[Federal Register Volume 70, Number 181 (Tuesday, September 20, 2005)]
[Notices]
[Pages 55179-55180]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-18667]


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SECURITIES AND EXCHANGE COMMISSION

[File No. SR-NASD-2005-093]


Securities Exchange Act of 1934; Release No. 52426/September 14, 
2005; In the Matter of: The National Association of Securities Dealers, 
Incorporated; Order of Summary Abrogation

    Notice is hereby given that the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(3)(C) of the Securities 
Exchange Act of 1934 (``Exchange Act''),\1\ is summarily abrogating a 
proposed rule change of The National Association of Securities Dealers, 
Incorporated (``NASD'').
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    \1\ 15 U.S.C. 78s(b)(3)(C).
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    On July 20, 2005, the NASD filed SR-NASD-2005-093.\2\ The NASD 
submitted the rule change for immediate effectiveness pursuant to 
Section 19(b)(3)(A) of the Exchange Act.\3\ The proposed rule change 
amended NASD Rule 3370 to clarify that members must make an affirmative 
determination and document compliance when effecting long sale orders. 
In the proposal, the NASD stated that it proposed to amend Rule 3370, 
``to re-adopt expressly the affirmative determination requirements as 
they now relate to member obligations with respect to long sales under 
Regulation SHO''.\4\ The NASD designated the rule change proposal as 
``non-controversial'' under paragraph (f)(6) of Rule 19b-4 under the 
Exchange Act,\5\ which renders the proposal effective upon filing with 
the Commission.
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    \2\ See Securities Exchange Act Release No. 52131 (Jul. 27, 
2005), 70 FR 44707 (Aug. 3, 2005).
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ See Securities Exchange Act Release No. 52131, 70 FR at 
44708.
    \5\ A proposed rule filing may take effect upon filing with the 
Commission pursuant to Section 19(b)(3)(A) if it is properly 
designated by the self-regulatory organization as effecting a change 
that: ``(i) Does not significantly affect the protection of 
investors or the public interest; (ii) Does not impose any 
significant burden on competition; and (iii) By its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate * * *.'' 17 CFR 
240.19b-4(f)(6).
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    Pursuant to Section 19(b)(3)(C) of the Exchange Act,\6\ at any time 
within 60 days of the date of filing a proposed rule change pursuant to 
Section 19(b)(1) of

[[Page 55180]]

the Exchange Act,\7\ the Commission may summarily abrogate the change 
in the rules of the self-regulatory organization and require that the 
proposed rule change be re-filed in accordance with the provisions of 
Section 19(b)(1) of the Exchange Act \8\ and reviewed in accordance 
with Section 19(b)(2) of the Exchange Act,\9\ 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 Exchange Act.
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    \6\ 15 U.S.C. 78s(b)(3)(C).
    \7\ 15 U.S.C. 78s(b)(1).
    \8\ Id.
    \9\ 15 U.S.C. 78s(b)(2).
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    The Commission has received three comment letters in response to 
the proposed rule change.\10\ The substance of the comment letters 
calls into question the ``non-controversial'' designation of the 
proposal.
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    \10\ See letter from Ira D. Hammerman, Senior Vice President and 
General Counsel, Securities Industry Association, to Jonathan G. 
Katz, Secretary, Commission, dated Aug. 24, 2005; letter from Julian 
Rainero, Bingham McCutchen LLP, to Jonathan G. Katz, Secretary, 
Commission, dated Aug. 24, 2005; letter from Shane E. Swanson, 
General Counsel, Automated Trading Desk, LLC, to Jonathan Katz, 
Secretary, Commission, dated Aug. 24, 2005.
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    Accordingly, the Commission believes that the procedures provided 
by Section 19(b)(2) of the Exchange Act \11\ will provide a more 
appropriate mechanism for determining whether the proposed rule change 
is consistent with the Exchange Act. Therefore, the Commission finds 
that it is appropriate in the public interest, for the protection of 
investors, and otherwise in furtherance of the purposes of the Exchange 
Act, to abrogate the proposed rule change.
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    \11\ Id.
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    It is therefore ordered, pursuant to Section 19(b)(3)(C) of the 
Exchange Act,\12\ that File No. SR-NASD-2005-093 be, and it hereby is, 
summarily abrogated. If the NASD chooses to re-file the proposed rule 
change, it must do so pursuant to Sections 19(b)(1) \13\ and 19(b)(2) 
of the Exchange Act.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(C).
    \13\ 15 U.S.C. 78s(b)(1).
    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(58).
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Jonathan G. Katz,
Secretary.
[FR Doc. 05-18667 Filed 9-19-05; 8:45 am]
BILLING CODE 8010-01-P