Document ID: SEC-2009-1845-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend IM-2110-7 To Reflect Changes to Corresponding FINRA Rule
Posted Date: 2009-12-30T05:00Z

[Federal Register: December 30, 2009 (Volume 74, Number 249)]
[Notices]               
[Page 69159-69161]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de09-126]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61224; File No. SR-NASDAQ-2009-110]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Amend IM-2110-7 To Reflect Changes to Corresponding FINRA Rule

December 22, 2009.
    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 December 14, 2009, The NASDAQ Stock Market LLC (the ``Exchange'' or 
``NASDAQ'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as constituting a non-
controversial rule change under

[[Page 69160]]

Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal effective 
upon filing with the Commission. 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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is filing this proposed rule change to amend NASDAQ 
IM-1002-1 [sic] to reflect recent changes to a corresponding rule of 
the Financial Industry Regulatory Authority (``FINRA''). The Exchange 
will implement the proposed rule change thirty days after the date of 
the filing. The text of the proposed rule change is available at http:/
/nasdaqomx.cchwallstreet.com, on the Commission's Web site at http://
www.sec.gov, at the Exchange'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, the Exchange 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 Exchange 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
    Many of NASDAQ's rules are based on rules of FINRA (formerly the 
National Association of Securities Dealers (``NASD'')). During 2008, 
FINRA embarked on an extended process of moving rules formerly 
designated as ``NASD Rules'' into a consolidated FINRA rulebook. In 
most cases, FINRA has renumbered these rules, and in some cases has 
substantively amended them. Accordingly, NASDAQ also has initiated a 
process of modifying its rulebook to ensure that NASDAQ rules 
corresponding to FINRA/NASD rules continue to mirror them as closely as 
practicable. In some cases, it is not possible for the rule numbers of 
NASDAQ rules to mirror corresponding FINRA rules, because existing or 
planned NASDAQ rules make use of those numbers. However, wherever 
possible, NASDAQ plans to update its rules to reflect changes to 
corresponding FINRA rules.
    This filing addresses NASDAQ IM-2110-7 (Interfering With the 
Transfer of Customer Accounts in the Context of Employment Disputes), 
which provides that it shall be inconsistent with just and equitable 
principles of trade for a member or person associated with a member to 
interfere with a customer's request to transfer his or her account in 
connection with the change in employment of the customer's registered 
representative, provided that the account is not subject to any lien 
for monies owed by the customer or other bona fide claim. NASDAQ IM 
2110-7 formerly corresponded to NASD IM-2110-7.
    In SR-FINRA-2008-052,\4\ FINRA renumbered NASD IM-2110-7 as FINRA 
Rule 2140 in the Consolidated FINRA Rulebook with only minor changes. 
Specifically, IM-2110-7 was re-codified, with conforming revisions to 
establish it as a stand-alone FINRA rule rather than as interpretive 
material to NASD Rule 2110 (Standards of Commercial Honor and 
Principles of Trade).
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    \4\ Securities Exchange Act Release No. 59495 (March 3, 2009), 
74 FR 10632 (March 11, 2009) (approving SR-FINRA-2008-052); 
Securities Exchange Act Release No. 59495A (March 18, 2009), 74 FR 
12417 (March 24, 2009) (amended approval).
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    NASDAQ is proposing to re-number IM 2110-7 as NASDAQ Rule 2140 and 
to make conforming changes to the text of IM 2110-7 that mirror the 
changes made by FINRA. To accommodate new rule 2140, NASDAQ proposes to 
re-number existing Rule 2140 (Restrictions on Affiliation) as NASDAQ 
Rule 2160, without modifying the rule text itself. This will ensure 
that the NASDAQ Rule 2140 remains consistent with FINRA Rule 2140 for 
regulatory purposes and administrative ease. The proposal will have no 
substantive impact on NASDAQ members.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Sections 6(b)(5) of the Act,\6\ 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 
changes will conform NASDAQ IM-2110-7 to recent changes made to a 
corresponding FINRA rule, to promote application of consistent 
regulatory standards.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    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 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:

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

[[Page 69161]]

Number SR-NASDAQ-2009-110 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2009-110. 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 Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of the Exchange. 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 publicly available. All 
submissions should refer to File Number SR-NASDAQ-2009-110 and should 
be submitted on or before January 20, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30914 Filed 12-29-09; 8:45 am]

BILLING CODE 8011-01-P