[Federal Register Volume 70, Number 90 (Wednesday, May 11, 2005)]
[Notices]
[Pages 24848-24849]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9388]


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SECURITIES AND EXCHANGE COMMISSION

[Docket No. 34-51658; File No. SR-NASD-2005-033]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Granting Approval of Proposed Rule Change Relating 
to Taping Rule ``Opt Out'' and Exemption Provisions

May 5, 2005.
    On March 22, 2005, the National Association of Securities Dealers, 
Inc. (``NASD'') 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 paragraph (L) of NASD Rule 3010(b)(2) 
(``Taping Rule''). The proposed rule change would (1) require member 
firms that are seeking an exemption from the Taping Rule to submit 
their exemption requests to NASD within 30 days of receiving notice 
from NASD or obtaining actual knowledge that they are subject to the 
provisions of the Taping Rule and (2) clarify that firms that trigger 
application of the Taping Rule for the first time can elect to either 
themselves of the one-time ``opt out provision'' or seek an exemption 
from the Taping Rule, but they may not seek both options.\3\ The 
proposal also

[[Page 24849]]

replaced, as a technical change, several references to ``Association'' 
and ``NASD Regulation'' in NASD Rule 3010(b)(2) with ``NASD.''
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ According to the NASD, it will announce the effective date 
of the proposed rule change in a Notice to Members (``NtM'') to be 
published no later than 60 days following Commission approval. The 
effective date would be 30 days following publication of the NtM 
announcing Commission approval.
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    The proposed rule change was published for comment in the Federal 
Register on April 4, 2005.\4\ The Commission received no comments on 
the proposed rule change.
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    \4\ See Securities Exchange Act Release No. 51434 (March 24, 
2005), 70 FR 17134.
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    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,\5\ and, in 
particular, the requirements of Section 15A of the Act \6\ and the 
rules and regulations thereunder. The Commission specifically finds 
that the proposed rule change is consistent with Section 15A(b)(6) of 
the Act \7\ in that it is 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. The Commission believes that the proposed rule change 
should ensure that members use the opt and exemption provisions of the 
Taping Rule consistent with the investor protection concerns that the 
Taping Rule is intended to address.
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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.
    \7\ 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,\8\ that the proposed rule change (File No. SR-NASD-2005-033) be, 
and it hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05-9388 Filed 5-10-05; 8:45 am]
BILLING CODE 8010-01-M