[Federal Register Volume 63, Number 142 (Friday, July 24, 1998)]
[Notices]
[Pages 39919-39923]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19807]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40227; File No. SR-NASD-98-01]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendments Nos. 1, 2, and 3 by the National Association of
Securities Dealers, Inc. Relating to the NASD's Rules Regarding
Electronic Communications Networks, Locked and Crossed Markets, and a
Member's Obligation to Provide Nasdaq With Certain Information
July 17, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on January 27, 1998, the
National Association of Securities Dealers, Inc. (``NASD''), through
its wholly owned subsidiary, The Nasdaq Stock Market, Inc.
(``Nasdaq''), filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change. The NASD filed
Amendment No. 1 to the proposal on June 8, 1998,\2\ Amendment No. 2 on
June 30, 1998,\3\ and Amendment No. 3 on July 16, 1998.\4\ The proposed
rule change, as amended, is described in Items I, II, and III below,
which Items have been prepared by Nasdaq. 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\ See letter from Robert E. Aber, Senior Vice President and
General Counsel, The Nasdaq Stock Market, Inc. to Katherine A.
England, Assistant Director, Division of Market Regulation
(``Division''), SEC, dated June 5, 1998.
\3\ See letter from Robert E. Aber, Senior Vice President and
General Counsel, The Nasdaq Stock Market, Inc. to Katherine A.
England, Assistant Director, Division, SEC, dated June 29, 1998.
\4\ See letter from Robert E. Aber, Senior Vice President and
General Counsel, The Nasdaq Stock Market, Inc. to Richard Strasser,
Assistant Director, Division, SEC, dated July 15, 1998.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
Nasdaq is submitting proposed rule changes to amend NASD Rule 4623,
which will specify the manner in which orders having a reserved size
that are entered into an electronic communications network (``ECN'')
must interact with SelectNet orders. Additionally, Nasdaq is proposing
to amend NASD Rule 4613(e) by adding a provision regarding locked and
crossed markets that occur at the open. Nasdaq also is proposing the
adoption of NASD Rule 4625, which will set out the obligation of
members participating in
[[Page 39920]]
The Nasdaq Stock market to provide specified information to Nasdaq
departments and staff when so requested. Proposed new language is
italicized; proposed deletions are in brackets.
* * * * *
Rule 4623. Electronic Communications Networks
(a) The Association may provide a means to permit electronic
communications networks (``ECN''), as such term is defined in SEC Rule
11Ac1-1(a)(8), to meet the terms of the [electronic communications
network] ECN display alternative provided for in SEC Rule 11Ac1-
1(c)(5)(ii) (A) and (B) (``ECN display alternative''). In providing any
such means, the Association shall establish a mechanism that permits
the [electronic communications network] ECN to display the best prices
and sizes of orders entered by Nasdaq market makers (and other
entities, if the [electronic communications network] ECN so chooses)
into the [electronic communications network] ECN, and allows any NASD
member the electronic ability to effect a transaction with such priced
orders that is equivalent to the ability to effect a transaction with a
Nasdaq market maker quotation in Nasdaq operated systems.
(b) An [electronic communications network] ECN that seeks to
utilize the Nasdaq-provided means to comply with the [electronic
communications network] ECN display alternative shall:
(1) demonstrate to the Association that it qualifies as an
[electronic communications network] ECN meeting the definition in the
SEC Rule;
(2) be registered as a[n] NASD member;
(3) enter into and comply with the terms of a Nasdaq WorkStation
Subscriber Agreement, as amended for ECNs;
(4) agree to provide for Nasdaq's dissemination in the quotation
data made available to quotation vendors the prices and sizes of Nasdaq
market maker orders (and other entities, if the [electronic
communications network] ECN so chooses) at the highest buy price and
the lowest sell price for each Nasdaq security entered in and widely
disseminated by the [electronic communications network] ECN, and prior
to entering such prices and sizes, register with Nasdaq Market
Operations for each such security as an ECN; and
(5) provide an automated execution or, if the price is no longer
available, an automated rejection of any order routed to the
[electronic communications network] ECN through the Nasdaq-provided
display alternative.
(c) When a NASD member attempts to electronically access through a
Nasdaq-provided system an ECN-displayed order by sending an order that
is larger than the ECN's Nasdaq-displayed size and the ECN is
displaying the order in Nasdaq on a reserved size basis, the NASD
member that operates the ECN shall execute such Nasdaq-delivered order:
(1) up to the size of the Nasdaq-delivered order, if the ECN order
(including the reserved size and displayed portions) is the same size
or larger than the Nasdaq-delivered order; or
(2) up to the size of the ECN order (including the reserved size
and displayed portions), if the Nasdaq-delivered order is the same size
or larger than the ECN order (including the reserved size and displayed
portions).
No ECN operating in Nasdaq pursuant to this rule is permitted to
provide a reserved-size function unless the size of the order displayed
in Nasdaq is 100 shares or greater. For purposes of this rule, the term
``reserved size'' shall mean that a customer entering an order into an
ECN has authorized the ECN to display publicly part of the full size of
the customer's order with the remainder held in reserve on an
undisplayed basis to be displayed in whole or in part as the displayed
part is executed.
Rule 4613 Character of Quotations
(a)-(d) No Change
(e) Locked and Crossed Markets
(1) A market maker shall not, except under extraordinary
circumstances, enter or maintain quotations in Nasdaq during normal
business hours if:
(A) the bid quotation entered is equal to or greater than the asked
quotation of another market maker entering quotations in the same
security; or
(B) the asked quotation is equal to or less than the bid quotation
of another market maker entering quotations in the same security.
The prohibitions of this rule include the entry of a locking or
crossing quotation at or after 9:25 a.m Eastern Time if such quotation
continues to lock or cross the market at the market's opening, and
requires a market maker or ECN that enters a locking or crossing
quotation at or after 9:25 a.m. Eastern Time to take action to avoid
the lock or cross at the market's open or immediately thereafter, but
in no case more than 30 seconds after 9:30 a.m.
(2) No Change
(3) For purposes of this [paragraph] rule, the term ``market
maker'' shall include: any NASD member that enters into an [electronic
communications network] ECN, as defined in SEC Rule 11Ac1-1(a)(8), a
priced order that is displayed in The Nasdaq Stock Market; and [Such
term also shall include] any NASD member that operates the [electronic
communication network] ECN when the priced order being displayed has
been entered by a person or entity that is not a[n] NASD member.
Rule 4625. Obligation to Provide Information
(1) A NASD member operating in or participating in the third
market. The Nasdaq Stock Market, or other Nasdaq-operated system, shall
provide information orally, in writing, or electronically (if such
information is, or is required to be, maintained in electronic form) to
the staff of Nasdaq when:
(a) Nasdaq MarketWatch staff makes an oral, written, or
electronically communicated request for information relating to a
specific NASD rule, SEC rule, or provision of a joint industry plan
(e.g., ITS, UTP, CTA, and CQA) (as promulgated and amended from time-
to-time) that Nasdaq MarketWatch is responsible for administering or to
other duties and/or obligations imposed on Nasdaq MarketWatch by the
Association under the Plan of Allocation and Delegation of Function by
the NASD to Subsidiaries or otherwise; this shall include, but not be
limited to, information relating to:
(i) a locked or crossed market;
(ii) a trade reported by a member or ECN to the Automated
Transaction Confirmation Service (``ACT''); or
(iii) trading activity, rumors, or information that a member may
possess that may assist in determining whether there is a basis to
initiate a trading halt, pursuant to NASD Rule 4120 and IM-4120-1; or
(iv) a quotation that appears not to be reasonably related to the
prevailing market.
(b) Nasdaq Market Operations staff makes an oral, written, or
electronically communicated request for information relating to a
specific NASD rule, SEC rule, provision of a joint industry plan (e.g.,
ITS, UTP, CTA, and CQA) (as promulgated and amended from time-to-time)
that Nasdaq Market Operations is responsible for administering or to
other duties and/or obligations imposed on Nasdaq Market Operations by
the Association under the Plan of Allocation and Delegation of Function
by the NASD to Subsidiaries or
[[Page 39921]]
otherwise; this shall include, but not be limited to, information
relating to:
(i) a clearly erroneous transaction, pursuant to NASD Rule 11890;
(ii) a request to reconsider a determination to withhold a primary
market maker designation, pursuant to NASD Rule 4612;
(iii) a request for an excused withdrawal or reinstatement,
pursuant to NASD Rules 4619, 4620, 4730, 5106 and 6350;
(iv) the resolution of a trade-through complaint, pursuant to NASD
Rules 5262, 5265, and 11890;
(v) an ACT input error;
(vi) an equipment failure; or
(vii) a request to submit a stabilizing bid, pursuant to NASD Rules
4614 and 5106, or a request to have a quotation identified as a penalty
bid on Nasdaq, pursuant to NASD Rule 4624.
(2) A failure to comply in a timely, truthful, and/or complete
manner with a request for information made pursuant to this rule may be
deemed conduct inconsistent with just and equitable principles of
trade.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In the NASD's filing with the Commission, Nasdaq included
statements concerning the purpose of, and statutory basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The test of these statements may be examined at
the places specified in Item IV below. Nasdaq 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. Background
Under SEC Rule 11Ac1-1(c)(5) (``ECN Rule''),\5\ Nasdaq market maker
must reflect in its public quotes any superior prices for those orders
that the market maker privately places within an ECN. The ECN Rule
provides an alternative to this requirement referred to as the ``ECN
Display Alternative.'' Under the ECN Display Alternative, a market
maker will be deemed to have complied with the ECN Rule if the ECN in
which the market maker has placed s superior priced order has:
established a link to Nasdaq by displaying the best ECN prices in
Nasdaq's quote montage; and provided non-subscribers access, through
Nasdaq, to such publicly displayed prices. To accommodate the
alternative, Nasdaq created the ``SelectNet Linkage'' which allows: (1)
ECNs to display their best prices from market makers and other ECN
subscribers in the Nasdaq quote montage, including the inside market
display; and (2) Nasdaq member firms to access those prices by sending
orders to an ECN through SelectNet. Subsequent to the implementation of
the ECN Rule, the following issues have come to the attention of the
Association, which have necessitated amending NASD Rules 4613(e) and
4623 and promulgating NASD Rule 4625.\6\
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\5\ The ECN Rules is embodied in SEC Rule 11Ac1-1 (``Firm Quote
Rule''). See 17 CFR 240.11Ac1-1.
\6\ Each ECN that chooses to link to Nasdaq must sign a contract
that imposes certain obligations on the ECN. Among the requirements
are: (1) immediate display of orders; (2) rapid and non-
discriminatory execution of SelectNet orders that seek to access the
ECN's quotation; and (3) provision of system description regarding
the operation of the ECN. While in the past the use of contracts has
worked successfully in establishing basic standards for ECN
operation and activity, as the number of ECNs has increased since
January 1997 it is less efficient to attempt to fashion changes to
the contract to address the issues described in this filing. Nasdaq
has determined that it is appropriate to propose changes to the
rules governing ECNs to address uniformly, across all ECNs, the
issues described in this filing.
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2. Reserved Size
Nasdaq is proposing amendments to NASD Rule 4623 to establish the
manner in which orders having a reserved size that are entered into an
ECN must interact with SelectNet orders. Since ECNs have been
integrated into the Nasdaq market, Nasdaq has observed that ECNs cause
a percentage of locked and crossed markets.\7\ Frequently, locks or
crosses are caused by an ECN's use of ``reserved'' size. Specifically,
an ECN may publicly display one size of an order (e.g. 1,000 shares),
while maintaining a significantly larger size of the order in reserve
(e.g., 10,000 shares) that is not displayed until the displayed size is
executed against, that is, every time a 1,000 share order is executed
against the ECN, the ECN displays another 1,000 shares at the same
price until the full size of the order is exhausted. The market maker,
however, does not know how many 1,000 share orders it must send to
exhaust the ECN's size and take out its quote. As a result, a market
maker often will send an ECN multiple SelectNet orders for the
displayed size in an attempt to take the quote out. If this practice
fails to take out the ECN quote, a market maker will then often send
another order for a size larger than the ECN's displayed size to try to
take out not only the displayed order but also any undisplayed reserved
size. Generally, however, ECNs execute SelectNet orders only for the
displayed size (i.e., the market maker can only execute 1,000 shares at
a time, not the full 10,000 share order.\8\ A market maker will, after
making these efforts to take out the ECN quote, post the quote it had
orginially wanted to post, which often results in market maker and ECN
quotations locking or crossing.\9\
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\7\ A locked market occurs when the quoted bid price is the same
as the quoted ask price. A crossed market occurs when the quoted bid
price is greater than the quoted ask price.
\8\ Nasdaq has noted that ECNs have the capability to accept,
and fromm time to time will accept, SelectNet orders for more than
the displayed size. Telephone Conversation between Gail Marshall-
Smith, Special Counsel, Division, SEC and John F. Malitzis, Senior
Attorney, Nasdaq, on July 14, 1998.
\9\ Market makers and ECNs are required to use reasonable means
not to lock or cross the market. The NASD has interpreted
``reasonable means'' to include perferencing a SelectNet order to
the firms(s) at the bid or offer. See NASD Notice to Members 97-49.
See also Letter to Joseph R. Hardiman, President, NASD, for Richard
R. Lindsey, Director, Division of Market Regulation, SEC, dated
November 22, 1996 (noting that, in the OTC market, a Nasdaq market
maker holding a limit order that is marketable against another
market maker's or ECN's quote may send a SelectNet message to the
market maker or ECN displaying the existing quote. However, after
using reasonable efforts to execute against the existing quote, the
market maker should display the limit order even if it locks the
market).
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Nasdaq believes that this is inappropriate for several reasons.
First, an ECN's unwillingness to execute against an order to the full
extent of the ECN's reserved size may violate the best execution duty
\10\ of the broker/dealer that is operating the ECN. Specifically,
Nasdaq believes that the broker/dealer sponsoring the ECN may not be
complying fully with best execution obligations if that broker/dealer
fills the order in small pieces at the displayed size rather than
accepting an order that would fill a customer's entire order. This type
of piecemeal execution is also economically inefficient and may cause
customers to incur unnecessary transaction costs because multiple
executions are required to fill the customer's order in full.
Additionally, this type of piecemeal execution contributes to locking
and crossing problems in Nasdaq, and thus has a negative impact on
market quality and the maintenance of orderly markets.
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\10\ See NASD rule 4613(b).
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Accordingly, Nasdaq is proposing an amendment to NASD Rule 4623.
Under the proposal, if an ECN displays in Nasdaq an order having a
reserved size and a market participant attempts to access the ECN's
Nasdaq-displayed order by sending (via a Nasdaq-provided means) an
order that is larger than the ECN's Nasdaq-displayed size, the ECN
[[Page 39922]]
would be required to execute the Nasdaq-delivered order: (1) up to the
size of the Nasdaq-delivered order, if the ECN order (including the
reserved size and displayed portions) is the same size as or larger
than the Nasdaq-delivered order; or (2) up to the size of the ECN order
(including the reserved size and displayed portions), if the Nasdaq-
delivered order is the same size as or larger than the ECN order
(including the reserved size and displayed portions).
3. Locked/Crossed Markets
Nasdaq also is proposing to amend the NASD's rule governing locked
and crossed markets, NASD Rule 4613(e). Nasdaq has observed instances
of market makers and ECNs entering orders at 9:29 a.m. (prior to the
opening when quotes are not firm) that lock or cross the market and
then leaving these orders in place at 9:30 a.m. when the market opens
and quotes become firm. This effectively locks/crosses the market on
the opening and, therefore, disrupts the market's opening.
Although NASD Rule 4613(e) addresses the responsibility to avoid
locking and crossing the market during normal business hours, the rule
currently does not specifically set out the responsibility to avoid
entering and leaving in place quotations that lock or cross the market
on open (although Nasdaq believes that it is clear that such activity
is contrary to the rule).\11\ Accordingly, the NASD and Nasdaq are
proposing to amend NASD Rule 4613(e) to clarify that if a market maker
or ECN enters, at or after 9:25:00 a.m. Eastern Time, a quotation that
locks or crosses the market on the opening, that market maker or ECN
has an obligation to take action to avoid locking or crossing the
market immediately at the market's open, but in no case later than 30
seconds thereafter (i.e., 9:30:30 a.m.). By including the 9:25 a.m.
benchmark, market makers and ECNs will be better able to determine
which party entered a market-locking/crossing quotation, and thus which
party has the obligation to execute a transaction against a quote to
unlock/uncross the market at the opening. The rule further provides
that it is the responsibility of the market maker or ECN that entered
the locking or crossing quotation at or after 9:25 a.m. to take action
(such as sending a SelectNet order to takeout the quotation that will
be crossed or locked or taking down its own quotation) to unlock/
uncross the market immediately at the open, but in no case later than
9:30:30 a.m. The 30 second period should give a market participant
ample time to send a SelectNet message to the party that it locked or
crossed or to take down its quote. Additionally, this provision
establishes a standard by when the market participant must resolve the
locked/crossed market situation--9:30:30 a.m.
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\11\ Nasdaq has previously noted that it is especially important
at the opening that members monitor their quotes as well as any
orders placed in ECNs to avoid locking or crossing the market during
the opening. See Notice to Members 97-49.
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Although Nasdaq believes that market participants should always
monitor their preopening quotes to ensure that they do not lock/cross
the market on the opening, the proposed rule includes a specific time
designation of when market participants should begin monitoring their
quotes, an allocation of which party is responsible for unlocking/
uncrossing the market, and a specific time designation of when the
locking/crossing quote must be removed. Without such standards, there
could be confusion as to which quote caused the lock/cross and who has
the affirmative obligation to unlock/uncross the market.
4. Staff Information Requests
Nasdaq also is proposing NASD Rule 4625 regarding a member's
obligation to supply Nasdaq staff with certain information upon
request. Nasdaq's MarketWatch and Market Operations departments have
day-to-day responsibilities for administering various NASD and SEC
rules, as well as for carrying out duties delegated to them by the
Association. For example, Nasdaq's MarketWatch Department is
responsible for, among other things, initiating trading halts and
monitoring locked and crossed market situations, while Nasdaq's Market
Operations Department is responsible for, among other things, reviewing
ITS trade-through complaints, clearly erroneous transactions, and
requests for excused withdrawals or reinstatements from unexecuted
withdrawals.
In order to properly rule or to carry out a departmental function,
Nasdaq staff often must obtain information on a real-time basis from a
market participant. For example, when monitoring for locked and crossed
markets, Nasdaq Market Watch routinely will contact the parties to the
lock or cross (e.g., a market maker and/or ECN) to request relevant
information.\12\ Staff then will review this information on a real-time
basis and assist in resolving the locked or crossed market
situation.\13\
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\12\ Staff may request information on the identity of the
customers, trade information, the reason for the lock or cross
(e.g., system error), and other information related to the locked or
crossed market situation.
\13\ In addition to the locks and crosses, there are other
instances when staff must gather information from market makers and
ECNs on a real-time basis. For example, Nasdaq Market Watch may need
to contact a market maker or ECN to determine quickly if a trade,
quotation, or series of trades appearing to be aberrations, were
caused by a malfunction of a computer system (which could pose a
threat to the integrity of Nasdaq from a technological prospective)
or by some other source.
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While Nasdaq staff must request information to properly carry out
its duties and responsibilities, currently there is no explicit
authority in the NASD's rules that allows Nasdaq staff to do so or that
requires members to comply with such requests.\14\ While in the past,
members generally have cooperated with Nasdaq staff and voluntarily
provided requested information, recently some members have refused to
comply with such requests. The inability to obtain necessary
information frustrates the Nasdaq staff's ability to properly
administer NASD and SEC rules and frustrates Nasdaq's responsibility of
maintaining fair and orderly markets.
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\14\ While staff of NASD Regulation currently has authority
under Rule 8210 to request information from members, such authority
may be exercised only in connection with a current investigation,
filed complaint, examination, or authorized disciplinary proceeding.
Nasdaq staff requests information to administer a rule, and does not
request information in connection with a filed complaint.
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To remedy this situation, Nasdaq is proposing the adoption of NASD
Rule 4625. This rule will authorize Nasdaq staff to request information
in specific circumstances and will obligate members to comply with such
requests. Specifically, under NASD Rule 4625 Nasdaq staff would be
permitted to request from a member information directly related: to an
SEC or NASD rule that the Nasdaq department is responsible for
administering; or to other duties/responsibilities imposed on the
Nasdaq department by the Plan of Allocation and Delegation of Function
or otherwise delegated by the Associated to such department. The rule
also states that the failure to provide information could subject the
member to a disciplinary action.
5. Statutory Basis
Nasdaq believes that the proposed rule changes are consistent with
Sections 15A(b)(6), 15A(b)(11), and 11A(a)(1)(C) of the Act. Among
other things, Section 15A(b)(6) requires that the rules of a national
securities association be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation
[[Page 39923]]
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to an perfect the
mechanisms of a free and open market and a national market system and
in general to protect investors and the public interest.\15\ Section
15A(b)(11) empowers the NASD to adopt rules governing the form and
content of quotations relating to securities in the Nasdaq market.\16\
Such rules must be designed to produce fair and informative quotations,
prevent fictitious or misleading quotations, and promote orderly
procedures for collecting, distributing, and publishing quotations.
Section 11A(a)(1)(C) provides that it is in the public interest and
appropriate for the protection of investors and the maintenance of fair
and orderly markets to, among other things, assure the economically
efficient execution of securities transactions and the availability to
brokers, dealers, and investors of information with respect to
quotations for and transactions in securities, and to assure fair
competition among brokers and dealers.\17\
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\15\ 15 U.S.C. 78o-3(b)(6).
\16\ 15 U.S.C. 78o-3(b)(11).
\17\ 15 U.S.C. 78k-1(a)(1)(C).
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Specifically, the reserved size proposal is consistent with
Sections 11A(a)(1)(C) and 15A(b)(6). This proposal helps to ensure that
members meet their best execution obligations and discourages piecemeal
executions, which may be economically inefficient and costly to the
customer. Thus, the proposal promotes just and equitable principles of
trade and the protection of investors and the public interest.
Additionally, the rule helps remove impediments to and perfect the
mechanism of a free and open market, and ensures economically efficient
executions by discouraging piecemeal executions of large orders.
The proposal to require members to provide Nasdaq staff with
information and the amendments to NASD Rule 4613(e) are consistent with
Sections 15A(b)(6) and 11A(a)(1)(C). By requiring market makers and
ECNs to avoid locks and crosses on the market's opening and to provide
Nasdaq staff with information necessary to administer NASD and SEC
rules, these proposed rules foster cooperation and coordination with
members. These two proposals also ensure the fair and orderly operation
of Nasdaq, as they clearly delineate the obligations regarding the
entry of quotations that lock/cross the market at the opening and
permit staff to gather information necessary to administer particular
rules or to discharge particular departmental duties.
B. Self-Regulatory Organization's Statement on Burden on Competition
Nasdaq 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.
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
Within 35 days of publication of this notice in the Federal
Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the NASD consents, the Commission will:
A. by order approve such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitations 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. 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 file number SR-NASD-98-01 and
should be submitted by August 14, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Jonathan G.Katz,
Secretary.
[FR Doc. 98-19807 Filed 7-23-98; 8:45 am]
BILLING CODE 8010-01-M
