[Federal Register Volume 67, Number 229 (Wednesday, November 27, 2002)]
[Notices]
[Pages 70993-70994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-30043]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46862; File No. SR-NASD-2002-129]


Self Regulatory Organizations; Order Granting Approval to 
Proposed Rule Change by the National Association of Securities Dealers, 
Inc. Relating to the Security Futures Risk Disclosure Statement

November 20, 2002.
    On September 25, 2002, the National Association of Securities 
Dealers, Inc. (``NASD'') 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 relating to the Security Futures 
Risk Disclosure Statement. The proposed rule change was published for 
comment in the Federal Register on October 17, 2002.\3\

[[Page 70994]]

The Commission received no comments on the proposal.
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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. 46614 (October 7, 
2002), 67 FR 64162.
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    In addition, on September 25, 2002, NASD submitted a separate 
proposed rule change relating to the Security Futures Risk Disclosure 
Statement (File No. SR-NASD-2001-28). At NASD's request, the Commission 
put that proposed rule change into effect summarily pursuant to section 
19(b)(3) of the Act,\4\ so that the Security Futures Risk Disclosure 
Statement would be in effect prior to the start of trading in security 
futures.\5\ Section 19(b)(3) of the Act \6\ requires that any proposed 
rule change put into effect summarily shall be filed promptly 
thereafter in accordance with the provisions of section 19(b)(1) of the 
Act.\7\ Accordingly, NASD filed this proposed rule change to gain final 
approval of the Security Futures Risk Disclosure Statement.
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    \4\ 15 U.S.C. 78s(b)(3).
    \5\ See Securities Exchange Act Release No. 46612 (October 7, 
2002), 67 FR 64151.
    \6\ 15 U.S.C. 78s(b)(3).
    \7\ 15 U.S.C. 78(s)(b)(1).
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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.\8\ In 
particular, the Commission finds that the proposal is consistent with 
the requirements of section 15A(b)(6) of the Act,\9\ which requires, 
among other things, that NASD's rules be designed to prevent fraudulent 
and manipulative acts and practices, and, in general, to protect 
investors and the public interest. Under NASD's rules, the Security 
Futures Risk Disclosure Statement must be provided to customers at or 
prior to the time the customer's account is approved for trading 
security futures. Among other things, the statement describes the risks 
of security futures, how they trade, margin, effects of leverage, 
settlement procedures, customer account protections, and the tax 
consequences of trading security futures. Accordingly, the Commission 
believes that the Security Futures Risk Disclosure Statement should 
inform customers that trade security futures of the characteristics of 
security futures and the risks associated with trading them.
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    \8\ 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).
    \9\ 15 U.S.C. 78o-3(b)(6).
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    It is therefore ordered, pursuant to section 19(b)(2) of the Act 
\10\, that the proposed rule change (File No. SR-NASD-2002-129) be, and 
it hereby is, approved.
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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. 02-30043 Filed 11-26-02; 8:45 am]
BILLING CODE 8010-01-P