[Federal Register Volume 68, Number 57 (Tuesday, March 25, 2003)]
[Notices]
[Pages 14451-14456]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6987]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47516; File No. SR-NASD-2002-141]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendment No. 1 Thereto by the National Association of
Securities Dealers, Inc. Relating to Proposed Amendments to NASD Rules
4200 and 4350 Regarding Board Independence and Independent Committees
March 17, 2003.
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 October 9, 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. On March 11,
2003, Nasdaq submitted Amendment No. 1 to the proposed rule change.\3\
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).
\2\ 17 CFR 240.19b-4.
\3\ See letter from Mary M. Dunbar, Vice President and Deputy
General Counsel, Nasdaq, to Katherine A. England, Assistant
Director, Division of Market Regulation (``Division''), Commission,
dated March 11, 2003 (``Amendment No. 1''). In Amendment No. 1,
Nasdaq proposed revisions to (1) the definition of ``independent
director'' and (2) Nasdaq's listing standards with respect to
provisions governing independent directors and audit committees.
Amendment No. 1 supersedes and replaces in its entirety the original
proposed rule change that Nasdaq filed with the Commission on
October 9, 2002.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
Nasdaq proposes amendments to NASD Rules 4200 and 4350 to modify
the definition of the term ``independent director.''
[[Page 14452]]
The text of the proposed rule change is below. Proposed new
language is italicized; proposed deletions are in brackets.\4\
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\4\ At Nasdaq's request, a few nonsubstantive changes were made
to the proposed rule text as filed with the Commission to correct
formatting errors. Telephone calls between Sara Bloom, Office of
General Counsel, Nasdaq, and Jennifer Lewis, Attorney, Division of
Market Regulation (``Division''), Commission, on March 14, 2003 and
Eleni Constantine, Office of General Counsel, Nasdaq, and Jennifer
Lewis, Attorney, Division, Commission, on March 17, 2003.
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* * * * *
Rule 4200. Definitions
(a) For purposes of the Rule 4000 Series, unless the context
requires otherwise:
(1)-(13) No change.
(14) ``Family Member'' means any person who is a relative by blood,
marriage or adoption or who has the same residence.
(15) ``Independent director'' means a person other than an officer
or employee of the company or its subsidiaries or any other individual
having a relationship, which, in the opinion of the company's board of
directors, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director. The following persons
shall not be considered independent:
(A) a director who is, or during the past three years was, employed
by the [corporation] company or by any parent or subsidiary of the
company [any of its affiliates for the current year or any of the past
three years];
(B) a director who accepts or who has a Family Member who accepts
any [compensation] payments from the [corporation] company or any [of
its affiliates] parent or subsidiary of the company in excess of
$60,000 during the current fiscal year or any of the past three fiscal
years [previous fiscal year], other than compensation for board
service, payments arising solely from investments in the company's
securities, compensation paid to a Family Member who is an employee of
the company or a parent or subsidiary of the company (but not if such
person is an executive officer of the company or any parent or
subsidiary of the company), benefits under a tax-qualified retirement
plan, or non-discretionary compensation (provided, however, that audit
committee members are subject to heightened requirements under Rule
4350(d));
(C) a director who is a [member of the immediate] [f]Family Member
of an individual who is, or [has been in any of] during the past three
years was, employed by the [corporation] company or by any [of its
affiliates] parent or subsidiary of the company as an executive
officer[. Immediate family includes a person's spouse, parents,
children, siblings, mother-in-law, father-in-law, brother-in-law,
sister-in-law, son-in-law, daughter-in-law, and anyone who resides in
such person's home];
(D) a director who is a partner in, or a controlling shareholder or
an executive officer of, any [for-profit business] organization to
which the [corporation] company made, or from which the [corporation]
company received, payments (other than those arising solely from
investments in the [corporation's] company's securities) that exceed 5%
of the recipient's [corporation's or business organization's]
consolidated gross revenues for that year, or $200,000, whichever is
more, in the current fiscal year or any of the past three fiscal years;
(E) a director of the listed company who is employed as an
executive officer of another entity where any of the [company's]
executive[s] officers of the listed company serve on [that entity's]
the compensation committee of such other entity, or if such
relationship existed during the past three years; or
(F) a director who is or was a partner or employee of the
company's outside auditor, and worked on the company's audit, during
the past three years.
Former (15)-(37) renumbered as (16)-(38).
IM--4200 Definition of Independence--Rule 4200(a)(15)
It is important for investors to have confidence that individuals
serving as independent directors do not have a relationship with the
listed company that would impair their independence. The board has a
responsibility to make an affirmative determination that no such
relationships exist through the application of Rule 4200. Rule 4200
also provides a list of certain relationships that preclude a board
finding of independence. These objective measures provide transparency
to investors and companies, facilitate uniform application of the
rules, and ease administration. Because Nasdaq does not believe that
ownership of company stock by itself would preclude a board finding of
independence, it is not included in the aforementioned objective
factors. The Rule's reference to a ``parent or subsidiary'' is intended
to cover entities that are consolidated with the issuer's financial
statements. It should also be noted that there are additional, more
stringent requirements that apply to audit committees, as specified in
Rule 4350.
Rule 4350. Qualitative Listing Requirements for Nasdaq National Market
and Nasdaq Small Cap Market Issuers Except for Limited Partnerships
(a)-(b) No change.
(c) Independent Directors
[Each issuer shall maintain a sufficient number of independent
directors on its board of directors to satisfy the audit committee
requirement set forth in Rule 4350(d)(2).]
(1) A majority of the board of directors must be comprised of
independent directors as defined in Rule 4200.
(2) Independent directors must have regularly scheduled meetings at
which only independent directors are present (``executive sessions'').
(3) Compensation of Officers
(A) Compensation of the chief executive officer of the company will
be determined either by:
(i) a majority of the independent directors meeting in executive
session, or
(ii) a compensation committee comprised solely of independent
directors meeting in executive session.
(B) Compensation of all other officers, as that term is defined in
section 16 of the Act and Rule 16a-1 thereunder, will be determined
either by:
(i) a majority of the independent directors, or
(ii) a compensation committee comprised solely of independent
directors.
The chief executive officer may be present during deliberations,
but may not vote.
(C) Notwithstanding paragraphs (3)(A)(ii) and (3)(B)(ii) above, if
the compensation committee is comprised of at least three members, one
director who is not independent as defined in Rule 4200 and is not a
current officer or employee or a Family Member of such person, may be
appointed to the compensation committee if the board, under exceptional
and limited circumstances, determines that such individual's membership
on the committee is required by the best interests of the company and
its shareholders, and the board discloses, in the next annual meeting
proxy statement subsequent to such determination, the nature of the
relationship and the reasons for the determination. A member appointed
under this exception may not serve longer than two years.
(4) Nomination of Directors
(A) The nomination of company directors will be determined either
by:
(i) a majority of the independent directors, or
[[Page 14453]]
(ii) a nominations committee comprised solely of independent
directors.
(B) Notwithstanding paragraph (4)(A)(ii) above, if the nominations
committee is comprised of at least three members, one director, who is
not independent as defined in Rule 4200 and is not a current officer or
employee or a Family Member of such person, may be appointed to the
nominations committee if the board, under exceptional and limited
circumstances, determines that such individual's membership on the
committee is required by the best interests of the company and its
shareholders, and the board discloses, in the next annual meeting proxy
statement subsequent to such determination, the nature of the
relationship and the reasons for the determination. A member appointed
under this exception may not serve longer than two years.
(C) Notwithstanding paragraph (4)(A)(ii) above, if the nominations
committee is comprised of at least three members, and if the exception
described in paragraph (4)(B) is not relied upon, one director who owns
20% or more of the company's common stock or voting power outstanding,
and is not independent as defined in Rule 4200 because that director is
also an officer, may be appointed to the nominations committee if the
board determines that such individual's membership on the committee is
required by the best interests of the company and its shareholders, and
the board discloses, in the next annual meeting proxy statement
subsequent to such determination, the nature of the relationship, and
the reasons for the determination.
(5) A Controlled Company is exempt from the requirements of this
subsection (c). A Controlled Company is a company of which more than
50% of the voting power is held by an individual, a group or another
company. A Controlled Company relying upon this exemption must disclose
in its annual meeting proxy statement that it is a Controlled Company
and the basis for that determination.
(d) Audit Committee
(1) Audit Committee Charter
Each issuer must certify that it has adopted a formal written audit
committee charter and that the audit committee has reviewed and
reassessed the adequacy of the formal written charter on an annual
basis. The charter must specify [the following]:
(A)-(B) No change.
(C) [the outside auditor's ultimate accountability to the board of
directors and the audit committee, as representatives of shareholders,
and these shareholder representatives' ultimate authority and
responsibility to select, evaluate, and, where appropriate, replace the
outside auditor (or to nominate the outside auditor to be proposed for
shareholder approval in any proxy statement)] the committee's purpose
of overseeing the accounting and financial reporting processes of the
issuer and the audits of the financial statements of the issuer;
(D) the following specific audit committee responsibilities and
authority:
(i) the pre-approval of all audit services and permissible non-
audit services as set forth in section 10A(i) of the Act;
(ii) the sole authority to appoint, determine funding for and
oversee the outside auditors as set forth in section 10A(m)(2) of the
Act;
(iii) the responsibility to establish procedures for complaints as
set forth in section 10A(m)(4) of the Act; and
(iv) the authority to engage and determine funding for independent
counsel and other advisors as set forth in section 10A(m)(5) of the
Act.
(2) Audit Committee Composition
(A) Each issuer must have, and certify that it has and will
continue to have, an audit committee of at least three members,
[comprised solely of independent directors] each of whom [is]:
(i) must: (a) be independent as defined under Rule 4200, (b) meet
the criteria for independence set forth in section 10A(m)(3) of the
Act, and (c) not own or control 20% or more of the issuer's voting
securities (or such lower measurement as may be established by the SEC
in rulemaking under section 10A(m) of the Act); and
(ii) must be able to read and understand fundamental financial
statements, including a company's balance sheet, income statement, and
cash flow statement [or will become able to do so within a reasonable
period of time after his or her appointment to the audit committee].
Additionally, each issuer must certify that it has, and will continue
to have, at least one member of the audit committee [that] who has past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or
background which results in the individual's financial sophistication,
including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
(B) Notwithstanding paragraph (2)(A)(i), one director who: (i) Is
not independent as defined in Rule 4200, [and] (ii) meets the criteria
set forth in section 10A(m)(3) of the Act and the rules thereunder,
(iii) does not own or control 20% or more of the issuer's voting
securities (or such lower measurement as may be established by the SEC
in rulemaking under section 10A(m)(3) of the Act), and (iv) is not a
current officer or employee or a[n immediate] F[f]amily M[m]ember of
such [employee] person, may be appointed to the audit committee, if the
board, under exceptional and limited circumstances, determines that
membership on the committee by the individual is required by the best
interests of the corporation and its shareholders, and the board
discloses, in the next annual proxy statement subsequent to such
determination, the nature of the relationship and the reasons for that
determination. A member appointed under this exception may not serve
longer than two years and may not chair the audit committee.
[(C) Exception for Small Business Filers--Paragraphs (2)(A) and
(2)(B) do not apply to issuers that file reports under SEC Regulation
S-B. Such issuers must establish and maintain an Audit Committee of at
least two members, a majority of the members of which shall be
independent directors.]
(e)-(l) No change.
IM-4350-4 Board Independence and Independent Committees
Independent Directors and Independent Committees--Rule 4350(c)
Majority Independent Board. Independent directors (as defined in
Rule 4200(A)(15)) play an important role in assuring investor
confidence. Through the exercise of independent judgment, they act on
behalf of investors to maximize shareholder value in the companies they
oversee and guard against conflicts of interest. Requiring that the
board be comprised of a majority of independent directors will empower
such directors to more effectively carry out these responsibilities.
Executive Sessions of Independent Directors. Regularly scheduled
executive sessions will encourage and enhance communication among
independent directors. It is contemplated that executive sessions will
occur at least twice a year, and perhaps more frequently, in
conjunction with regularly scheduled board meetings.
[[Page 14454]]
Independent Director Oversight of Executive Compensation.
Independent director oversight of executive officer compensation will
help assure that appropriate incentives are in place, consistent with
the board's responsibility to maximize shareholder value. The Rule is
intended to provide flexibility for an issuer to choose an appropriate
3 board structure and to reduce resource burdens, while ensuring
independent director control of compensation decisions.
Independent Director Oversight of Director Nominations. Independent
director oversight of nominations enhances investor confidence in the
selection of well-qualified director nominees, as well as independent
nominees as required by the Rules. This Rule is also intended to
provide flexibility for a company to choose an appropriate board
structure and reduce resource burdens, while ensuring that independent
directors approve all nominations.
This Rule will not apply in cases where the right to nominate a
director legally belongs to a third party. For example, investors may
negotiate the right to appoint directors in connection with an
investment in the company, holders of preferred stock may be permitted
to nominate or appoint directors upon certain defaults, or the company
may be a party to a shareholder's agreement that allocates the right to
nominate some directors. Because the right to nominate directors in
these cases does not reside with the company, independent director
approval would not be required.
Controlled Company Exception. This exception recognizes that
majority shareholders, including parent companies, have the right to
select directors and control certain key decisions, such as executive
officer compensation, by virtue of their ownership rights. In order for
a group to exist for purposes of this Rule, the shareholders must have
publicly filed a notice that they are acting as a group (e.g., a
Schedule 13D). It should be emphasized that this controlled company
exception does not extend to the audit committee requirements under
Rule 4350.
Audit Committees--Rule 4350(d)
Audit Committee Charter. A company's audit committee is required to
adopt a formal written charter that specifies the scope of its
responsibilities and the means by which it carries out those
responsibilities; the outside auditor's accountability to the audit
committee; and the audit committee's responsibility to ensure the
independence of the outside auditor. Consistent with this, the charter
must specify all audit committee responsibilities set forth in section
10A of the Act. The rights and responsibilities as articulated in the
audit committee charter empower the audit committee and enhance its
effectiveness in carrying out its responsibilities. While the audit
committee is empowered to retain outside consultants, it is not
expected to do so routinely. Rather, it is expected that such authority
would be exercised in response to specific circumstances giving rise to
an audit committee determination that such action is in the best
interest of the company and its shareholders.
Audit Committee Composition. Audit committees are required to have
a minimum of three members and be comprised only of independent
directors. In addition to satisfying the independent director
requirements under Rule 4200, audit committee members must satisfy the
heightened independence standards provided in section 10A(m)(3) of the
Act: they must not accept any consulting, advisory, or other
compensatory fee from the company other than for board service, and
they must not be an affiliated person of the company. For purposes of
determining whether a person is an affiliate solely by virtue of stock
ownership, an audit committee member will be considered an affiliated
person of the issuer if such member owns or controls, directly or
indirectly, 20% or more of the company's voting stock, or such other
lower threshold as the SEC may establish. Nasdaq would also consider
the employee of an entity that owns or controls such securities as an
affiliated person.
All audit committee members must be able to read and understand
fundamental financial statements, including a company's balance sheet,
income statement, and cash flow statement at the time they join the
board. In addition, at least one audit committee member must have past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or
background which results in the individual's financial sophistication,
including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
It should be noted that, under exceptional and limited
circumstances, one director who is not considered independent under
Rule 4200, but meets the independence requirements of section 10A(m)(3)
of the Act, may serve on the audit committee, provided that the board
determines it to be in the best interests of the company and its
shareholders, and the board discloses the reasons for the determination
in the company's next annual proxy statement.
* * * * * *
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
Nasdaq is proposing a comprehensive package of corporate governance
reforms relating to NASD Rules 4200 and 4350, in order to provide
greater transparency as to certain relationships that would preclude a
board of directors finding that an individual can serve as an
independent director and to increase the role of independent directors
on board committees, in order to enhance investor confidence in the
companies that list on Nasdaq.
The Definition of Independence
Nasdaq believes that it is important for investors to have
confidence that individuals serving as independent directors do not
have a relationship with the issuer that would impair their
independence. Proposed interpretive material to NASD Rule 4200 states
that the board has a responsibility to make an affirmative
determination that no such relationships exist through the application
of this rule. The rule also would specify specific relationships that
would preclude a board finding of independence. The proposed rule
change would expand and clarify this list of relationships. Nasdaq
believes that these objectively measured relationships would provide
transparency to investors and companies, facilitate uniform application
of the rules, and ease administration. The rule's reference to parent
or subsidiary is intended to cover
[[Page 14455]]
entities that are consolidated with the issuer's financial statements.
It should also be noted that additional, more stringent
requirements for audit committees would be provided in NASD Rule 4350.
Independent Board Committees
The proposed rule would require a majority of independent directors
on the issuer's board. Nasdaq believes that independent directors play
an important role in assuring investor confidence. Through the exercise
of independent judgment, they act on behalf of investors to maximize
shareholder value in the companies they oversee, and guard against
conflicts of interest. Requiring that the board be comprised of a
majority of independent directors would empower such directors to more
effectively carry out these responsibilities.
The proposed rule also would require regularly convened executive
sessions of the independent directors. Nasdaq believes that regularly
scheduled executive sessions would encourage and enhance communication
among independent directors. Nasdaq contemplates that executive
sessions would occur at least twice a year, and perhaps more
frequently, in conjunction with regularly scheduled board meetings.
Independent director approval of executive officer compensation
would also be required. This oversight would help assure that
appropriate incentives are in place, consistent with the board's
responsibility to maximize shareholder value. The proposed rule is
intended to provide flexibility for an issuer to choose an appropriate
board structure and to reduce resource burdens, while ensuring
independent director control of compensation decisions.
Independent director approval would also be required for director
nominations. Independent director oversight of nominations enhances
investor confidence in the selection of well-qualified director
nominees, as well as independent nominees as required by the rules.
This rule is also intended to provide flexibility for an issuer to
choose an appropriate board structure and reduce resource burdens,
while ensuring that independent directors approve all nominations.
This rule would not apply in cases where the right to nominate a
director legally belongs to a third party. For example, investors may
negotiate the right to appoint directors in connection with an
investment in the company, holders of preferred stock may be permitted
to nominate or appoint directors upon certain defaults, or the issuer
may be a party to a shareholder's agreement that allocates the right to
nominate some directors. Because the right to nominate directors in
these cases does not reside with the Company, independent director
approval would not be required.
A Controlled Company would be exempt from the requirements of
proposed NASD Rule 4350(c). A Controlled Company is defined in proposed
NASD Rule 4350(c) as a company of which more than 50% of the voting
power is held by an individual, a group or another company. A
Controlled Company relying upon this exemption would be required to
disclose in its annual meeting proxy statement that it is a Controlled
Company and the basis for that determination. This exception recognizes
that majority shareholders, including parent companies, have the right
to select directors and control certain key decisions, such as
executive officer compensation, by virtue of their ownership rights. In
order for a group to exist for purposes of this rule, the shareholders
would be required to publicly file a notice that they are acting as a
group (e.g., a Schedule 13D). Nasdaq emphasizes that this Controlled
Company exemption would not extend to the audit committee requirements
under Rule 4350.
Audit Committee Requirements
The proposed rule would expand the items that must be specified in
the charter of the issuer's audit committee. In particular, the charter
would be required to specify all audit committee responsibilities
required under the Act. The rights and responsibilities as articulated
in the audit committee charter empower the audit committee and enhance
its effectiveness in carrying out its responsibilities. Proposed
interpretive material to NASD Rule 4350 states that while the audit
committee would be empowered to retain outside consultants, it would
not be expected to do so routinely. Rather, it would be expected that
such authority would be exercised in response to specific circumstances
giving rise to an audit committee determination that such action was in
the best interest of the company and its shareholders.
The proposal also would expand and tighten audit committee
composition requirements. In addition to satisfying the independent
director requirements under NASD Rule 4200, the proposal would require
audit committee members to satisfy the heightened independence
standards provided in section 10A(m)(3) of the Act, which provides that
an audit committee member may not accept any consulting, advisory, or
other compensatory fee from the issuer other than for board service,
and may not be an affiliated person of the issuer. For purposes of
determining whether a person would be an affiliate solely by virtue of
stock ownership, proposed revisions to NASD Rule 4350 provide that an
audit committee member would be considered an affiliated person of the
issuer if such member owns or controls, directly or indirectly, 20% or
more of the issuer's voting stock, or such other lower threshold as the
Commission may establish.
The proposal would also tighten the current requirement that all
audit committee members must be able to read and understand fundamental
financial statements, including a company's balance sheet, income
statement, and cash flow statement within a reasonable time of joining
the board, by providing that they must meet these qualifications at the
time they join the board. Finally, the proposal would remove the
exception applicable to Small Business filers in order to further
strengthen the rule.
Timing for Effectiveness of Proposal
Nasdaq proposes to make the proposed rule change effective as
follows: Requirements that may call for an adjustment to the
composition of the company's board or committees (``board composition
requirements'') would be required to be implemented by the company's
next annual meeting occurring after January 1, 2004. These include:
NASD Rule 4200(a)(15), relating to the definition of independence; NASD
Rule 4350(c)(1), requiring a majority of independent board members;
NASD Rule 4350(c)(3), relating to independent director approval of
executive compensation; NASD Rule 4350(c)(4), relating to independent
approval of director nominations; and NASD Rule 4350(d)(2), relating to
audit committee composition. This would allow companies to make
necessary adjustments in the course of their regular annual meeting
schedule. All other independence-related corporate governance
requirements, including NASD Rule 4350(c)(2), relating to executive
sessions and NASD Rule 4350(d)(1), relating to audit committee
charters, would be required to be implemented six months after
Commission approval.
Following Commission approval of the proposed rule change, newly
listed companies would be afforded two years to comply with all board
composition requirements and also would be
[[Page 14456]]
afforded any remaining balance of the six month grace period for
compliance with all other requirements. Companies transferring from
other markets with substantially similar requirements would be afforded
the balance of any grace period afforded by the other market.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of section 15A of the Act,\5\ in general, and with
section 15A(b)(6) of the Act,\6\ in particular, in that the proposed
rules are designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
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\5\ 15 U.S.C. 78o-3.
\6\ 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
Written comments were neither solicited nor received.
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, including whether the proposed rule
change 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 No. SR-NASD-2002-141 and
should be submitted by April 15, 2003.
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. 03-6987 Filed 3-24-03; 8:45 am]
BILLING CODE 8010-01-P