[Federal Register Volume 68, Number 177 (Friday, September 12, 2003)]
[Notices]
[Page 53767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23226]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48442; File No. SR-NASD-2003-98]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment No. 1 Thereto by the National Association of 
Securities Dealers, Inc. To Clarify Reporting Requirements for 
Transactions Conducted Through Electronic Communications Networks

September 4, 2003.
    On June 19, 2003, the National Association of Securities Dealers, 
Inc. (``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq'') submitted to 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 to clarify the reporting requirements applicable 
to transactions conducted through electronic communication networks 
(``ECNs''). On July 11, 2003, Nasdaq submitted Amendment No. 1 to the 
proposal.\3\ The Federal Register published the proposal, as amended, 
for comment on August 4, 2003.\4\ The Commission received one comment 
letter supporting the proposal.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from John M. Yetter, Associate General Counsel, 
Nasdaq to Katherine England, Assistant Director, Division of Market 
Regulation, Commission, dated July 10, 2003 (``Amendment No. 1''). 
Nasdaq filed Amendment No. 1 to revise portions of the proposed rule 
text contained in the original filing.
    \4\ Securities Exchange Act Release No. 48239 (July 28, 2003), 
68 FR 45871.
    \5\ See Letter from William O'Brien, Chief Operating Officer, 
Brut, LLC to the Commission, dated August 25, 2003.
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    Nasdaq has stated that it allows ECNs to adopt different 
methodologies for reporting transactions to the Automated Confirmation 
Transaction Service (``ACT'') in order to accommodate their varying 
business needs. Nasdaq believes, however, that the absence of clearly 
defined rules on the ACT trade reporting requirements has created some 
confusion for ECNs and their subscribers. Nasdaq proposed these rule 
changes to provide greater clarity and certainty regarding the ACT 
trade reporting requirements for ECNs and their subscribers. 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 \6\ and, in particular, 
the requirements of section 15A(b)(6) of the Act,\7\ which requires, 
among other things, that the rules of a national securities association 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities. The Commission believes that 
the proposed rules will provide ECNs and subscribers with necessary 
guidelines to facilitate their compliance with ACT trade reporting 
requirements. Therefore, the Commission finds the proposed rule changes 
are designed to foster cooperation and coordination with persons 
engaged in regulating, clearing, settling, processing information with 
respect to, and facilitating transactions in securities.
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    \6\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \7\ 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,\8\ that the proposed rule change (SR-NASD-2003-98), as amended, is 
approved.
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-23226 Filed 9-11-03; 8:45 am]
BILLING CODE 8010-01-P