[Federal Register Volume 66, Number 70 (Wednesday, April 11, 2001)]
[Notices]
[Pages 18836-18837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8864]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44148; File No. SR-NASD-01-02]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Reflecting the Transfer of Responsibilities to 
the Nasdaq Office of Appeals and Review

April 4, 2001.

    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 22, 2001, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association''), through it subsidiary, the Nasdaq Stock 
Market, Inc. (``Nasdaq''), filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I, II, and III below, which Items have been prepared 
by the NASD. The NASD has designated this proposal as one concerned 
solely with the administration of the self-regulatory organization 
under section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(3),\4\ 
which renders the rule effective upon filing with the Commission. 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).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 79s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq is herewith filing with the Commission a proposed rule 
change amending the NASD Rules to reflect certain internal changes in 
the Nasdaq office that will receive, acknowledge, and maintain records 
regarding reviews by the Nasdaq Listing and Hearing Review Council and 
the NASD Board of Governors. Below is the text of the proposed rule 
change. New language is italicized, and deletions are bracketed.
* * * * *

4840. Review by the Nasdaq Listing and Hearing Review Council

    (a) No change.
    (b) The issuer may initiate the Listing Council's review of any 
Panel Decision by making a written request within 15 calendar days of 
the date of the decision. Requests for review should be addressed to 
the Listing Council in care of the Nasdaq Office of [General Counsel] 
Appeals and Review. The request will not operate as a stay of the Panel 
Decision. Also within 15 calendar days of the date of the Panel 
Decision, the issuer must submit a fee of $1,400 to the The Nasdaq 
Stock Market, Inc. to cover the cost of the review. Upon receipt of the 
request for review and the applicable fee, the Nasdaq Office of 
[General Counsel] Appeals and Review will make an acknowledgement of 
the issuer's request stating the deadline for the issuer to provide any 
written submissions.
    (c) No change.
    (d) The Listing Council will consider the written record and, at 
its discretion, hold additional hearings. Any hearing will be 
scheduled, to the extent practicable, within 45 days of the date that a 
request for review initiated by either the issuer or one or more 
members of the Listing Council, is made. The Listing Council may also 
recommend that the NASD Board of Governors (``NASD Board'') consider 
the matter. The record of proceedings before the Listing Council will 
be kept by the Nasdaq Office of [General Counsel] Appeals and Review.
    (e) No change.

4850. Discretionary Review by NASD Board

    (a) No change.
    (b) If the NASD Board conducts a discretionary review, the review 
generally will be based on the written record considered by the Listing 
Council. However, the NASD Board may, at its discretion, request and 
consider additional information from the issuer and/or from Nasdaq 
staff. Should the Board consider additional information, the record of 
proceedings before the NASD Board will be kept by the Nasdaq Office of 
[General Counsel] Appeals and Review.
    (c) No change.
    (d) No change.
* * * * *

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

[[Page 18837]]

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

1. Purpose
    The NASD Rule 4800 Series provides procedures for the independent 
review of determinations that prohibit or limit the listing of an 
issuer's securities on the Nasdaq. Securities of issuers that do not 
meet the quantitative or qualitative listing standards set forth in the 
Rule 4000 Series are subject to delisting from, or denial of initial 
inclusion on, the Nasdaq. Currently, pursuant to Rule 4840, the Nasdaq 
Office of General Counsel receives and acknowledges requests for review 
of Listing Qualifications Panel Decisions. Additionally, pursuant to 
Rules 4840 and 4850, the Nasdaq Office of General Counsel maintains the 
record on review for the Nasdaq Listing and Hearing Review Council and 
the NASD Board. This proposed rule change gives effect to a decision by 
the NASD to transfer these responsibilities to a new unit with Nasdaq's 
Listing Qualifications Department, the Office of Appeals and Review. 
Accordingly,the proposed rule change modifies NASD Rules 4840(b), 
4840(d), and 4850(b) to indicate that requests for review should be 
addressed to, and will be acknowledged by, the Nasdaq Office of Appeals 
and Review, and that the record on review will be maintained by the 
Nasdaq Office of Appeals and Review.
2. Statutory Basis
    Nasdaq believes the proposed rule change is consistent with the 
provisions of section 15A(b)(6) of the Act,\5\ which requires, among 
other things, that the Association's rules must be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, and, in general, to protect investors 
and the public interest. This proposal enhances Nasdaq's ability to 
provide for an independent review of determinations of the Association 
that prohibit or limit the listing of an issuer's securities on the 
Nasdaq, thus protecting issuers, investors and the public interest.
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    \5\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organizaiton's Statement on Burden on Competition

    The NASD 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. Self-Regulatory 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

    The proposed rule change has become effective pursuant to section 
19(b)(3)(A)(iii) of the Act \6\ and subparagraph (f)(3) of Rule 19b-4 
thereunder \7\ because it is concerned solely with the administration 
of the self-regulatory organization. At any time within 60 days of the 
filing of the 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.
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(3).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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 20549-0609. 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 SR-NASD-01-02 and should be 
submitted by May 2, 2001.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 01-8864 Filed 4-10-01; 8:45 am]
BILLING CODE 8010-01-M