[Federal Register Volume 70, Number 146 (Monday, August 1, 2005)]
[Notices]
[Pages 44135-44136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4088]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52121; File No. SR-NASD-2005-088]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to Non-NASD Member Access to Nasdaq's Brut 
Facility

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 15, 2005, the National Association of Securities Dealers, Inc. 
(``NASD''), through its subsidiary, The Nasdaq Stock Market, Inc. 
(``Nasdaq'') filed with the Securities and Exchange Commission (``SEC'' 
or the ``Commission'') the proposed rule change as described in Items I 
and II below, which items have been prepared by Nasdaq. Nasdaq has 
designated the proposed rule change as a ``non-controversial'' rule 
change under Rule 19b-4(f)(6) under the Act,\3\ which renders the 
proposal effective upon filing with the Commission. 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\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to extend, through December 31, 2005, the ability 
of non-NASD member firms to use Nasdaq's Brut Facility. The text of the 
proposed rule change is below. Proposed new language is in italics; 
proposed deletions are in [brackets].
* * * * *

4901. Definitions

    Unless stated otherwise, the terms described below shall have the 
following meaning:
    (a) through (h) No Change.
    (i) The term ``Participant'' shall mean an NASD member that 
fulfills the obligations contained in Rule 4902 regarding participation 
in the System. Until [July] December 31, 2005, the term ``Participant'' 
shall also include non-NASD members that desire to use the System and 
otherwise meet all other requirements for System participation.
    (j) through (w) No Change.
* * * * *

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

    In its filing with the Commission, Nasdaq 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. Nasdaq 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
    Currently, Brut provides direct access to its system to non-NASD 
member entities. As part of the original approval of Brut's Rules, 
Nasdaq and Commission Staff agreed to allow Brut to continue to provide 
such non-NASD member access until July 31, 2005. This filing seeks to 
extend Brut's ability to provide non-NASD member access through 
December 31, 2005, while Nasdaq and Commission staff continue to review 
issues related to non-member participation in facilities owned by self-
regulatory organizations.
    During the period of the above extension, Nasdaq will continue, 
pursuant to NASD Rule 4914, to maintain procedures and internal 
controls to restrict the flow of confidential information between the 
Brut System and the separate introducing broker functions that Brut 
performs for non-NASD member firms.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 15A of the Act,\4\ in general and with 
Section 15A(b)(6) of the Act,\5\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to remove impediments to a free 
and open market and a national market system, and, in general, to 
protect investors and the public interest.
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    \4\ 15 U.S.C. 78o-3.
    \5\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Nasdaq does not believe that the proposed rule change would impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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

    The foregoing rule change has become effective as a non-
controversial proposal pursuant to Section 19(b)(3)(A) of the Exchange 
Act \6\ and Rule 19b-4(f)(6) \7\ thereunder because the rule change 
does not: (i) Significantly affect the protection of investors or the 
public interest; (ii) impose any significant burden on competition; or 
(iii) become operative for 30 days from the day on which it was filed, 
or such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).

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[[Page 44136]]

    Nasdaq has requested that the Commission waive the five-day notice 
requirement and 30-day operative delay period so that the proposed rule 
change will be immediately operative. The Commission notes that the 
proposed rule change will not introduce any new changes to the current 
level of access to Nasdaq's Brut Facility, but will merely extend the 
access that is currently available to non-NASD members through Brut for 
an additional five months. The Commission also notes that the current 
rule granting non-NASD members access to Nasdaq's Brut Facility expires 
on July 31, 2005. Therefore, the Commission has determined to waive the 
five-day notice requirement and 30-day operative delay because such 
waiver will enable Nasdaq to implement the rule immediately and avoid 
any lapse in Brut access for non-NASD members.\8\
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    \8\ For purposes only of waiving the 30-day operative delay 
only, the Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. See 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.

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-2005-088 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-2005-088. 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-2005-088 and should be submitted on or before 
August 22, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4088 Filed 7-29-05; 8:45 am]
BILLING CODE 8010-01-P