Document ID: SEC-2005-0381-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2005-12-14T05:00Z

[Federal Register: December 14, 2005 (Volume 70, Number 239)]
[Notices]               
[Page 74074]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14de05-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52896; File No. SR-NASD-2005-116]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Approving Proposed Rule Change To Modify Nasdaq's 
Auditor Peer Review Requirement

December 6, 2005.
    On September 29, 2005, the National Association of Securities 
Dealers, Inc. (``NASD''), through its subsidiary, The Nasdaq Stock 
Market, Inc. (``Nasdaq''), filed with the Securities and Exchange 
Commission (``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to modify NASD Rule 4350(k), 
regarding the oversight of accountants that audit listed issuers.\3\ 
The proposed rule change was published for comment in the Federal 
Register on October 26, 2005.\4\ The Commission received no comments on 
the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The proposed rule change would also make a conforming 
amendment to the language of NASD Rule 4200(a).
    \4\ Securities Exchange Act Release No. 52645 (Oct. 20, 2005), 
70 FR 61864.
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    Current NASD Rule 4350(k) requires each issuer listed on Nasdaq to 
be audited by an independent accountant that has received an external 
quality control review by another independent public accountant (a 
``peer review'') or is enrolled in an acceptable peer review program. 
The proposed rule change would replace this requirement with a 
provision that requires each listed issuer to be audited by an 
independent accountant that is registered as a public accounting firm 
with the Public Company Accounting Oversight Board (``PCAOB''), as 
provided for in the Sarbanes-Oxley Act of 2002 (the ``Sarbanes-Oxley 
Act'').\5\ The PCAOB is charged, among other things, with conducting a 
continuing program of inspections of registered public accounting 
firms.\6\
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    \5\ See Section 102 of the Sarbanes-Oxley Act, 15 U.S.C. 7212.
    \6\ See Section 104 of the Sarbanes-Oxley Act, 15 U.S.C. 7214.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of Section 15A(b) of the Act \7\ and the rules 
and regulations thereunder applicable to a national securities 
association,\8\ and in particular, with Section 15A(b)(6) of the 
Act.\9\ The Commission believes that the proposed rule change will 
align Nasdaq's requirements with the auditor oversight requirements of 
the Sarbanes-Oxley Act and eliminate the redundancy of Nasdaq's current 
rule.
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    \7\ 15 U.S.C. 78o-3(b).
    \8\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition and 
capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78o-3(b)(6).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NASD-2005-116) be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7333 Filed 12-13-05; 8:45 am]

BILLING CODE 8010-01-P