[Federal Register: September 20, 2005 (Volume 70, Number 181)]
[Notices]
[Page 55179-55180]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20se05-110]
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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