[Federal Register Volume 68, Number 181 (Thursday, September 18, 2003)]
[Notices]
[Pages 54762-54763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23799]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48488; File No. SR-NASD-2003-138]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to Changes to the Territorial 
Boundaries of Certain NASD District Offices

September 12, 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 September 3, 2003, the National Association of Securities 
Dealers, Inc. (``NASD''), 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 NASD. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD is proposing to amend Schedule B to the NASD By-Laws to change 
the territorial boundaries of certain NASD District Offices. Below is 
the text of the proposed rule change. Proposed new language is in 
italics; proposed deletions are in [brackets].
* * * * *
Schedule B to the NASD By-Laws
    The number and territorial boundaries of the several districts 
established as provided in Section 1 of Article VIII are as follows:
    District No. 1 through District No. 4: No change.
    District No. 5: States of Alabama, Arkansas, [Kentucky,] Louisiana, 
Mississippi, Oklahoma and Tennessee.
    District No. 6 through District No. 7: No change.
    District No. 8: States of Illinois, Indiana, Kentucky, Michigan, 
Ohio and Wisconsin[, and, in the State of New York, the Counties of 
Monroe, Livingston and Steuben, and the remainder of the State West of 
such Counties].
    District No. 9: The District of Columbia, and the States of 
Delaware, Maryland, New Jersey, Pennsylvania, Virginia, [and] West 
Virginia, and New York (except for the Counties of Nassau,

[[Page 54763]]

Orange, Putnam, Rockland, Suffolk, Westchester, and the five Boroughs 
of New York City) [, in the States of New Jersey, the Counties of 
Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, 
Ocean and Salem].
    District No. 10: In the State of New York, the Counties of Nassau, 
Orange, Putnam, Rockland, Suffolk, Westchester, and the five Boroughs 
of New York City[, and the State of New Jersey (except for the Counties 
of Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, 
Mercer, Ocean and Salem)].
    District No. 11: States of Connecticut, Maine, Massachusetts, New 
Hampshire, Rhode Island, and Vermont [,and New York (except for the 
Counties of Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester; 
the Counties of Monroe, Livingston and Steuben, and the remainder of 
the State West of such Counties; and the five Boroughs of New York 
City)].
* * * * *

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASD 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. NASD 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
    NASD has experienced a shift in member locations resulting in 
certain District Offices no longer having close proximity to a critical 
mass of members. Accordingly, NASD is proposing to amend Schedule B to 
the NASD By-Laws to change the territorial boundaries of certain NASD 
District Offices to reflect this shift. The proposed amendments to 
Schedule B will also allow NASD to better manage its resources and 
expenses and will enhance coordination with other self-regulatory 
organizations, the states, and the SEC. Specifically, the proposed rule 
change will amend Schedule B to the NASD By-Laws as follows:
    [sbull] District No. 5: Will be amended to delete the state of 
Kentucky.
    [sbull] District No. 8: Will be amended to: (1) Include the state 
of Kentucky, and (2) delete any reference to the state of New York.
    [sbull] District No. 9: Will be amended to: (1) Include the state 
of New York, except for the Counties of Nassau, Orange, Putnam, 
Rockland, Suffolk, Westchester, and the five boroughs of New York City; 
(2) include the entire state of New Jersey; and (3) delete the 
references to New Jersey Counties Atlantic, Burlington, Camden, Cape 
May, Cumberland, Gloucester, Mercer, Ocean, and Salem.
    [sbull] District No. 10: Will be amended to delete any reference to 
the state of New Jersey.
    [sbull] District No. 11: Will be amended to delete any reference to 
the state of New York.
    The remaining allocations of states among District Offices as 
reflected in Schedule B will remain the same.
    The proposed rule change will not only provide NASD with a more 
coherent regional balance among the District Offices, it will also 
allow NASD to manage more effectively its resources and expenses when 
discharging its regulatory programs and permit better coordination 
among other self-regulatory organizations, the states, and the SEC. In 
addition, the proposed rule change will help NASD better balance the 
composition of member firms assigned to the District Offices.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of section 15A(b)(6) of the Act,\3\ which requires, among 
other things, that NASD's rules must 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. The restructuring that will result from the proposed 
rule change will provide a more coherent regional balance as well as 
allow for a more equitable distribution of NASD's District Offices' 
workloads and resources.
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    \3\ 15 U.S.C. 78o-3(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD does not believe that the proposed rule change will impose any 
burden on competition 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 section 
19(b)(3)(A) of the Act,\4\ and subparagraph (f)(3) of Rule 19b-4 
thereunder \5\ because it is concerned solely with the administration 
of the self-regulatory organization. At any time within 60 days of the 
filing of the proposed rule change, the Commission may summarily 
abrogate such 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.
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(3).
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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 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 NASD. 
All submissions should refer to File No. NASD-2003-138 and should be 
submitted by October 9, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-23799 Filed 9-17-03; 8:45 am]
BILLING CODE 8010-01-P