[Federal Register Volume 68, Number 20 (Thursday, January 30, 2003)]
[Notices]
[Page 4810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-2169]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47240; File No. SR-NASD-2002-113]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc; Order Granting Approval of Proposed Rule Change Relating 
to the Implementation of a Fingerprinting Program for Nasdaq Employees 
and Independent Contractors

January 23, 2003.
    On August 16, 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 establish a program for 
conducting fingerprint-based background checks of Nasdaq employees and 
independent contractors. On September 10, 2002, Nasdaq submitted an 
amendment to the proposed rule change.\3\ The proposed rule change, as 
amended, was published for comment in the Federal Register on December 
16, 2002.\4\ 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 September 9, 2002 letter from Mary M. Dunbar, Vice 
President and Deputy General Counsel, Nasdaq, to Katherine A. 
England, Assistant Director, Division of Market Regulation, 
Commission (``Amendment No. 1'').
    \4\ See Securities Exchange Act Release No. 46974 (December 9, 
2002), 67 FR 77119 (``Notice'').
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    After careful review, the Commission finds that the proposed rule 
change, as amended, is consistent with the requirements of the Act and 
the rules and regulations thereunder,\5\ and, in particular, the 
requirements of section 15A of the Act \6\ and the rules and 
regulations thereunder. The Commission finds specifically that the 
proposed rule change is consistent with sections 15A(b)(2) and 
15A(b)(6) of the Act.\7\ Section 15A(b)(2) \8\ requires that the 
Association have the capacity to enforce compliance by its members and 
persons associated with its members with the federal securities laws 
and the rules of the Association. Section 15A(b)(6) \9\ requires, among 
other things, that the NASD's rules be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest.
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    \5\ 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).
    \6\ 15 U.S.C. 78o-3.
    \7\ 15 U.S.C. 78o-3(b)(2) and 15 U.S.C. 78o-3(b)(6).
    \8\ 15 U.S.C. 78o-3(b)(2).
    \9\ 15 U.S.C. 78o-3(b)(6).
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    The Commission believes that the proposed rule change, as amended, 
promotes the objectives of these sections of the Act. The Commission 
notes that Nasdaq is an important component of the National Market 
System and that a serious disruption in the operation of Nasdaq systems 
could have a significant deleterious impact on the U.S. and global 
financial markets. The proposed rule change will promote the objectives 
of the Act by establishing procedures that should help prevent a 
serious disruption to Nasdaq systems. Specifically, the proposal should 
provide Nasdaq with an effective tool for identifying and excluding 
individuals whose prior criminal activities may pose a threat to the 
security of Nasdaq operations.\10\
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    \10\ As explicitly stated in the proposed rule language in the 
Notice, such identification and exclusion of individuals will be 
carried out by Nasdaq only when permitted by applicable law.
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change, as amended, (File No. SR-NASD-
2002-113) be, and it hereby is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-2169 Filed 1-29-03; 8:45 am]
BILLING CODE 8010-01-P