[Federal Register Volume 69, Number 205 (Monday, October 25, 2004)]
[Notices]
[Pages 62312-62314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2820]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50558; File No. SR-NASD-2004-148]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Inc. Relating to Amendments to TRACE Rule 6250

October 18, 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 October 1, 2004, the National Association of Securities Dealers, 
Inc. (``NASD''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by NASD. The NASD 
has filed the proposal as a ``non-controversial'' rule change pursuant 
to Section 19(b)(3)(A)(iii) of the Act,\3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders the proposal effective upon filing with 
the Commission.\5\ 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).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The NASD asked the Commission to waive the 30-day operative 
delay. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD is proposing to amend Rule 6250 to continue to disseminate 
transaction information for certain TRACE-eligible securities during 
Stage One of the implementation of SR-NASD-2004-094,\6\ notwithstanding 
that the securities do not meet the frequency standards for such 
dissemination set forth in Rule 6250(b)(1)(C)(ii). Below is the text of 
the proposed rule change. Proposed new language is in italics.
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    \6\ See Securities Exchange Act Release No. 50317 (September 3, 
2004), 69 FR 55202.
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* * * * *

6250. Dissemination of Transaction Information

    (a) through (c) No change.

(d) Dissemination of Transaction Information for Certain Non-Investment 
Grade TRACE-Eligible Securities

    Until such time as the effective date of (1) Rule 6250(a), (2) the 
portion of proposed Rule 6250(b)(1)(C)(i) not effective as of October 
1, 2004, and (3) Rule 6250(b)(2) (being the effective date of ``Stage 
Two''), information for transactions in Non-Investment Grade TRACE-
eligible securities that were subject to dissemination under the Rule 
6200 Series prior to October 1, 2004, but that do not meet the 
frequency standards set forth in Rule 6250(b)(1)(C)(ii), will continue 
to be disseminated immediately upon receipt of the transaction report. 
Following the effective date of Stage Two, dissemination of such 
securities will be subject to all provisions of the Rule 6200 Series 
then in effect, at which time this paragraph (d) of Rule 6250 shall 
automatically expire by its own terms.
* * * * *

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.

[[Page 62313]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

3. Purpose
    The proposed rule change would continue the dissemination of 
transactions in a very small number (i.e., fewer that 15) of Non-
Investment Grade TRACE-eligible securities that are currently subject 
to dissemination, but that would not be disseminated during the first 
stage of implementation (although eligible for delayed dissemination) 
of the recently approved amendments to the Rule 6200 Series that became 
effective on October 1, 2004 (SR-NASD-2004-094).\7\ The proposed rule 
change would, during the first stage of the two-stage implementation of 
the dissemination changes taking effect on October 1, 2004, allow NASD 
to continue to provide transaction information on such TRACE-eligible 
securities, rather than reduce transparency during such implementation. 
NASD asserts that this action is in furtherance of the general 
principles of transparency and the increase in transparency of all 
TRACE-eligible securities, as discussed by the Bond Transaction 
Reporting Committee, an advisory committee to the Board of Governors of 
NASD.
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    \7\ Id.
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    As discussed below, NASD is filing the proposed rule change for 
immediate effectiveness, and the implementation date will be October 1, 
2004.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ which requires, among 
other things, that NASD 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 believes that the proposed rule change will 
promote transparency in the debt securities markets for the benefit of 
customers and other market participants in furtherance of the public 
interest and for the protection of investors.
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    \8\ 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 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

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days (or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest) from the date on which it was filed, the proposed rule change 
has become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. NASD has asked the Commission to 
waive the 30-day operative delay. The Commission hereby grants this 
request. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because such waiver will enable NASD to continue to provide 
transaction information on certain TRACE-eligible securities that have 
previously been subject to dissemination, but that would not be 
disseminated during the first stage of implementation of recently 
approved amendments to the Rule 6200 Series that became effective on 
October 1, 2004 (SR-NASD-2004-094).\11\ NASD has also requested that 
the Commission waive the pre-filing notice requirement of at least five 
business days (or such shorter time as designated by the 
Commission).\12\ The Commission hereby grants NASD's request to waive 
the pre-filing requirement.\13\
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    \11\ See supra, note 6.
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only of accelerating 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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    At any time within 60 days of the filing of the 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.\14\
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    \14\ See Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C).
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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-2004-148 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-2004-148. 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 such 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-2004-148 and

[[Page 62314]]

should be submitted on or before November 15, 2004.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E4-2820 Filed 10-22-04; 8:45 am]
BILLING CODE 8010-01-P