[Federal Register Volume 60, Number 200 (Tuesday, October 17, 1995)]
[Notices]
[Pages 53820-53821]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25664]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36359; International Series Release No. 865; File No.
SR-NASD-95-46]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the National
Association of Securities Dealers, Inc., Relating to an Extension of
the Nasdaq International Service Pilot Program
October 11, 1995.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on October
4, 1995, the National Association of Securities Dealers, Inc. (``NASD''
or ``Association'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the NASD. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons. For the reasons discussed
below, the Commission is granting accelerated approval of the proposed
rule change.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule
The NASD proposes to extend for two years: (i) The pilot term of
the Nasdaq International Service (``Service''); and (ii) the
effectiveness of certain rules (``International Rules'') that are
unique to the Service. This rule change does not entail any
modification of the International Rules. The present authorization for
the Service and the International Rules expires on October 11, 1995;
therefore, with this filing, the pilot period for the Service and the
International Rules would be extended until October 11, 1997.
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 NASD 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 NASD 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
The NASD proposes to extend for two years, until October 11, 1997,
the pilot operation of the Service and the effectiveness of the
International Rules governing broker-dealers' access to and use of the
Service. The existing pilot operation of the Service and the
International Rules was authorized by the SEC in October 19911 and
the Service was launched on January 20, 1992. In October 1993, the SEC
approved a two-year extension of the pilot program for the Service
through October 11, 1995.\2\
\1\See Securities Exchange Act Release No. 29812 (October 11,
1991), 56 FR 52082 (SR-NASD-90-33).
\2\See Securities Exchange Act Release No. 33037 (October 8,
1993), 58 FR 53752 (SR-NASD-93-50).
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The Service supports an early trading session running from 3:30
a.m. to 9:00 a.m. Eastern Time on each U.S. business day (``European
Session'') that overlaps the business hours of the London financial
markets. Participation in the Service is voluntary and is open to any
authorized NASD member firm or its approved broker-dealer affiliate in
the U.K. A member participates as a Service market maker either by
staffing its trading facilities in the U.S. or the facilities of its
approved affiliate during the European Session. The Service also has a
variable opening feature that permits Service market makers to elect to
participate starting from 3:30 a.m., 5:30 a.m. or 7:30 a.m., Eastern
Time. The election is required to be made on a security-by-security
basis at the time a firm registers with the NASD as a Service market
maker.\3\ At present, there
[[Page 53821]]
are no Service market makers participating in the Service.
\3\Regardless of the opening time chosen by the Service market
maker, the Service market maker is required to fulfill all the
obligations of a Service market maker from that time (i.e., either
3:30 a.m., 5:30 a.m. or 7:30 a.m.) until the European Session closes
at 9:00 a.m., Eastern Time. See Securities Exchange Act Release No.
32471 (June 16, 1993), 58 FR 33965 (SR-NASD-92-54).
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As noted above, the NASD is seeking to extend the pilot term for
two more years. During this period, the NASD plans to reevaluate the
Service's operation and consider possible enhancements to the Service
to broaden market maker participation. The NASD views the Service as a
significant experiment in expanding potential opportunities for
international trading via systems operated by The Nasdaq Stock Market,
Inc. Accordingly, the NASD believes that this pilot operation warrants
an extension to permit possible enhancements that will increase the
Service's utility and attractivensess to the investment community.\4\
\4\Assuming that the pilot term is extended, the NASD will
continue to supply the Commission with the statistical reports
prescribed in the initial approval order for the Service order at
six month intervals.
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The NASD believes that the proposed rule change is consistent with
Sections 11A(a)(1) (B) and (C) and 15A(b)(6) of the Act. Subsections
(B) and (C) of Section 11A(a)(1) set forth the Congressional goals of
achieving more efficient and effective market operations, broader
availability of information with respect to quotations for securities,
and the execution of investor orders in the best market through the use
of advanced data processing and communications techniques. Section
15A(b)(6) requires, among other things, that the NASD rules be designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, and to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities. The NASD believes that the proposed extension of the
Service and the International Rules is fully consistent with these
statutory provisions.
(B) Self-Regulatory Organization's Statement on Burden on Competition
The NASD believes that the proposed rule change will not result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received from Members, Participants, or Others
Comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and timing for
Commission Action
The Commission finds good cause for approving the proposed rule
change prior to the 30th day after the date of publication of notice of
filing thereof. The Commission believes that it is appropriate to
approve on an accelerated basis the two year extension of the Nasdaq
International Service, until October 11, 1997, to ensure the continuous
operation of the Service, which is set to expire on October 11, 1995.
The Commission believes that the proposed rule change is consistent
with Sections 11A(a)(1)(B) and (C) and 15A(b)(6) of the Act. The
Commission believes that, in connection with the globalization of
securities markets, the service provides an opportunity to advance the
statutory goals of: (1) Achieving more efficient and effective market
operations; (2) broader availability of information with respect to
quotations for securities; (3) the execution of investor orders in the
best market through the use of advanced data processing and
communications techniques; and (4) fostering cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities. The Commission continues to view the Service as a
significant experiment in expanding potential opportunities for
international trading via systems operated by The Nasdaq Stock Market,
Inc. The Service is intended to promote additional commitments of
merger firms' capital to market making and to attract commitments from
firms based in Europe that currently do not function as Nasdaq market
makers. Although there are no Service market makers participating in
the Service, the NASD plans to reevaluate the Service's operation and
consider possible enhancements to the Service to broaden market maker
participation. Accordingly, the Commission believes that this pilot
operation warrants an extension to permit possible enhancements that
will increase the Service's utility and attractiveness to the
investment community. Any changes to the operation of the Service will
be filed pursuant to Section 19(b)(2) of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.
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. Copies of such filing will also be
available for inspection and copying at the principal office of the
NASD. All submissions should refer to the File No. SR-NASD-95-46 and
should be submitted by November 7, 1995.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change SR-NASD-95-46 be, and hereby is, approved
through October 11, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
\5\17 CFR 200.30-3(a)(12) (1989)
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-25664 Filed 10-16-95; 8:45 am]
BILLING CODE 8010-01-M
