4) of the Act.22 The

NASD has represented that high-profile,

public service-oriented candidates—

exactly the sort of candidates that the

NASD and its membership likely would

support—are dissuaded from running

for the NASD Board because they

cannot receive any backing from the

NNC. The Commission therefore

believes that the NNC plays a critical

role in the operation of the NASD by

helping to ensure that qualified people

serve on the NASD Board.

The Commission finds that it is

reasonable to allow the NNC to have

some limited involvement in providing

assistance to candidates that the NNC

has deemed to be appropriately

qualified for the NASD board. This

proposed change is consistent with

section 15A(b)(4)’s fair representation

requirement, in that it allows for

sufficient involvement of the NNC is

contested elections to lead to an

informed dialogue among members

about candidates for election to the

NASD Board without unduly privileging

NNC-supported candidates. The

Commission notes that the NASD has

carefully delineated the permissible

actions that can be taken by the NNC.

The nominees endorsed by the NNC

currently are allowed to make use of

administrative support by the NASD

under Article VII, Section 12, a practice

that will continue under the NASD’s

proposed amendments. The

Commission notes that the NASD has

preserved dissident candidates’ ability,

pursuant to that section, to distribute

two such mailings using certain NASD

administrative support services and

indicating their NNC backing, if

applicable. The only substantive change

is evident in NASD’s proposed addition

of Article VII, Section 11(b), which

allows the NNC to send directly to

eligible NASD members two mailings in

support of its candidates ‘‘in lieu of’’

mailings sent by the candidates

themselves 23 and to ‘‘respond in-kind’’

to opposing candidates’ mailings. The

Federal Register / Vol. 66, No. 94 / Tuesday, May 15, 2001 / Notices 26895

24See note 9, supra.

25 15 U.S.C. 78o–3(b)(4).

26See note 14, supra.

27 15 U.S.C. 78o–3(b)(6).

28 15 U.S.C. 78f(b)(2).

29 15 U.S.C. 78s(b)(2).

30 17 CFR 200.30–3(a)(12).

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

proposal does not allow the NASD

Board to wage an all-out offensive on

behalf of its candidates, as claimed by

the commenter.24 Therefore, the

Commission finds that this proposed

amendment permitting the NNC to

participate in contested election under

the measured terms proposed by the

NASD is consistent with section

15A(b)(4) because, as proposed, it

ensures fair representation by fostering

dialogue among the NASD membership

about candidates eligible for election to

the NASD Board without giving unfair

advantage to NNC-supported

candidates.

Access to Ballot by Petition

The Commission further finds that

changes to the petition process for

individual nominees and a slate of

nominees also is consistent with section

15A(b)(4)’s fair access requirement.

Currently, the By-Laws provide that a

candidate—including slates of

candidates—needs to obtain a petition

signed by only three percent of the

NASD membership. By presenting a

slate of candidates to the NASD

membership, one of the candidates on

the slate can in effect ‘‘coattail’’ on the

endorsement obtained by the other

members of the slate. This result both

frustrates the purpose of the petitionmaking process (to gauge the support of

an individual NASD candidate) and

treats individual candidates seeking

nomination through petitions the same

as a slate of candidates. Therefore, the

NASD’s amendments, while continuing

to recognize the validity of slate

petitions, requires that the slate be

endorsed by ten percent of the NASD’s

voting members. The NASD will retain

the three percent standard for

individuals. This modification is a

reasonable attempt by the NASD to

promote the fairness of its nomination

process by limiting the ability of

individual candidates to be nominated

via a slate and without independent

support, consistent with section

15A(b)(4) of the Act.

Industry Segment Representation

The NASD is proposing to amend

Article VII, Section 4 of the NASD ByLaws to require representation by three

additional Industry segments: a national

retail firm, a regional retail or

independent financial planning member

firm, and a clearing firm, and to allow

the Board, by resolution, to specify the

criteria for representatives of national

retail and regional retail or independent

financial planning firms.

The Commission finds that this

proposed change is consistent with

sections 15A(b)(4) of the Act.25 The

Commission believes that this proposed

amendment ensures that the NASD

Board reflects the current constituencies

of the securities markets and allows for

representation by various categories of

market participants within the NASD’s

membership ranks. Consequently, the

Commission believes that NASD’s

proposal promotes fair representation,

consistent with section 15A(b)(4).

Other changes

To conform the NASD By-Laws to the

new NASD corporate structure and the

change in the NASD-Nasdaq

relationship, the NASD has determined

to make three categories of additional

changes to the By-Laws: (1)

amendments reflecting the new

corporate relationship between NASD

and Nasdaq (e.g., NASD’s proposed

changes to Article VII, Section 9 of its

By-Laws reflect that the NASD

Regulation and Nasdaq Boards no longer

will propose candidates to the NASD

Board for appointment to the NNC); (2)

references to the newly formed NASD

Dispute Resolution subsidiary and

deleted references to Nasdaq where no

longer applicable (e.g., in Article IV,

Section 1, NASD’s proposal to add a

reference to ‘‘NASD Dispute

Resolution’’ in the membership

agreement that must be signed by new

NASD members);26 (3) amendments to

conform the NASD By-Laws to Delaware

law (e.g., in Article VIII, Section 6,

NASD’s proposed amendment stating

that a resolution for removal of officers

of the NASD must be in writing,

consistent with Delaware law). The

Commission finds that these proposed

changes are consistent with section

15A(b)(6) of the Act 27 in that they

accurately reflect the NASD’s new

corporate structure and conform to

applicable law.

The Commission finds good cause for

approving proposed Amendments No. 3

and No. 4 prior to the thirtieth day after

the date of publication of notice of filing

thereof in the Federal Register. The

Commission notes that Amendments

No. 3 and No. 4 clarifies the proposed

rule change. Because these amendments

do not significantly alter the original

proposal, which was subject to a full

notice and comment period, the

Commission finds that granting

accelerated approval to Amendments

No. 3 and No. 4 is consistent with

section 19(b)(2) of the Act.28

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning Amendments No.

3 and No. 4, including whether the

proposed amendments are 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 at

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 No.

SR–NASD–2001–06 and should be

submitted by June 5, 2001.

V. Conclusion

It Is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,29 that the

proposed rule change (SR–NASD–2001–

06), as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.30

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–12189 Filed 5–14–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44276; File No. SR–NSCC–

2001–04]

Self-Regulatory Organizations; The

National Securities Clearing

Corporation; Notice of Filing of

Proposed Rule Change to Modify and

Consolidate Clearing Fund Rules

May 8, 2001.

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

Securities Exchange Act of 1934

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

April 24, 2001, the National Securities