[Federal Register Volume 66, Number 240 (Thursday, December 13, 2001)]
[Notices]
[Pages 64490-64491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30779]



[[Page 64490]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45137; File No. SR-NASD-2001-48]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by National Association of Securities Dealers, Inc. To Clarify 
That the Nasdaq Limited Partnership Qualitative Listing Requirements 
Are Applicable to Limited Partnerships Listed on Both the National 
Market and the SmallCap Market

December 6, 2001.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ notice is hereby given that on August 7, 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 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by Nasdaq. 
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).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule change clarifies that Nasdaq's limited 
partnership qualitative listing requirements are applicable to limited 
partnerships listed on both the National Market and the SmallCap 
Market. Nasdaq is also proposing to make a conforming change to 
Marketplace Rule 4350. Below is the text of the proposed rule change. 
Proposed new language is italicized; proposed deletions are in 
brackets.
* * * * *
4350. Qualitative Listing Requirements for Nasdaq National Market and 
Nasdaq SmallCap Market Issuers Except for Limited Partnerships [traded 
on the Nasdaq National Market]
    (a)-(l) No change
4470. Qualitative Listing Requirements for Nasdaq National Market 
Issuers That Are Limited Partnerships
    Renumbered as Rule 4360 and amended as follows:
4360. Qualitative Listing Requirements for Nasdaq [National Market] 
Issuers That Are Limited Partnerships
    (a) No change
    (b) Distribution of Annual and Interim Reports
    (1) Each [NNM] issuer that is a limited partnership shall 
distribute to limited partners copies of an annual report containing 
audited financial statements of the limited partnership. The report 
shall be distributed to limited partners within a reasonable period of 
time after the end of the limited partnership's fiscal year end and 
shall be filed with Nasdaq at the time it is distributed to limited 
partners.
    (2)(A) Each [NNM] issuer that is a limited partnership which is 
subject to SEC Rule 13a-13 shall make available copies of quarterly 
reports including statements of operating results to limited partners 
either prior to or as soon as practicable following the partnership's 
filing of its Form 10-Q with the Commission. Such reports shall be 
distributed to limited partners if required by statute or regulation in 
the state in which the limited partnership is formed or doing business 
or by the terms of the partnership's limited partnership agreement. If 
the form of such quarterly report differs from the Form 10-Q, the 
issuer shall file one copy of the report with Nasdaq in addition to 
filing its Form 10-Q pursuant to Rule 4310(c)(14). The statement of 
operations contained in quarterly reports shall disclose, at a minimum, 
any substantial items of an unusual or nonrecurrent nature and net 
income before and after estimated federal income taxes or net income 
and the amount of estimated federal taxes.
    (B) Each [NNM] issuer that is a limited partnership which is not 
subject to SEC Rule 13a-13 and which is required to file with the 
Commission, or another federal or state regulatory authority, interim 
reports relating primarily to operations and financial position, shall 
make available to limited partners reports which reflect the 
information contained in those interim reports. Such reports shall be 
distributed to limited partners if required by statute or regulation in 
the state in which the limited partnership is formed or doing business 
or by the terms of the partnership's limited partnership agreement. 
Such reports shall be distributed to limited partners either before or 
as soon as practicable following filing with appropriate regulatory 
authority. If the form of the interim report provided to limited 
partners differs from that filed with the regulatory authority, the 
issuer shall file one copy of the report to limited partners with 
Nasdaq in addition to the report to the regulatory authority that is 
filed with Nasdaq pursuant to Rule 4310(c)(14).
    (c)-(d) No change
    (e) Partner Meetings
    An [NNM] issuer that is a limited partnership shall not be required 
to hold an annual meeting of limited partners unless required by 
statute or regulation in the state in which the limited partnership is 
formed or doing business or by the terms of the partnership's limited 
partnership agreement.
    (f)-(g) No change
    (h) Listing Agreement
    Each [NNM] issuer that is a limited partnership shall execute a 
Listing Agreement in the form designated by Nasdaq.
    (i) Conflict of Interest
    Each [NNM] issuer which is a limited partnership shall conduct an 
appropriate review of all related party transactions on an ongoing 
basis and shall utilize the Audit Committee or a comparable body of the 
Board of Directors or the review of potential material conflict of 
interest situations where appropriate.

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 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 purpose of the proposed rule change is to clarify that Nasdaq's 
limited partnership qualitative listing requirements are applicable to 
limited partnerships listed on both the National Market and the 
SmallCap Market. The limited partnership qualitative listing standards 
were initially adopted in 1993 for limited partnerships listed on the 
National Market.\2\ Limited partnerships listed on the SmallCap Market 
were not required to comply with these qualitative standards as there 
were no corporate governance requirements for SmallCap Market issuers 
at that time. Although corporate governance requirements were 
subsequently implemented for the SmallCap Market

[[Page 64491]]

in 1997,\3\ the limited partnership rules have not been updated to 
reflect this change. As such, Nasdaq is proposing to amend its 
Marketplace Rules in order to clarify that the limited partnership 
qualitative listing standards apply to all limited partnerships listed 
on Nasdaq.
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    \2\ Securities Exchange Act Release No. 32250 (April 30, 1993), 
58 FR 27601 (May 10, 1993).
    \3\ Securities Exchange Act Release No. 38961 (August 22, 1997), 
62 FR 45895 (August 29, 1997).
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    Nasdaq is also proposing to make a conforming change to Marketplace 
Rule 4350.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(6) of the Act \4\ in that the proposal 
is designed to prevent fraudulent and manipulative acts and practices, 
and to protect investors and the public interest. As previously 
mentioned, Nasdaq is proposing to amend its limited partnership 
qualitative listing standards in order to provide greater clarity and 
transparency for issuers, their counsel and investors.
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    \4\ 15 U.S.C. 78o-3(b)(6).
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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

    Nasdaq has neither solicited nor received written comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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, N.W., 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 submission should refer to file number SR-NASD-2001-48 and 
should be submitted by January 3, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-30779 Filed 12-12-01; 8:45 am]
BILLING CODE 8010-01-M