[Federal Register Volume 70, Number 145 (Friday, July 29, 2005)]
[Notices]
[Pages 43918-43922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4062]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52119; File No. SR-NASD-2005-089]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendment 
No. 1 Thereto Relating to NASD's Direct Authority for the Activities 
Related to or in Support of Trading in Over-the-Counter Equity 
Securities

July 25, 2005.
    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 July 19, 2005, the National Association of Securities Dealers, Inc. 
(``NASD'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the NASD. On July 22, 
2005, the NASD filed Amendment No. 1 to the proposed rule change.\3\ 
The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1, which replaced the original filing in its 
entirety, proposed to revise NASD Rule 6620(f)(1) to reflect the 
changes proposed to NASD Rule 11890 and made other minor and 
technical changes to the filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NASD is proposing to amend NASD's Plan of Allocation and 
Delegation of Functions by the NASD to Subsidiaries (``Delegation 
Plan'') and certain NASD rules to reflect the NASD's direct authority 
for the activities related to or in support of trading in over-the-
counter (``OTC'') equity securities,\4\ including, but not limited to, 
the OTC Bulletin Board (``OTCBB''), rather than the current delegation 
of such authority to The Nasdaq Stock Market, Inc. (``Nasdaq'').
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    \4\ The term ``OTC equity securities'' herein refers to OTC 
Equity Securities as defined in the Rule 6600 Series, including, but 
not limited to, OTC Bulletin Board securities.
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    Below is the text of the proposed rule change, as amended. Proposed 
new language is in italics; proposed deletions are in brackets.
* * * * *

PLAN OF ALLOCATION AND DELEGATION OF FUNCTIONS BY NASD TO SUBSIDIARIES

I. NASD, Inc.

    The NASD, Inc. (referenced as ``NASD''), the Registered Section 15A 
Association, is the parent company of the [wholly-owned] Subsidiaries 
NASD Regulation, Inc. (referenced individually as ``NASD Regulation''), 
The Nasdaq Stock Market, Inc. (referenced individually as ``Nasdaq''), 
and NASD Dispute Resolution, Inc. (referenced individually as ``NASD 
Dispute Resolution'') (referenced collectively as the 
``Subsidiaries''). The term ``Association'' shall refer to the NASD and 
the Subsidiaries collectively.
    A. [Governors, Directors and Committee Members]Other Defined 
Terms--The terms ``Industry Governors,'' ``Non-Industry Governors,'' 
``Public Governors,'' ``Industry Directors,'' ``Non-Industry 
Directors,'' ``Public Directors,'' ``Industry committee members,'' 
``Non-Industry committee members,'' and ``Public committee members,'' 
as used herein, shall have the meanings set forth in the By-Laws of the 
NASD, NASD Regulation and Nasdaq, as applicable. For purposes of 
Section III herein, the term ``other markets or systems'' does not 
include markets or systems relating to the trading of OTC Equity 
Securities as defined in the Rule 6600 Series, including, but not 
limited to, OTC Bulletin Board securities.
    B. through E. No change.

II. NASD Regulation, Inc.

    A. Delegation of Functions and Authority
    1. Subject to Section I.B.11, the NASD hereby delegates to NASD 
Regulation and NASD Regulation assumes the following responsibilities 
and functions as a registered securities association:
    a. through s. No change.
    t. To develop and adopt rule changes to establish trading practices 
with respect to OTC Equity Securities, as defined in the Rule 6600 
Series, including, but not limited to, OTC Bulletin Board securities.
    B. No change.
    C. Supplemental Delegation Regarding Committees
    1. No change.
    2. [Operations] Uniform Practice Code Committee
    a. The [Operations] Uniform Practice Code Committee shall have the 
following functions:
    i. through iii. No change.
    b. The NASD Regulation Board shall appoint the [Operations] Uniform 
Practice Code Committee by resolution. The [Operations] Uniform 
Practice Code Committee shall have not more than 50 percent of its 
members directly engaged in market-making activity or employed by a 
member firm whose revenues from market-making activity exceed ten 
percent of its total revenues.

III. Nasdaq

    A. Delegation of Functions and Authority
    1. Subject to Section I.B.11., the NASD hereby delegates to Nasdaq 
and Nasdaq assumes the following responsibilities and functions as a 
registered securities association:
    a. To operate The Nasdaq Stock Market, automated systems supporting 
The Nasdaq Stock Market, and other markets or systems[ for non-Nasdaq 
securities].
    b. and c. No change.
    d. To develop and adopt rule changes (i) applicable to the 
collection, processing, and dissemination of quotation and transaction 
information for securities traded on The Nasdaq Stock Market, on other 
markets operated by The Nasdaq Stock Market, and in the third market 
for securities listed on a registered exchange, [and in the over-the-
counter market, ](ii) for Nasdaq-operated trading systems for these 
securities, and (iii) establishing trading practices with respect to 
these securities.
    e. through o. No change.
    2. No change.
    B. and C. No change.

IV. and V. No change.

* * * * *
6545. Trading and Quotation Halt in OTCBB-Eligible Securities
    (a) Authority for Initiating a Trading and Quotation Halt
    In circumstances in which it is necessary to protect investors and 
the public interest, [Nasdaq]NASD may direct members, pursuant to the 
procedures set forth in paragraph (b), to halt trading and quotations 
in the over-the-counter (``OTC'') market of a

[[Page 43919]]

security or an American Depository Receipt (``ADR'') that is included 
in the OTC Bulletin Board (``OTCBB'') if:
    (1) the OTCBB security or the security underlying the OTCBB ADR is 
listed on or registered with a foreign securities exchange or market, 
and the foreign securities exchange, market, or regulatory authority 
overseeing such issuer, exchange, or market, halts trading in such 
security for regulatory reasons because of public interest concerns 
(``Foreign Regulatory Halt''); provided, however, that [Nasdaq]NASD 
will not impose a trading and quotation halt if the Foreign Regulatory 
Halt was imposed solely for material news, a regulatory filing 
deficiency, or operational reasons; or
    (2) through (3) No change.
    (b) Procedure for Initiating a Trading and Quotation Halt
    (1) When a halt is initiated under subparagraph (a)(1) of this 
rule, upon receipt of information from a foreign securities exchange or 
market on which the OTCBB security or the security underlying the OTCBB 
ADR is listed or registered, or from a regulatory authority overseeing 
such issuer, exchange, or market, [Nasdaq]NASD will promptly evaluate 
the information and determine whether a trading and quotation halt in 
the OTCBB security is appropriate.
    (2) Should [Nasdaq]NASD determine that a basis exists under this 
rule for initiating a trading and quotation halt, the commencement of 
the trading and quotation halt will be effective simultaneous with the 
issuance of appropriate public notice.
    (3) Trading and quotations in the OTC market may resume when 
[Nasdaq]NASD determines that the basis for the halt no longer exists, 
or when five business days have elapsed from the date [Nasdaq]NASD 
initiated the trading and quotation halt in the security, whichever 
occurs first. [Nasdaq]NASD shall disseminate appropriate public notice 
that the trading and quotation halt is no longer in effect.
    (c) No change.
* * * * *
6620. Transaction Reporting
    (a) through (e) No change.
    (f) Reporting Cancelled Trades
    (1) Obligation and Party Responsible for Reporting Cancelled Trades
    With the exception of trades cancelled [by Nasdaq staff] in 
accordance with Rule 11890, members shall report to the Nasdaq Market 
Center the cancellation of any trade previously submitted to the Nasdaq 
Market Center. The member responsible under Rule 6620 for submitting 
the original trade report shall submit the cancellation report in 
accordance with the procedures set forth in paragraph (f)(2). For 
trades executed through a Nasdaq system that automatically reports 
trades to the Nasdaq Market Center, the member that would have been 
required by Rule 6620 to report the trade (but for the trade being 
reported automatically by the Nasdaq system) shall submit the 
cancellation report in accordance with the procedures set forth in 
paragraph (f)(2).
    (2) No change.
* * * * *
7010. System Services
    (a) through (o) No change.
    (p) Historical Research and Administrative Reports
    (1) and (2) No change.
    (3) The charge to be paid by the purchaser of an Historical 
Research Report regarding an OTC Bulletin Board security or other OTC 
security through the OTCBB.com website shall be determined in 
accordance with the following schedule:
    A. No change.
    B. No change.
    C. [Nasdaq] NASD may, in its discretion, choose to make a report 
that purchasers wish to obtain every trading day available on a 
subscription discount basis. In such cases, the price for a 
subscription to receive a report every trading day in a month shall be 
the applicable rate to receive the report for a day times 20; the price 
for a subscription to receive the report for every trading day in a 
quarter shall be the applicable rate to receive the report every day 
times 60; and the price for a subscription to receive a report every 
trading day in a year shall be the applicable rate to receive the 
report for a day times 240.
    D. No change
    (4) No change.
    (q) through (v) No change.
* * * * *
11120. Definitions
    (a) Committee
    The term ``Committee'' as used in this Code, unless the context 
otherwise requires, shall mean the Committee delegated the authority to 
administer this Code by the Board of Governors.*
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    \*\ The Board of Governors has so designated the [Association's 
Operations] NASD's Uniform Practice Code Committee.
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    (b) through (g) No change.
* * * * *
11890. Clearly Erroneous Transactions
    (a) No change.
    (b) Procedures for Reviewing Transactions on NASD's or Nasdaq's Own 
Motion
    (1) In the event of (i) a disruption or malfunction in the use or 
operation of any quotation, execution, communication, or trade 
reporting system owned or operated by Nasdaq and approved by the 
Commission, or (ii) extraordinary market conditions or other 
circumstances in which the nullification or modification of 
transactions may be necessary for the maintenance of a fair and orderly 
market or the protection of investors and the public interest, the 
President of Nasdaq or any Executive Vice President designated by the 
President may, on his or her own motion, review any transaction in 
Nasdaq or exchange-listed securities arising out of or reported through 
any such quotation, execution, communication, or trade reporting 
system, including transactions entered into by a member of a UTP 
Exchange through the use or operation of such a system, but excluding 
transactions that are entered into through, or reported to, a UTP 
Exchange. A Nasdaq officer acting pursuant to this subsection may 
declare any such transaction null and void or modify the terms of any 
such transaction if the officer determines that (i) the transaction is 
clearly erroneous, or (ii) such actions are necessary for the 
maintenance of a fair and orderly market or the protection of investors 
and the public interest; provided, however, that, in the absence of 
extraordinary circumstances, the officer must take action pursuant to 
this subsection within thirty (30) minutes of detection of the 
transaction, but in no event later than 3 p.m., Eastern Time, on the 
next trading day following the date of the trade at issue.
    (2) In the event of (i) a disruption or malfunction in the use or 
operation of any quotation, communication, or trade reporting system 
owned or operated by NASD or its subsidiaries and approved by the 
Commission, or (ii) extraordinary market conditions in which the 
nullification or modification of transactions may be necessary for the 
maintenance of a fair and orderly market or the protection of investors 
and the public interest, an Executive Vice President of NASD's Market 
Regulation Department or an Executive Vice President of NASD's 
Transparency Services Department may, on his or her own motion, review 
any transaction in an OTC equity security, as defined in Rule 6610, 
arising out of or reported through any such quotation, communication, 
or trade reporting system. An NASD officer acting

[[Page 43920]]

pursuant to this subsection may declare any such transaction null and 
void or modify the terms of any such transaction if the officer 
determines that (i) the transaction is clearly erroneous, or (ii) such 
actions are necessary for the maintenance of a fair and orderly market 
or the protection of investors and the public interest; provided, 
however, that, in the absence of extraordinary circumstances, the 
officer must take action pursuant to this subsection within thirty (30) 
minutes of detection of the transaction, but in no event later than 3 
p.m., Eastern Time, on the next trading day following the date of the 
trade at issue.
    (c) Review by the Market Operations Review Committee (``MORC'') or 
the Uniform Practice Code (``UPC'') Committee
    (1) A member, member of a UTP Exchange, or person associated with 
any such member may appeal a determination made under subsection (a) to 
the MORC. A member, member of a UTP Exchange, or person associated with 
any such member may appeal a determination made under subsection (b)(1) 
to the MORC, or a determination made under subsection (b)(2) to the UPC 
Committee, unless the officer making the determination also determines 
that the number of the affected transactions is such that immediate 
finality is necessary to maintain a fair and orderly market and to 
protect investors and the public interest. An appeal must be made in 
writing, and must be received by Nasdaq or NASD, as applicable, within 
thirty (30) minutes after the person making the appeal is given the 
notification of the determination being appealed, except that if Nasdaq 
or NASD notifies the parties of action taken pursuant to paragraph (b) 
after 4 p.m., the appeal must be received by [Nasdaq by] 9:30 a.m. the 
next trading day. Once a written appeal has been received, the 
counterparty to the trade will be notified of the appeal and both 
parties shall be able to submit any additional supporting written 
information up until the time the appeal is considered by the 
appropriate Committee. Either party to a disputed trade may request the 
written information provided by the other party during the appeal 
process. An appeal [to the Committee] shall not operate as a stay of 
the determination being appealed. Once a party has appealed a 
determination to the appropriate Committee, the determination shall be 
reviewed and a decision rendered, unless both parties to the 
transaction agree to withdraw the appeal prior to the time a decision 
is rendered [by the Committee]. Upon consideration of the record, and 
after such hearings as it may in its discretion order, the MORC or the 
UPC Committee, pursuant to the standards set forth in this section, 
shall affirm, modify, reverse, or remand the determination.
    (2) The decision of [the] a Committee pursuant to an appeal, or a 
determination by a Nasdaq or NASD officer that is not appealed, shall 
be final and binding upon all parties and shall constitute final 
[Association] action on the matter in issue. Any determination by a 
Nasdaq or NASD officer pursuant to paragraph (a) or (b) or any decision 
by [the] a Committee pursuant to paragraph (c)(1) shall be rendered 
without prejudice as to the rights of the parties to the transaction to 
submit their dispute to arbitration.
    (d) Communications
    (1) All materials submitted [to Nasdaq or the MORC] pursuant to 
this Rule shall be submitted via facsimile machine and within the time 
parameters specified herein; provided, however, that if requested, 
Nasdaq or NASD staff may authorize submission of material via 
electronic mail on a case-by-case basis. Materials shall be deemed 
received at the time indicated by the equipment (i.e., facsimile 
machine or computer) receiving the materials. Nasdaq and NASD, in [its] 
their sole and absolute discretion, reserve[s] the right to reject or 
accept any material that is not received within the time parameters 
specified herein.
    (2) Nasdaq or NASD shall provide affected parties with prompt 
notice of determinations under this Rule via facsimile machine, 
electronic mail, or telephone (including voicemail); provided, however, 
that if an officer nullifies or modifies a large number of transactions 
pursuant to subsection (b), Nasdaq or NASD may instead provide notice 
to parties via the Nasdaq Workstation II Service, a press release, or 
any other method reasonably expected to provide rapid notice to many 
market participants.
IM-11890-1. Refusal To Abide by Rulings [of a Nasdaq Officer or the 
MORC]
    It shall be considered conduct inconsistent with just and equitable 
principles of trade for any member to refuse to take any action that is 
necessary to effectuate a final decision of a Nasdaq or NASD officer or 
the MORC or the UPC Committee under Rule 11890.
IM-11890-2. Review by Panels of the MORC or the UPC Committee
    For purposes of Rule 11890 and other NASD rules that permit review 
of Nasdaq or NASD decisions by the MORC or the UPC Committee, 
respectively, a decision of the MORC or the UPC Committee may be 
rendered by a panel of three or more members of [the MORC] that 
Committee, provided that no more than 50 percent of the members of any 
panel are directly engaged in market making activity or employed by a 
member firm whose revenues from market making activity exceed ten 
percent of its total revenues.
* * * * *

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

    In its filing with the Commission, the NASD included statements 
concerning the purpose of and basis for the proposed rule change, as 
amended, and discussed any comments it received on the proposed rule 
change, as amended. The text of these statements may be examined at the 
places specified in Item IV below. The NASD has prepared summaries, set 
forth in Sections A, B, and C below, of the most significant aspects of 
such statements.

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

1. Purpose
    Pursuant to the Delegation Plan, activities related to or in 
support of the trading in OTC equity securities, including, but not 
limited to, operation of the OTCBB5 \5\ (collectively referred to 
herein as ``OTC equity operations''), have been delegated to Nasdaq. In 
this context, OTC equity operations includes services such as trade 
reporting, comparison, quote collection and dissemination, as 
applicable, and the related rulemaking functions in this area. The NASD 
is proposing to assume direct authority for OTC equities operations 
rather than delegate it to Nasdaq and delegate to NASD Regulation 
rulemaking authority related to trading practices for OTC equity 
securities. The NASD intends to contract with Nasdaq to have it 
continue

[[Page 43921]]

to provide the OTCBB quotation and trade reporting platform and certain 
other services that it currently provides with respect to OTC equity 
operations. As a result, market makers and other users of such services 
will continue to access the OTCBB and other OTC equity services in the 
same way they do today.
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    \5\ The OTCBB provides an electronic quotation medium for 
subscribing members to enter, update, and display quotations in 
individual securities on a real-time basis. Such quotation entries 
may consist of a priced bid and/or offer; an unpriced indication of 
interest; or a bid/offer accompanied by a modifier to reflect 
unsolicted customer interest. The OTCBB is not an issuer listing 
service and therefore does not maintain a relationship with quoted 
issuers or impose quantitive listing standards as do Nasdaq and the 
exchanges. To be eligible for quotation on the OTCBB, issuers must 
be current in their filings with the Commission or applicable 
regulatory authority.
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    In furtherance of this transition, the NASD also is proposing to: 
(1) Transfer trading and quotation halt authority for OTCBB-eligible 
securities from Nasdaq to the NASD; (2) conform the language governing 
reporting cancelled trades to reflect the proposed changes in NASD Rule 
11890 relating to the NASD's ability to nullify or modify transactions 
in OTC equity securities; (3) transfer the authority to set certain 
fees in this area from Nasdaq to the NASD; and (4) transfer from Nasdaq 
to the NASD the ability to nullify or modify a transaction in an OTC 
equity security due to a disruption or malfunction in the use or 
operation of any quotation, communication, or trade reporting system or 
other extraordinary market conditions.
    Delegation Plan Changes. The NASD will be assuming direct 
responsibility for OTC equity operations and is therefore proposing to 
delete the delegation of authority to Nasdaq of these functions and 
also to delegate to NASD Regulation rulemaking authority related to 
trading practices for OTC equity securities. Nasdaq will continue to 
operate the Nasdaq Stock Market and other markets or systems, as 
appropriate, and will maintain its delegation of authority accordingly. 
In addition, the NASD is proposing a technical change in the 
introductory language of Section I of the Delegation Plan, to delete 
the reference to ``wholly-owned'' subsidiaries given that Nasdaq is no 
longer a wholly-owned subsidiary of the NASD.
    OTCBB Trading and Quotation Halts. The NASD is proposing to amend 
NASD Rule 6545, which governs the trading and quotation halt authority 
for OTCBB-eligible securities, to provide that NASD has direct 
responsibility for this function. NASD Rule 6545 currently provides 
Nasdaq with authority to impose trading and quotation halts in OTCBB-
eligible securities in certain circumstances. Instead, the NASD 
proposes to amend NASD Rule 6545 to provide that the NASD has the 
authority to determine the basis for a trading and quotation halt and 
to resume trading after a trading and quotation halt has been initiated 
under the rule.
    Cancelled Trades. The NASD is proposing to amend NASD Rule 6620(f), 
which governs the reporting of cancelled trades for OTC Equity 
Securities, to reflect the proposed transfer of authority to the NASD 
to nullify or modify transactions in OTC equity securities pursuant to 
NASD Rule 11890 as discussed below. Accordingly, the NASD proposes to 
amend Rule NASD 6620(f) to conform the language in that rule to the 
proposed language in NASD Rule 11890.
    Charges and Fees. The NASD will be responsible for determining fees 
associated with OTC equity operations. With one exception noted below, 
the fee provisions within NASD Rule 7010 for services related to OTC 
equity operations do not explicitly provide the authority to set such 
fees to Nasdaq, so no rule changes are necessary. The one exception is 
NASD Rule 7010(p)(3), which governs the charges for historical research 
reports for OTCBB-eligible securities. As a result, the NASD is 
proposing to amend NASD Rule 7010(p)(3) to provide that the NASD has 
authority to set fees in this area. The NASD is not proposing any 
changes to the current fee structure associated with OTC equity 
operations at this time.
    Clearly Erroneous Authority. The NASD is proposing to amend NASD 
Rule 11890 to transfer the authority to the NASD to nullify or modify 
transactions in OTC equity securities as may be necessary for the 
maintenance of a fair and orderly market or the protection of investors 
and the public interest. Specifically, the proposed rule change, as 
amended, will permit an Executive Vice President of NASD's Market 
Regulation Department or an Executive Vice President of NASD's 
Transparency Services Department to review, on his or her own motion, 
any transaction in an OTC equity security, as defined in NASD Rule 
6610, arising out of or reported through any quotation, communication, 
or trade reporting system owned or operated by the NASD or its 
subsidiaries and approved by the Commission in the event of a 
disruption or malfunction in the use or operation of any such system or 
extraordinary market conditions. The proposed rule change, as amended, 
also provides for a process by which a determination under this 
provision may be appealed to the Uniform Practice Code (UPC) Committee, 
unless the officer making the determination also determines that the 
number of the affected transactions is such that immediate finality is 
necessary to maintain a fair and orderly market and to protect 
investors and the public interest.
    The NASD intends for the proposed rule change, as amended, to 
become effective on September 1, 2005, assuming Commission approval 
prior to that date.

2. Statutory Basis

    The NASD believes that the proposed rule change, as amended, is 
consistent with the provisions of Section 15A(b)(6) of the Act,\6\ 
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. The NASD believes that the proposed 
rule change, as amended, will clarify the NASD Delegation Plan and 
rules to reflect the NASD's direct responsibility for OTC equity 
operations.
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    \6\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The NASD does not believe that the proposed rule change, as 
amended, 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, as amended, or
    B. Institute proceedings to determine whether the proposed rule 
change, as amended, should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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

[[Page 43922]]

     Send an e-mail to [email protected]. Please include 
File Number SR-NASD-2005-089 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NASD-2005-089. 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 the 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-2005-089 and should be submitted on or before 
August 19, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4062 Filed 7-28-05; 8:45 am]
BILLING CODE 8010-01-P