Document ID: SEC-2009-1832-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness ofProposed Rule Change To Amend IM-1002-1 To Reflect Changes to a Corresponding FINRA Rule
Posted Date: 2009-12-29T05:00Z

[Federal Register: December 29, 2009 (Volume 74, Number 248)]
[Notices]               
[Page 68878-68880]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29de09-131]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61205; File No. SR-NASDAQ-2009-105]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend IM-1002-1 To Reflect Changes to a Corresponding FINRA Rule

December 18, 2009.
    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 December 3, 2009, the NASDAQ Stock Market LLC (the ``Exchange'' or 
``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 the Exchange. The 
Exchange has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\ 
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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of the [sic] 
Substance of the Proposed Rule Change

    The Exchange is filing this proposed rule change to amend NASDAQ 
IM-1002-1 to reflect recent changes to a corresponding rule of the 
Financial Industry Regulatory Authority (``FINRA''). The Exchange will 
implement the proposed rule change thirty days after the date of the 
filing.

[[Page 68879]]

The text of the proposed rule change is available at http://
nasdaqomx.cchwallstreet.com, at the Exchange'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, the Exchange 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. The Exchange 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
    Many of NASDAQ's rules are based on rules of FINRA (formerly the 
National Association of Securities Dealers (``NASD'')). During 2008, 
FINRA embarked on an extended process of moving rules formerly 
designated as ``NASD Rules'' into a consolidated FINRA rulebook. In 
most cases, FINRA has renumbered these rules, and in some cases has 
substantively amended them. Accordingly, NASDAQ also has initiated a 
process of modifying its rulebook to ensure that NASDAQ rules 
corresponding to FINRA/NASD rules continue to mirror them as closely as 
practicable. In some cases, it is not possible for the rule numbers of 
NASDAQ rules to mirror corresponding FINRA rules, because existing or 
planned NASDAQ rules make use of those numbers. However, wherever 
possible, NASDAQ plans to update its rules to reflect changes to 
corresponding FINRA rules.
    This filing addresses NASDAQ IM-1002-1, which prohibits members and 
associated persons from filing with NASDAQ misleading information 
relating to membership or registration, and which formerly corresponded 
to NASD IM-1000-1. In SR-FINRA-2009-009,\4\ FINRA redesignated that 
rule as FINRA Rule 1122 and made amendments to clarify and simplify the 
rule. NASD IM-1000-1 provided that the filing of membership or 
registration information as a Registered Representative with FINRA 
which is incomplete or inaccurate so as to be misleading, or which 
could in any way tend to mislead, or the failure to correct such filing 
after notice thereof, may be deemed conduct inconsistent with just and 
equitable principles of trade and may be subject to disciplinary 
action.
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    \4\ Securities Exchange Act Release No. 59789 (April 20, 2009), 
74 FR 18767 (April 24, 2009) (SR-FINRA-2009-009).
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    FINRA's rule change clarified the rule's applicability to members 
and persons associated with members by specifying that ``no member or 
person associated with a member'' shall file incomplete or misleading 
membership or registration information. FINRA also eliminated the 
reference to the filing of registration information ``as a Registered 
Representative'' to clarify that the rule applies to the filing of 
registration information regarding any category of registration. In 
addition, FINRA deleted the reference that the prohibited conduct may 
be deemed inconsistent with just and equitable principles of trade and 
subject to disciplinary action as unnecessary and to better reflect the 
adoption of the NASD IM as a stand-alone FINRA rule. Likewise, NASDAQ 
is proposing to make changes to the text of IM-1002-1 that virtually 
mirror the changes made by FINRA to NASD IM-1000-1 so that the rules 
remain consistent for regulatory purposes.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Sections [sic] 6(b)(5) of the Act,\6\ 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 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 changes will conform NASDAQ IM-1002-1 to recent changes 
made to a corresponding FINRA rule, to promote application of 
consistent regulatory standards.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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.

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 \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).
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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 No. SR-NASDAQ-2009-105 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 No. SR-NASDAQ-2009-105. 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

[[Page 68880]]

submission,\9\ 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 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 No. SR-NASDAQ-2009-105 and should be submitted on or before 
January 19, 2010.
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    \9\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30782 Filed 12-28-09; 8:45 am]

BILLING CODE 8011-01-P