[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