Federal Register: October 19, 2006 (Volume 71, Number 202)
DOCID: FR Doc E6-17440
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-54598; File No. SR-NASDAQ-2006-042]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Nasdaq Rule 4760 Relating to the Operation of the Nasdaq Crossing Network
DOCUMENT SUMMARY:
October 13, 2006.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on October 4, 2006, The NASDAQ Stock Market LLC (``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. Nasdaq filed the proposed rule change
pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b4(f)(6)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Nasdaq is proposing to modify Nasdaq Rule 4760 relating to the
operation of the Nasdaq Crossing Network. Nasdaq plans to implement the
proposed rule change on November 6, 2006. The text of the proposed rule
change is available on Nasdaq's Web site (http://www.nasdaq.com), at
Nasdaq's principal office, and at the Commission's Public Reference Room.
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 5, 2006, the Commission approved Nasdaq Rule 4760 which
governs the operation of the Nasdaq Crossing Network.\5\ The Nasdaq
Crossing Network will provide a new execution option to market
participants trading in Nasdaq and other exchangelisted securities
that will facilitate the execution of trades quickly and anonymously.
Nasdaq expects to launch the operation of the Crossing Network on or about November 6, 2006.\6\
\5\ See Securities Exchange Act Release No. 54248 (July 31,
2006), 71 FR 44738 (August 7, 2006) (SRNASDAQ2006019). Prior to
the effective date of Nasdaq's operation as an exchange for Nasdaq
listed securities, the rule governing the Nasdaq Crossing Network
had been approved as an NASD rule (NASD Rule 4716). Securities
Exchange Act Release No. 54101 (July 5, 2006), 71 FR 39382 (July 12, 2006) (SRNASD2005140).
\6\ Telephone conference between Jan Woo, Attorney, Division of
Market Regulation, Commission, and Jeffrey Davis, Senior Associate General Counsel, Nasdaq, on October 4, 2006 (correcting a
typographical error in the filing which stated that Nasdaq plans to
launch the operation of the Crossing Network on or about October 30, 2006).
In anticipation of the launch, Nasdaq has proposed some minor
modifications to Nasdaq Rule 4760. Due to the intervening approval of
Nasdaq's Single Book integration rule proposal \7\ which has caused a
conflict regarding the numbering of certain Nasdaq rules, Nasdaq
proposes to renumber the provisions governing the operation of the Nasdaq Crossing Network as Nasdaq Rule 4770.
\7\ See Securities Exchange Act Release No. 54155 (July 14, 2006), 71 FR 41291 (July 20, 2006) (SRNASDAQ2006001).
In addition, in response to input from our members and other market participants, Nasdaq proposes to modify the times of the Reference Price Crosses during the regular hours session. Under the proposed rule change, the regular hours session crosses would commence at 10:45 a.m., 12:45 p.m., and 2:45 p.m. Eastern Time.
Nasdaq also proposes to add a clarification to Nasdaq Rule 4770 about how Reference Price Cross orders will be allocated. The existing rule provides that Reference Price Cross orders will be allocated on a prorata basis, so that shares will be allocated prorata in round lots to eligible orders based on the original size of the order. If additional shares remain after the initial prorata allocation, those shares will continue to be allocated prorata to eligible orders until a number of round lots remain that is less than the number of eligible orders. The proposed rule change clarifies that any remaining shares will be allocated to the order which has designated the smallest minimum acceptable execution quantity. If more than one such order exists, any remaining shares will be allocated to the oldest eligible order.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of section 6 of the Act,\8\ in general and with section
6(b)(5) of the Act,\9\ in particular, in that it is designed 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. Nasdaq believes that the
proposed rule change is consistent with these requirements in that the
changes are designed to address market participant input and issues
raised in testing relating to Nasdaq's proposed reference price crossing product, which
[[Page 61816]]
will provide the Nasdaq additional means for facilitating transactions. \8\ 5 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory 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: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3) by
its terms become operative for 30 days after the date of this filing,
or such shorter time as the 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) \10\ of the Act and Rule 19b4(f)(6) thereunder.\11\
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b4(f)(6).
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
Paper Comments
All submissions should refer to File Number SRNASDAQ2006042. This file number should be included on the subject line if email 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 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 the File Number SRNASDAQ 2006042 and should be submitted on or before November 9, 2006.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(12).
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E617440 Filed 101806; 8:45 am]
BILLING CODE 801101P
SUMMARY:
NASDAQ Stock Market LLC,
DOCUMENT BODY 2:
October 13, 2006.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b4 thereunder,\2\ notice is hereby given that
on October 4, 2006, The NASDAQ Stock Market LLC (``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. Nasdaq filed the proposed rule change
pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b4(f)(6)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons. \1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b4(f)(6).
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Nasdaq is proposing to modify Nasdaq Rule 4760 relating to the
operation of the Nasdaq Crossing Network. Nasdaq plans to implement the
proposed rule change on November 6, 2006. The text of the proposed rule
change is available on Nasdaq's Web site (http://www.nasdaq.com), at
Nasdaq's principal office, and at the Commission's Public Reference Room.
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 5, 2006, the Commission approved Nasdaq Rule 4760 which
governs the operation of the Nasdaq Crossing Network.\5\ The Nasdaq
Crossing Network will provide a new execution option to market
participants trading in Nasdaq and other exchangelisted securities
that will facilitate the execution of trades quickly and anonymously.
Nasdaq expects to launch the operation of the Crossing Network on or about November 6, 2006.\6\
\5\ See Securities Exchange Act Release No. 54248 (July 31,
2006), 71 FR 44738 (August 7, 2006) (SRNASDAQ2006019). Prior to
the effective date of Nasdaq's operation as an exchange for Nasdaq
listed securities, the rule governing the Nasdaq Crossing Network
had been approved as an NASD rule (NASD Rule 4716). Securities
Exchange Act Release No. 54101 (July 5, 2006), 71 FR 39382 (July 12, 2006) (SRNASD2005140).
\6\ Telephone conference between Jan Woo, Attorney, Division of
Market Regulation, Commission, and Jeffrey Davis, Senior Associate General Counsel, Nasdaq, on October 4, 2006 (correcting a
typographical error in the filing which stated that Nasdaq plans to
launch the operation of the Crossing Network on or about October 30, 2006).
In anticipation of the launch, Nasdaq has proposed some minor
modifications to Nasdaq Rule 4760. Due to the intervening approval of
Nasdaq's Single Book integration rule proposal \7\ which has caused a
conflict regarding the numbering of certain Nasdaq rules, Nasdaq
proposes to renumber the provisions governing the operation of the Nasdaq Crossing Network as Nasdaq Rule 4770.
\7\ See Securities Exchange Act Release No. 54155 (July 14, 2006), 71 FR 41291 (July 20, 2006) (SRNASDAQ2006001).
In addition, in response to input from our members and other market participants, Nasdaq proposes to modify the times of the Reference Price Crosses during the regular hours session. Under the proposed rule change, the regular hours session crosses would commence at 10:45 a.m., 12:45 p.m., and 2:45 p.m. Eastern Time.
Nasdaq also proposes to add a clarification to Nasdaq Rule 4770 about how Reference Price Cross orders will be allocated. The existing rule provides that Reference Price Cross orders will be allocated on a prorata basis, so that shares will be allocated prorata in round lots to eligible orders based on the original size of the order. If additional shares remain after the initial prorata allocation, those shares will continue to be allocated prorata to eligible orders until a number of round lots remain that is less than the number of eligible orders. The proposed rule change clarifies that any remaining shares will be allocated to the order which has designated the smallest minimum acceptable execution quantity. If more than one such order exists, any remaining shares will be allocated to the oldest eligible order.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of section 6 of the Act,\8\ in general and with section
6(b)(5) of the Act,\9\ in particular, in that it is designed 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. Nasdaq believes that the
proposed rule change is consistent with these requirements in that the
changes are designed to address market participant input and issues
raised in testing relating to Nasdaq's proposed reference price crossing product, which
[[Page 61816]]
will provide the Nasdaq additional means for facilitating transactions. \8\ 5 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
B. SelfRegulatory 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. SelfRegulatory 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: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3) by
its terms become operative for 30 days after the date of this filing,
or such shorter time as the 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) \10\ of the Act and Rule 19b4(f)(6) thereunder.\11\
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b4(f)(6).
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
Paper Comments
All submissions should refer to File Number SRNASDAQ2006042. This file number should be included on the subject line if email 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 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 the File Number SRNASDAQ 2006042 and should be submitted on or before November 9, 2006.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\12\
\12\ 17 CFR 200.303(a)(12).
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E617440 Filed 101806; 8:45 am]
BILLING CODE 801101P