Document ID: SEC-2006-1010-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NASDAQ Stock Market LLC
Posted Date: 2006-08-07T04:00Z

[Federal Register: August 7, 2006 (Volume 71, Number 151)]
[Notices]               
[Page 44738-44740]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07au06-112]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54248; File No. SR-NASDAQ-2006-019]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding Technical and Conforming Changes to Nasdaq's 4000 Series 
Rules

July 31, 2006.
    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 July 28, 2006, The NASDAQ Stock Market LLC (``Nasdaq'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by Nasdaq. Nasdaq has designated the proposed rule change as 
constituting a non-controversial rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders the proposed rule change effective upon filing with the 
Commission.\5\ The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The Exchange requested the Commission to waive the 30-day 
operative delay, as specified in Rule 19b-4(f)(6)(iii). 17 CFR 
240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change.

    Nasdaq proposes to conform the Rule 4000 Series of Nasdaq's rules 
to certain changes made to the Rule 4000 Series of the rules of the 
National Association of Securities Dealers, Inc. (``NASD'') since 
approval of Nasdaq's rules by the Commission in January 2006 and to 
correct certain errors in the approved rules. Nasdaq proposes to 
implement the proposed rule change immediately.
    The text of the proposed rule change is available on Nasdaq's Web 
site (http://www.complinet.com/nasdaq), at Nasdaq's principal office, and at 

the Commission's Public Reference Room.

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 the 
Statutory Basis for, the Proposed Rule Change.

1. Purpose.
    Nasdaq is modifying its 4000 Series Rules to conform them to 
certain changes made to the 4000 Series Rules of the NASD since 
approval of Nasdaq's rules by the Commission in January 2006 and to 
correct certain typographical errors in the approved rules.
    Specifically, Nasdaq is:
     Amending Nasdaq Rule 4120 to reflect changes made by SR-
NASD-2006-015 \6\ in connection with the implementation of the Nasdaq 
Halt Cross, and to add language concerning halts in Nasdaq index 
warrants that is being relocated from former Nasdaq Rule 2854.\7\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 53687 (April 20, 2006), 
71 FR 24787 (April 27, 2006) (SR-NASD-2006-015). Nasdaq notes that a 
further amendment to Rule 4120 was approved by the Commission in 
Securities Exchange Act Release No. 54155 (July 14, 2006), 71 FR 
41291 (July 20, 2006) (SR-NASDAQ-2006-001), but with an 
implementation date of August 28, 2006. Accordingly, Nasdaq will 
file a technical rule change prior to that date to reflect the 
difference between the version of the rule adopted in this filing 
for the period prior to August 28, and the version to take effect on 
that date.
    \7\ SR-NASDAQ-2006-018 (July 25, 2006).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4120 to update contact information 
for Nasdaq's MarketWatch Department and amending Nasdaq IM-4120 and 
Nasdaq Rules 4310, 4320, and 4350 to remove superfluous and outdated 
contact information.
     Amending Nasdaq Rule 4305 to change a reference to the 
Nasdaq National Market to the Nasdaq Global Market, consistent with 
changes made through SR-NASDAQ-2006-007.\8\
---------------------------------------------------------------------------

    \8\ Securities Exchange Act Release No. 53799 (May 12, 2006), 71 
FR 29195 (May 19, 2006) (SR-NASDAQ-2006-007).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4320 to eliminate phase-in dates that 
have already passed and rule text that has been superseded by the 
phased-in rules.\9\
---------------------------------------------------------------------------

    \9\ Securities Exchange Act Release No. 50753 (November 29, 
2004), 69 FR 70486 (December 6, 2004) (SR-NASD-2004-147).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4350 and adding Nasdaq IM-4350-8 to 
reflect an amendment made to NASD Rule 4350 by SR-NASD-2005-073.\10\
---------------------------------------------------------------------------

    \10\ Securities Exchange Act Release No. 53578 (March 30, 2006), 
71 FR 17532 (April 6, 2006) (SR-NASD-2005-073).
---------------------------------------------------------------------------

     Amending Nasdaq Rules 4510 and 4520, deleting Nasdaq IM-
4500-3, and adding new Nasdaq IM-4500-4, to reflect changes made by SR-
NASD-2005-143 \11\ and SR-NASD-2006-047.\12\
---------------------------------------------------------------------------

    \11\ Securities Exchange Act Release No. 52997 (December 22, 
2005), 70 FR 77222 (December 29, 2005) (SR-NASD-2005-143).
    \12\ Securities Exchange Act Release No. 53696 (April 21, 2006), 
71 FR 25273 (April 28, 2006) (SR-NASD-2006-047).
---------------------------------------------------------------------------

     Adding Nasdaq Rule 4613(a)(2) and (3) and Nasdaq IM-4613 
to restore a pilot program for supplemental MPIDs that had lapsed at 
the time of the approval of Nasdaq's exchange registration application 
but that was

[[Page 44739]]

restored under NASD rules in SR-NASD-2006-004.\13\
---------------------------------------------------------------------------

    \13\ Securities Exchange Act Release No. 53192 (January 30, 
2006), 71 FR 6302 (February 7, 2006) (SR-NASD-2006-004). Nasdaq 
notes that a further amendment to Rule 4613 was approved by the 
Commission in Securities Exchange Act Release No. 54155 (July 14, 
2006), 71 FR 41291 (July 20, 2006) (SR-NASDAQ-2006-001), but with an 
implementation date of August 28, 2006. Accordingly, Nasdaq will 
file a technical rule change prior to that date to reflect the 
difference between the version of the rule adopted in this filing 
for the period prior to August 28, and the version to take effect on 
that date.
    Nasdaq is not at this time restoring the pilot for multiple 
MPIDs in non-Nasdaq stocks, since rules relating to such stocks are 
not operational. Rather, as part of the technical rule change 
referenced above, Nasdaq will expand the language of the pilot in 
Rule 4613 to cover non-Nasdaq stocks.
---------------------------------------------------------------------------

     Amending Nasdaq Rules 4613, 4701, 4710, 4901, and 4904 to 
reflect changes made to corresponding NASD rules by SR-NASD-2005-150 
and SR-NASD-2006-054.\14\
---------------------------------------------------------------------------

    \14\ Securities Exchange Act Release No. 53017 (December 22, 
2005), 70 FR 77225 (December 29, 2005) (SR-NASD-2005-150); 
Securities Exchange Act Release No. 53739 (April 26, 2006), 71 FR 
25876 (May 2, 2006) (SR-NASD-2006-054).
    Nasdaq notes that a further amendment to these rules was 
approved by the Commission in Securities Exchange Act Release No. 
54155 (July 14, 2006) (SR-NASDAQ-2006-001), but with an 
implementation date of August 28, 2006. Accordingly, Nasdaq will 
file a technical rule change prior to that date to reflect the 
difference between the version of the rule adopted in this filing 
for the period prior to August 28, and the version to take effect on 
that date.
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4710 to reflect a change made to NASD 
Rule 4710 by SR-NASD-2006-019.\15\
---------------------------------------------------------------------------

    \15\ Securities Exchange Act Release No. 53233 (February 2, 
2006), 71 FR 7100 (February 10, 2006) (SR-NASD-2006-019).
---------------------------------------------------------------------------

     Adopting Nasdaq Rule 4703 to reflect the adoption the 
Nasdaq Halt Cross (NASD Rule 4703) in SR-NASD-2005-015,\16\ and making 
conforming changes to Nasdaq Rule 4704.
---------------------------------------------------------------------------

    \16\ Securities Exchange Act Release No. 53687 (April 20, 2006), 
71 FR 24878 (April 27, 2006) (SR-NASD-2006-015).
---------------------------------------------------------------------------

     Adding Nasdaq Rule 4760, which reflects the recent 
adoption of the Nasdaq Crossing Network (NASD Rule 4716) in SR-NASD-
2005-140.\17\
---------------------------------------------------------------------------

    \17\ Securities Exchange Act Release No. 54101 (July 5, 2006), 
71 FR 39382 (July 12, 2006) (SR-NASD-2005-140).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4813 to reflect changes made to NASD 
Rule 4813 by SR-NASD-2005-153.\18\
---------------------------------------------------------------------------

    \18\ Securities Exchange Act Release No. 53067 (January 6, 
2006), 71 FR 2965 (January 18, 2006) (SR-NASD-2005-153).
---------------------------------------------------------------------------

     Amending Nasdaq Rules 4714 and 4905 to reflect changes 
made to NASD Rules 4714 and 4905 by SR-NASD-2006-049.\19\
---------------------------------------------------------------------------

    \19\ Securities Exchange Act Release No. 53675 (April 18, 2006), 
71 FR 23975 (April 25, 2006) (SR-NASD-2006-049).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4912 to reflect changes made to NASD 
Rule 4912 by SR-NASD-2006-006.\20\
---------------------------------------------------------------------------

    \20\ Securities Exchange Act Release No. 53187 (January 30, 
2006), 71 FR 6116 (February 6, 2006) (SR-NASD-2006-006).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4953 to reflect changes made to NASD 
Rule 4953 by SR-NASD-2006-051 and SR-NASD-2006-017.\21\
---------------------------------------------------------------------------

    \21\ Securities Exchange Act Release No. 53720 (April 25, 2006), 
71 FR 25875 (May 2, 2006) (SR-NASD-2006-051); Securities Exchange 
Act Release No. 53316 (February 15, 2006), 71 FR 9401 (February 23, 
2006) (SR-NASD-2006-017).
---------------------------------------------------------------------------

     Amending Nasdaq Rule 4962 to reflect changes made to NASD 
Rule 4962 by SR-NASD-2006-054 and SR-NASD-2006-016.\22\
---------------------------------------------------------------------------

    \22\ Securities Exchange Act Release No. 53720 (April 26, 2006), 
71 FR 25876 (May 2, 2006) (SR-NASD-2006-054); Securities Exchange 
Act Release No. 53203 (January 31, 2006), 71 FR 6300 (February 7, 
2006) (SR-NASD-2006-016).
---------------------------------------------------------------------------

     Amending Nasdaq Rules 4360, 4410, 4450, 4619, 4620, and 
4803 and Nasdaq IM-4351 to correct typographical errors.
2. Statutory Basis.
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\23\ in general, and with 
Section 6(b)(5) of the Act,\24\ in particular, in that the proposal is 
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. The proposed 
rule change conforms the Rule 4000 Series of Nasdaq's rules to certain 
changes made to the Rule 4000 Series of the rules of NASD since 
approval of Nasdaq's rules by the Commission in January 2006 and 
corrects typographical errors in the approved rules.
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f.
    \24\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \25\ and Rule 19b-4(f)(6) thereunder 
\26\ because the proposed rule change: (1) Does not significantly 
affect the protection of investors or the public interest; (2) does not 
impose any significant burden on competition; and (3) does not become 
operative for 30 days from the date of filing, or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest pursuant to Section 19(b)(3)(A) of 
the Act \27\ and Rule 19b-4(f)(6) \28\ thereunder.
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78s(b)(3)(A).
    \26\ 17 CFR 240.19b-4(f)(6).
    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    Nasdaq has requested that the Commission waive the 30-day operative 
delay.\29\ The Commission believes that the waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Waiver of the 30-day operative period will allow 
Nasdaq to implement these changes immediately so that they can be in 
place prior to the time when Nasdaq begins to operate as a national 
securities exchange. Accordingly, the Commission designates the 
proposal to be effective and operative upon filing with the 
Commission.\30\
---------------------------------------------------------------------------

    \29\ 17 CFR 240.19b-4(f)(6)(iii).
    \30\ For the purposes only of waiving the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 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 the 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, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

[[Page 44740]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-NASDAQ-2006-019 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2006-019. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 Section, 100 F Street, 
NE., Washington, DC 20549-1090. Copies of such filing also will be 
available for inspection and copying at the principal office of Nasdaq. 
All comments received will be posted without change; the Commission 
does not edit personal identifying information from submissions. You 
should submit only information that you wish to make available 
publicly. All submissions should refer to File Number SR-NASDAQ-2006-
019 and should be submitted on or before August 28, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-12703 Filed 8-4-06; 8:45 am]

BILLING CODE 8010-01-P