[Federal Register Volume 59, Number 111 (Friday, June 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-14097]
[[Page Unknown]]
[Federal Register: June 10, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34159; International Series Release No. 669; File No.
SR-NASD-94-33]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to the Termination of the Nasdaq-London Stock
Exchange Linkage
June 3, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on May 26, 1994, the National
Association of Securities Dealers, Inc. (``NASD'' or ``Association'')
filed with the Securities and Exchange Commission (``Commission'' or
``SEC'') the proposed rule change as described in Items I, II, and III
below, which Items have been prepared by the NASD. 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) (1988).
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Pursuant to section 19(b)(1) of the Act, the NASD hereby files this
proposed rule change to accelerate to June 30, 1994 the termination
date of the experimental quotation linkage between the London Stock
Exchange (``LSE'') and The Nasdaq Stock Market (``Nasdaq''), a
subsidiary of the NASD. The linkage had been scheduled to terminate on
October 31, 1994.
II. Self-Regulatory Organization's Statement of the Purpose Of, and
Statutory Basis For, the Proposed Rule Change
In its filing with the Commission, the NASD 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. The NASD 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
On October 2, 1987, the SEC issued an order approving operation of
an experimental market linkage between Nasdaq and LSE (formerly, the
International Stock Exchange of The United Kingdom and the Republic of
Ireland) for a pilot term of two years.\2\ This linkage supports an
interchange of quotation information (``linkage information'') on about
740 securities (``linkage securities''); of that total, each
marketplace has designated approximately half as its ``pilot group'' of
linkage securities. NASD and LSE members that function as market makers
in one or more of a subset of linkage securities that are quoted in
both the Nasdaq and LSE dealer markets (``common issues'') are entitled
to access linkage information without paying a separate charge to
receive it. Operation of the linkage in this fashion comports with the
terms of the Commission's October 1987 Order.
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\2\Securities Exchange Act Release No. 24979 (Oct. 2, 1987), 52
FR 37684 (Oct. 8, 1987) (the ``October 1987 Order'').
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Most recently, the Commission authorized an extension of this pilot
linkage through October 31, 1994 by approving File No. SR-NASD-94-
23.\3\ The latter also stated that the linkage would terminate on or
about October 31, 1994. Subsequently, the LSE advised Nasdaq that it
will switch communication carriers at the end of June and that Nasdaq
would have to bear the costs of new communication lines to its
processors in Trumbull, Connecticut and Rockville, Maryland. After
reviewing the specific communication requirements and costs, Nasdaq
determined to forgo the added communication costs and terminate the
Nasdaq-LSE linkage on June 30, 1994. Therefore, the sole purpose of
this rule change is to accelerate the termination date for the Nasdaq-
LSE linkage to June 30, 1994.
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\3\Securities Exchange Act Release No. 33946 (Apr. 21, 1994), 59
FR 22036 (Apr. 28, 1994).
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The NASD believes that the proposed rule change is consistent with
the provisions of section 15A(b)(5) and 15A(b)(11) of the Act. Section
15A(b)(5) requires that the NASD's rules provide for the equitable
allocation of reasonable dues, fees, and other changes among members or
others using any facility or system that the NASD operates or controls.
Section 15A(b)(11) authorizes the NASD to adopt rules governing the
form and content of quotations disseminated by member firms.
Termination of the Nasdaq-LSE linkage on June 30, 1994 will obviate the
imposition of additional communication costs (which could not be
readily recovered) to support a service that is infrequently used by
eligible NASD members and that duplicates market data offerings by
commercial vendors. Similarly, LSE members that wish to receive
comprehensive quotation and transaction information from Nasdaq can
easily do so by subscribing to an appropriate vendor service. From
either perspective, a vendor-sponsored service will provide access to
more market information than that which is accessible through the
Nasdaq-LSE linkage.
B. Self-Regulatory Organization's Statement on Burden on Competition
The NASD believes that the rule change will not 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
Comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing
For Commission Action
The foregoing rule change has become effective pursuant to section
19(b)(3)(A) of the Act and subparagraph (e) of Rule 19b-4 thereunder
because the proposal constitutes a stated policy, practice, or
interpretation concerned solely with the administration of a pilot
system whose operation had been extended, on an interim basis, by
numerous rule changes filed by the NASD. In this regard, the
establishment of a revised date for terminating this experimental
system is an administrative matter that does not involve the
enforcement or interpretation of any NASD rules.
At any time within 60 days of the filing of such rule change, the
Commission may summarily abrogate the 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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.
Copies of the submissions, 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 SR-NASD-94-33 and
should be submitted by July 1, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 94-14097 Filed 6-9-94; 8:45 am]
BILLING CODE 8010-01-M