Document ID: SEC-2006-1198-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NASDAQ Stock Market LLC
Posted Date: 2006-09-18T04:00Z

[Federal Register: September 18, 2006 (Volume 71, Number 180)]
[Notices]               
[Page 54696-54697]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18se06-121]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54420; File No. SR-NASDAQ-2006-033]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Eliminate Certain Transitional Corporate Governance Rules

September 11, 2006.
    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 August 25, 2006, The NASDAQ Stock Market LLC (``Nasdaq''), 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 Nasdaq. Nasdaq has designated the proposed rule 
change as one constituting a non-controversial rule change under 
Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders the proposal effective upon filing with 
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\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to eliminate certain transitional provisions of its 
Rules that have expired and to clarify the applicability of Nasdaq Rule 
4320(a). Nasdaq proposes to implement the proposed rule change 
immediately.
    The text of the proposed rule change is available on Nasdaq's Web 
site at http://www.nasdaq.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, Nasdaq 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. Nasdaq has prepared summaries, set forth in Sections A, 
B,

[[Page 54697]]

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
    Nasdaq proposes to delete Nasdaq Rules 4200-1 and 4350-1 and to 
amend Nasdaq Rule 4350(a)(5) and IM 4350-6 to remove transitional rules 
that are no longer applicable to any listed companies. The rules 
replacing these provisions were fully phased-in as of December 31, 
2005. In addition, Nasdaq proposes to modify Nasdaq Rule 4320(a) to 
clarify the applicability of that section to newly-issued securities. 
This rule currently excludes a ``newly issued security'' from the 
registration requirements contained in Rule 4320(a).\5\ Nonetheless, 
pursuant to Section 12(a) of the Act,\6\ all securities must be 
registered under, or subject to an exemption from, Section 12(b) \7\to 
be listed on Nasdaq. As a result, Nasdaq proposes to eliminate this 
exclusion, consistent with the comparable provision of Rule 4310(a).\8\
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    \5\ Nasdaq Rule 4320(a) currently provides that a security of a 
non-Canadian foreign issuer or an American Depositary Receipt or 
similar security issued in respect of a security of a foreign 
issuer, ``other than a newly issued security,'' shall be considered 
or listing on Nasdaq provided that, among other things, it is: (1) 
Registered pursuant to Section 12(b) of the Act; or (2) subject to 
an exemption issued by the Commission that permits the listing of 
the security notwithstanding its failure to be registered pursuant 
to Section 12(b).
    \6\ 15 U.S.C. 78l(a).
    \7\ 15 U.S.C. 78l(b).
    \8\ Nasdaq Rule 4310(a) currently provides that a security of a 
domestic or Canadian issuer shall be considered for listing on 
Nasdaq provided that, among other things, it is: (1) Registered 
pursuant to Section 12(b) of the Act; or (2) subject to an exemption 
issued by the Commission that permits the listing of the security 
notwithstanding its failure to be registered pursuant to Section 
12(b).
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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,\9\ in general, and with Section 
6(b)(5) of the Act,\10\ 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 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. 
Nasdaq believes the proposed rule change clarifies its rules.
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    \9\ 15 U.S.C. 78f.
    \10\ 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.

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 with respect 
to the proposed rule change.

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) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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    Nasdaq has requested that the Commission waive the 30-day pre-
operative period requirement for ``non-controversial'' proposals 
because the provisions to be deleted have no current application, and 
the proposed changes to the rule text merely clarify the existing text. 
In light of the foregoing, the Commission believes that waiver of the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Accordingly, the Commission has determined to 
waive the operative delay, and the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act,\13\ and Rule 19b-
4(f)(6) thereunder,\14\ with no operative delay.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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.

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-NASDAQ-2006-033 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2006-033. 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 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-2006-033 and should be submitted on or before 
October 10, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E6-15441 Filed 9-15-06; 8:45 am]

BILLING CODE 8010-01-P