[Federal Register Volume 75, Number 170 (Thursday, September 2, 2010)]
[Notices]
[Pages 53989-53991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21929]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62771; File No. SR-NASDAQ-2010-102]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 2260 To Reflect Changes to Corresponding FINRA Rule
August 26, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on August 16, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NASDAQ Rule 2260 and IM-2260 to
reflect recent changes to a corresponding rule of the Financial
Industry Regulatory Authority (``FINRA''). The text of the proposed
rule change is available at http://nasdaq.cchwallstreet.com, at the
Exchange's principal office, at the Commission's Public Reference Room,
and on the Commission's Web site at http://www.sec.gov.
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 Exchange 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. The Exchange 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
Many of NASDAQ's rules are based on rules of FINRA (formerly the
National Association of Securities Dealers (``NASD'')). During 2008,
FINRA embarked on an extended process of moving rules formerly
designated as ``NASD Rules'' into a consolidated FINRA rulebook. In
many cases, FINRA has renumbered these rules, and in some cases has
substantively amended them. Accordingly, NASDAQ has initiated a process
of modifying its rulebook to ensure that NASDAQ rules corresponding to
FINRA/NASD rules continue to mirror them as closely as practicable.
This filing addresses NASDAQ Rule 2260 and IM-2260, which
incorporates the guidance previously contained in the corresponding
NASD Rules relating to the forwarding of proxy and other materials by
members and the rates of reimbursement for such actions. In SR-FINRA-
2009-066,\3\ FINRA combined NASD Rule 2260 and IM-2260 into FINRA Rule
2251 without material
[[Page 53990]]
amendment to the substance of the rule. FINRA also made minor
clarifying changes and other changes primarily to reflect the new
formatting and terminology conventions of the Consolidated FINRA
Rulebook.\4\ NASDAQ proposes to similarly combine NASDAQ Rule 2260 and
IM-2260 into new NASDAQ Rule 2251, which will continue to incorporate
the requirements of the corresponding FINRA rule.\5\
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\3\ Securities Exchange Act Release No. 61052 (November 23,
2009), 74 FR 62857 (December 1, 2009) (SR-FINRA-2009-066).
\4\ The Commission notes that, as part of those changes, FINRA
deleted references to NASD Rule 2430. Since FINRA Rule 2251 no
longer references NASD Rule 2430, and Nasdaq is conforming its rule
to reflect the current FINRA rule, Nasdaq is also proposing to
delete references to Nasdaq Rule 2430.
\5\ NASDAQ intends to make a separate rule filing to incorporate
changes required to this Rule by Section 957 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\6\ in general, and with
Section 6(b)(5) of the Act,\7\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The proposed
changes will conform NASDAQ rules to recent changes made to the
corresponding FINRA rules, to promote application of consistent
regulatory standards.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) \9\ thereunder in that
it effects 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 if consistent with the
protection of investors and the public interest.\10\ Nasdaq has
requested that the Commission waive the 30-day operative delay.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change
pursuant to Rule 19b-4(f)(6) under the Act, an Exchange is required
to give the Commission written notice of its intent to file the
proposed rule change, along with a brief description and text of the
proposed rule change, at least five business days prior to the date
of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Exchange has met this requirement.
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The Commission has considered the Exchange's request to waive the
30-day operative delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest. As noted above, Nasdaq rules cross-reference certain
NASD rules that no longer exist, and have been updated in the
consolidated FINRA rulebook. The proposed rule change will update
certain of the references in the Exchange's rules that are outdated.
The Commission also notes that these changes have previously been
approved by the Commission for FINRA. The Commission believes that
allowing this rule change to become immediately operative will
facilitate the purpose of this rule change--namely, to eliminate any
potential confusion arising from the existing rule's outdated cross-
references. Based on the foregoing, the Commission finds that waiving
the 30-day operative delay period is consistent with the protection of
investors and the public interest, and the proposal is therefore deemed
operative upon filing.\11\
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\11\ For the purposes only of waiving the operative date of this
proposal, 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 summarily may temporarily suspend 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-NASDAQ-2010-102 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2010-102. 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 website
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. 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-
NASDAQ-2010-102 and should be submitted on or before September 23,
2010.
[[Page 53991]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-21929 Filed 9-1-10; 8:45 am]
BILLING CODE 8010-01-P