Document ID: SEC-2010-0351-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2010-03-08T05:00Z

[Federal Register Volume 75, Number 44 (Monday, March 8, 2010)]
[Notices]
[Pages 10541-10542]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-4734]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61606; File No. SR-NASDAQ-2010-026]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Eliminate Erroneous Citations From Rule 9557

March 1, 2010.
    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 February 24, 2010, The NASDAQ Stock Market LLC (``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 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

    Nasdaq is proposing to eliminate erroneous citations found under 
Rule 9557. The text of the proposed rule change is below. Proposed new 
language is in italics and proposed deletions are in brackets.
    9557. Procedures for Regulating Activities Under Rules 4110A[,] and 
4120A [and 4130A] Regarding a Member Experiencing Financial or 
Operational Difficulties

    (a) Notice of Requirements and/or Restrictions; Nasdaq Action
    Nasdaq Regulation staff may issue a notice directing a member to 
comply with the provisions of Rule 4110A[,]  or 4120A [or 4130A]or 
restrict its business activities, either by limiting or ceasing to 
conduct those activities consistent with Rule 4110A[,] or 4120A [or 
4130A], if Nasdaq Regulation staff has reason to believe that a 
condition specified in Rule 4110A[,] or 4120A [or 4130A] exists. A 
notice served under this Rule shall constitute Nasdaq action.
    (b)-(f) No change.
    (g) Additional Requirements and/or Restrictions or the Removal or 
Reduction of Requirements and/or Restrictions; Letter of Withdrawal of 
the Notice
    (1) Additional Requirements and/or Restrictions
    If a member continues to experience financial or operational 
difficulty specified in Rule 4110A or 4120A [or 4130A], notwithstanding 
an effective notice, Nasdaq Regulation staff may impose additional 
requirements and/or restrictions by serving an additional notice under 
paragraph (b) of this Rule. The additional notice shall inform the 
member that it may apply for relief from the additional requirements 
and/or restrictions by filing a written request for a letter of 
withdrawal of the notice and/or a written request for a hearing before 
the Office of Hearing Officers under Rule 9559. The procedures 
delineated in this Rule shall be applicable to such additional notice.
    (2) No change.
    (A)-(B) No change.
    (h) 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. The 
text of these statements may be examined at the places specified in 
Item IV below, and is set forth in Sections A, B, and C below.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Nasdaq is proposing to eliminate erroneous citations found under 
Rule 9557. Many of Nasdaq's rules are based on rules of Financial 
Industry Regulatory Authority (``FINRA''). Nasdaq endeavors to keep 
these common rules consistent with the analogous rules of FINRA, to the 
extent possible. FINRA recently adopted new consolidated financial 
responsibility rules found under a new FINRA Rule 4000 series.\3\ On 
January 20, 2010, Nasdaq filed a proposed rule change to make 
conforming changes to its rules, which included the adoption of a new 
Rule 4000A series \4\ and certain amendments to Rules 9557 and 9559.\5\ 
The proposed changes were immediately effective, and became operative 
on February 19, 2010. In adopting the new consolidated rules, FINRA 
eliminated Rule 3131 and in its place adopted a new Rule 4130 that 
concerns the regulation of activities of Section 15C members 
experiencing financial and/or operational difficulties and made 
conforming changes to citations found under FINRA Rule 9557. Section 
15C of the Exchange Act \6\ applies to government securities brokers 
and dealers, which does not apply to Nasdaq's membership as no such 
class of membership exists under Nasdaq rules. As a consequence, Nasdaq 
did not adopt an analogous Rule 4130A. In revising citations in Rule 
9557, however, Nasdaq inadvertently included erroneous references to 
Rule 4130A. Accordingly, Nasdaq is proposing to eliminate the erroneous 
references to Rule 4130A found in Rule 9557.
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    \3\ Securities Exchange Act Release No. 60933 (November 4, 
2009), 74 FR 58334 (November 12, 2009) (SR-FINRA-2008-067).
    \4\ Nasdaq currently has rules under its 4000 series, so to 
mirror the changes made by FINRA as closely as possible, Nasdaq 
created a new Rule 4000A series.
    \5\ See supra, note 3.
    \6\ 15 U.S.C. 78o-5.
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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,\7\ in general and with Section 
6(b)(5) of the Act,\8\ 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 
corrects certain erroneous citations inadvertently included in Rule 
9557 when adopting the new Rule 4000A series.
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    \7\ 15 U.S.C. 78f.
    \8\ 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 result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

[[Page 10542]]

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) \9\ of the Act and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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. Nasdaq has provided 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.
    Nasdaq believes that the proposed rule change does not 
significantly affect the protection of investors or the public interest 
because it merely eliminates erroneous citations that, if left in the 
rule text, would cause investor confusion.
    Nasdaq requests that the Commission waive the 30-day pre-operative 
waiting period contained in Exchange Act Rule 19b-4(f)(6)(iii).\11\ 
Nasdaq requests this waiver so that these corrections can be both 
immediately effective and operative, thus minimizing any confusion that 
may be caused by the erroneous citations. The Commission notes the 
proposed rule changes make technical non-substantive changes to Rule 
9557. As noted above on January 20, 2010, Nasdaq filed a proposed rule 
change to make conforming changes to its rules, which included adopting 
a new Rule 4000A series\12\ and certain amendments to Rules 9557 and 
9559.\13\ The proposed changes were immediately effective and became 
operative on February 19, 2010. The Commission believes the earlier 
operative date is consistent with the protection of investors and the 
public interest because the proposed rule change permits Nasdaq to 
implement the rule without further delay and in a timely manner for the 
operative date of the financial responsibility rules.\14\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ Nasdaq currently has rules under its 4000 series, so to 
mirror the changes made by FINRA as closely as possible, Nasdaq 
created a new Rule 4000A series.
    \13\ See supra, note 3.
    \14\ For purposes only of waiving the 30-day operative delay of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 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, as amended, 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-2010-026 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-2010-026. 
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 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 a.m. and 3 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 Number SR-NASDAQ-2010-
026 and should be submitted on or before March 29, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4734 Filed 3-5-10; 8:45 am]
BILLING CODE 8011-01-P