Document ID: SEC-2012-1786-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2012-11-06T05:00Z

[Federal Register Volume 77, Number 215 (Tuesday, November 6, 2012)]
[Notices]
[Pages 66658-66660]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27000]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68123; File No. SR-NASDAQ-2012-123]

Self-Regulatory Organizations; NASDAQ Stock Market LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend and 
Adopt Several NASDAQ Rules To Reflect Changes To Rules of the Financial 
Industry Regulatory Authority (``FINRA'')

October 31, 2012.
    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 October 22, 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 and 
II below, which Items have been prepared by the Exchange. 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 Exchange proposes to amend and adopt several NASDAQ rules to 
reflect changes to rules of the Financial Industry Regulatory Authority 
(``FINRA''). NASDAQ 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://nasdaq.cchwallstreet.com, 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, 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.

[[Page 66659]]

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 governing member conduct are based on the 
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 has also 
been undertaking a process of modifying its rulebook to ensure that 
NASDAQ rules corresponding to FINRA/NASD rules continue to mirror them 
as closely as practicable. To the extent possible, NASDAQ will 
designate a NASDAQ rule that is intended to parallel a FINRA rule with 
the suffix ``A''. For example, the NASDAQ rule paralleling FINRA Rule 
5320 will be designated as Rule 5320A. In this filing, NASDAQ is 
amending Rule 3110 (Books and Records) and redesignating it as Rule 
3110A to incorporate NASD Rule 3110 (or any successor FINRA rule) by 
reference. In addition, NASDAQ is deleting IM-3110 (Customer Account 
Information), and adopting the Rule 4510A Series (Books and Records 
Requirements). The series includes Rule 4511A (General Requirement), 
which incorporates FINRA Rule 4511; Rule 4512A (Customer Account 
Information), which incorporates FINRA Rule 4512; Rule 4513A (Records 
of Written Customer Complaints), which incorporates FINRA Rule 4513; 
Rule 4514A (Authorization Records for Negotiable Instruments Drawn from 
a Customer's Account), which incorporates FINRA Rule 4514; and Rule 
4515A (Approval and Documentation of Changes in Account Name or 
Designation), which incorporates FINRA Rule 4515.\3\ NASDAQ notes that 
in some instances, the amended rules reference rules that are being 
adopted or renumbered by contemporaneous NASDAQ rule filings that have 
been filed on an immediately effective basis.\4\
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    \3\ See Securities Exchange Act Release No. 63784 (January 27, 
2011), 76 FR 5850 (February 2, 2011) (SR-FINRA-2010-052).
    \4\ See SR-NASDAQ-2012-122 (October 22, 2012); SR-NASDAQ-2012-
124 (October 22, 2012).
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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 
Section 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 various NASDAQ Rules to changes made to 
corresponding FINRA rules (including certain changes resulting in 
adoption of new rules), thus promoting application of consistent 
regulatory standards with respect to the rules that FINRA enforces 
pursuant to its regulatory services agreement with NASDAQ.
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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

    No written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act \7\ and paragraph (f)(6) of Rule 19b-4 
thereunder,\8\ in that the proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days after the date of the 
filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest; 
provided the self-regulatory organization has given 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.
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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 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 Number SR-NASDAQ-2012-123 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-2012-123. 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 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 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 the filing also will be available 
for

[[Page 66660]]

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 available publicly.
    All submissions should refer to File Number SR-NASDAQ-2012-123 and 
should be submitted on or before November 27, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-27000 Filed 11-5-12; 8:45 am]
BILLING CODE 8011-01-P