Federal Register: June 11, 2001 (Volume 66, Number 112)
DOCID: FR Doc 01-14587
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-44390; File No. SR-NASD-00-33]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; Order Approving Proposed Rule Change by the National Association of Securities Dealers, Inc. To Amend NASD Rule 3340 To Prohibit Publication of Quotations or Indications of Interest in a Security During a Trading Halt
DOCUMENT SUMMARY:
June 5, 2001.
I. Introduction
On June 7, 2000, the National Association of Securities Dealers,
Inc. (``NASD'' or ``Association''), through its wholly owned
subsidiary, NASD Regulation, Inc. (``NASD Regulation''), filed with the
Securities and Exchange Commission (``Commission'' or ``SEC'') a
proposed rule change pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder.\2\ On
August 2, 2000, NASD Regulation amended the proposal.\3\ Notice of the
proposed rule change, as amended, was published for comment in the
Federal Register on October 3, 2000.\4\ The Commission received one
comment letter regarding the proposal.\5\ This order approves the proposed rule change.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ See August 2, 2000 letter from Kathleen A. O'Mara, Assistant
General Counsel, NASD Regulation, to Katherine A. England, Assistant
Director, Division of Market Regulation (``Division''), SEC
(``Amendment No. 1''). In Amendment No. 1, NASD Regulation broadened the scope of the proposed rule change.
\4\ See Securities Exchange Act Release No. 43346 (September 26, 2000), 65 FR 59036.
\5\ See October 30, 2000 letter from Cameron Smith, General
Counsel, Island ECN, Inc. to Jonathan Katz, Secretary, SEC (``Island Letter'').
II. Description of the Proposal
NASD Regulation proposes to amend NASD Rule 3340 to expressly prohibit members from publishing quotations in a security during a trading halt.
According to NASD Regulation, the purpose of the rule change is to
expressly prohibit members from publishing quotations or indications of
interest in a security during a trading halt. Currently, NASD Rule 3340
prohibits members from effecting a transaction in a security during a
trading halt, but does not expressly state that members are prohibited
from publishing quotations or indications of interest.\6\ However, NASD Rules 3310 \7\
[[Page 31263]]
and 3320,\8\ respectively, state that members are required to enter
only bona fide quotations and honor such quotations if presented with
an order. Thus, if during a trading halt, a member that is publishing a
quotation for a security is presented with a liability order for such
security, the member would be faced with the choice of either honoring
its quote and violating the rule prohibiting transactions in a security
during a trading halt, or complying with the trading halt rule but violating the Firm Quote Rule.
\6\ The Commission may impose trading suspensions in the United
States securities markets under Section 12(k) of the Act. See 15 U.S.C. 781(k).
NASD Rule 4120 provides that Nasdaq may halt trading: (1) In the
overthecounter market of a security listed on Nasdaq to permit the
dissemination of material news; or (2) in the overthecounter
market of a security listed on a national securities exchange during
a trading halt imposed by such exchange to permit the dissemination
of material news; or (3) by (i) Consolidated Quotation System
(``CQS'') market makers in a CQS security because of an order
imbalance or influx (``operational trade halt''); or (ii) Nasdaq
market makers in a security listed on Nasdaq, when the security is a
derivative or component of a CQS security and a national securities
exchange imposes an operational trading halt in that CQS security;
or (4) in an American Depositary Receipt (``ADR'') or other security
listed on Nasdaq, when the Nasdaqlisted security or the security
underlying the ADR is listed on or registered with a national or
foreign securities exchange or market, and the national or foreign
securities exchange or market, or regulatory authority overseeing
such exchange or market, halts trading in such security for
regulatory reasons; or (5) in a security listed on Nasdaq when
Nasdaq requests from the issuer information relating to: (i)
Material news; (ii) the issuer's ability to meet Nasdaq listing
qualification requirements, as set forth in NASD Rule 4300 and 4400
Series; or (iii) any other information which is necessary to protect
investors and the public interest. See also Securities Exchange Act
Release No. 42806 (May 22, 2000), 65 FR 34518 (May 30, 2000) (SR
NASD9933), which establishes Nasdaq's trade and quote halt
authority in certain specific circumstances in securities included
in the OTC Bulletin Board Service (``OTCBB''), and Notice to Members
9969 soliciting comments on whether NASD Regulation should have
authority to halt trading in nonNasdaq, nonOTCBB, overthecounter securities under certain circumstances.
\7\ NASD Rule 3310 states that: [n]o member shall publish or
circulate, or cause to be published or circulated, any notice,
circular, advertisement, newspaper article, investment service, or
communication of any kind which purports * * * to quote the bid
price or asked price for any security, unless such member believes
that such quotation represents a bona fide bid for, or offer of, such security * * *.
NASD Rule IM3310 states, among other things, that: [i]t would
be inconsistent with the above provisions for a member, for itself
or for any other person, to publish or circulate or to cause to be
published or circulated, by any means whatsoever, any quotation for
any security without having reasonable cause to believe that such
quotation is a bona fide quotation, is not fictitious and is not
published or circulated or caused to be published or circulated for
any fraudulent, deceptive or manipulative purpose. IM3310 also
provides: [f]or the purposes of this interpretation, the term
``quotation'' shall include any bid or offer or any formula, such as
``bid wanted'' or ``offer wanted,'' designed to induce any person to make or submit any bid or offer.
\8\ NASD Rule 3320 (``Firm Quote Rule'') states that: [n]o
member shall make an offer to buy from or sell to any person any
security at a stated price unless such member is prepared to
purchase or sell, as the case may be, at such price and under such
conditions as are stated at the time of such offer to buy or sell.
In addition, the entry of quotations or indications of interest while there is a trading halt in a security could be potentially misleading. To prevent this from happening, NASD Regulation is proposing that NASD Rule 3340 be amended to expressly state that members are prohibited from publishing quotations or indications of interest during a trading halt.
III. Summary of Comments
The Commission received one comment letter regarding the
proposal.\9\ The commenter expressed concern that the proposal would
cause the market to abruptly open once a trading halt is lifted without
allowing a time period for market participants to enter new quotes.\10\
The commenter also stated that the proposal did not provide instruction
on what would happen to quotes that were in the system before a trading
halt was imposed, and whether market participants would have a chance to refresh their quotes when a trading halt is lifted.\11\
\9\ See footnote 5, supra.
\10\ Island Letter, page 2.
\11\ Id.
The commenter suggested an alternative method of resuming trading after a trading halt, whereby participants would be allowed a five minute period to open their quotes. If a quote were refreshed during that period, the quote would then be considered open, and subject to the Firm Quote Rule. Any remaining quotes would remain closed. If, after the fiveminute period, any market participants failed to update their quotes, the quotes would be refreshed at the price established before the trading halt was imposed. If the prehalt price would lock or cross the market, the quote would be subject to an excused withdrawal.\12\
\12\ Id.
The commenter also suggested that Nasdaq should be required to make system changes to prevent the entry of orders in SelectNet during a trading halt, rather than requiring each of the Nasdaq market participants to make the changes in their own systems.\13\
\13\ Id.
Finally, the commenter suggested that Nasdaq develop official and automated methodology to alert members about the imposition of trading halts, citing examples of two occasions where incorrect or delayed messages regarding the status of trading halts were posted on the Nasdaq News Frame.\14\
\14\ Id.
In response to the comment letter,\15\ NASD Regulation stated that
the proposed rule change would not alter the method by which trading is
resumed when a trading halt is lifted.\16\ NASD Regulation stated that
Nasdaq MarketWatch provides notice of trading halts to members through
the Nasdaq workstation. Simultaneously, all quotes for the security at
issue are eliminated from the Nasdaq workstation interactive area.
Nasdaq MarketWatch updates the status of a trading halt, and notifies
members of the exact time the trading halt will be lifted. MarketWatch
also notifies members that they may begin entering quotations in
anticipation of the end of a trading halt (the ``grace period'').
Quotations during the grace period are designated as closed by
displaying a ``g'' symbol next to each quotation. The quotations remain
closed until the trading halt is lifted, at which time the ``g'' symbol is removed, and quotations become firm.\17\
\15\ See May 10, 2001 letter from Jeffrey S. Holik, Vice
President and Acting General Counsel, NASD Regulation, to Katherine
A. England, Assistant Director, Division, SEC (``NASD Regulation Letter'').
\16\ Id. at page 2.
\17\ Id.
Regarding the commenter's suggestion that Nasdaq modify SelectNet
to prevent the entry of orders in SelectNet during a trading halt, NASD
Regulation stated it is a member's responsibility to ensure compliance
with NASD rules.\18\ While modifying SelectNet may be appropriate as a
supplemental measure, NASD Regulation believes there must be
fundamental prohibition of the conduct addressed by the proposed rule
change.\19\ NASD Regulation indicated it has forwarded the commenter's
suggestion to Nasdaq, along with the commenter's request that Nasdaq
develop official and automated methodology to alert members to the imposition of a trading halt.\20\
\18\ Id.
\19\ Id.
\20\ Id.
IV. Discussion and Commission Findings
The Commission has reviewed carefully the proposed rule change, the
comment letter, NASD Regulation's response to the comment letter, and
the entire record herein, and finds that the proposed rule change, as
amended, is consistent with the Act and the rules and regulations
applicable to the Association. In particular, the Commission finds that
the proposal is consistent with the requirements of Sections
15A(b)(6),\21\ 15A(b)(11),\22\ and 11A(a)(1)(C) \23\ of the Act. \21\ 15 U.S.C. 78o3(b)(6).
\22\ 15 U.S.C. 78o3(b)(11).
\23\ 15 U.S.C. 78k1(a)(1)(C).
Section 15A(b)(6) \24\ requires that the rules of a registered national securities association be 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 Commission finds the proposal is consistent with these requirements.
\24\ 15 U.S.C. 78o3(b)(6).
The Commission further finds the proposed rule is consistent with Section 15A(b)(11),\25\ which requires that the rules of a registered national securities association be designed to produce fair and informative quotations, prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, distributing, and publishing quotations.
\25\ 15 U.S.C. 78o3(b)(11).
The Commission also finds the proposed rule is consistent with the goals expressed in Section
[[Page 31264]]
11A(a)(1)(C),\26\ which grants the Commission the authority to require
rules designed to ensure appropriate protection of investors and the
maintenance of fair and orderly markets to assure: (1) Economically
efficient execution of securities transactions; (2) fair competition
among brokers and dealers; (3) the availability to brokers, dealers and
investors of information with respect to quotations and transactions in
securities; (4) the practicability of brokers executing investors'
orders in the best market; and (5) an opportunity for investors' orders to be executed without the participation of a dealer.
\26\ 15 U.S.C. 78k1(a)(1)(C).
The Commission has reviewed carefully the commenter's letter, and
is not persuaded by the commenter's assertions. NASD Regulation has
stated that the proposed rule change will not affect the process by
which trading resumes after a trading halt is lifted for Nasdaq
National Market Securities and Nasdaq SmallCap securities, and has
explained in detail those procedures.\27\ Additionally, NASD Regulation
has stated it would not consider the entry of closed quotations into
Nasdaq for these types of securities a violation of NASD Rule 3340,
provided the quotations were entered in conformity with Nasdaq's
resumption process.\28\ The Commission also agrees that the
responsibility to ensure compliance with NASD rules rests with the
NASD's members, and that the proposal is important because it
delineates the prohibition of specific conduct during trading halts.\29\
\27\ See NASD Regulation Letter, page 2.
\28\ Id.
\29\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiently, competition and capital
formation. 15 U.S.C. 78c(f). Additionally, the Commission notes that
the Association's definition of ``quotation'' under the proposal
differs from the definition of ``quotation'' under Exchange Act Rule
15c211. 17 CFR 240.15c211. The Association's definition of
``quotation'' will have no impact whatsoever on the definition of ``quotation'' under Exchange Act Rule 15c211.
V. Conclusion
For the reasons stated above, the Commission finds that the
proposed rule change, as amended, is consistent with the Act, in
general, and in particular with Sections 15A(b)(6),\30\ 15A(b)(11),\31\ and 11A(a)(1)(c)\32\ of the Act.
\30\ 15 U.S.C. 78o3(b)(6).
\31\ 15 U.S.C. 78o3(b)(11).
\32\ 15 U.S.C. 78k1(a)(1)(C).
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\33\ that the proposed rule change (SRNASD0033), as amended, be and hereby is approved.
\33\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\34\
\34\ 17 CFR 200.303(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 0114587 Filed 6801; 8:45 am]
BILLING CODE 801001M
SUMMARY:
National Association of Securities Dealers, Inc.,
DOCUMENT BODY 2:
June 5, 2001.
I. Introduction
On June 7, 2000, the National Association of Securities Dealers,
Inc. (``NASD'' or ``Association''), through its wholly owned
subsidiary, NASD Regulation, Inc. (``NASD Regulation''), filed with the
Securities and Exchange Commission (``Commission'' or ``SEC'') a
proposed rule change pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b4 thereunder.\2\ On
August 2, 2000, NASD Regulation amended the proposal.\3\ Notice of the
proposed rule change, as amended, was published for comment in the
Federal Register on October 3, 2000.\4\ The Commission received one
comment letter regarding the proposal.\5\ This order approves the proposed rule change.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ See August 2, 2000 letter from Kathleen A. O'Mara, Assistant
General Counsel, NASD Regulation, to Katherine A. England, Assistant
Director, Division of Market Regulation (``Division''), SEC
(``Amendment No. 1''). In Amendment No. 1, NASD Regulation broadened the scope of the proposed rule change.
\4\ See Securities Exchange Act Release No. 43346 (September 26, 2000), 65 FR 59036.
\5\ See October 30, 2000 letter from Cameron Smith, General
Counsel, Island ECN, Inc. to Jonathan Katz, Secretary, SEC (``Island Letter'').
II. Description of the Proposal
NASD Regulation proposes to amend NASD Rule 3340 to expressly prohibit members from publishing quotations in a security during a trading halt.
According to NASD Regulation, the purpose of the rule change is to
expressly prohibit members from publishing quotations or indications of
interest in a security during a trading halt. Currently, NASD Rule 3340
prohibits members from effecting a transaction in a security during a
trading halt, but does not expressly state that members are prohibited
from publishing quotations or indications of interest.\6\ However, NASD Rules 3310 \7\
[[Page 31263]]
and 3320,\8\ respectively, state that members are required to enter
only bona fide quotations and honor such quotations if presented with
an order. Thus, if during a trading halt, a member that is publishing a
quotation for a security is presented with a liability order for such
security, the member would be faced with the choice of either honoring
its quote and violating the rule prohibiting transactions in a security
during a trading halt, or complying with the trading halt rule but violating the Firm Quote Rule.
\6\ The Commission may impose trading suspensions in the United
States securities markets under Section 12(k) of the Act. See 15 U.S.C. 781(k).
NASD Rule 4120 provides that Nasdaq may halt trading: (1) In the
overthecounter market of a security listed on Nasdaq to permit the
dissemination of material news; or (2) in the overthecounter
market of a security listed on a national securities exchange during
a trading halt imposed by such exchange to permit the dissemination
of material news; or (3) by (i) Consolidated Quotation System
(``CQS'') market makers in a CQS security because of an order
imbalance or influx (``operational trade halt''); or (ii) Nasdaq
market makers in a security listed on Nasdaq, when the security is a
derivative or component of a CQS security and a national securities
exchange imposes an operational trading halt in that CQS security;
or (4) in an American Depositary Receipt (``ADR'') or other security
listed on Nasdaq, when the Nasdaqlisted security or the security
underlying the ADR is listed on or registered with a national or
foreign securities exchange or market, and the national or foreign
securities exchange or market, or regulatory authority overseeing
such exchange or market, halts trading in such security for
regulatory reasons; or (5) in a security listed on Nasdaq when
Nasdaq requests from the issuer information relating to: (i)
Material news; (ii) the issuer's ability to meet Nasdaq listing
qualification requirements, as set forth in NASD Rule 4300 and 4400
Series; or (iii) any other information which is necessary to protect
investors and the public interest. See also Securities Exchange Act
Release No. 42806 (May 22, 2000), 65 FR 34518 (May 30, 2000) (SR
NASD9933), which establishes Nasdaq's trade and quote halt
authority in certain specific circumstances in securities included
in the OTC Bulletin Board Service (``OTCBB''), and Notice to Members
9969 soliciting comments on whether NASD Regulation should have
authority to halt trading in nonNasdaq, nonOTCBB, overthecounter securities under certain circumstances.
\7\ NASD Rule 3310 states that: [n]o member shall publish or
circulate, or cause to be published or circulated, any notice,
circular, advertisement, newspaper article, investment service, or
communication of any kind which purports * * * to quote the bid
price or asked price for any security, unless such member believes
that such quotation represents a bona fide bid for, or offer of, such security * * *.
NASD Rule IM3310 states, among other things, that: [i]t would
be inconsistent with the above provisions for a member, for itself
or for any other person, to publish or circulate or to cause to be
published or circulated, by any means whatsoever, any quotation for
any security without having reasonable cause to believe that such
quotation is a bona fide quotation, is not fictitious and is not
published or circulated or caused to be published or circulated for
any fraudulent, deceptive or manipulative purpose. IM3310 also
provides: [f]or the purposes of this interpretation, the term
``quotation'' shall include any bid or offer or any formula, such as
``bid wanted'' or ``offer wanted,'' designed to induce any person to make or submit any bid or offer.
\8\ NASD Rule 3320 (``Firm Quote Rule'') states that: [n]o
member shall make an offer to buy from or sell to any person any
security at a stated price unless such member is prepared to
purchase or sell, as the case may be, at such price and under such
conditions as are stated at the time of such offer to buy or sell.
In addition, the entry of quotations or indications of interest while there is a trading halt in a security could be potentially misleading. To prevent this from happening, NASD Regulation is proposing that NASD Rule 3340 be amended to expressly state that members are prohibited from publishing quotations or indications of interest during a trading halt.
III. Summary of Comments
The Commission received one comment letter regarding the
proposal.\9\ The commenter expressed concern that the proposal would
cause the market to abruptly open once a trading halt is lifted without
allowing a time period for market participants to enter new quotes.\10\
The commenter also stated that the proposal did not provide instruction
on what would happen to quotes that were in the system before a trading
halt was imposed, and whether market participants would have a chance to refresh their quotes when a trading halt is lifted.\11\
\9\ See footnote 5, supra.
\10\ Island Letter, page 2.
\11\ Id.
The commenter suggested an alternative method of resuming trading after a trading halt, whereby participants would be allowed a five minute period to open their quotes. If a quote were refreshed during that period, the quote would then be considered open, and subject to the Firm Quote Rule. Any remaining quotes would remain closed. If, after the fiveminute period, any market participants failed to update their quotes, the quotes would be refreshed at the price established before the trading halt was imposed. If the prehalt price would lock or cross the market, the quote would be subject to an excused withdrawal.\12\
\12\ Id.
The commenter also suggested that Nasdaq should be required to make system changes to prevent the entry of orders in SelectNet during a trading halt, rather than requiring each of the Nasdaq market participants to make the changes in their own systems.\13\
\13\ Id.
Finally, the commenter suggested that Nasdaq develop official and automated methodology to alert members about the imposition of trading halts, citing examples of two occasions where incorrect or delayed messages regarding the status of trading halts were posted on the Nasdaq News Frame.\14\
\14\ Id.
In response to the comment letter,\15\ NASD Regulation stated that
the proposed rule change would not alter the method by which trading is
resumed when a trading halt is lifted.\16\ NASD Regulation stated that
Nasdaq MarketWatch provides notice of trading halts to members through
the Nasdaq workstation. Simultaneously, all quotes for the security at
issue are eliminated from the Nasdaq workstation interactive area.
Nasdaq MarketWatch updates the status of a trading halt, and notifies
members of the exact time the trading halt will be lifted. MarketWatch
also notifies members that they may begin entering quotations in
anticipation of the end of a trading halt (the ``grace period'').
Quotations during the grace period are designated as closed by
displaying a ``g'' symbol next to each quotation. The quotations remain
closed until the trading halt is lifted, at which time the ``g'' symbol is removed, and quotations become firm.\17\
\15\ See May 10, 2001 letter from Jeffrey S. Holik, Vice
President and Acting General Counsel, NASD Regulation, to Katherine
A. England, Assistant Director, Division, SEC (``NASD Regulation Letter'').
\16\ Id. at page 2.
\17\ Id.
Regarding the commenter's suggestion that Nasdaq modify SelectNet
to prevent the entry of orders in SelectNet during a trading halt, NASD
Regulation stated it is a member's responsibility to ensure compliance
with NASD rules.\18\ While modifying SelectNet may be appropriate as a
supplemental measure, NASD Regulation believes there must be
fundamental prohibition of the conduct addressed by the proposed rule
change.\19\ NASD Regulation indicated it has forwarded the commenter's
suggestion to Nasdaq, along with the commenter's request that Nasdaq
develop official and automated methodology to alert members to the imposition of a trading halt.\20\
\18\ Id.
\19\ Id.
\20\ Id.
IV. Discussion and Commission Findings
The Commission has reviewed carefully the proposed rule change, the
comment letter, NASD Regulation's response to the comment letter, and
the entire record herein, and finds that the proposed rule change, as
amended, is consistent with the Act and the rules and regulations
applicable to the Association. In particular, the Commission finds that
the proposal is consistent with the requirements of Sections
15A(b)(6),\21\ 15A(b)(11),\22\ and 11A(a)(1)(C) \23\ of the Act. \21\ 15 U.S.C. 78o3(b)(6).
\22\ 15 U.S.C. 78o3(b)(11).
\23\ 15 U.S.C. 78k1(a)(1)(C).
Section 15A(b)(6) \24\ requires that the rules of a registered national securities association be 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 Commission finds the proposal is consistent with these requirements.
\24\ 15 U.S.C. 78o3(b)(6).
The Commission further finds the proposed rule is consistent with Section 15A(b)(11),\25\ which requires that the rules of a registered national securities association be designed to produce fair and informative quotations, prevent fictitious or misleading quotations, and to promote orderly procedures for collecting, distributing, and publishing quotations.
\25\ 15 U.S.C. 78o3(b)(11).
The Commission also finds the proposed rule is consistent with the goals expressed in Section
[[Page 31264]]
11A(a)(1)(C),\26\ which grants the Commission the authority to require
rules designed to ensure appropriate protection of investors and the
maintenance of fair and orderly markets to assure: (1) Economically
efficient execution of securities transactions; (2) fair competition
among brokers and dealers; (3) the availability to brokers, dealers and
investors of information with respect to quotations and transactions in
securities; (4) the practicability of brokers executing investors'
orders in the best market; and (5) an opportunity for investors' orders to be executed without the participation of a dealer.
\26\ 15 U.S.C. 78k1(a)(1)(C).
The Commission has reviewed carefully the commenter's letter, and
is not persuaded by the commenter's assertions. NASD Regulation has
stated that the proposed rule change will not affect the process by
which trading resumes after a trading halt is lifted for Nasdaq
National Market Securities and Nasdaq SmallCap securities, and has
explained in detail those procedures.\27\ Additionally, NASD Regulation
has stated it would not consider the entry of closed quotations into
Nasdaq for these types of securities a violation of NASD Rule 3340,
provided the quotations were entered in conformity with Nasdaq's
resumption process.\28\ The Commission also agrees that the
responsibility to ensure compliance with NASD rules rests with the
NASD's members, and that the proposal is important because it
delineates the prohibition of specific conduct during trading halts.\29\
\27\ See NASD Regulation Letter, page 2.
\28\ Id.
\29\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiently, competition and capital
formation. 15 U.S.C. 78c(f). Additionally, the Commission notes that
the Association's definition of ``quotation'' under the proposal
differs from the definition of ``quotation'' under Exchange Act Rule
15c211. 17 CFR 240.15c211. The Association's definition of
``quotation'' will have no impact whatsoever on the definition of ``quotation'' under Exchange Act Rule 15c211.
V. Conclusion
For the reasons stated above, the Commission finds that the
proposed rule change, as amended, is consistent with the Act, in
general, and in particular with Sections 15A(b)(6),\30\ 15A(b)(11),\31\ and 11A(a)(1)(c)\32\ of the Act.
\30\ 15 U.S.C. 78o3(b)(6).
\31\ 15 U.S.C. 78o3(b)(11).
\32\ 15 U.S.C. 78k1(a)(1)(C).
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\33\ that the proposed rule change (SRNASD0033), as amended, be and hereby is approved.
\33\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\34\
\34\ 17 CFR 200.303(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 0114587 Filed 6801; 8:45 am]
BILLING CODE 801001M