[Federal Register Volume 62, Number 137 (Thursday, July 17, 1997)]
[Notices]
[Pages 38332-38333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18765]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38823; File No. SR-NASD-97-01]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Order Amending Effective Date of Proposed Rule 
Change Relating to Entry and Cancellation of SelectNet Broadcast Orders

July 8, 1997.

I. Introduction

    On June 30, 1997, the Securities and Exchange Commission 
(``Commission''

[[Page 38333]]

or ``SEC'') approved a rule proposal by the National Association of 
Securities Dealers, Inc. (``NASD'' or ``Association'') filed pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ clarifying the obligations 
of NASD members regarding the use of the SelectNet Service. The 
proposed rule change was published for comment in Securities Exchange 
Act Release No. 38149 (January 10, 1996), 62 FR 1942 (January 14, 1997) 
(``Notice of Proposed Rule Change''). The Commission subsequently 
approved a portion of this proposed rule change on a temporary 
basis.\3\ No comments were received on the Notice of Proposed Rule 
Change. The Commission thereafter approved the proposed rule change in 
its entirety on a permanent basis.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 38185 (January 21, 
1997), 62 FR 3935 (January 27, 1997), approving until July 1, 1997, 
a new conduct rule to prohibit members from cancelling or attempting 
to cancel a preferenced order entered into SelectNet until a minimum 
period of ten seconds has elapsed and from entering conditional 
orders preferenced to electronic communications networks.
    \4\ See Securities Exchange Act Release No. 38794 (June 30, 
1997).
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II. Discussion

    The Commission approved new conduct rule, rule 3380, to prohibit 
members from cancelling or attempting to cancel a broadcast or 
preferenced order entered into Nasdaq's SelectNet Service 
(``SelectNet'') until a minimum period of ten seconds has elapsed 
(``10-second rule'').\5\ The 10-second rule with respect to SelectNet 
preferenced orders became temporarily effective on January 21, 1997 and 
was permanently approved on June 30, 1997.\6\ For SelectNet broadcast 
orders, however, the 10-second rule was permanently approved with an 
effective date of July 7, 1997.\7\
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    \5\ Conduct rule 3380(a) is proposed to read: Cancellation of a 
SelectNet Order: No member shall cancel or attempt to cancel an 
order, whether preferenced to a specific market maker or electronic 
communications network, or broadcast to all available members, until 
a minimum time period of ten seconds has expired after the order to 
be cancelled was entered. Such ten second time period shall be 
measured by the Nasdaq processing system processing the SelectNet 
order.
    \6\ See Securities Exchange Act Release No. 38185 (January 21, 
1997), 62 FR 3935 (January 27, 1997), approving the 10-second rule 
for SelectNet preferenced orders until July 1, 1997. See also 
Securities Exchange Act Release No. 38794 (June 30, 1997), approving 
the rule on a permanent basis.
    \7\ See Securities Exchange Act Release No. 38794 (June 30, 
1997).
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    The NASD has requested that the effective date for the 10-second 
rule for SelectNet broadcast orders be revised to permit market 
participants adequate time to adapt computer systems to the new 
requirements.\8\ The Commission, therefore, has determined to revise 
the effective date from July 7, 1997 to a date no later than October 6, 
1997. This should afford market participants the time needed to prepare 
for compliance with the 10-second rule with respect to SelectNet 
broadcast orders. The NASD will provide notice to its membership of the 
definitive effective date for the 10-second rule for SelectNet 
broadcast orders by way of an informational facsimile.
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    \8\ Telephone conference between J. Patrick Campbell, Executive 
Vice President, The Nasaq Stock Market, Inc., and Howard L. Kramer, 
Senior Associate Director, Division of Market Regulation, SEC, July 
3, 1997.
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III. Conclusion

    It is therefore Ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the effective date of the proposed rule change (NASD-97-
01) with respect to SelectNet broadcast orders be, and hereby is, 
revised to a date no later than October 6, 1997.

    \9\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-18765 Filed 7-16-97; 8:45 am]
BILLING CODE 8010-01-M