[Federal Register Volume 69, Number 160 (Thursday, August 19, 2004)]
[Notices]
[Page 51500]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18977]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50176; File No. SR-NASD-2004-065]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Approving Proposed Rule Change Regarding the 
Nasdaq Closing Cross

August 10, 2004.
    On April 19, 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 thereunder,\2\ a 
proposed rule change to amend the Nasdaq Closing Cross. The proposed 
rule change was published for comment in the Federal Register on June 
4, 2004.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 49783 (May 27, 
2004), 69 FR 31650.
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    The proposed rule change would amend NASD Rule 4709 to permit 
market participants to cancel Imbalance Only orders (``IOs''), Market 
on Close orders (``MOC''), or Limit on Close orders (``LOC'') between 
3:50 p.m. EST and 3:55 p.m. EST where a firm is able to clearly 
demonstrate a legitimate error, including in the side, size, symbol, 
price, or duplication of the order. Market participants would not be 
permitted to cancel IO, MOC, or LOC orders after 3:55 p.m. EST for any 
reason.
    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities association.\4\ The 
Commission believes that the proposed rule change is consistent with 
Section 15A(b) of the Act,\5\ in general, and furthers the objectives 
of Section 15A(b)(6),\6\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and in general, to 
protect investors and the public interest. The proposed rule change 
will allow Nasdaq greater flexibility to correct errors prior to the 
Nasdaq Closing Cross, which should result in a Nasdaq Closing Cross 
that more accurately reflects the trading in a particular security at 
the close.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78o-3(b).
    \6\ 15 U.S.C. 78o-3(b)(6).
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    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and rules 
and regulations thereunder.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-NASD-2004-065) 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. 04-18977 Filed 8-18-04; 8:45 am]
BILLING CODE 8010-01-P