Document ID: SEC-2012-1427-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market, LLC
Posted Date: 2012-08-29T04:00Z

[Federal Register Volume 77, Number 168 (Wednesday, August 29, 2012)]
[Notices]
[Pages 52373-52375]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-21256]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67721; File No. SR-NASDAQ-2012-097]

Self-Regulatory Organizations; NASDAQ Stock Market, LLC; Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Membership in The NASDAQ Stock Market LLC

August 23, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August

[[Page 52374]]

21, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or ``Exchange'') 
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 NASDAQ. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NASDAQ Stock Market LLC proposes to amend NASDAQ Rule 1013, 
titled ``New Member Application'' to provide that an applicant that is 
approved by NASDAQ OMX BX, Inc. (``BX'') shall have the option to apply 
to become a NASDAQ member through an expedited process.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaq.cchwallstreet.com, at http://www.sec.gov, 
at the principal office of the Exchange, 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. 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
    The Exchange desires to streamline the process of becoming a NASDAQ 
member for current BX members. Today, Rule 1013 permits applicants that 
are an approved Financial Industry Regulatory Authority (``FINRA'') 
member to have the option to apply to become a NASDAQ member and to 
register with NASDAQ all associated persons of the firm whose 
registrations with the firm are approved by FINRA in categories 
recognized by NASDAQ Rules through an expedited process by submitting a 
Waive-In Membership Application Form and a NASDAQ Membership Agreement. 
The Exchange proposes to also permit a current BX member to have the 
same options as a FINRA member in applying to NASDAQ for membership.
    The membership application rules of NASDAQ and BX are substantially 
similar to each other as are the rules of FINRA with both NASDAQ and BX 
Rules. BX Rule 1013(a)(5) provides that an approved member of FINRA or 
NASDAQ may apply to become a BX member and register with the Exchange 
all associated persons whose registrations are approved with FINRA or 
NASDAQ (as applicable) in categories of registration recognized by the 
Exchange through an expedited process by submitting a Short Form 
Membership Application and Agreement.\3\
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    \3\ See Securities Exchange Act Release No. 58927 (November 10, 
2008), 73 FR
    69685 (November 19, 2008) (SR-BSE-2008-48). See also BX Rule 
1013(a)(5).
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    The process by which an applicant may register and become a member 
of NASDAQ, FINRA or BX is substantially similar. The Exchange requests 
the same information from applicants applying to be members of NASDAQ 
or BX.\4\ The steps and procedures undertaken by Exchange staff of 
NASDAQ and BX, pursuant to membership rules, are the same for reviewing 
new member applications.\5\
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    \4\ See NASDAQ Rule 1013 and BX Rule 1013. See Securities 
Exchange Act Release No. 58927 (November 10, 2008), 73 FR 69685 
(November 19, 2008) (SR-BSE-2008-48). See also BX Rule 1013(a)(5). 
BX Rule 1013 (a)(5(C) [sic] today provides that a FINRA or NASDAQ 
member shall have the option to apply to become a member of the 
Exchange and to register with the Exchange all associated persons of 
the firm whose registrations with the firm are approved with FINRA 
or NASDAQ in categories recognized by the Rules of the Exchange 
through an expedited process by submitting a Short Form Membership 
Application Form and a Membership Agreement. The Short Form 
Membership Application Form shall contain information sufficient to 
establish the identity of the applicant as an approved FINRA or 
NASDAQ member, its proposed activity on the Exchange, and certain 
contact personnel, and shall be available on a Web site maintained 
by the Exchange. The proposal would create a similar rule for NASDAQ 
to provide BX members the same reciprocity that the BX rule provides 
today.
    \5\ See NASDAQ Rules 1013 and 1014 and BX Rules 1013 and 1014.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \7\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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, 
by streamlining the process by which applicants may apply to become a 
member of NASDAQ. Today, an applicant seeking membership at BX has the 
option of applying through an expedited process if that applicant is a 
NASDAQ member. The Exchange believes that same reciprocity should be 
granted to BX members desiring to become NASDAQ members. The rules and 
process are substantially similar with nearly identical rules for each 
market. The Exchange believes that permitting an expedited review 
similar to the process which exists today for FINRA members would allow 
BX members to forego unnecessary paperwork that was already obtained at 
the time they applied to become a BX member.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    Additionally, Exchange staff expends considerable time in reviewing 
applications. The Exchange believes that the streamlined process would 
not only avoid duplicative processes for BX members, but also assist 
Exchange staff in conserving resources by focusing on the pertinent 
information that would be required by a BX member seeking membership at 
NASDAQ rather than obtaining paperwork that was already provided at the 
time the BX member applied for membership with BX.
    While the Exchange is streamlining the process to create a more 
efficient review of applications and more appropriately allocate 
resources, the Exchange will continue to review member applications to 
ensure that all applications comply with its Rules. BX members have a 
continuing obligation to comply with Exchange Rules, which are 
substantially similar to those of NASDAQ. FINRA would initially review 
the application for membership on NASDAQ's behalf for compliance with 
those rules and there would also be a requirement for continued 
compliance as exists for BX today. The Exchange would continue to 
ensure that all applicants comply with Exchange rules despite a 
shortened form of application. The Exchange also believes that its 
proposal will not have a negative impact on the protection of investors 
or the public interest because the Exchange will continue to review 
member applications to ensure that all applications comply with its 
Rules.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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.

[[Page 52375]]

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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) \9\ 
thereunder.
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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) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 Exchange has satisfied this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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 email to rule-comments@sec.gov. Please include 
File No. SR-NASDAQ-2012-097 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 No. SR-NASDAQ-2012-097. This file 
number should be included on the subject line if email 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 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 Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. 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 No. SR-NASDAQ-2012-097 and should be submitted on 
or before September 19, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-21256 Filed 8-28-12; 8:45 am]
BILLING CODE 8011-01-P