[Federal Register Volume 69, Number 71 (Tuesday, April 13, 2004)]
[Notices]
[Pages 19591-19592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8325]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49535; File No. SR-NASD-2004-018]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment No. 1 Thereto by the National Association of 
Securities Dealers, Inc. To Amend the Procedures for the Review of 
Nasdaq Listing Determinations

April 7, 2004.
    On January 28, 2004, the National Association of Securities 
Dealers, Inc. (``NASD''), through its subsidiary, the Nasdaq Stock 
Market, Inc. (``Nasdaq''), filed with 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 \2\ 
thereunder, a proposal to amend the procedures for the review of Nasdaq 
listing determinations. On February 20, 2004, Nasdaq submitted 
Amendment No. 1 to the proposal,\3\ which replaced the original 
proposal in its entirety. On March 1, 2004, the Commission published 
the proposed rule change, as amended, in the Federal Register.\4\ The 
Commission received no comments on the proposal. This order approves 
the amended proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Mary M. Dunbar, Vice President and Deputy 
General Counsel, Nasdaq, to Katherine A. England, Division of Market 
Regulation, Commission, dated February 20, 2004 (``Amendment No. 
1'').
    \4\ See Securities Exchange Act Release No. 49306 (February 23, 
2004), 69 FR 9662 (March 1, 2004).
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    The Commission believes that the proposed rule change is consistent 
with the Act and the rules and regulations thereunder applicable to a 
national securities association.\5\ In particular, the Commission 
believes that the proposal is consistent with Section 15A(b)(6) of the 
Act \6\ which requires, among other things, that the rules of an 
association be designed to promote just and equitable principles of 
trade and to protect investors and the public interest. NASD Rule 4830 
provides that all hearings before the Nasdaq Listing Qualifications 
Panel be conducted by at least two persons designated by the Nasdaq 
board of directors. Nasdaq's practice is to conduct such hearings 
before panels composed of two members. Currently, NASD Rule 4830 does 
not make provision for a deadlock between the two members of the panel. 
Under new paragraph (d) of NASD Rule 4830, in the event of a deadlock, 
the issuer would be afforded the opportunity for a new hearing before a 
new Listing Qualifications Panel comprised of three members. The issuer 
and Nasdaq staff would be afforded the opportunity to supplement the 
record on review, including any information that was not available at 
the time of the first hearing before the Listing Qualifications Panel. 
There would be no fee for the second hearing.
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    \5\ In approving the proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78o-3(b)(6).
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    Among other things, the rule change also: (1) Allows the Listing 
Qualifications Panel or the Nasdaq Listing Council to reconsider its 
decision, but only if there were a mistake of material fact in the 
decision; (2) clarifies when the Nasdaq Listing Council may assert 
jurisdiction over a decision or permit the Listing Qualifications Panel 
to proceed with the

[[Page 19592]]

reconsideration; and (3) allows documents required by the NASD Rule 
4800 process to be delivered by e-mail, if the issuer consents to such 
method of delivery.
    The Commission believes that these proposals will improve the 
efficiency and fairness of the process by which Nasdaq makes listing 
determinations and, therefore, are reasonable and consistent with the 
Act.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-NASD-2004-018), as amended, 
is approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-8325 Filed 4-12-04; 8:45 am]
BILLING CODE 8010-01-P