Document ID: SEC-2006-1243-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2006-09-25T04:00Z

[Federal Register: September 25, 2006 (Volume 71, Number 185)]
[Notices]               
[Page 55816-55817]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25se06-56]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54462; File No. SR-NASD-2006-107]

 
Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Related to Thru Orders for Nasdaq's INET Facility

September 15, 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 September 11, 2006, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``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 filed 
the proposal pursuant to Section 19(b)(3)(A) 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).
    \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 introduce a new Thru order type for Nasdaq's 
INET Facility that will allow users to direct that their order be 
delivered by the INET system to the American Stock Exchange (``Amex'') 
or New York Stock Exchange (``NYSE''), as appropriate. Nasdaq has 
designated this proposal as non-controversial and has requested that 
the Commission waive the 30-day pre-operative waiting period contained 
in Rule 19b-4(f)(6)(iii) under the Act.\5\
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    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is below. Proposed new 
language is italicized; proposed deletions are in [brackets].
* * * * *

4956. Routing

    (a) INET Order Routing Process
    (1) The INET Order Routing Process shall be available to 
Participants from 7 a.m. to 8 p.m. Eastern Time, and shall route orders 
as described below:
    (A) Routing Options.
    The System provides [eight] nine routing options for orders. Of 
these eight, [five] six--DOT Immediate , DOT Alternative, DOT 
Alternative 2, Reactive Only DOT, [and] DOT Nasdaq--and Thru DOT--are 
available for orders ultimately sought to be directed to either the New 
York Stock Exchange (``NYSE'') or the American Stock Exchange 
(``AMEX''). The System also allows firms to send individual orders to 
the NYSE Direct + System, and to elect to have orders not be sent to 
the AMEX. The [eight] nine System routing options are:
    (i)-(viii) No Change.
    (ix) Thru DOT (``TDOT'')--under this option, orders are sent 
directly to either the NYSE or AMEX, as directed by the entering party. 
If unexecuted, the order (or unexecuted portion thereof) shall be 
returned to the entering party. This option may only be used for orders 
with time-in-force parameters of either DAY, IOC, or market-on-open/
close.
    (B) No Change.
* * * * *

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, 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 create a new order routing option for its INET 
facility that would allow users to direct that their orders be 
delivered by the INET system to the NYSE or the Amex, as appropriate. 
Nasdaq notes that this direct delivery functionality already exists in 
Nasdaq's Brut facility as the Thru Brut order \6\ and would provide 
additional flexibility and functionality to INET system users that 
desire to send orders to the NYSE or the Amex.
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    \6\ See NASD Rule 4903(b).
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\7\ in general, and with 
Section 15A(b)(6) of the Act,\8\ in particular, in that it is designed 
to promote just and equitable principles of trade, and to remove 
impediments to a free and open market and a national market system.
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    \7\ 15 U.S.C. 78o-3.
    \8\ 15 U.S.C. 78o-3(b)(6).
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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.

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

    The foregoing proposed rule change is subject to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder \10\ 
because the proposal: (i) Does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on

[[Page 55817]]

competition; and (iii) does not become operative prior to 30 days after 
the date of filing or such shorter time as the Commission may designate 
if consistent with the protection of investors and the public interest; 
provided that Nasdaq has given the Commission 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    Nasdaq has fulfilled the five-day pre-filing requirement. Nasdaq 
has requested that the Commission waive the 30-day operative delay. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver would provide users of Nasdaq's INET facility the 
ability to utilize the proposed Thru DOT order type immediately, an 
order type with the same functionality as an order type that is 
currently available for use in Nasdaq's Brut facility. For these 
reasons, the Commission designates the proposed rule change to be 
effective and operative upon filing with the Commission.\11\
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    \11\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such 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-2006-107 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-2006-107. 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 the filing 
also will be available for inspection and copying at the principal 
office of the 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-2006-107 and should be submitted on or before October 16, 2006.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
[FR Doc. 06-8142 Filed 9-22-06; 8:45 am]

BILLING CODE 8010-01-P