

[Federal Register: June 1, 2006 (Volume 71, Number 105)]
[Notices]               
[Page 31249-31250]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jn06-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53861; File No. SR-NSX-2006-05]

 
Self-Regulatory Organizations; National Stock Exchange; Order 
Granting Approval to Proposed Rule Change To Prohibit Tape Shredding

May 24, 2006.

I. Introduction

    On April 4, 2006, National Stock ExchangeSM (``NSX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to prohibit tape shredding. The proposed rule 
change was published for comment in the Federal Register on April 24, 
2006.\3\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 53663 (April 17, 
2006), 71 FR 21063.
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II. Description of the Proposal

    The Exchange proposed to add an interpretation to Rule 3.1, which 
identifies the splitting of any order into multiple smaller orders 
(``tape shredding'') for any purpose other than best execution as 
contrary to the high standards of commercial honor and just and 
equitable principles of trade.

III. Discussion and Commission Findings

    The Commission has reviewed carefully the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\4\ particularly section 6(b)(5) of the Act which, among other 
things, requires that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating 
securities transactions, to remove impediments to and to perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.\5\ The 
Commission believes that the proposed rule change

[[Page 31250]]

should help eliminate the distortive practice of trade shredding, and, 
therefore, promote just and equitable principles of trade.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-NSX-2006-05), be and 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 06-4998 Filed 5-31-06; 8:45 am]

BILLING CODE 8010-01-M
