Document ID: SEC-2007-1030-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2007-08-01T04:00Z

[Federal Register: August 1, 2007 (Volume 72, Number 147)]
[Notices]               
[Page 42165-42166]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01au07-128]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56124; File No. SR-NASD-2007-042]

 
Self-Regulatory Organizations: National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change to Delay the Implementation of NASD Interpretive Material 
2210-4, which Requires Certain Member Firms to Provide a Hyperlink to 
http://www.nasd.com.

July 24, 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 June 27, 2007, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Exchange'') 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 NASD. 
NASD filed the proposed rule change pursuant to section 19(b)(3)(A)(i) 
of the Act,\3\ and Rule 19b-4(f)(1) thereunder,\4\ as one constituting 
a stated policy, practice, or interpretation with respect to the 
meaning, administration, or enforcement of an existing rule, which 
renders the proposed rule change effective upon filing with the 
Commission. On July 20, 2007, NASD filed Amendment No. 1 to the 
proposed rule change. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as amended, 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)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD is proposing to delay, until October 31, 2007, implementation 
of an amendment to Interpretive Material 2210-4 (``IM 2210-4'') \5\ 
that was scheduled to be implemented on July 7, 2007.\6\ The recent 
amendment to IM-2210-4 requires an NASD member referring to its NASD 
membership on its Web site to provide a hyperlink to the Internet 
domain http://www.nasd.com (``hyperlink requirement''). There are no 

proposed changes to the text of NASD rules.
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    \5\ See Securities Exchange Act Release No. 54740 (November 9, 
2006), 71 FR 67184 (November 20, 2006) (SR-NASD-2006-073) (Order 
Approving Proposed Rule Change and Amendment No. 1 thereto and 
Notice of Filing and Order Granting Accelerated Approval to 
Amendment No. 2 to Amend NASD Interpretive Material 2210-4 to 
Require Certain Member Firms to Provide a Hyperlink to the NASD's 
Internet Home Page) (``Approval Order'').
    \6\ As required by the Approval Order, unless amended, the 
implementation date of the hyperlink requirement will be 180 days 
following publication of Notice to Members 07-02, which announces 
Commission approval of the hyperlink requirement. Notice to Members 
07-02 was published on January 8, 2007.
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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. 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
    On November 9, 2006, the SEC approved an amendment to IM-2210-4 
establishing the hyperlink requirement.\7\ On January 8, 2007, NASD 
published Notice to Members 07-02, which announced the Commission's 
approval of the hyperlink requirement and established July 7, 2007 as 
its implementation date.\8\ Following SEC approval of the hyperlink 
requirement, NASD and NYSE Group, Inc. (``NYSE'') announced a plan to 
consolidate their member regulation operations into a combined 
organization that will be the sole U.S. private-sector provider of 
member firm regulation for securities firms that do business with the 
public.\9\ To reflect this consolidation, NASD will be changing its 
name to the Financial Industry Regulatory Authority, Inc. (``FINRA'') 
and changing its internet domain. NASD is delaying implementation of 
the hyperlink requirement until its new name and internet domain are 
established and is providing sufficient time for firms to make the 
necessary changes to their Web sites. NASD will submit a separate rule 
change to amend IM-2210-4 to reflect its new corporate name and 
internet domain.
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    \7\ See Approval Order.
    \8\ See NASD Notice to Members 07-02 (January 2007).
    \9\ See SR-NASD-2007-023, which proposes to amend the By-Laws of 
NASD to implement governance and related changes to accommodate the 
consolidation of the member firm regulatory functions of NASD and 
NYSE Regulation, Inc., Securities Exchange Act Release No. 55495 
(March 20, 2007), 72 FR 14149 (March 26, 2007).
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    NASD has filed the proposed rule change for immediate effectiveness 
to immediately postpone, until October 31, 2007, the implementation 
date of the hyperlink requirement, which otherwise would have been 
implemented on July 7, 2007.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of section 15A(b)(6) of the Act,\10\ which requires, among 
other things, that NASD's 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 is delaying implementation of the hyperlink 
requirement until its new name and internet domain are established and 
is providing sufficient time for firms to make the necessary changes to 
their Web sites.
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    \10\ 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.

[[Page 42166]]

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

    The foregoing proposal has become effective pursuant to section 
19(b)(3)(A)(i) of the Act,\11\ and Rule 19b-4(f)(1) \12\ thereunder, in 
that it constitutes a stated policy with respect to the enforcement of 
an existing rule. 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.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(i).
    \12\ 17 CFR 240.19b-4(f)(1).
    \13\ 15. U.S.C. 78s(b)(3)(C). For purposes of calculating the 
60-day period within which the Commission may abrogate the proposal, 
the Commission considers the period to commence on July 20, 2007, 
the date on which NASD filed Amendment No. 1.
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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 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-2007-042 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-2007-042. 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, 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 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-2007-042 and should be 
submitted on or before August 22, 2007.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14834 Filed 7-31-07; 8:45 am]

BILLING CODE 8010-01-P