[Federal Register Volume 68, Number 232 (Wednesday, December 3, 2003)]
[Notices]
[Pages 67712-67714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30064]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48839; File No. SR-NQLX-2003-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by Nasdaq Liffe Markets, LLC to 
Amend Rule 419 To Make the Information Recording and Submission 
Requirements for Block Trades and Exchange for Physical Trades 
Consistent

November 25, 2003.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-7 under the Act,\2\ notice is hereby given 
that on November 10, 2003, NQLX, LLC (``NQLX'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change described in Items I, II, and III below, which Items have been 
prepared by NQLX. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons. On 
November 7, 2003, NQLX filed the proposed rule change with the 
Commodity Futures Trading Commission (``CFTC''), together with a 
written certification under Section 5c(c) of the Commodity Exchange Act 
\3\ (``CEA'') in which NQLX indicated that

[[Page 67713]]

the effective date of the proposed rule change would be November 10, 
2003.
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    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 17 CFR 240.19b-7.
    \3\ 7 U.S.C. 7a-2(c).
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I. Self-Regulatory Organization's Description of the Proposed Rule 
Change

    NQLX proposes to amend NQLX Rule 419 to make the information 
recording and submission requirements for Block Trades and Exchange for 
Physical Trades consistent. Previously, certain requirements applicable 
to Exchange for Physical Trades were not explicitly applicable to Block 
Trades.
    The text of the proposed rule change appears below. New text is in 
italic. Deleted text is in [brackets].
* * * * *
Rule 419 Block Trades.* * *
(g) Information Recording, Submission, and Dissemination
    (1) For a [each] Block Trade[,] in addition to the requirements of 
Rules 408(b) and 408(c), a Member or Person Associated with a Member 
must [ensure that information is recorded and retained] record on an 
Order Ticket [consistent with Rule 408(c)] the identity of the 
individual arranging the Block Trade and time stamp the Order when 
negotiation begins.
    (2)--(7) No change
* * * * *

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

    NQLX has prepared statements concerning the purpose of, and 
statutory basis for, the proposed rule change, burdens on competition, 
and comments received from members, participants, and others. The text 
of these statements may be examined at the places specified in Item IV 
below. These statements are set forth in Sections A, B, and C below.

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

1. Purpose
    NQLX proposes revising specified provisions of NQLX Rule 419 so 
that the information recording and submission requirements for Block 
Trades and Exchange for Physical Trades are consistent. Previously, 
certain requirements applicable to Exchange for Physical Trades were 
not explicitly applicable to Block Trades. First, amended Rule 419(g) 
would require members to comply with the requirements of NQLX Rule 
408(b), in addition to those of NQLX Rule 408(c), when recording and 
retaining information on an Order Ticket for a Block Trade. Second, 
amended NQLX Rule 419(g) would require members to record on an Order 
Ticket the identity of the individual arranging the Block Trade and to 
time stamp the Order when negotiations begin.
    NQLX believes that the proposed rule change is consistent with the 
requirements, where applicable, under Section 6(h)(3)(J) of the Act \4\ 
and the criteria, where applicable, under Section 2(a)(1)(D)(i)(IX) of 
the CEA,\5\ as modified by joint orders of the Commission and the 
CFTC.\6\
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    \4\ 15 U.S.C. 78f(h)(3)(J).
    \5\ 7 U.S.C. 2(a)(1)(D)(i)(IX).
    \6\ See Joint Order Granting the Modification of Listing 
Standards Requirements (Exchange-Traded Funds, Trust-Issued Receipts 
and shares of Closed-End Funds), Securities Exchange Act Release No. 
46090 (June 19, 2002), 67 FR 42760 (June 25, 2002) and Joint Order 
Granting the Modification of Listing Standards Requirements 
(American Depository Receipts), Securities Exchange Act Release No. 
44725 (August 20, 2001), 67 FR 42760 (June 25, 2002).
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2. Statutory Basis
    NQLX files the proposed rule change pursuant to Section 19(b)(7) of 
the Act.\7\ NQLX believes that the proposed rule change is consistent 
with the requirements of the Commodity Futures Modernization Act of 
2000,\8\ including the requirement that NQLX have audit trails 
necessary and appropriate to facilitate coordinated surveillance to 
detect, among other things, manipulation.\9\ NQLX further believes that 
its proposed rule change complies with the requirements under Section 
6(h)(3) of the Act \10\ and the criteria under Section 2(a)(1)(D)(i) of 
the CEA,\11\ as modified by joint orders of the Commission and the 
CFTC. In addition, NQLX believes that its proposed rule change is 
consistent with the provisions of Section 6 of the Act,\12\ in general, 
and Section 6(b)(5) of the Act,\13\ in particular, in that it is 
designed to prevent fraudulent and manipulative acts and practices, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities and, in general, to protect 
investors and the public interest.
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    \7\ 15 U.S.C. 78s(b)(7).
    \8\ Pub. L. 106-554, 114 Stat. 2763 (2000).
    \9\ 15 U.S.C. 78f(h)(3)(J).
    \10\ 15 U.S.C. 78f(h)(3).
    \11\ 7 U.S.C. 2(a)(1)(D)(i).
    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NQLX 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 of Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    NQLX neither solicited nor received written comment on the proposed 
rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change has become effective on November 10, 2003. 
Within 60 days of the date of effectiveness of the proposed rule 
change, the Commission, after consultation with the CFTC, may summarily 
abrogate the proposed rule change and require that the proposed rule 
change be refiled in accordance with the provisions of Section 19(b)(1) 
of the Act.\14\
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    \14\ 15 U.S.C. 78s(b)(1).
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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 conflicts with the Act. Persons making written submissions 
should file nine copies of the submission with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549-0609. Comments also may be submitted electronically to the 
following e-mail address: [email protected]. 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 these filings will also be available 
for inspection and copying at the principal office of NQLX. 
Electronically submitted comments will be posted on the Commission's 
Internet Web site (http://www.sec.gov). All submissions should refer to 
File No. SR-NQLX-2003-08 and should be submitted by December 24, 2003.


[[Page 67714]]


    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(75).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-30064 Filed 12-2-03; 8:45 am]
BILLING CODE 8010-01-P