Federal Register: February 19, 2003 (Volume 68, Number 33)
DOCID: FR Doc 03-3944
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-47344; File No. SR-NASD-2003-05]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendments Nos. 1 and 2 Thereto, by the National Association of Securities Dealers, Inc. To Clarify Rule 4701(o) Regarding the Ability of UTP Exchanges To Enter Non-Attributable Quotes/Orders Into Nasdaq's SuperMontage System
DOCUMENT SUMMARY:
February 11, 2003.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(''Exchange Act'' or ``Act''),\1\ and Rule 19b4 thereunder,\2\ notice
is hereby given that on January 17, 2003, 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, II, and III below, which items have been prepared by Nasdaq.
On January 30, 2003, Nasdaq filed Amendment No. 1 to the proposal.\3\
On February 6, 2003, Nasdaq filed Amendment No. 2 to the proposal.\4\
The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ See letter from Thomas P. Moran, Associate General Counsel,
Nasdaq, to Katherine A. England, Assistant Director, Division of
Market Regulation (``Division''), Commission, dated January 30, 2003
(``Amendment No. 1''). In Amendment No. 1, Nasdaq provided a basis for waiving the 30day operative delay.
\4\ See letter from Thomas P. Moran, Associate General Counsel,
Nasdaq, to Katherine A. England, Assistant Director, Division,
Commission, dated February 6, 2003 (``Amendment No. 2''). In
Amendment No. 2, Nasdaq amended the proposed rule change language
for Rule 4701(o) to reflect changes approved by the Commission in
Release No. 3447301 (January 31, 2003), 68 FR 6236 (February 6,
2003). For the purposes of calculating the 60day abrogation period,
the Commission considers the period to have commenced on February 6, 2003, the date Nasdaq filed Amendment No. 2.
I. SelfRegulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change
The NASD proposes to amend NASD Rule 4701(o) to clarify the ability of UTP Exchanges to enter NonAttributable Quotes/Orders into the Nasdaq National Market Execution System (``NNMS'' or ``SuperMontage''). The text of the proposed rule change is below. Proposed new language is italicized.
4700. NASDAQ National Market Execution System (NNMS)
4701. DefinitionsUnless stated otherwise, the terms described below shall have the following meaning:
(a) through (n) No Change.
(o) The term ``NonAttributable Quote/Order'' shall mean a bid or
offer Quote/Order that is entered by a Nasdaq Quoting Market
Participant or NNMS Order Entry Firm and is designated for display
(price and size) on an anonymous basis in the Nasdaq Order Display
Facility. UTP Exchanges may submit NonAttributable Quote/Order(s) in conformity with Rule 4710(e).
(p) through (jj) No Change.
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
On July 1, 2002, Nasdaq filed SRNASD200291 with the Commission
setting forth rules governing the entry of orders and quotes by UTP
Exchanges into Nasdaq's SuperMontage system.\5\ As explained in that
filing, UTP Exchanges that elect to participate in the system are
allowed to enter a single bid Quote/Order and a single offer Quote/
Order representing their principal trading interest that will displayed
along with the UTP Exchange's identifier in the Nasdaq Quotation
Montage. If that Attributed Quote/Order falls with the number of price
levels subject to aggregation, that UTP Quote/Order will be included in
the total aggregated share amounts displayed by the system. For their
agency Quotes/Orders, UTP Exchanges that elect to participate in
SuperMontage can send one, or multiple, NonAttributable Quote/Orders
to the system. These Quotes/Orders will be displayed under
SuperMontage's SIZE MMID. In order to make clear the ability of
participating UTP Exchanges to enter NonAttributable Quotes/ Orders
for their agency customers, Nasdaq proposes to amend the definition of
NonAttributable Quote/Order in NASD Rule 4701(o) to reference NASD
Rule 4710(e) that authorizes and governs UTP Exchange capabilities in SuperMontage.
\5\ See Securities Exchange Act Release No. 46343 (August 13,
2002), 67 FR 53822 (August 19, 2002) (File No. SRNASD200291
regarding the voluntary participation of national securities exchanges in the SuperMontage).
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions 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, 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. \6\ 15 U.S.C. 78o3.
\7\ 15 U.S.C. 78o3(b)(6).
B. SelfRegulatory Organization's Statement on Burden on Competition
Nasdaq believes that the proposed rule change will not impose any
burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Nasdaq has not solicited nor received any written comments with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule: (1) Does not significantly
affect the protection of investors or the public interest; (2) does not
impose any significant burden on competition; and (3) does not become operative for 30 days or such shorter time as the
[[Page 8055]]
Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to section 19(b)(3)(A) of the Act,\8\ and
subparagraph (f)(6) of Rule 19b4 thereunder.\9\ At any time within 60
days of the filing of the proposed rule change, as amended, 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.
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b4(f)(6).
Nasdaq has requested that the Commission waive the 30day operative delay. Nasdaq believes the proposed rule change clarifies a functionality that is already available to UTP Exchanges. In particular, as already set forth in NASD Rule 4710(e), the proposed rule change makes clear that a UTP Exchange participating in the SuperMontage may enter NonAttributable Quotes/Orders for their agency customers into the system using the SIZE MMID.\10\
\10\ See Amendment No. 1, supra note 3.
The Commission believes that it is consistent with the protection
of investors and the public interest to waive the 30day operative
delay.\11\ The Commission notes that this proposal merely clarifies the
ability of UTP Exchanges to enter NonAttributable Quotes/Orders, as currently permitted by the system.
\11\ For purposes of only 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).
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 205490609. 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 such filing will also be available for inspection and copying at the principal office of the NASD. All submissions should refer to file number SRNASD200305 and should be submitted by March 21, 2003.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 033944 Filed 21803; 8:45 am]
BILLING CODE 801001P
SUMMARY:
National Association of Securities Dealers, Inc.,
DOCUMENT BODY 2:
February 11, 2003.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(''Exchange Act'' or ``Act''),\1\ and Rule 19b4 thereunder,\2\ notice
is hereby given that on January 17, 2003, 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, II, and III below, which items have been prepared by Nasdaq.
On January 30, 2003, Nasdaq filed Amendment No. 1 to the proposal.\3\
On February 6, 2003, Nasdaq filed Amendment No. 2 to the proposal.\4\
The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ See letter from Thomas P. Moran, Associate General Counsel,
Nasdaq, to Katherine A. England, Assistant Director, Division of
Market Regulation (``Division''), Commission, dated January 30, 2003
(``Amendment No. 1''). In Amendment No. 1, Nasdaq provided a basis for waiving the 30day operative delay.
\4\ See letter from Thomas P. Moran, Associate General Counsel,
Nasdaq, to Katherine A. England, Assistant Director, Division,
Commission, dated February 6, 2003 (``Amendment No. 2''). In
Amendment No. 2, Nasdaq amended the proposed rule change language
for Rule 4701(o) to reflect changes approved by the Commission in
Release No. 3447301 (January 31, 2003), 68 FR 6236 (February 6,
2003). For the purposes of calculating the 60day abrogation period,
the Commission considers the period to have commenced on February 6, 2003, the date Nasdaq filed Amendment No. 2.
I. SelfRegulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change
The NASD proposes to amend NASD Rule 4701(o) to clarify the ability of UTP Exchanges to enter NonAttributable Quotes/Orders into the Nasdaq National Market Execution System (``NNMS'' or ``SuperMontage''). The text of the proposed rule change is below. Proposed new language is italicized.
4700. NASDAQ National Market Execution System (NNMS)
4701. DefinitionsUnless stated otherwise, the terms described below shall have the following meaning:
(a) through (n) No Change.
(o) The term ``NonAttributable Quote/Order'' shall mean a bid or
offer Quote/Order that is entered by a Nasdaq Quoting Market
Participant or NNMS Order Entry Firm and is designated for display
(price and size) on an anonymous basis in the Nasdaq Order Display
Facility. UTP Exchanges may submit NonAttributable Quote/Order(s) in conformity with Rule 4710(e).
(p) through (jj) No Change.
II. SelfRegulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
1. Purpose
On July 1, 2002, Nasdaq filed SRNASD200291 with the Commission
setting forth rules governing the entry of orders and quotes by UTP
Exchanges into Nasdaq's SuperMontage system.\5\ As explained in that
filing, UTP Exchanges that elect to participate in the system are
allowed to enter a single bid Quote/Order and a single offer Quote/
Order representing their principal trading interest that will displayed
along with the UTP Exchange's identifier in the Nasdaq Quotation
Montage. If that Attributed Quote/Order falls with the number of price
levels subject to aggregation, that UTP Quote/Order will be included in
the total aggregated share amounts displayed by the system. For their
agency Quotes/Orders, UTP Exchanges that elect to participate in
SuperMontage can send one, or multiple, NonAttributable Quote/Orders
to the system. These Quotes/Orders will be displayed under
SuperMontage's SIZE MMID. In order to make clear the ability of
participating UTP Exchanges to enter NonAttributable Quotes/ Orders
for their agency customers, Nasdaq proposes to amend the definition of
NonAttributable Quote/Order in NASD Rule 4701(o) to reference NASD
Rule 4710(e) that authorizes and governs UTP Exchange capabilities in SuperMontage.
\5\ See Securities Exchange Act Release No. 46343 (August 13,
2002), 67 FR 53822 (August 19, 2002) (File No. SRNASD200291
regarding the voluntary participation of national securities exchanges in the SuperMontage).
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions 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, 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. \6\ 15 U.S.C. 78o3.
\7\ 15 U.S.C. 78o3(b)(6).
B. SelfRegulatory Organization's Statement on Burden on Competition
Nasdaq believes that the proposed rule change will not impose any
burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. SelfRegulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Nasdaq has not solicited nor received any written comments with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule: (1) Does not significantly
affect the protection of investors or the public interest; (2) does not
impose any significant burden on competition; and (3) does not become operative for 30 days or such shorter time as the
[[Page 8055]]
Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to section 19(b)(3)(A) of the Act,\8\ and
subparagraph (f)(6) of Rule 19b4 thereunder.\9\ At any time within 60
days of the filing of the proposed rule change, as amended, 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.
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b4(f)(6).
Nasdaq has requested that the Commission waive the 30day operative delay. Nasdaq believes the proposed rule change clarifies a functionality that is already available to UTP Exchanges. In particular, as already set forth in NASD Rule 4710(e), the proposed rule change makes clear that a UTP Exchange participating in the SuperMontage may enter NonAttributable Quotes/Orders for their agency customers into the system using the SIZE MMID.\10\
\10\ See Amendment No. 1, supra note 3.
The Commission believes that it is consistent with the protection
of investors and the public interest to waive the 30day operative
delay.\11\ The Commission notes that this proposal merely clarifies the
ability of UTP Exchanges to enter NonAttributable Quotes/Orders, as currently permitted by the system.
\11\ For purposes of only 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).
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 205490609. 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 such filing will also be available for inspection and copying at the principal office of the NASD. All submissions should refer to file number SRNASD200305 and should be submitted by March 21, 2003.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 033944 Filed 21803; 8:45 am]
BILLING CODE 801001P