[Federal Register Volume 69, Number 8 (Tuesday, January 13, 2004)]
[Notices]
[Pages 2034-2035]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-612]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49021; File No. SR-NASD-2003-197]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. To Delay the Implementation Date of Amendments 
to Article VIII (District Committees and District Nominating 
Committees) of the By-Laws of NASD Regulation, Inc.

January 5, 2004.
    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 December 29, 2003, the National Association of Securities Dealers, 
Inc. (``NASD'') 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 the NASD. NASD filed 
the proposal pursuant to Section 19(b)(3)(A)(i) of the Act,\3\ and Rule 
19b-4(f)(1) \4\ thereunder, in that the proposed rule change 
constitutes a stated policy, practice, or interpretation with respect 
to the meaning, administration, or enforcement of an existing rule, 
which renders the proposal effective upon filing with the Commission. 
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\ 15 U.S.C. 78s(b)(3)(A)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD is filing with the Commission a proposed rule change to delay, 
until February 1, 2004, the implementation date of amendments to 
Article VIII (District Committees and District Nominating Committees) 
of the By-Laws of NASD Regulation, Inc. that were established by SR-
NASD-2003-55.\5\ NASD filed SR-NASD-2003-55 to streamline the 
nomination and election processes governing NASD District Committees 
and District Nominating Committees (``Committees''), modernize 
communication procedures, and improve the consistency among the 
Committees across all districts. There is no change to the rule text 
associated with this rule filing. NASD subsequently filed SR-NASD-2003-
107 to delay the implementation date of the amendments to January 1, 
2004 to avoid disrupting the 2004 election cycle, which was already 
underway.\6\
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    \5\ See Securities Exchange Act Release No. 48105 (June 11, 
2003), 68 FR 35926 (June 17, 2003).
    \6\ See Securities Exchange Act Release No. 48259 (July 30, 
2003), 68 FR 46673 (August 6, 2003).
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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
    The purpose of the proposed rule change is to notify the Commission 
and other interested parties of the delay in implementation of 
amendments to Article VIII of the By-Laws of NASD Regulation, Inc. 
(``Article VIII'') established by SR-NASD-2003-55 until February 1, 
2004. On March 21, 2003, NASD filed a proposed rule change to 
streamline the nomination and election processes governing District 
Committees and District Nominating Committees, modernize communication 
procedures, and improve the consistency among the Committees across all 
districts. On June 11, 2003, the SEC published a notice of filing and 
immediate effectiveness of the proposed rule change.\7\ The amendments 
were to become effective 30 days later. NASD submitted a subsequent 
rule filing to extend the implementation date of the amendments to 
January 1, 2004 because NASD's election cycle for District Committees 
and District Nominating Committees for 2004 was already underway and 
NASD did not want new rules to become effective in the middle of such 
election cycle.\8\
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    \7\ See Securities Exchange Act Release No. 48015 (June 11, 
2003), 68 FR 35926 (June 17, 2003).
    \8\ See Securities Exchange Act Release No. 48259 (July 30, 
2003), 68 FR 46673 (August 6, 2003).
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    In this rule filing, NASD is proposing to extend the implementation 
date of the amendments to February 1, 2004. As the amendments to 
Article VIII were not effective prior to the start of the 2004 election 
cycle, NASD is conducting these elections in accordance with the 
existing provisions of Article VIII. NASD believed that the 2004 
election cycle would be completed by December 2003. However, a 
contested election in one of the Districts has resulted in a delay in 
the 2004 election cycle. NASD expects to have the 2004 District 
Committee and District Nominating Committee elections completed and 
certified by the end of January 2004 and, therefore, proposes to delay 
the implementation date of the amendments to Article VIII until 
February 1, 2004 in order to avoid any confusion among participants and 
to prevent any disruption in the election procedures that could be 
brought on by adopting amendments in the middle of the election cycle.
1. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\9\ which require, among 
other things, that NASD rules 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. In addition, the proposed rule change is effective 
upon filing pursuant to Section 19(b)(3)(A)(i) of the Act \10\ and 
paragraph (f)(1) of Rule 19b-4\11\ thereunder, in that the proposed 
rule change constitutes a stated policy, practice, or interpretation 
with respect to the meaning, administration, or enforcement of an 
existing rule. NASD believes that delaying the implementation date of 
the amendments to Article VIII of the By-Laws of NASD Regulation, Inc. 
until February 1, 2004 will permit this year's Committee elections to 
proceed in an orderly fashion under existing procedures. Any change to 
existing procedures in the middle of the current Committee election 
cycle may cause unnecessary confusion to participants and disrupt the 
election process.
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    \9\ 15 U.S.C. 78o-3(b)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\ 17 CFR 240.19b-4(f)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD 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.\12\
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    \12\ Telephone conversation between Kosha Dalal, Assistant 
General Counsel, Office of General Counsel, NASD and Leah Mesfin, 
Attorney, Division of Market Regulation, Commission on January 2, 
2004.

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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 proposed rule change has been filed by NASD as constituting a 
stated policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule under Section 
19(b)(3)(A)(i) of the Act \13\ and Rule 19b-4(f)(1) thereunder,\14\ 
which renders the proposal effective upon receipt of this filing by the 
Commission.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(i).
    \14\ 17 CFR 240.19b-4(f)(1).
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    At any time within 60 days of this filing, the Commission may 
summarily abrogate this proposal 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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. Comments 
may also be submitted electronically at the following e-mail address: 
[email protected]. All comment letters should refer to File No. SR-
NASD-2003-197. This file number should be included on the subject line 
if e-mail is used. To help the Commission process and review comments 
more efficiently, comments should be sent in hardcopy or by e-mail but 
not by both methods. 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-2003-197 and should be 
submitted by February 3, 2004.

    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)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 04-612 Filed 1-12-04; 8:45 am]
BILLING CODE 8010-01-U