[Federal Register Volume 70, Number 151 (Monday, August 8, 2005)]
[Rules and Regulations]
[Page 45529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-15597]



[[Page 45529]]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 242

[Release No. 34-52196; File No. S7-10-04]


Regulation NMS

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; extension of compliance date.

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SUMMARY: The Commission is extending the compliance date for the rule 
under the Securities Exchange Act of 1934 included as part of 
Regulation NMS that governs sub-penny quoting.

DATES: The effective date of Regulation NMS published on June 29, 2005 
(70 FR 37496) remains August 29, 2005. Effective on August 8, 2005, the 
compliance date for the sub-penny rule is extended from August 29, 2005 
to January 31, 2006.

FOR FURTHER INFORMATION CONTACT: Michael Gaw, (202) 551-5602, Senior 
Special Counsel, Division of Market Regulation, Securities and Exchange 
Commission, 100 F Street NE., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: On June 29, 2005, the Securities and 
Exchange Commission (``Commission'') published in the Federal Register 
its release adopting Regulation NMS \1\ under the Securities Exchange 
Act of 1934. Rule 612 of Regulation NMS \2\ governs sub-penny quoting 
of NMS stocks.\3\ The Regulation NMS Adopting Release established an 
effective date and a compliance date of August 29, 2005 for Rule 
612.\4\
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    \1\ 17 CFR 242.600 to 242.612. See Securities Exchange Act 
Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) 
(``Regulation NMS Adopting Release'').
    \2\ 17 CFR 242.612.
    \3\ See 17 CFR 242.600(b)(46) and (b)(47) (defining ``NMS 
stock'').
    \4\ See 70 FR at 37576.
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    During the implementation period for Rule 612, numerous market 
participants have stated that complying with Rule 612 by August 29, 
2005 will be unduly burdensome based on interpretive and programming 
issues and have requested a delay. The original compliance date--August 
29, 2005--is less than one month away. According to market 
participants, an extension of the compliance date will provide them 
additional time to address issues related to compliance with and 
implementation of Rule 612 and to make necessary systems and other 
changes to comply with the requirements of Rule 612.
    The Commission believes that delaying the compliance date for Rule 
612 for a short period of time is appropriate. An extension of the 
compliance date will provide the Commission and its staff time to 
respond to the interpretive issues that the industry has identified. 
Additionally, an extension will provide market participants with 
adequate time to resolve implementation issues. The benefits of Rule 
612 \5\ will be delayed briefly as market participants address issues 
related to compliance with and implementation of Rule 612, ascertain 
what systems and other changes are necessary to comply with the rule, 
and develop, implement, and test those changes. Accordingly, the 
Commission believes it is appropriate to extend the compliance date for 
Rule 612 until January 31, 2006. The effective date of August 29, 2005 
remains unchanged.\6\
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    \5\ See Regulation NMS Adopting Release, 70 FR at 37588 
(discussing benefits of Rule 612).
    \6\ This extension does not alter the effective or compliance 
dates of the other provisions of Regulation NMS.
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    The Commission for good cause finds that, for the reasons cited 
above, notice and solicitation of comment regarding the extension of 
the compliance date for Rule 612 is impracticable, unnecessary, and 
contrary to the public interest.\7\ The Commission notes that the 
August 29, 2005 compliance date is less than one month away, and that a 
limited extension of the compliance date will provide market 
participants with additional time to seek guidance on interpretive 
questions, apply the requirements of Rule 612, and implement 
appropriate changes. Further, the Commission notes that, in light of 
these time constraints, full notice and comment rulemaking could not be 
completed prior to the August 29, 2005 compliance date. The change to 
the compliance date for Rule 612 is effective upon publication in the 
Federal Register. This date is less than 30 days after publication in 
the Federal Register, in accordance with the Administrative Procedure 
Act, which allows effectiveness in less than 30 days after publication 
for ``a substantive rule which grants or recognizes an exemption or 
relieves a restriction.'' \8\
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    \7\ See Section 553(b)(3)(B) of the Administrative Procedure Act 
(5 U.S.C. 553(b)(3)(B)) (an agency may dispense with prior notice 
and comment when it finds, for good cause, that notice and comment 
are ``impracticable, unnecessary, or contrary to the public 
interest'').
    \8\ 5 U.S.C. 553(d)(1).

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    Dated: August 2, 2005.

    By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 05-15597 Filed 8-5-05; 8:45 am]
BILLING CODE 8010-01-P