[Federal Register Volume 69, Number 128 (Tuesday, July 6, 2004)]
[Notices]
[Pages 40698-40699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15155]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49927; File No. SR-NASD-2004-093]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of a Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Establishing a Revised Effective Date for 
Amendments to the Order Audit Trail System Rules Relating to Execution 
Reports

June 28, 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 June 15, 2004, 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 NASD. NASD has filed 
this proposed rule change pursuant to section 19(b)(3)(A)(i) of the Act 
\3\ and Rule 19b-4(f)(1) thereunder,\4\ 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 proposing to establish October 4, 2004 as the effective 
date of the amendments to NASD Rule 6954(d) approved by the Commission 
in April 2004.\5\ As amended, NASD Rule 6954(d) requires members to 
record and report the execution price and firm capacity in the Order 
Audit Trail System (``OATS'') Execution Reports.
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    \5\ See Securities Exchange Act Release No. 49628 (April 29, 
2004), 69 FR 25651 (May 7, 2004).
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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
    NASD is proposing to establish October 4, 2004 as the effective 
date for the amendments to NASD Rule 6954(d) approved by the Commission 
in April 2004.\6\ As amended, NASD Rule 6954(d) requires that members 
record and report the execution price and firm capacity in OATS 
Execution Reports. As explained in NASD's proposed rule change SR-NASD-
2004-023, the amendments to NASD Rule 6954(d) would go into effect 
ninety days following publication of the Notice to Members announcing 
Commission approval. That proposed rule change further stated that NASD 
would issue such Notice to Members within 60 days of Commission 
approval. Under this implementation schedule, NASD represents that the 
effective date of the new requirements would have been no later than 
September 27, 2004.
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    \6\ Id.
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    NASD, however, intends to include the new requirements set forth in 
the SR-NASD-2004-023 as part of its OATS third quarter 2004 release, 
which is now scheduled to occur on October 4, 2004. Accordingly, NASD 
seeks to delay implementation of the recently approved amendments to 
NASD Rule 6954(d) until October 4, 2004. NASD staff believes that 
having the implementation date of the amendments to NASD Rule 6954(d) 
coincide with the OATS third quarter release, which includes other 
changes to OATS technical specifications, is the most cogent approach 
for both member firms and NASD. Among other things, the NASD believes 
that this approach will allow NASD to roll out the necessary systems 
changes in one comprehensive release, thereby resulting in fewer 
burdens on member firms having to comply with the revised OATS 
reporting requirements and ensuring that there is sufficient time for 
all parties to make the necessary system changes. NASD will publish a 
Notice to Members announcing the effective date within 5 business days 
of the filing of this rule change.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of section 15A(b)(6) of the Act,\7\ which requires, among 
other things, that NASD's rules must 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. NASD also believes that the proposed rule change will 
enhance OATS information and will improve NASD's ability to conduct 
surveillance and investigations relating to compliance with NASD and 
other applicable rules. Furthermore, NASD believes that extending the 
implementation date to October 4, 2004 to coincide with OATS third 
quarter release, which includes other changes to OATS technical 
specifications, will benefit both NASD and member firms by providing 
adequate time to make all

[[Page 40699]]

necessary system changes and enabling members to comply with OATS 
changes in a comprehensive manner.
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    \7\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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 proposed rule change has become effective pursuant to 
section 19(b)(3)(A)(i) of the Act \8\ and Rule 19b-4(f)(1) 
thereunder,\9\ because it constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule series of the NASD. At any time within 
60 days of the filing of the proposed rule change, the Commission may 
summarily abrogate the 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(i).
    \9\ 17 CFR 240.19b-4(f)(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 is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment for (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-NASD-2004-093 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-2004-093. 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 Room. Copies of the 
filing also will be available for inspection and copying at the 
principal office of 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-2004-093 and should be submitted on or before July 27, 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. 04-15155 Filed 7-2-04; 8:45 am]
BILLING CODE 8010-01-P