[Federal Register Volume 67, Number 82 (Monday, April 29, 2002)]
[Notices]
[Pages 21007-21008]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10393]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45790; File No. SR-NASD-2002-22]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 
Thereto by the National Association of Securities Dealers, Inc. 
Relating to the Expansion From Three to Five the Levels of Aggregated 
Price and Size Information Displayed in Nasdaq's Future Order Display 
and Collector Facility

April 19, 2002.
    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 April 18, 2002, 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'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by Nasdaq.\3\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On April 5, 2002, the Commission received an amendment from 
Nasdaq which made conforming changes to NASD Rules 4707(d) and 
4710(f). See letter from Thomas P. Moran, Associate General Counsel, 
Nasdaq, to Katherine A. England, Assistant Director, Division of 
Market Regulation, Commission, dated April 5, 2002 (``Amendment No. 
1''). Subsequently, on April 18, 2002, the Commission received an 
amendment from Nasdaq which corrected a citation in its rule text 
and replaced Amendment No. 1 in its entirety. See letter from Thomas 
P. Moran, Associate General Counsel, Nasdaq, to Katherine A. 
England, Assistant Director, Division of Market Regulation, 
Commission, dated April 18, 2002 (``Amendment No. 2''). This 
proposed rule change is treated as filed on the date that Amendment 
No. 2 was received.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Nasdaq proposes to expand, from three to five, the levels of 
aggregated price and size information displayed in Nasdaq's future 
Order Display and Collector Facility (``SuperMontage''). Nasdaq will 
implement this rule change within 30 days after successful completion 
of SuperMontage user acceptance testing. The text of the proposed rule 
change is available at the Office of the Secretary, Nasdaq, and at the 
Commission.

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
    As part of its ongoing preparation for the launch of SuperMontage, 
Nasdaq is engaging in a continuing review of the system's functionality 
and rules with a view to constant improvement. As a result of this 
review, and in consultation with industry professionals, Nasdaq has 
determined to expand to five the number of price levels aggregated and 
displayed via the SuperMontage.
    As approved by the Commission, SuperMontage would only display the 
top three price levels of aggregated price and size information for 
both the bid and offer side of the market for a particular security. As 
a result of discussions with market participants and Nasdaq's 
experience with decimalization, Nasdaq has determined to expand the 
availability of aggregated price and share amount information around 
the inside price by displaying, and disseminating through data vendors, 
five price levels (the inside price plus four additional price levels 
away) of trading interest on both the bid and offer side of the market.
    Nasdaq believes that expanding the amount of aggregated trading 
interest information available through SuperMontage to five price 
levels will further increase transparency and assist market 
participants in making informed trading decisions.
2. Statutory Basis
    Nasdaq believes the proposed rule change, as amended, is consistent 
with the provisions of Section 15A(b)(6) of

[[Page 21008]]

the Act\4\ in that the proposal is designed to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market, and, in general, to 
protect investors and the public interest.
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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, as amended, 
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 neither solicited nor received any written comments.

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

    The proposed rule change, as amended, has become effective pursuant 
to Section 19(b)(3)(A) of the Act \5\ and subparagraph (f)(5) of Rule 
19b-4 thereunder\6\ because 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; and (3) 
have the effect of limiting the access to or availability of the 
system. At any time within 60 days of the filing of the proposed rule 
change, as amended, 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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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(5).
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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, 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-2002-22 and 
should be submitted by May 20, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-10393 Filed 4-26-02; 8:45 am]
BILLING CODE 8010-01-U