[Federal Register Volume 69, Number 89 (Friday, May 7, 2004)]
[Notices]
[Page 25651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-10397]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49628; File No. SR-NASD-2004-023]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change and Amendment No. 1 Thereto by the National Association of 
Securities Dealers, Inc. To Amend the Order Audit Trail System Rules 
Relating to Execution Reports

April 29, 2004.
    On February 5, 2004, the National Association of Securities 
Dealers, Inc. (``NASD'') 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 
thereunder,\2\ a proposed rule change to amend NASD Rule 6954(d) to 
require that members record and report the execution price and firm 
capacity (e.g., agency, principal or riskless principal) in Order Audit 
Trail System (``OATS'') Execution Reports. On March 11, 2004, NASD 
filed Amendment No. 1 to the proposed rule change.\3\The proposed rule 
change, as amended, was published for comment in the Federal Register 
on March 24, 2004.\4\ The Commission received no comments on the 
proposal. This order approves the proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Barbara Z. Sweeney, Senior Vice President 
and Corporate Secretary, NASD to Katherine A. England, Assistant 
Director, Division of Market Regulation, Commission, dated March 10, 
2004 (``Amendment No. 1''). Amendment No. 1 replaced the proposed 
rule change in its entirety.
    \4\ See Securities Exchange Act Release No. 49439 (March 17, 
2004), 69 FR 13927.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of 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 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.
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    \5\ In approving this proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78o-3(b)(6).
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    The Commission believes that NASD's proposal to require its members 
to record and report the execution price and firm capacity as part of 
the OATS Execution Report should allow NASD to address potential gaps 
in the audit trail information currently collected by NASD. 
Consequently, the Commission believes that the proposed rule change 
should enhance OATS information and improve NASD's ability to conduct 
surveillance and investigations relating to compliance with NASD and 
other applicable rules.
    It is therefore ordered, pursuant to section 19(b)(2) of the Act 
\7\, that the proposed rule change, as amended, (SR-NASD-2004-023) 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. 04-10397 Filed 5-6-04; 8:45 am]
BILLING CODE 8010-01-P