
[Federal Register: September 21, 2009 (Volume 74, Number 181)]
[Notices]               
[Page 48111-48112]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21se09-85]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60661; File No. SR-NASDAQ-2009-083]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Amend IM-2110-4 To Reflect 
Changes to a Corresponding FINRA Rule

September 11, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 1, 2009, The NASDAQ Stock Market LLC (the ``Exchange'' or 
``NASDAQ'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\ 
which renders the proposal effective upon filing with the Commission. 
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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing this proposed rule change to amend NASDAQ 
Rule IM-2110-4 to reflect recent changes to a corresponding rule of the 
Financial Industry Regulatory Authority (``FINRA''). NASDAQ will 
implement the proposed rule change thirty days after the date of the 
filing. The text of the proposed rule change is available at http://
nasdaqomxbx.cchwallstreet.com, at the Exchange's principal office, and 
at the Commission's Public Reference Room.

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 
most cases, FINRA has renumbered these rules, and in some cases has 
substantively amended them. Accordingly, NASDAQ also proposes to 
initiate a process of modifying its rulebook to ensure that NASDAQ 
rules corresponding to FINRA/NASD rules continue to mirror them as 
closely as practicable. In some cases, it will not be possible for the 
rule numbers of NASDAQ rules to mirror corresponding FINRA rules, 
because existing or planned NASDAQ rules make use of those numbers. 
However, wherever possible, NASDAQ plans to update its rules to reflect 
changes to corresponding FINRA rules.
    This filing addresses NASDAQ IM-2110-04, which bars trading ahead 
of research reports and which formerly corresponded to NASD IM-2110-04. 
In SR-FINRA-2008-054,\4\ FINRA redesignated that rule as FINRA Rule 
5280 and made substantive amendments to strengthen and simplify the 
rule. Notably, the amended FINRA rule requires FINRA members to 
establish, maintain and enforce policies and procedures reasonably 
designed to restrict or limit the flow of information between research 
department personnel or other persons with knowledge of the content or 
timing of a research report, and trading department personnel. Such 
policies and procedures had formerly been recommended but not required. 
NASDAQ is adopting the new FINRA rule in full (with minor modifications 
to reflect limits on its jurisdiction to regulate non-NASDAQ conduct), 
but is continuing to designate its rule as IM-2110-04 in order to 
maintain unused numbers of the 5000 Series of the NASDAQ Rules for 
possible future use.
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    \4\ Securities Exchange Act Release No. 59254 (January 15, 
2009), 74 FR 4271 (January 23, 2009) (SR-FINRA-2008-054).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with

[[Page 48112]]

the provisions of Section 6 of the Act,\5\ in general, and with 
Sections 6(b)(5) of the Act,\6\ 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 IM-2110-04 to recent changes made to a 
corresponding FINRA rule, to promote application of consistent 
regulatory standards.
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    \5\ 15 U.S.C. 78f.
    \6\ 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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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 rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2009-083 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2009-083. 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 inspection 
and copying 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 such 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 publicly available. All 
submissions should refer to File Number SR-NASDAQ-2009-083 and should 
be submitted on or before October 13, 2009.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-22681 Filed 9-18-09; 8:45 am]

BILLING CODE 8010-01-P
