[Federal Register Volume 70, Number 104 (Wednesday, June 1, 2005)]
[Notices]
[Page 31558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2767]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51741; File No. SR-NASD-2005-054]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Order Granting Accelerated Approval of Proposed Rule 
Change and Amendment No. 1 Thereto Relating to Certain Amendments to 
the Restated Certificate of Incorporation and the By-Laws of The Nasdaq 
Stock Market, Inc

May 25, 2005.

I. Introduction

    On April 19, 2005, the National Association of Securities Dealers 
(``NASD''), through its subsidiary, The Nasdaq Stock Market Inc. 
(``Nasdaq''), filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') a proposed rule change, pursuant to Section 
19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 
19b-4 thereunder,\2\ to make certain amendments to the Nasdaq Restated 
Certificate of Incorporation (the ``Certificate'') and the Nasdaq By-
Laws (the ``By-Laws'') to phase out the current classified board 
structure and provide for the annual election of all members of the 
Nasdaq Board of Directors (the ``Nasdaq Board''). The proposed rule 
change was published for comment in the Federal Register on May 4, 
2005.\3\ The Commission received no comments on the proposal. On May 
25, 2005, Nasdaq submitted Amendment No. 1 to the proposed rule 
change.\4\ This order grants accelerated approval to the proposed rule 
change, as amended.
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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. 51626 (April 28, 
2005), 70 FR 23286 (May 4, 2005).
    \4\ In Amendment No. 1, Nasdaq modified the text of their 
proposed rule change to reflect NASD and stockholder approval of the 
proposed amendments to Nasdaq's Certificate of Incorporation. 
Specifically, the Amendment stated that the Board of Governors of 
the NASD (the ``NASD Board'') approved the proposed rule change on 
April 21, 2005, and that Nasdaq's stockholders approved the proposed 
rule change at the 2005 annual meeting of stockholders which was 
held on May 25, 2005. Amendment No. 1 is a technical amendment and, 
therefore, not subject to notice and comment.
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II. Discussion and Commission Findings

    The Commission has reviewed the proposed rule change, as amended, 
and finds that it is consistent with the requirements of Section 15A of 
the Act,\5\ and the rules and regulations thereunder applicable to a 
national securities association.\6\ In particular, the Commission finds 
that the proposed rule change is consistent with Sections 15A(b)(2) and 
(6) of the Act,\7\ which require, among other things, that Nasdaq be so 
organized and have the capacity to be able to carry out the purposes of 
the Act and to comply with and enforce compliance with the provisions 
of the Act, and that Nasdaq's rules 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. The Commission believes that the proposed rule change 
will serve the public interest by enhancing the accountability of board 
members through more frequent elections and thereby may help Nasdaq 
fulfill its obligations under the Act.
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    \5\ 15 U.S.C. 78o-3.
    \6\ In approving the proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78o-3(b)(2) and (6).
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    The Commission finds good cause for approving the proposed rule 
change prior to the thirtieth day after the date of publication of 
notice thereof in the Federal Register. In order for the amendments to 
the Certificate and the By-Laws to take effect as approved, Nasdaq 
requested that the Commission accelerate approval of the proposed rule 
change on May 25, 2005, immediately after the filing of the amendment 
indicating approval by Nasdaq's stockholders and the NASD Board. 
Accelerating approval will allow for the timely filing, of the proposed 
changes being made to the Certificate, with the Secretary of State of 
the State of Delaware. Furthermore, approval of the proposed rule 
change on May 25, 2005 will avert the need for a second stockholder 
vote at a later meeting that would entail additional expense and delay 
while not conferring benefits from a regulatory or corporate governance 
standpoint. Accordingly, the Commission finds good cause, consistent 
with Sections 15A(b)(6) and 19(b) of the Exchange Act, to approve the 
proposed rule change, as amended, on an accelerated basis.

III. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that proposed rule change (SR-NASD-2005-054), as amended, is 
approved on an accelerated basis.
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-2767 Filed 5-31-05; 8:45 am]
BILLING CODE 8010-01-P