Document ID: SEC-2006-1248-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2006-09-26T04:00Z

[Federal Register: September 26, 2006 (Volume 71, Number 186)]
[Notices]               
[Page 56202-56203]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26se06-125]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54471; File No. SR-NASD-2006-081]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Approving Proposed Rule Change To Adopt New NASD 
Rule 5150 Relating to Trade-Throughs

September 19, 2006.
    On July 11, 2006, the National Association of Securities Dealers, 
Inc. (``NASD'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the

[[Page 56203]]

Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to adopt a new NASD rule relating 
to trade-throughs. The proposed rule change was published for comment 
in the Federal Register on July 27, 2006.\3\ The Commission received no 
comment letters on the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 54186 (July 20, 
2006), 71 FR 42698.
---------------------------------------------------------------------------

    Proposed rule NASD Rule 5150 would require an NASD member that is 
registered as a market maker with the Nasdaq Stock Market LLC (``Nasdaq 
Exchange'') in an ITS Security \4\ to comply with the provisions of 
NASD Rule 5262 relating to trade-throughs with respect to that security 
for trades reported to the NASD. Accordingly, the NASD's proposed rule 
will not take effect until the Nasdaq Exchange begins operations as an 
exchange in such securities.\5\ The proposed rule further defines the 
term ``block transaction'' for purposes of the rule.
---------------------------------------------------------------------------

    \4\ The term ``ITS Security'' is defined in NASD Rule 5210(c) as 
``any security which may be traded through the [ITS] System by an 
ITS/CAES Market Maker.''
    \5\ See Securities Exchange Act Release No. 53128 (January 13, 
2006), 71 FR 3550 (January 23, 2006); and 54085 (June 30, 2006), 71 
FR 38910 (July 10, 2006). Currently, the Nasdaq Exchange operates as 
a national securities exchange for securities listed on the Nasdaq 
Exchange and reported to the Joint Self-Regulatory Organization Plan 
Governing the Collection, Consolidation and Dissemination of 
Quotation and Transaction Information for Nasdaq-Listed Securities 
on Exchanges on an Unlisted Trading Privileges Basis (``Nasdaq-
Listed Securities'').
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change is consistent 
with the requirements of Section 15A of the Act,\6\ in general, and 
with Section 15A(b)(6) of the Act,\7\ in particular, in that it is 
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. Proposed NASD Rule 5150 will 
maintain, after the Nasdaq Exchange begins operations as a national 
securities exchange for ITS Securities, the application of the NASD's 
trade-through rule, Rule 5162, to NASD members that are also Nasdaq 
market makers in ITS Securities to the extent such market makers report 
transactions in ITS Securities to the NASD.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-NASD-2006-081) be, and hereby 
is, approved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Nancy M. Morris,
Secretary.
[FR Doc. 06-8238 Filed 9-25-06; 8:45 am]

BILLING CODE 8010-01-P