[Federal Register Volume 66, Number 150 (Friday, August 3, 2001)]
[Notices]
[Page 40761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19435]



[[Page 40761]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44609; File No. SR-NASD-2001-37]


Self-Regulatory Organizations; Order Granting Approval of 
Proposed Rule Change and Notice of Filing and Order Granting 
Accelerated Approval of Amendment No. 1 Thereto by the National 
Association of Securities Dealers, Inc. Clarifying the Extent of 
Nasdaq's Authority To Halt Trading in a Security in Response to 
Extraordinary Market Activity

July 27, 2001.

I. Introduction

    On May 11, 2001, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to clarify the extent of Nasdaq's authority to 
halt trading in a security in response to extraordinary market activity 
that Nasdaq believes may be caused by the misuse or malfunction of an 
electronic system that is operated by, or linked to, Nasdaq. Notice of 
the proposed rule change appeared in the Federal Register on May 22, 
2001.\3\ Nasdaq submitted an amendment to the proposed rule change on 
July 27, 2001.\4\ The Commission received no comments on the proposed 
rule change. This order approves the proposed rule change, as amended, 
on a pilot basis through October 27, 2001.
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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. 44307 (May 15, 
2001), 65 FR 28209.
    \4\ Letter from Thomas P. Moran, Associate General Counsel, 
Nasdaq, to Alton Harvey, Division of Market Regulation, dated July 
27, 2001 (``Amendment No. 1''). Amendment No. 1 requests the 
Commission to approve the proposed rule change on a three month 
pilot basis expiring on October 27, 2001.
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II. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the proposed Amendment No. 1, including whether 
the proposed rule change, as amended, 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-2001-37 and should be 
submitted by August 24, 2001.

III. Discussion and Commission Findings

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities association \5\ and, in 
particular, the requirements of Section 15A of the Act \6\ and the 
rules and regulations thereunder. The Commission finds specifically 
that the proposed rule change is consistent with Section 15A(b)(6) of 
the Act \7\ because it will provide Nasdaq with clearer authority to 
respond to and alleviate market disruptions and thereby protect 
investors and the public interest.
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    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(6).
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    The Commission finds good cause for accelerating approval of 
Amendment No. 1 to the proposed rule change prior to the thirtieth day 
after publication in the Federal Register. The Commission notes that 
Amendment No. 1 makes no substantive changes, but merely requests that 
the Commission approve the proposed rule change on a three month pilot 
basis. Accordingly, the Commission finds that good cause exists, 
consistent with Sections 15A(b)(6) of the Act,\8\ and Section 19(b) of 
the Act \9\ to accelerate approval of Amendment No. 1 to the proposed 
rule change.
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    \8\ 15 U.S.C. 78o-3(b)(6).
    \9\ 15 U.S.C. 78s(b).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act 
\10\, that the proposed rule change (SR-NASD-2001-37), as amended, be, 
and it hereby is, approved on a pilot basis through October 27, 2001.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-19435 Filed 8-2-01; 8:45 am]
BILLING CODE 8010-01-M