[Federal Register Volume 67, Number 80 (Thursday, April 25, 2002)]
[Notices]
[Page 20565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10157]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45779; File No. SR-NASD-2001-97]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Granting Approval to a Proposed Rule Change and 
Amendment No. 1 Thereto Relating to the Elimination of Interval Delays 
in Nasdaq's SuperMontage System

April 18, 2002.
    On January 2, 2002, 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''), 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 amend NASD Rule 4710(b)(1)(D) 
to remove delays between executions across price levels in Nasdaq's 
future Order Display and Collector Facility (``NNMS'' or 
``SuperMontage''). On March 7, 2002, Nasdaq filed Amendment No. 1 to 
the proposed rule change.\3\] The proposed rule change and Amendment 
No. 1 were published for comment in the Federal Register on March 19, 
2002.\4\ The Commission received no comments regarding the proposal, as 
amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Thomas P. Moran, Associate General Counsel, 
Nasdaq, to Katherine A. England, Assistant Director, Division of 
Market Regulation, Commission, dated March 6, 2002 (``Amendment No. 
1'').
    \4\ See Securities Exchange Act Release No. 45554 (March 13, 
2002), 67 FR 12631.
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    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. Specifically, the Commission finds 
that the proposal to eliminate the delays between executions at 
different price levels in SuperMontage is consistent with section 
15A(b)(6) of the Act \7\ because it may minimize the risk of orders 
queuing within SuperMontage, thereby helping to ensure the efficient 
and orderly operation of SuperMontage. In addition, the Commission 
believes that the prompt execution of orders in SuperMontage should 
facilitate the price discovery process, to the benefit of all market 
participants. Nasdaq represents that it will implement this rule change 
within 30 days after successful completion of SuperMontage user 
acceptance testing. The Commission expects Nasdaq to carefully monitor 
the effect on the Nasdaq market and on market participants of 
eliminating the interval delays between executions in SuperMontage, as 
it currently does for SuperSOES.\8\
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    \5\ In approving this amended proposal, 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).
    \8\ See Securities Exchange Act Release No. 44504 (July 2, 
2001), 66 FR 36022 (July 10, 2001) (order approving the elimination 
of interval delays in SuperSOES); see also Securities Exchange Act 
Release No. 43863 (January 19, 2001), 66 FR 8020 (January 26, 2001) 
(order approving SuperMontage and requiring Nasdaq to monitor market 
performance in SuperMontage as it related to interval delays).
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    For the foregoing reasons, the Commission finds that the proposed 
rule change, as amended, is consistent with the requirements of the Act 
and rules and regulations thereunder.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NASD-2001-97), as amended, is 
approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    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. 02-10157 Filed 4-24-02; 8:45 am]
BILLING CODE 8010-01-P