[Federal Register Volume 69, Number 110 (Tuesday, June 8, 2004)]
[Notices]
[Pages 32083-32084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12897]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49796; File No. SR-NASD-2004-083]


Self-Regulatory Organizations; National Association of Securities 
Dealers; Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change Regarding Non-Standard Settlement Trades

June 2, 2004.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on May 24, 2004, the National 
Association of Securities Dealers (``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 
primarily by NASD. NASD filed the proposal pursuant to Section 
19(b)(3)(A) of the Act \2\ and Rule 19b-4(f)(6) \3\ thereunder, whereby 
the proposal is 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\ 15 U.S.C. 78s(b)(3)(A).
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change allows members to submit to the Nasdaq 
Market Center trade reporting service trades that settle on other than 
the standard T+3 basis for comparison and transmission to the National 
Securities Clearing Corporation (``NSCC''). Non-standard settlement 
trades include cash, next day, and sellers-option transactions.

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.\4\
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    \4\ The Commission has modified parts of these statements.
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(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    Nasdaq proposes to amend the NASD rules that govern the use of the 
Nasdaq Market Center trade reporting service to allow members to submit 
non-standard settlement trades for comparison in the service and to 
allow Nasdaq to transmit such trades to NSCC. The Commission recently 
approved a proposal by NSCC to accept non-standard settlement input of 
over-the-counter trades from, among others, self-regulatory 
organizations submitting such information on behalf of their 
members.\5\ The current Nasdaq Market Center trade reporting service 
rules state that non-standard settlement

[[Page 32084]]

trades will not be compared by the service or be transmitted to NSCC. 
By removing this language, Nasdaq will be able to accept such trades 
from members for comparison and transmit the trades to NSCC. As a 
result, NSCC and NASD members will be able to realize the full benefits 
of NSCC's new service.
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    \5\ Securities Exchange Act Release No. 49685 (May 11, 2004), 69 
FR 27964 (May 17, 2004) [File No. SR-NSCC-2004-02].
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    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act \6\ and with Section 15A(b)(6) 
in particular because it is designed to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities. The proposed rule change will allow members to submit 
non-standard settlement trades to the Nasdaq Market Center trade 
reporting service for comparison and transmission to NSCC, which will 
improve the comparison of these trades. The proposal also allows NSCC 
and NASD members to achieve the full benefits of NSCC's new service.
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    \6\ 15 U.S.C. 78c-3.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq 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, 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 \7\ and Rule 19b-4(f)(6) \8\ promulgated 
thereunder because Nasdaq has designated the proposed rule change as 
one that: (i) Does not significantly affect the protection of investors 
or the public interest; (ii) does not impose any significant burden on 
competition; (iii) does not become operative for 30 days from the date 
on which it was filed, or such shorter time as the Commission may 
designate. The NASD gave the Commission written notice of its intention 
to file the proposed rule change at least five business days prior to 
filing. At any time within 60 days of the filing of such 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
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    The NASD has requested a waiver of the 30-day operative delay. The 
Commission believes that such a waiver is consistent with the 
protection of investors and the public interest, will permit NASD to 
put the proposed rule change into effect prior to June 2, 2004, which 
is the first date that NASD will transmit non-standard settlement 
trades for comparison to NSCC, and that such a waiver will also permit 
NASD to provide adequate advance notice of this change to its members 
prior to that date. For these reasons, the Commission designates the 
proposal to be effective and operative upon filing with the 
Commission.\9\
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    \9\ For purposes only of waiving the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml) or
     Send an E-mail to [email protected]. Please include 
File Number SR-NASD-2004-083 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-NASD-2004-083. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
NASD. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NASD-2004-083 and should be submitted on or before June 29, 2004.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-12897 Filed 6-7-04; 8:45 am]
BILLING CODE 8010-01-P