Document ID: SEC-2007-0410-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2007-03-19T04:00Z

[Federal Register: March 19, 2007 (Volume 72, Number 52)]
[Notices]               
[Page 12852-12853]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19mr07-111]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55440; File No. SR-NASD-2007-019]

 
Self-Regulatory Organizations: National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To Revise Effective Date of Amendments to NASD's Order 
Audit Trail System Rules

March 9, 2007.
    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 March 1, 2007, the National Association of Securities Dealers, Inc. 
(``NASD'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by NASD. NASD has 
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by 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\ 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

    NASD is filing the proposed rule change to establish February 4, 
2008, as the effective date of the amendments to NASD Rules 6951, 6952, 
and 6955 that the Commission approved on October 10, 2006.\4\ The 
amendments expand the Order Audit Trail System (``OATS'') reporting 
requirements to over-the-counter (``OTC'') equity securities. No 
changes are being proposed to NASD rule text.
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    \4\ See Securities Exchange Act Release No. 54585 (October 10, 
2006), 71 FR 61112 (October 17, 2006) (SR-NASD-2005-101).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASD 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. NASD 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
    NASD is filing the proposed rule change to establish February 4, 
2008, as the effective date for the amendments to the OATS rules 
expanding the OATS reporting requirements to OTC equity securities.
    On October 10, 2006, the SEC approved SR-NASD-2005-101, which 
amended NASD Rules 6951, 6952, and 6955 to expand the OATS reporting 
requirements to include ``OTC equity securities,'' as defined in NASD 
Rule 6951.\5\ On December 11, 2006, NASD published (1) Notice to 
Members 06-70 announcing the Commission's approval of the amendments 
and (2) a new version of the OATS Reporting Technical Specifications. 
Pursuant to the SEC's approval of SR-NASD-2005-101, the amendments to 
the OATS rules will go into effect on June 11, 2007, six months 
following the publication of the revised OATS Reporting Technical 
Specifications.
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    \5\ Id.
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    Since the publication of the Notice to Members and the OATS 
Reporting Technical Specifications, many firms have requested that the 
effective date for the new reporting requirements be delayed to allow 
firms sufficient time to make necessary systems updates and changes. As 
a result of these discussions, NASD seeks to delay the implementation 
of the new requirements until February 4, 2008, to give firms 
sufficient time to make necessary changes to their systems to enable 
them to comply with the expanded OATS reporting requirements. NASD also 
seeks to delay the implementation of these provisions until after firms 
have completed technological and systems changes required by the 
complete implementation of Regulation NMS, which is scheduled for 
October 2007.
    NASD has filed the proposed rule change for immediate 
effectiveness.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\6\ which requires, among 
other things, that NASD rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest. NASD believes that the proposed rule change is 
consistent with the provisions of the Act noted above because extending 
the effective date will ensure that firms have sufficient time to make 
the necessary changes to their systems to be able to comply with the 
new OATS reporting requirements.
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    \6\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD 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.

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

[[Page 12853]]

19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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 has determined to waive the five-day pre-
filing notice requirement.
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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.

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-NASD-2007-019 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASD-2007-019. 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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of NASD.
    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-NASD-2007-019 
and should be submitted on or before April 9, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-4894 Filed 3-16-07; 8:45 am]

BILLING CODE 8010-01-P