[Federal Register Volume 66, Number 162 (Tuesday, August 21, 2001)]
[Notices]
[Pages 43942-43943]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-21015]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44704; File No. SR-NASD-2001-51]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc., Relating to the Opening of Nasdaq's SelectNet 
Service at 8:00 a.m. Eastern Time

August 15, 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 August 14, 2001, the National Association of Securities Dealers, 
Inc. (``NASD'' or ``Association''), through its subsidiary The Nasdaq 
Stock Market, Inc. (``Nasdaq''), 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 Nasdaq. Nasdaq filed the proposal pursuant to section 19(b)(3)(A) of 
the Act,\3\ and Rule 19b-4(f)(5) thereunder,\4\ as one effecting a 
change in an existing order-entry or trading system of a self-
regulatory organization, which renders the proposal effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq proposes to open its SelectNet service (``SelectNet'') at 
8:00 a.m. Eastern Time (``ET''). Nasdaq will implement this rule change 
on September 4, 2001. The text of the proposed rule change is below. 
Proposed new language is in italics.

4720. SelectNet Service

    (a)-(c) No Change.
    (d) Hours of Operation
    The SelectNet Service shall operate from 8:00 a.m. ET to 6:30 
p.m. ET.

* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq 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. Nasdaq has prepared summaries, set forth in Section 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

I. Purpose
    Nasdaq's SelectNet Service is an order negotiation and delivery 
service that allows market participants to direct or broadcast orders 
to buy or sell Nasdaq securities to market makers or Electronic 
Communication Networks (``ECNs''). Trades executed through SelectNet 
are confirmed to the parties and the trade is automatically sent to 
Nasdaq's Automated Confirmation Transaction Service (``ACT'') and sent 
to clearing as ``locked-in'' transactions. Currently, Nasdaq operates 
SelectNet from 9 a.m. to 6:30 p.m. ET. In response to requests from 
market participants seeking to expand their usage of SelectNet's 
communication and execution capabilities prior to normal market hours, 
Nasdaq has determined to open SelectNet one hour earlier, starting at 8 
a.m. ET. Nasdaq will commence operating SelectNet at 8 a.m. starting 
September 4, 2001. Opening SelectNet earlier should further assist 
market participants in accessing trading partners prior to the Nasdaq 
market open. In turn, this enhanced access will provide more 
opportunities for Nasdaq market participants to manage pre-open order 
flows and engage in robust price discovery.
2. Statutory Basis
    Nasdaq believes the proposed rule change is consistent with section 
15A(b)(6) of the Act,\5\ in that the proposal is designed to promote 
just and equitable principles of trade, foster cooperation and 
coordination with persons engaged in processing information with 
respect to and facilitating transactions in securities, as well as 
removing impediments to and perfect the mechanism of a free and open 
market, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq 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 foregoing proposal has become effective pursuant to section 
19(b)(3)(A) of the Act,\6\ and Rule 19b-4(f)(5) \7\ thereunder, in that 
it effects a change in an existing order-entry or trading system of a 
self-regulatory organization that does not: (1) Significantly affect 
the protection of investors or the public interest, (2) impose any 
significant burden on competition, or (3) have the effect of limiting 
the access to or availability of the system.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------

    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.

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 he public in accordance with the provision

[[Page 43943]]

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 
Association. All submissions should refer to file number SR-NASD-2001-
51 and should be submitted by September 11, 2001.
    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).

Jonathan G. Katz,
Secretary.
[FR Doc. 01-21015 Filed 8-20-01; 8:45 am]
BILLING CODE 8010-01-M