[Federal Register Volume 68, Number 179 (Tuesday, September 16, 2003)]
[Notices]
[Pages 54252-54256]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23550]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48466; File No. SR-NASD-2003-125]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the National Association of Securities Dealers, Inc. To Modify NASD 
Rules 4614, 4619, 4620, 4624, 4625, 5106, 6350 and 11890

September 9, 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 August 8, 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'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by Nasdaq. On September 
4, 2003, Nasdaq filed Amendment No. 1 to the proposed rule change.\3\ 
Pursuant to sections 19(b)(3)(A)(i) and (iii) of the Act \4\ and Rules 
19b-4(f)(1) and (3) thereunder,\5\ Nasdaq has designated this proposal 
as one that, in part, constitutes a stated policy, practice or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule and that, in the remaining part, is 
concerned solely with the administration of the self-regulatory 
organization, which renders the proposed rule change effective upon the 
Commission's receipt of this filing. 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\ See letter from Alex Kogan, Associate General Counsel, 
Nasdaq, to Katherine A. England, Assistant Director, Division of 
Market Regulation, Commission, dated September 3, 2003 (``Amendment 
No. 1''). In Amendment No. 1, Nasdaq corrected rule text, clarified 
the application of Rule 19(b)(3)(A) to the proposed rule change, and 
clarified its description of NASD Rules 5265 and 11890.
    \4\ 15 U.S.C. 78s(b)(3)(A)(i) and (iii).
    \5\ 17 CFR 240.19b-4(f)(1) and (3).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The proposed rule change seeks to reflect the administrative shift 
of certain responsibilities under NASD Rules 4614, 4619, 4620, 4624, 
4625, 5106, 6350 and 11890 from Nasdaq Market Operations to Nasdaq 
MarketWatch and

[[Page 54253]]

to clarify members' obligations under NASD Rule 4625.\6\ This proposed 
rule change is effective upon the Commission's receipt of Nasdaq's 
filing.
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    \6\ Nasdaq states that, with one exception, the proposed rule 
change is concerned solely with the administration of the self-
regulatory organization, and therefore immediately effective 
pursuant to section 19(b)(3)(A)(iii) of the Act. The one exception 
to this is the addition of the words ``or other transaction'' to one 
of the examples contained in NASD Rule 4625 (the relevant example 
was originally contained in Rule 4625(a)(2)(D) but is now being re-
designated as Rule 4625(a)(1)(G)). Nasdaq states that this 
particular aspect of the proposed rule change constitutes a stated 
policy, practice or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule, and is therefore 
immediately effective pursuant to section 19(b)(3)(A)(i) of the Act. 
See Amendment No. 1, supra, n.3.
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    The text of the proposed rule change is below. Proposed new 
language is in italics; proposed deletions are in [brackets].
* * * * *
4614. Stabilizing Bids
(a) Market Maker Obligation/Identifier
    A market maker that intends to stabilize the price of a Nasdaq 
security that is a subject or reference security under SEC Rule 101 
shall submit a request to Nasdaq [Market Operations] MarketWatch for 
the entry of a one-sided bid that is identified on Nasdaq as a 
stabilizing bid in compliance with the standards set forth in this Rule 
and SEC Rules 101 and 104.
    (b) and (c) No change.
(d) Submission of Request to Association
    (1) A market maker that wishes to enter a stabilizing bid shall 
submit a request to Nasdaq [Market Operations] MarketWatch for entry on 
Nasdaq of a one-sided bid identified as a stabilizing bid. The market 
maker shall confirm its request in writing no later than the close of 
business the day the stabilizing bid is entered by submitting an 
Underwriting Activity Report to Nasdaq [Market Operations] MarketWatch 
that includes the information required by subparagraph (d)(2).
    (2) In lieu of submitting the Underwriting Activity Report as set 
forth in subparagraph (d)(1), the market maker may provide written 
confirmation to Nasdaq [Market Operations] MarketWatch that shall 
include:
    (A) The identity of the security and its Nasdaq symbol;
    (B) The contemplated effective date of the offering and the date 
when the offering will be priced;
    (C) The date and time that an identifier should be included on 
Nasdaq; and
    (D) A copy of the cover page of the preliminary or final prospectus 
or similar offering document, unless the Association determines 
otherwise.
* * * * *

4619. Withdrawal of Quotations and Passive Market Making

    (a) A market maker that wishes to withdraw quotations in a security 
or have its quotations identified as the quotations of a passive market 
maker shall contact Nasdaq [Market Operations] MarketWatch to obtain 
excused withdrawal status prior to withdrawing its quotations or 
identification as a passive market maker. Withdrawals of quotations or 
identifications of quotations as those of a passive market maker shall 
be granted by Nasdaq [Market Operations] MarketWatch only upon 
satisfying one of the conditions specified in this Rule.
    (b) Excused withdrawal status based on circumstances beyond the 
market maker's control may be granted for up to five (5) business days, 
unless extended by Nasdaq [Market Operations] MarketWatch. Excused 
withdrawal status based on demonstrated legal or regulatory 
requirements, supported by appropriate documentation and accompanied by 
a representation that the condition necessitating the withdrawal of 
quotations is not permanent in nature, may, upon notification, be 
granted for not more than sixty (60) days (unless such request is 
required to be made pursuant to paragraph (d) below). Excused 
withdrawal status based on religious holidays may be granted only if 
written notice is received by the Association one business day in 
advance and is approved by the Association. Excused withdrawal status 
based on vacation may be granted only if:
    (1) The written request for withdrawal is received by the 
Association one business day in advance, and is approved by the 
Association;
    (2) The request includes a list of the securities for which 
withdrawal is requested; and
    (3) The request is made by a market maker with three (3) or fewer 
Nasdaq level 3 terminals. Excused withdrawal status may be granted to a 
market maker that has withdrawn from an issue prior to the public 
announcement of a merger or acquisition and wishes to re-register in 
the issue pursuant to the same-day registration procedures contained in 
Rule 4611 above, provided the market maker has remained registered in 
one of the affected issues. The withdrawal of quotations because of 
pending news, a sudden influx of orders or price changes, or to effect 
transactions with competitors shall not constitute acceptable reasons 
for granting excused withdrawal status.
    (c) No change.
    (d) Excused withdrawal status or passive market maker status may be 
granted to a market maker that is a distribution participant (or, in 
the case of excused withdrawal status, an affiliated purchaser) in 
order to comply with SEC Rule 101, 103, or 104 under the Act on the 
following conditions:
    (1) A member acting as a manager (or in a similar capacity) of a 
distribution of a Nasdaq security that is a subject security or 
reference security under Rule 101 and any member that is a distribution 
participant or an affiliated purchaser in such a distribution that does 
not have a manager shall provide written notice to Nasdaq [Market 
Operations] MarketWatch and the Market Regulation department of NASD 
Regulation, Inc. no later than the business day prior to the first 
entire trading session of the one-day or five-day restricted period 
under SEC rule 10, unless later notification is necessary under the 
specific circumstances.
    (A) No change.
    (B) The managing underwriter shall advise each market maker that it 
has been identified as a distribution participant or an affiliated 
purchaser to Nasdaq [Market Operations] MarketWatch and that its 
quotations will be automatically withdrawn or identified as passive 
market maker quotations, unless a market maker that is a distribution 
participant (or an affiliated purchaser of a distribution participant) 
notifies Nasdaq [Market Operations] MarketWatch as required by 
subparagraph (d)(2), below.
    (2) A market maker that has been identified to Nasdaq [Market 
Operations] MarketWatch as a distribution participant (or an affiliated 
purchaser of a distribution participant) shall promptly notify Nasdaq 
[Market Operations] MarketWatch and the manager of its intention not to 
participate in the prospective distribution or not to act as a passive 
market maker in order to avoid having its quotations withdrawn or 
identified as the quotations of a passive market maker.
    (3) If a market maker that is a distribution participant withdraws 
its quotations in a Nasdaq security in order to comply with the net 
purchases limitation of SEC Rule 103 or with any other provision of SEC 
Rules 101, 103, or 104 and promptly notifies Nasdaq [Market Operations] 
MarketWatch of its action, the withdrawal shall be deemed an excused 
withdrawal. Nothing in this

[[Page 54254]]

subparagraph shall prohibit the Association from taking such action as 
is necessary under the circumstances against a member and its 
associated persons for failure to contact Nasdaq [Market Operations] 
MarketWatch to obtain an excused withdrawal as required by 
subparagraphs (a) and (d) of this Rule.
    (4) No change.
    (5) A member acting as a manager (or in a similar capacity of a 
distribution subject to subparagraph (d)(1) of this rule shall submit a 
request a to Nasdaq [Market Operations] MarketWatch and the market 
Regulation Department of NASD Regulation, Inc. to rescind the excused 
withdrawal status or passive market making status of distribution 
participants and affiliated purchasers, which request shall include the 
date and time of the pricing of the offering, the offering price, and 
the time the offering terminated, and, if not in writing, shall be 
confirmed in writing no later than the close of business the day the 
offering terminates. The request by this subparagraph may be submitted 
on the Underwriting Activity Report.
    (e) No change.
* * * * *

4620. Voluntary Termination of Registration

    (a) No change.
    (b) Notwithstanding the above, a market maker that accidentally 
withdraws as a market maker may be reinstated if:
    (1) The market maker notified [Market Operations] MarketWatch of 
the accidental withdrawal as soon as practicable under the 
circumstances, but within at least one hour of such withdrawal, and 
immediately thereafter provided written notification of the withdrawal 
and reinstatement request;
    (2) through (3) No change
    (c) Factors that the Association will consider in granting a 
reinstatement under paragraph (b) of this rule include, but are not 
limited to:
    (1) through (4) No change
    (5) the timeliness with which the market maker notified [Market 
Operations] MarketWatch of the error.
    (d) No change.
* * * * *

4624. Penalty Bids and Syndicate Covering Transactions

    (a) and (b) No change
    (c) Notwithstanding paragraph (a), a market maker may request that 
its quotation be identified as a penalty bid on Nasdaq by providing 
notice to Nasdaq [Market Operations] MarketWatch, which notice shall 
include the date and time that the penalty bid identifier should be 
entered on Nasdaq and, if not in writing, shall be confirmed in writing 
no later than the close of business the day the penalty bid identifier 
is entered on Nasdaq.
    (d) No change
* * * * *

4625. Obligation To Provide Information

    (a) A NASD member operating in or participating in the third 
market, The Nasdaq Stock Market, or other Nasdaq-operated system, shall 
provide information orally, in writing, or electronically (if such 
information is, or is required to be, maintained in electronic form) to 
the staff of Nasdaq when:
    (1) Nasdaq MarketWatch staff makes an oral, written, or 
electronically communicated request for information relating to a 
specific NASD rule, SEC rule, or provision of a joint industry plan 
(e.g., ITS, UTP, CTA, and CQA) (as promulgated and amended from time-
to-time) that Nasdaq MarketWatch is responsible for administering or to 
other duties and/or obligations imposed on Nasdaq MarketWatch by the 
Association under the Plan of Allocation and Delegation of Function by 
the NASD to Subsidiaries or otherwise; this shall include, but not be 
limited to, information relating to:
    (A) A locked or crossed market; or
    (B) A trade reported by a member or ECN to the Automated 
Transaction Confirmation Service (``ACT''); or
    (C) Trading activity, rumors, or information that a member may 
possess that may assist in determining whether there is a basis to 
initiate a trading halt, pursuant to NASD Rule 4120 and IM-4120-1; or
    (D) A quotation that appears not to be reasonably related to the 
prevailing market; or
    (E) A clearly erroneous transaction, pursuant to NASD Rule 11890; 
or
    (F) A request for an excused withdrawal or reinstatement, pursuant 
to NASD Rules 4619, 4620, 5106 and 6350; or
    (G) The resolution of a trade-through complaint, or other 
transaction, pursuant to NASD Rules 5262, 5265, and 11890; or
    (H) A request to submit a stabilizing bid, pursuant to NASD Rules 
4614 and 5106, or a request to have a quotation identified as a penalty 
bid on Nasdaq, pursuant to NASD Rule 4624.
    (2) Nasdaq Market Operations staff makes an oral, written, or 
electronically communicated request for information relating to a 
specific NASD rule, SEC rule, provision of a joint industry plan (e.g., 
ITS, UTP, CTA, and CQA) (as promulgated and amended from time-to-time) 
that Nasdaq Market Operations is responsible for administering or to 
other duties and/or obligations imposed on Nasdaq Market Operations by 
the Association under the Plan of Allocation and Delegation of Function 
by the NASD to Subsidiaries or otherwise; this shall include, but not 
be limited to, information relating to:
    (A)[a clearly erroneous transaction, pursuant to NASD Rule 11890;
    (B)] a request to reconsider a determination to withhold a primary 
market maker designation, pursuant to NASD Rule 4612; or
    [(C) a request for an excused withdrawal or reinstatement, pursuant 
to NASD Rules 4619, 4620, 4730, 5106 and 6350;
    (D) the resolution of a trade-through complaint, pursuant to NASD 
Rules 5262, 5265, and 11890;
    (E)](B) an ACT input error; or
    [(F)](C) an equipment failure [; or
    (G) a request to submit a stabilizing bid, pursuant to NASD Rules 
4614 and 5106, or a request to have a quotation identified as a penalty 
bid on Nasdaq, pursuant to NASD Rule 4624].
    (b) No change
* * * * *

5106. Requirements Applicable to Market Makers

    (a) No change
(b) Market Maker Obligations.
    The following requirements and procedures govern a broker/dealer's 
participation in Nasdaq International as a Service market maker.
    (1) Registration.
    (A) through (C) No change.
    (D) A Service market maker may become registered in a newly 
qualified security by telephoning [Market Operations] MarketWatch. If 
registration is requested within five (5) business days after the issue 
becomes qualified, registration shall take effect at the time the 
request is entered.
    (E) and (F) No change.
    (2) No change
(3) Character of Quotations
    (A) through (C) No change
    (D) If a Service market maker's ability to enter or update 
quotations is impaired, the market maker shall immediately contact 
[Market Operations] MarketWatch to request the withdrawal of its 
quotations.
    (E) through (H) No change.
(4) Withdrawal of Quotations
    (A) A Service market maker that wishes to withdraw its quotations 
in a

[[Page 54255]]

qualified security shall contact [Market Operations] MarketWatch to 
obtain excused withdrawal status prior to effecting withdrawal. Excused 
withdrawals shall be granted by [Market Operations] MarketWatch only 
upon the demonstration of the existence of one of the circumstances set 
forth in subparagraphs (B) and (C) below.
    (B) Excused withdrawal status based on physical circumstances 
beyond the Service market maker's control may be granted for up to five 
(5) business days, unless extended by [Market Operations] MarketWatch. 
Excused withdrawal status based on demonstrated legal or regulatory 
requirements, supported by appropriate documentation and accompanied by 
a representation that the condition necessitating the withdrawal of 
quotations is not permanent in nature, may, upon written request, be 
granted for not more than sixty (60) days. Excused withdrawal status 
based on religious holidays or national holidays in the U.K. may be 
granted only if the request is received by the Association five (5) 
business days in advance and is approved by the Association. Excused 
withdrawal status based on vacation may be granted only if: the request 
for withdrawal is received by the Association twenty (20) business days 
in advance, and is approved by the Association; the request includes a 
list of the securities for which withdrawal is requested; and the 
request is made by a Service market maker with three (3) or fewer 
Nasdaq Workstation\TM\ units authorized for market making in the 
Service. The following shall not constitute acceptable reasons for 
granting excused withdrawal status: pending news, a sudden influx of 
orders or price changes, or the desire to effect transactions with 
competitors.
    (C) No change.
    (5) No change.
(6) Stabilizing Bids
    (A) and (B) No change.
(C) Notice to the Association
    (i) A Service market maker that wishes to enter a stabilizing bid 
shall so notify [Market Operations] MarketWatch in writing prior to the 
first day on which the stabilizing bid is to appear in the Service. The 
notice shall include: the name of the qualified Nasdaq security and its 
Nasdaq symbol; the date on which the security's registration will 
become effective, if it is already quoted in the Service; whether the 
stabilizing bid will be a penalty bid or a penalty-free bid; and a copy 
of the preliminary prospectus or shelf registration statement, unless 
the Association determines otherwise.
    (ii) In the case of a pre-effective stabilizing bid, the notice 
shall include: the name of the qualified Nasdaq security and its Nasdaq 
symbol; the contemplated effective date of the offering; whether it is 
contemplated that the pre-effective stabilizing bid will be converted 
to a stabilizing bid and, if so, whether the stabilizing bid will be a 
penalty bid or a penalty-free bid; and a copy of the preliminary 
prospectus, unless the Association determines otherwise.
    (iii) A service market maker that has provided the written notice 
prescribed above shall also contact [Market Operations] MarketWatch for 
authorization on the day the market maker wishes to enter the 
stabilizing bid into the Service.
    (D) and (E) No change.
* * * * *

6350. Withdrawal of Quotations

    (a) A CQS market maker that wishes to withdraw quotations in a 
reported security shall contact Nasdaq [Market Operations] MarketWatch 
to obtain excused withdrawal status prior to withdrawing its 
quotations.
    (b) Excused withdrawal status based on illness, vacations or 
physical circumstances beyond the CQS market maker's control may be 
granted for up to five (5) business days, unless extended by Nasdaq 
[Market Operations] MarketWatch. Excused withdrawal status based on 
investment activity or advice of legal counsel, accompanied by a 
representation that the condition necessitating the withdrawal of 
quotations is not permanent in nature, may, upon written request, be 
granted for not more than sixty (60) days. The withdrawal of quotations 
because of pending news, a sudden influx of orders or price changes, or 
to effect transactions with competitors shall not normally constitute 
acceptable reasons for granting excused withdrawal status, unless the 
Association has initiated a trading halt for ITS/CAES Market Makers in 
the security, pursuant to Rule 4120.
* * * * *

11890. Clearly Erroneous Transactions

    (a) Authority to Review Transactions Pursuant to Complaint of 
Market Participant
    (1) No change.
(2) Procedures for Reviewing Transactions
    (A) Any member, member of a UTP Exchange, or person associated with 
any such member that seeks to have a transaction reviewed pursuant to 
paragraph (a)(1) hereof shall submit a written complaint to Nasdaq 
[Market Operations] MarketWatch in accordance with the following time 
parameters:
    (i) For transactions occurring at or after 9:30 a.m., Eastern Time, 
but prior to 10 a.m., Eastern Time, complaints must be received by 
Nasdaq by 10:30 a.m., Eastern Time; and
    (ii) For transactions occurring prior to 9:30 a.m., Eastern Time 
and at or after 10 a.m., Eastern Time, complaints must be received by 
Nasdaq within thirty minutes.
    (B) through (E) No change.
    (b) through (d) No change.
* * * * *

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
    The proposed rule change seeks to reflect the administrative shift 
of certain responsibilities under NASD Rules 4614, 4619, 4620, 4624, 
4625, 5106, 6350 and 11890 from Nasdaq Market Operations to Nasdaq 
MarketWatch and to clarify members' obligations under NASD Rule 4625.
    NASD Rules 4614, 4619, 4620, 4624, 5106, 6350, and 11890 all 
identify Market Operations as the Nasdaq department responsible for 
administration of the respective rules. Nasdaq has determined that, in 
order to ensure continued effective administration of these rules, it 
would be appropriate and desirable to transfer this responsibility to 
Nasdaq's MarketWatch department. As such, the proposed rule change to 
NASD Rules 4614, 4619, 4620, 4624, 5106, 6350, and 11890 would merely 
replace references to Market Operations with references to MarketWatch.
    NASD Rule 4625 authorizes Nasdaq to seek certain information from 
members and provides specific examples of the types of information that 
Market Operations and MarketWatch,

[[Page 54256]]

respectively, may seek. In light of the shift of certain regulatory 
responsibilities from Market Operations to MarketWatch, as described in 
the preceding paragraph, the examples contained in NASD Rule 4625 need 
to be realigned accordingly, since certain types of information that 
previously would likely have been sought by Market Operations, would 
now be most likely needed by MarketWatch as it exercises its newly-
acquired authority (which would shift to it from Market Operations) 
under the proposed rule change.
    Furthermore, Nasdaq wishes to clarify the language in one of the 
examples contained in NASD Rule 4625. The example currently contained 
in paragraph (a)(2)(D) of NASD Rule 4625\7\, refers to information 
relating to ``the resolution of a trade-through complaint, pursuant to 
NASD Rules 5262, 5265, and 11890.'' NASD Rule 5262 focuses on 
InterMarket trade-through complaints. Rules 5265 and 11890, however, 
make no reference to trade-through complaints but rather focus on the 
authority to adjust other transactions. As such, a clarification is 
desirable in order to identify specifically Nasdaq's authority to seek, 
and members' obligation to provide, information relating to ``the 
resolution of a trade-through complaint, or other transaction, pursuant 
to NASD Rules 5262, 5265, and 11890.''
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    \7\ Under the proposed rule change, this example would be moved 
to paragraph (a)(1)(G) of NASD Rule 4625.
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2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 15A of the Act,\8\ including sections 
15A(b)(2) and (6) of the Act,\9\ which require, respectively, that (i) 
NASD be organized and have the capacity to be able to carry out the 
purposes of the Act and to comply, and to enforce compliance by its 
members and persons associated with its members with the Act, the rules 
and regulations thereunder, the rules of the Municipal Securities 
Rulemaking Board, and the rules of the NASD and (ii) the rules of the 
NASD be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, 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 a national market 
system, and, in general, to protect investors and the public interest. 
Nasdaq believes that, at this time, MarketWatch, rather than Market 
Operations, is the most appropriate department to handle certain 
regulatory responsibilities referenced above. As such, the 
organizational realignment and the corresponding proposed rule changes 
are consistent with the requirements of the Act. Furthermore, the 
proposed clarifying change in the language of the example currently 
contained in NASD Rule 4625(a)(2)(D) will make that rule's meaning more 
transparent, thereby helping advance the investor protection and public 
interest objectives of the Act.
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    \8\ 15 U.S.C. 78o-3.
    \9\ 15 U.S.C. 78o-3(b)(2) and (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, as amended.

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

    The foregoing rule change has become effective pursuant to sections 
19(b)(3)(A)(i) and (iii) of the Act\10\ and Rules 19b-4(f)(1) and (3) 
thereunder\11\ in that it, in part, constitutes a stated policy, 
practice or interpretation with respect to the meaning, administration, 
or enforcement of an existing rule and that, in the remaining part, 
concerns solely with the administration of the self-regulatory 
organization.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(i) and (iii).
    \11\ 17 CFR 240.19b-4(f)(1) and (3).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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. For purposes of calculating 
the 60-day abrogation period, the Commission considers the proposed 
rule change to have been filed on September 4, 2003, when Amendment No. 
1 was filed.\12\
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    \12\ See n.3, supra.
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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 proposed rule 
change, 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-2003-125 and should be submitted by October 7, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-23550 Filed 9-15-03; 8:45 am]
BILLING CODE 8010-01-P