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Federal Register / Vol. 72, No.

134 / Friday, July 13, 2007 / Notices 38641

exchanges, except Nasdaq,27 may list The Commission believes that its SECURITIES AND EXCHANGE
securities using three-character ticker approval of the proposed rule change is COMMISSION
symbols.28 Unlike one-character independent of its consideration of
symbols, three-character symbols are these plans. The Commission under [Release No. 34–56029; File No. SR–NASD–
not associated by investors with any one Rule 608(b)(2) may declare effective any 2007–038]
market. The Commission also notes that national market system plan or plans for
the transfer of securities listings with the selection and reservation of ticker Self-Regulatory Organizations;
three-character ticker symbols typically National Association of Securities
symbols that is consistent with the
occur among other exchanges without Dealers, Inc; Notice of Filing and
requirements of the Act. Participants in
any discernable confusion or disruption Immediate Effectiveness of Proposed
any such plan would be required to Rule Change to Amend the Customer
to the marketplace.29
Another commenter asserted that comply with its requirements, which and the Industry Codes of Arbitration
three-character symbols are exclusive could necessitate changes to SRO Procedure To Clarify NASD’s
indicators of securities trading on rules.35 Jurisdiction Concerning Members of
NYSE’s and Amex’s specialist-based D. Symbol Shortage Other Self-Regulatory Organizations
markets, and that it would cause
confusion if such symbols were used on Two commenters argued that the July 9, 2007.
Nasdaq’s dealer market.30 However, as proposal could create a shortage of Pursuant to Section 19(b)(1) of the
the Commission noted above, exchanges available three-character ticker Securities Exchange Act of 1934
other than NYSE and Amex may list symbols.36 Nasdaq’s proposal, however, (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
securities with three-character would only permit it to list securities notice is hereby given that on June 13,
symbols.31 2007 the National Association of
with three-character ticker symbols
Securities Dealers, Inc. (‘‘NASD’’),
C. National Market System Plan Process when such issuer transfers its listing
through its wholly owned subsidiary,
from another exchange; the proposal NASD Dispute Resolution, Inc. (‘‘NASD
Some of the commenters have
expressed concern that the proposed would not permit Nasdaq to list new Dispute Resolution’’) filed with the
rule change would disrupt or securities with three-character ticker Securities and Exchange Commission
circumvent ongoing efforts by the SROs symbols. The Commission, therefore, (‘‘Commission’’), the proposed rule
to develop a national market system does not believe Nasdaq’s proposal change as described in Items I, II, and
plan.32 The Commission recently would have a negative impact on the III below, which Items have been
received two proposed national market availability of three-character ticker substantially prepared by NASD Dispute
system plans for the selection and symbols. Resolution. NASD has designated the
reservation of ticker symbols submitted proposed rule change as constituting a
V. Conclusion
by two separate groups of SROs.33 The stated policy, practice, or interpretation
Commission is currently considering It is therefore ordered, pursuant to with respect to the meaning,
these plans and intends to publish the Section 19(b)(2) of the Act,37 that the administration, or enforcement of an
proposed plans for public comment.34 proposed rule change (SR–NASDAQ– existing rule of the self-regulatory
2007–031) be, and hereby is, approved. organization under Section
27 With the exception of the transfer of the DFC
19(b)(3)(A)(i) of the Act 3 and Rule 19b–
listing, Nasdaq currently only lists securities of By the Commission. 4(f)(1) thereunder,4 which renders the
companies using four- or five-character symbols.
See supra note 7 and accompanying text.
Florence E. Harmon, proposal effective upon receipt of this
28 For example, as noted in the Angel Letter, the Deputy Secretary. filing by the Commission. The
NAIC Growth Fund lists on the Chicago Stock [FR Doc. E7–13578 Filed 7–12–07; 8:45 am] Commission is publishing this notice to
Exchange, Inc. with the ticker symbol ‘‘GRF’’.
29 Nasdaq has also represented that its recent BILLING CODE 8010–01–P solicit comments on the proposed rule
listing of DFC occurred without any trading change from interested persons.
problems. The Amex Letter tacitly agreed with this
view, but argued that the lack of trading problems
I. Self-Regulatory Organization’s
associated with DFC is not the best proxy for other Statement of the Terms of Substance of
companies that may transfer their listings to Nasdaq the Proposed Rule Change
because it believed that DFC is a microcap
company. The Nasdaq Response Letter, however, NASD Dispute Resolution is
disputed this argument and the Amex Letter’s proposing to amend NASD Rules 12100
labeling of DFC as a ‘‘microcap company,’’ citing and 13100 of the NASD Codes of
the fact that DFC has a market capitalization of over
$230 million, a figure that it contends is nearly Arbitration Procedure for Customer
triple the $67 million market capitalization of the Disputes (‘‘Customer Code’’) and for
median Amex issuer. Industry Disputes (‘‘Industry Code’’)
30 See Amex Letter.
(together, the ‘‘Codes’’) to clarify that,
31 For example, NYSE Arca lists three-character

symbols. See also supra note 27.


for purposes of the Codes, the term
32 See Ward Letter, NYSE Letter, Amex Letter, ‘‘member’’ includes any broker or dealer
and RPM Letter. admitted to membership in a self-
33 See Proposed NMS Plan for the Selection and regulatory organization that, with NASD
Reservation of Securities Symbols by the Chicago ‘Ticker’ Symbols (April 5, 2007) (available at
consent, has required its members to
Stock Exchange, Inc., Nasdaq, National Association http://www.sec.gov/news/press/2007/2007–63.htm).
of Securities Dealers, Inc., National Stock Exchange, 35 See 15 U.S.C. 78k–1(a)(3) and 17 CFR
arbitrate pursuant to the Codes and/or to
Inc. and Philadelphia Stock Exchange, Inc. 242.608(b) and (c). The NYSE Letter referenced a be treated as members of NASD for
purposes of the Codes. Below is the text
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(available at http://www.sec.gov/rules/sro/4– ‘‘Symbol Reservation Plan,’’ which it stated has


533revised.pdf) and Proposed NMS Plan for the operated to allocate and reserve symbols for over 30
Selection and Reservation of Securities Symbols by
years. The Commission notes, however, that no 1 15 U.S.C. 78s(b)(1).
Amex, NYSE and NYSE Arca (available at http://
www.sec.gov/rules/sro/4–534.pdf). such plan has been approved by the Commission. 2 17 CFR 240.19b–4.
34 See Press Release, Commission, SEC 36 See NYSE Letter and Amex Letter. 3 15 U.S.C. 78s(b)(3)(A)(i).

Announces Process for Proposals on Securities 37 15 U.S.C. 78s(b)(2). 4 17 CFR 240.19b–4(f)(1).

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38642 Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices

of the proposed rule change. Proposed summaries, set forth in Sections (A), (B), and a national market system, to
new language is in italics. and (C) below, of the most significant promote just and equitable principles of
* * * * * aspects of such statements. trade, and, in general, to protect
(A) Self-Regulatory Organization’s investors and the public interest. NASD
Customer Code
Statement of the Purpose of, and believes that the proposed rule change
12100. Definitions Statutory Basis for, the Proposed Rule is consistent with the provisions of the
Unless otherwise defined in the Code, Change Act noted above because it will make
terms used in the Code and interpretive explicit NASD’s jurisdiction with
1. Purpose respect to members of other self-
material, if defined in the NASD By-
Laws, shall have the meaning as defined NASD is amending Rule 12100(o) of regulatory organizations that, with
in the NASD By-Laws. its Customer Code and Rule 13100(o) of NASD consent, have required their
Paragraphs (a) through (n) unchanged. its Industry Code to clarify that, for members to arbitrate pursuant to the
(o) Member purposes of the Codes, the term Codes and/or to be treated as members
For purposes of the Code, the term ‘‘member’’ includes any broker or dealer of NASD for purposes of the Codes. The
‘‘member’’ means any broker or dealer admitted to membership in a self- proposed rule change also will clarify
admitted to membership in NASD, regulatory organization that, with NASD that one set of arbitration rules and
whether or not the membership has consent, has required its members to
administration procedures will apply to
been terminated or cancelled; and any arbitrate pursuant to the Codes and/or to
these other self-regulatory organizations.
broker or dealer admitted to be treated as members of NASD for
membership in a self-regulatory purposes of the Codes. Such members (B) Self-Regulatory Organization’s
organization that, with NASD consent, would, like NASD members, be treated Statement on Burden on Competition
has required its members to arbitrate as members whether or not their
pursuant to the Code and/or to be membership has been terminated or NASD does not believe that the
treated as members of NASD for cancelled. proposed rule change will result in any
purposes of the Code, whether or not the The proposed rule change will codify burden on competition that is not
membership has been terminated or current practice under which NASD has necessary or appropriate in furtherance
cancelled. assumed, by agreement, the arbitration of the purposes of the Act.
Remainder unchanged. and mediation functions of several self-
regulatory organizations that closed (C) Self-Regulatory Organization’s
* * * * *
their dispute resolution forums.5 Statement on Comments on the
Industry Code Proposed Rule Change Received from
2. Statutory Basis Members, Participants, or Others
13100. Definitions
NASD believes that the proposed rule
Unless otherwise defined in the Code, change is consistent with the provisions Written comments were neither
terms used in the Code and interpretive of Section 15A(b)(6) of the Act,6 which solicited nor received by NASD.
material, if defined in the NASD By- requires, among other things, that
Laws, shall have the meaning as defined III. Date of Effectiveness of the
NASD’s rules must be designed to
in the NASD By-Laws. prevent fraudulent and manipulative Proposed Rule Change and Timing for
Paragraphs (a) through (n) unchanged. acts and practices, to remove Commission Action
(o) Member impediments to and perfect the
For purposes of the Code, the term The foregoing rule change has become
mechanism of a free and open market effective pursuant to Section
‘‘member’’ means any broker or dealer
admitted to membership in NASD, 5 The Codes apply not only to NASD members
19(b)(3)(A)(i) of the Act and
whether or not the membership has and their associated persons, but also to members subparagraph (f)(1) of Rule 19b–4
been terminated or cancelled; and any and associated persons of the Municipal Securities thereunder, because it constitutes a
broker or dealer admitted to Rulemaking Board (‘‘MSRB’’), the Philadelphia stated policy, practice or interpretation
Stock Exchange (‘‘Phlx’’), the American Stock
membership in a self-regulatory Exchange (‘‘Amex’’), International Securities with respect to the meaning,
organization that, with NASD consent, Exchange (‘‘ISE’’), and The Nasdaq Stock Market administration, or enforcement of an
has required its members to arbitrate LLC (‘‘Nasdaq’’), pursuant to agreements under existing rule.7 At any time within 60
pursuant to the Code and/or to be which members of those self-regulatory
organizations for which the NASD administers the
days of the filing of the proposed rule
treated as members of NASD for arbitration process will be treated as ‘‘members’’ of change, the Commission may summarily
purposes of the Code, whether or not the the NASD for purposes of the Codes. See Securities abrogate such rule change if it appears
membership has been terminated or Exchange Act Release No. 39378 (Dec. 1, 1997), 62
FR 64417 (Dec. 5, 1997) (SR–MSRB–97–4) (MSRB
to the Commission that such action is
cancelled. approval order); Securities Exchange Act Release necessary or appropriate in the public
Remainder unchanged. No. 40517 (Oct. 1, 1998), 63 FR 54177 (Oct. 8, 1998) interest, for the protection of investors,
* * * * * (SR–Phlx–98–28) (Phlx approval order); Securities or otherwise in furtherance of the
Exchange Act Release No. 40622 (Oct. 30, 1998), 63
II. Self-Regulatory Organization’s FR 59819 (Nov. 5, 1998) (SR–Amex–98–32) (Amex purposes of the Act.
Statement of the Purpose of, and approval order); Securities Exchange Act Release
45094 (Nov. 21, 2001), 66 FR 60230 (Dec. 3, 2001) IV. Solicitation of Comments
Statutory Basis for, the Proposed Rule (File No. SR–ISE–00–17) (ISE approval order); and
Change Securities Exchange Act Release No. 53128 (Jan. 13, Interested persons are invited to
In its filing with the Commission, 2006), 71 FR 3550 (Jan. 23, 2006) (File No. 10–131) submit written data, views, and
(Nasdaq approval order). See also Securities arguments concerning the foregoing,
NASD included statements concerning Exchange Act Release No. 55818 (May 25, 2007), 72
the purpose of and basis for the FR 30898 (June 4, 2007) (SR–NYSE–2007–048) (the including whether the proposed rule
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proposed rule change and discussed any New York Stock Exchange LLC’s proposed rule change is consistent with the Act.
comments it received on the proposed change to provide guidance regarding new and Comments may be submitted by any of
pending arbitrations in light of the consolidation of
rule change. The text of these statements NYSE Regulation’s arbitration department with that
the following methods:
may be examined at the places specified of NASD DisputeResolution.).
in Item IV below. NASD has prepared 6 15 U.S.C. 78o–3(b)(6). 7 17 CFR 240.19b–4(f)(1).

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Federal Register / Vol. 72, No. 134 / Friday, July 13, 2007 / Notices 38643

Electronic Comments SECURITIES AND EXCHANGE of the most significant aspects of such
COMMISSION statements.
• Use the Commission’s Internet
comment form (http://www.sec.gov/ [Release No. 34–56024; File No. SR–NYSE– A. Self-Regulatory Organization’s
rules/sro.shtml); or 2007–61] Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
• Send an e-mail to rule- Self-Regulatory Organizations; New Change
comments@sec.gov. Please include File York Stock Exchange LLC; Notice of
Number SR–NASD–2007–038 on the Filing and Immediate Effectiveness of 1. Purpose
subject line. a Proposed Rule Change Relating to The Exchange is proposing to amend
Rule 97, Limitation on Members’ NYSE Rule 97 in order to permit
Paper Comments Trading Because of Block Positioning member organizations that hold long
• Send paper comments in triplicate positions as a result of a block
July 6, 2007. transaction with a customer to execute
to Nancy M. Morris, Secretary, Pursuant to section 19(b)(1) of the
Securities and Exchange Commission, proprietary ISOs on a plus tick during
Securities Exchange Act of 1934 the last 20 minutes of the trading day if
100 F Street, NE., Washington, DC (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 they are required under Regulation
20549–1090. notice is hereby given that on July 6, NMS 5 to send a buy ISO in the course
All submissions should refer to File 2007, the New York Stock Exchange of facilitating another customer’s buy or
Number SR–NASD–2007–038. This file LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with sell order during that time period.
number should be included on the the Securities and Exchange NYSE Rule 97 governs block
subject line if e-mail is used. To help the Commission (‘‘Commission’’) the facilitation transactions by NYSE
Commission process and review your proposed rule change as described in member organizations on behalf of
comments more efficiently, please use Items I and II below, which Items have customers. The rule states that if, as a
only one method. The Commission will been substantially prepared by the result of facilitating one or more
post all comments on the Commission’s Exchange. The Exchange has designated customer sell order(s) in a stock during
the proposed rule change as a ‘‘non- the trading day, a member organization
Internet Web site (http://www.sec.gov/
controversial’’ rule change pursuant to ends up holding a long position in the
rules/sro.shtml). Copies of the
section 19(b)(3)(A) of the Act 3 and Rule stock in a proprietary account, then
submission, all subsequent 19b–4(f)(6) thereunder,4 which renders during the last 20 minutes of trading,
amendments, all written statements the proposed rule change effective upon the member organization is prohibited
with respect to the proposed rule filing with the Commission. The from buying such stock as principal on
change that are filed with the Commission is publishing this notice to a ‘‘plus tick’’ if the transaction would
Commission, and all written solicit comments on the proposed rule take place at a price above the lowest
communications relating to the change from interested persons. price at which it acquired the long
proposed rule change between the position. The Exchange states that the
Commission and any person, other than I. Self-Regulatory Organization’s
underlying purpose of Rule 97 was to
those that may be withheld from the Statement of the Terms of Substance of
address concerns that a member firm
public in accordance with the the Proposed Rule Change
might engage in manipulative practices
provisions of 5 U.S.C. 552, will be The Exchange proposes to amend by attempting to ‘‘mark-up’’ the price of
available for inspection and copying in NYSE Rule 97 to permit members or a stock to enable the position acquired
the Commission’s Public Reference member organizations that hold long in the course of block positioning to be
Room, 100 F Street, NE., Washington, positions as a result of block liquidated at a profit, or to maintain the
DC 20549, on official business days transactions with customers to send market at the price at which the position
between the hours of 10 a.m. and 3 p.m. proprietary buy intermarket sweep was acquired.
Copies of such filing also will be orders (‘‘ISOs’’) in the course of Under Regulation NMS, member
available for inspection and copying at facilitating another customer’s buy or organizations may not trade through a
the principal office of NASD. All sell order. The text of the proposed rule protected quotation in another market,
change is available on the NYSE’s Web but may satisfy their obligation to the
comments received will be posted
site (http://www.nyse.com), at the protected order by sending ISOs to the
without change; the Commission does
NYSE, and at the Commission’s Public protected market at the same time that
not edit personal identifying Reference Room. they send orders to the inferior-priced
information from submissions. You market. Depending on the size of the
should submit only information that II. Self-Regulatory Organization’s
block that is being facilitated and the
you wish to make available publicly. All Statement of the Purpose of, and size of the protected quotes, block
submissions should refer to File Statutory Basis for, the Proposed Rule customers may—pursuant to Rules
Number SR–NASD–2007–038 and Change 600(b)(30)(ii) and 611(b)(6) of
should be submitted on or before In its filing with the Commission, the Regulation NMS 6—decline to take and
August 3, 2007. Exchange included statements process better priced executions that
For the Commission, by the Division of concerning the purpose of, and basis for, result from the sending of the ISO
Market Regulation, pursuant to delegated the proposed rule change. The text of orders. This may occur, for example,
authority.8 these statements may be examined at where the ISO amounts are de minimis
the places specified in Item IV below. in relation to the size of the block being
Florence E. Harmon,
The Exchange has prepared summaries, facilitated. In those situations, the firm
Deputy Secretary.
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set forth in sections A, B, and C below, would be required—based on the


[FR Doc. E7–13599 Filed 7–12–07; 8:45 am] customer’s instructions—to print the
BILLING CODE 8010–01–P 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4. 5 17CFR 242.600 et seq.
3 15 U.S.C. 78s(b)(3)(A). 6 17CFR 242.600(b)(30)(ii) and 17 CFR
8 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6). 242.611(b)(6).

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