[Federal Register Volume 69, Number 206 (Tuesday, October 26, 2004)]
[Notices]
[Page 62493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2855]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50573; File No. SR-NASD-2004-105]


Self-Regulatory Organizations; Order Granting Approval to 
Proposed Rule Change and Amendment No. 1 Thereto by the National 
Association of Securities Dealers, Inc. To Amend Rule 4350(n) and IM-
4350-7 To Provide Time Frames for Foreign Issuers and Foreign Private 
Issuers To Disclose Certain Code of Conduct Waivers

October 20, 2004.
    On July 8, 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 NASD Rule 4350 and related Interpretive 
Material to set forth specific time frames within which non-U.S. 
issuers must disclose any waivers of their codes of conduct for 
directors or executive officers. On August 23, 2004, Nasdaq 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 September 1, 2004.\4\ The Commission received no comments on the 
proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Mary M. Dunbar, Vice President and General 
Counsel, Nasdaq, to Katherine England, Assistant Director, Division 
of Market Regulation, Commission, dated August 20, 2004 (``Amendment 
No. 1'').
    \4\ See Securities Exchange Act Release No. 50267 (August 26, 
2004), 69 FR 53478 (September 1, 2004).
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    NASD Rule 4350(n) and Interpretive Material IM-4350-7 require 
issuers listed on Nasdaq to adopt codes of conduct that are applicable 
to all directors, officers and employees. Each code of conduct must 
require that any waiver of the code for executive officers or directors 
may be made only by the board of directors of the issuer and must be 
promptly disclosed to shareholders, along with the reasons for the 
waiver. The rule specifies that domestic issuers must disclose such 
waivers in a Form 8-K within five business days. The proposed rule 
change would amend the rule and interpretive material to specify that 
all issuers, other than foreign private issuers, must disclose such 
waivers in a Form 8-K within five business days, and to establish that 
foreign private issuers must disclose such waivers either in a Form 6-K 
or in the next Form 20-F or 40-F.
    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\ and, in particular, the requirements of section 
15A(b)(6) of the Act.\6\ The Commission believes that the proposed 
method and timing for disclosure of waivers by foreign private issuers 
is consistent with rules of other exchanges concerning such waivers and 
with the requirements of the Commission concerning disclosure of 
waivers by a foreign private issuer for principal executive, financial 
and accounting officers. In addition, the Commission believes that the 
proposed rule change appropriately clarifies that non-U.S. issuers that 
are not foreign private issuers must meet the same disclosure 
requirements as domestic issuers.
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    \5\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's 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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    It is therefore ordered, pursuant to section 19(b)(2) of the Act 
\7\, that the proposed rule change, as amended, (File No. SR-NASD-2004-
105) be, and it hereby 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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Jill M. Peterson,
Assistant Secretary.
 [FR Doc. E4-2855 Filed 10-25-04; 8:45 am]
BILLING CODE 8010-01-P