Document ID: SEC-2009-1775-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2009-12-18T05:00Z

[Federal Register: December 18, 2009 (Volume 74, Number 242)]
[Notices]               
[Page 67293-67294]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18de09-113]                         

[[Page 67293]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61151; File No. SR-NASDAQ-2009-109]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Update Rule 1160 To Reflect the Availability of the FINRA Contact 
System to Nasdaq Members That Are Not Also Members of FINRA

December 10, 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 9, 2009, 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 under Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
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\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 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

    Nasdaq submits this proposed rule change to Rule 1160 to extend the 
availability of the FINRA Contact System to Nasdaq members that are not 
also members of FINRA.
    The text of the proposed rule change is below. Proposed new 
language is underlined and proposed deletions are in brackets.

1160. Contact Information Requirements

    (a) Each member shall report to Nasdaq all contact information 
required by Nasdaq via the FINRA [NASD] Contact System [(in the case of 
Nasdaq members that are FINRA members) or via electronic mail or paper 
mail (in the case of Nasdaq members that are not FINRA members)].
    (b)-(c) 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

1. Purpose
    Nasdaq is proposing to update Rule 1160 to reflect the availability 
of the FINRA Contact System (``System'') to Nasdaq members that are not 
also members of FINRA, and to make a technical change to the name of 
the System. The System maintains contact information records required 
by both Nasdaq and NASD Rules 1120, 1150, 3011, and 3520. Both Nasdaq 
and FINRA use this information for regulatory communications, and 
compliance purposes, among other things. The information is provided to 
FINRA as part of the membership application. If the applicant is 
approved for membership, the new member is provided access to the 
System and is responsible for entering the required information into 
the System as well as keeping it current thereafter. Historically, 
FINRA permitted access to the System only to members of FINRA. A Nasdaq 
member that was already a member of FINRA could access the System to 
fulfill its ongoing obligation to keep the required information 
current; however, Nasdaq members that were not also members of FINRA 
were not permitted access to the System. As a consequence, such firms 
could only fulfill their obligation to keep the required information 
current by submitting the information to Nasdaq via e-mail or paper 
mail.
    FINRA recently made changes to the System so that Nasdaq-only 
members may also access the System, thus eliminating the need for the 
existing methods of providing such information. Nasdaq believes that 
having a central electronic location for this information is superior 
to the paper and e-mail-based methods of warehousing the information. 
Nasdaq will have access to the information maintained in the System for 
Nasdaq-only members in the same way as it has historically had with 
respect to Nasdaq members that are also members of FINRA. As such, 
Nasdaq is proposing to eliminate the language from Rule 1160 that 
requires Nasdaq-only members to provide required information by means 
other than the System. Nasdaq is also proposing to update the rule to 
reflect the new name of the System adopted by FINRA.\5\
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    \5\ http://www.finra.org/Industry/Compliance/RegulatoryFilings/
FCS/P005662.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\6\ in general and with Sections 
6(b)(5) of the Act,\7\ in particular in that it 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 is 
consistent with these provisions in that it will make available to all 
Nasdaq members an efficient means by which they may provide information 
required by Nasdaq rules.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or 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, if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section

[[Page 67294]]

19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires that a self-regulatory organization submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. The Commission notes that Nasdaq has satisfied the five-
day pre-filing notice requirement.
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    Normally, a proposed rule change filed under 19b-4(f)(6) may not 
become operative prior to 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. Nasdaq has requested that the 
Commission waive the 30-day operative delay. In its filing, Nasdaq 
noted that the proposal would provide a means for firms to comply with 
regulatory requirements more easily and quickly, and that keeping such 
information in a centralized, electronic location would enhance 
Nasdaq's and FINRA's oversight of these members.
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    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiver of the 30-day operative period 
is consistent with the protection of investors and the public interest. 
The proposed rule change would allow contact information, utilized for 
regulatory communications and compliance purposes, among other things, 
to be more efficiently collected in a centralized location. In 
addition, the modification of the rule to reflect the new name of the 
System will add clarity to Nasdaq's rules. Accordingly, the Commission 
designates the proposal to be effective upon filing with the 
Commission.\11\
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    \11\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 
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 Number SR-NASDAQ-2009-109 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-2009-109. 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 on official 
business days between the hours of 10 a.m. and 3 p.m. Copies of the 
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-2009-109 and should be submitted on or before 
January 8, 2010.

    For the Commission, by the Division of Trading & Markets, 
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
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    \12\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-30062 Filed 12-17-09; 8:45 am]

BILLING CODE 8011-01-P