

[Federal Register: February 15, 2006 (Volume 71, Number 31)]
[Notices]               
[Page 8007-8008]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15fe06-136]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53250; File No. S7-24-89]

 
Joint Industry Plan; Order Granting Approval of Category 1 
Changes From Amendment No. 13 of the Reporting Plan for Nasdaq-Listed 
Securities Traded on Exchanges on an Unlisted Trading Privilege Basis, 
Submitted by the Pacific Exchange, Inc., the National Association of 
Securities Dealers, Inc., the American Stock Exchange LLC, the Boston 
Stock Exchange, Inc., the Chicago Stock Exchange, Inc., the National 
Stock Exchange, Inc., and the Philadelphia Stock Exchange, Inc.

February 7, 2006.

I. Introduction and Description

    On May 31, 2002, the National Stock Exchange, Inc. (``NSX''),\1\ on 
behalf of itself and the National Association of Securities Dealers, 
Inc. (``NASD''), the American Stock Exchange LLC (``Amex''), the Boston 
Stock Exchange, Inc. (``BSE''), the Chicago Stock Exchange, Inc. 
(``CHX''), the Pacific Exchange, Inc. (``PCX''), and the Philadelphia 
Stock Exchange, Inc. (``Phlx'') (hereinafter referred to collectively 
as ``Participants''),\2\ as members of the Operating Committee of the 
Plan submitted to the Securities and Exchange Commission 
(``Commission'') a proposal to amend the Plan, pursuant to Rule 608 \3\ 
under the Securities Exchange Act of 1934 (``Act'' or ``Exchange 
Act''). The proposal represents the 13th amendment (``13th Amendment'') 
made to the Plan. Notice of the proposed 13th Amendment was published 
in the Federal Register on July 5, 2002.\4\
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    \1\ At the time Amendment No. 13 was submitted, the NSX was 
known as the Cincinnati Stock Exchange, Inc (``CSE''). The 
Commission notes that the CSE changed its name to the National Stock 
Exchange, Inc. See Securities Exchange Act Release No. 48774 
(November 12, 2003), 68 FR 65332 (November 19, 2003) (File No. SR-
CSE-2003-12).
    \2\ At the time of submission, NSX was the chair of the 
operating committee (``Operating Committee'' or ``Committee'') for 
the Joint Self-Regulatory Organization Plan Governing the 
Collection, Consolidation and Dissemination of Quotation and 
Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privilege Basis (``Nasdaq UTP 
Plan'' or ``Plan'') by the Participants. PCX is the current chair of 
the Operating Committee.
    \3\ 17 CFR 202.608.
    \4\ See Securities Exchange Act Release No. 46139 (June 28, 2001 
[sic]), 67 FR 44888 (``13th Amendment Notice'').
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    The Nasdaq UTP Plan governs the collection, processing, and 
dissemination on a consolidated basis of quotation and last sale 
information for each of its Participants. This consolidated information 
informs investors of the current quotation and recent trade prices of 
The Nasdaq Stock Market, Inc. (``Nasdaq'') securities. It enables 
investors to ascertain from one data source the current prices in all 
the markets trading Nasdaq securities. The Plan serves as the required 
transaction reporting plan for its Participants, which is a 
prerequisite for their trading Nasdaq securities.
    As discussed in the 13th Amendment Notice, proposed amendments to 
the Plan have been segregated into four categories: (1) Category 1, 
``Effective Upon Nasdaq's Exchange Registration;'' (2) Category 2, 
``Effective Upon Launch of the Internal SIP;'' (3) Category 3, 
``Effective Upon End of Parallel Period--Elimination of the Legacy 
SIP;'' and (4) Category 4, ``Timing Not An Issue.'' The amendments 
detailed in Category 2 were granted summary effectiveness through the 
13th Amendment Notice so as to allow the target launch date for the new 
Internal Securities Information Processor (``SIP'') data feeds to be 
met.\5\ In addition, the Commission granted partial temporary approval 
to the 13th Amendment with respect to extension of the expiration date 
of the Plan itself. The partial temporary approval extended the 
expiration date of the Plan through August 19, 2003.\6\ The Commission 
then granted approval to the amendments detailed in Categories 2, 3, 
and 4 on a pilot basis.\7\ However, the order approving parts 2, 3, and 
4 of Amendment 13 noted specifically that it did not approve those 
amendments detailed in Category 1 because the Commission intended to 
address those amendments detailed in Category 1 through separate action 
when the Commission acted on the Nasdaq exchange registration 
application.\8\
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    \5\ The summary effectiveness expired on October 26, 2002.
    \6\ See Securities Exchange Act Release No. 46381 (August 19, 
2002), 67 FR 54687 (August 23, 2002) (``Date Extension Approval 
Order'').
    \7\ See Securities Exchange Act Release No. 46729 (October 25, 
2002), 67 FR 66685 (November 1, 2002).
    \8\ Pursuant to Rule 608(b)(2), 17 CFR 242.608(b)(2), the 
Commission must take action within 120 days of the date of 
publication of notice of filing of amendment in the Federal Register 
unless the sponsors of such amendment consent to an extension. The 
sponsors of the 13th Amendment consented to final action on the 
Category 1 amendments being contingent upon a subsequent trigger 
event. See letter from Jeffrey T. Brown, Chairman, Operating 
Committee, to Jonathan G. Katz, Secretary, Commission, dated May 30, 
2002 (``13th Amendment Filing'').

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[[Page 8008]]

    Now that the Nasdaq exchange registration application has been 
approved,\9\ the Commission is approving the amendments detailed in 
Category 1 of Amendment 13, as published in the Federal Register.\10\
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    \9\ See Securities Exchange Act Release No. 53128 (January 13, 
2006), 71 FR 3550 (January 23, 2006).
    \10\ See supra note 4, 13th Amendment Notice.
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    The Commission received one comment letter on the 13th Amendment 
from BrokerageAmerica (``BA'').\11\ However, this comment letter 
discussed changes proposed in Categories 2, 3, and 4 of Amendment 13, 
and the comment letter was discussed fully in the Partial Temporary 
Approval of Amendment No. 13.\12\
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    \11\ See letter from Sam Guidetti, Senior Vice President & Chief 
Compliance Officer, BrokerageAmerica, to Jonathan Katz, Secretary, 
Commission, dated September 17, 2002.
    \12\ See supra note 7.
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    The Commission finds that the Category 1 changes included in the 
13th Amendment are consistent with the requirements of the Act and the 
rules and regulations thereunder, and, in particular, Section 12(f) 
\13\ and Section 11A(a)(1) \14\ of the Act and Rules 601 and 608 
thereunder.\15\ Section 11A of the Act directs the Commission to 
facilitate the development of a national market system for securities, 
``having due regard for the public interest, the protection of 
investors, and the maintenance of fair and orderly markets,'' and cites 
as an objective of that system ``fair competition * * * between 
exchange markets and markets other than exchange markets.'' \16\ When 
the Commission first approved the Plan on a pilot basis, it found that 
the Plan ``should enhance market efficiency and fair competition, avoid 
investor confusion, and facilitate surveillance of concurrent exchange 
and OTC trading.'' \17\ The Commission believes that amending the Plan 
to incorporate the amendments detailed in Category 1 of Amendment 13 
furthers these goals.
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    \13\ 15 U.S.C. 78l(f). The Commission finds that extending the 
Plan is consistent with fair and orderly markets, the protection of 
investors and the public interest, and otherwise in furtherance of 
the purposes of the Act. The Commission has taken into account the 
public trading activity in securities traded pursuant to the Plan, 
the character of the trading, the impact of the trading of such 
securities on existing markets, and the desirability of removing 
impediments to, and the progress that has been made toward the 
development of a national market system.
    \14\ 15 U.S.C. 78k-1(a)(1).
    \15\ 17 CFR 242.601 and 17 CFR 242.608.
    \16\ 15 U.S.C. 78k-1(a).
    \17\ See Securities Exchange Act Release No. 28146 (June 26, 
1990), 55 FR 27917 (July 6, 1990).
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    It is therefore ordered, pursuant to Sections 12(f) and 11A of the 
Act \18\ and paragraph (b)(4) of Rule 608 thereunder,\19\ that the 
operation of the Plan, as modified by the amendments detailed in 
Category 1 of Amendment 13 be, and hereby is, approved.
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    \18\ 15 U.S.C. 78(f) and 15 U.S.C. 78k-1.
    \19\ 17 CFR 242.608(b)(4).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(27).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-2108 Filed 2-14-06; 8:45 am]

BILLING CODE 8010-01-P
