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Federal Register / Vol. 71, No.

99 / Tuesday, May 23, 2006 / Notices 29697

comments more efficiently, please use have been prepared by NASD. NASD firms shall be required to report
only one method. The Commission will has designated the proposed rule change information item (18) specified in Rule
post all comments on the Commission’s as constituting a stated policy, practice, 6954(b) only to the extent such item is
Internet Web site (http://www.sec.gov/ or interpretation with respect to the available to them.
rules/sro.shtml). Copies of the meaning, administration, or (d) No Change.
submission, all subsequent enforcement of an existing rule under * * * * *
amendments, all written statements Section 19(b)(3)(A)(i) of the Act 3 and
with respect to the proposed rule Rule 19b–4(f)(1) thereunder,4 which 6958. Exemption to the Order Recording
change that are filed with the renders the proposal effective upon and Data Transmission Requirements
Commission, and all written receipt of this filing with the (a) through (b) No Change.
communications relating to the Commission. The Exchange filed (c) This Rule shall be in effect until
proposed rule change between the Amendment No. 1 to the proposed rule July 10, 2011[May 8, 2011].
Commission and any person, other than change on May 15, 2006.5 The * * * * *
those that may be withheld from the Commission is publishing this notice to
public in accordance with the solicit comments on the proposed rule II. Self-Regulatory Organization’s
provisions of 5 U.S.C. 552, will be change, as amended, from interested Statement of the Purpose of, and
available for inspection and copying in persons. Statutory Basis for, the Proposed Rule
the Commission’s Public Reference Change
Room. Copies of such filing also will be I. Self-Regulatory Organization’s
In its filing with the Commission,
available for inspection and copying at Statement of the Terms of Substance of
NASD included statements concerning
the principal office of NASD. All the Proposed Rule Change
the purpose of and basis for the
comments received will be posted NASD is proposing to establish July proposed rule change and discussed any
without change; the Commission does 10, 2006 as the effective date of the comments it received on the proposed
not edit personal identifying amendments to NASD’s Order Audit rule change. The text of these statements
information from submissions. You Trail System (‘‘OATS’’) rules approved may be examined at the places specified
should submit only information that by the Commission on September 28, in Item IV below. NASD has prepared
you wish to make available publicly. All 2005 6 and March 30, 2006.7 summaries, set forth in sections A, B,
submissions should refer to File No. Below is the text of the proposed rule and C below, of the most significant
SR–NASD–2006–062 and should be change. Proposed new language is in aspects of such statements.
submitted on or before June 13, 2006. italics; proposed deletions are in
[brackets].8 A. Self-Regulatory Organization’s
For the Commission, by the Division of
Market Regulation, pursuant to delegated * * * * * Statement of the Purpose of, and
authority.14 Statutory Basis for, the Proposed Rule
Nancy M. Morris,
6950. Order Audit Trail System Change
Secretary. * * * * * 1. Purpose
[FR Doc. E6–7816 Filed 5–22–06; 8:45 am] 6957. Effective Date NASD is proposing to establish July
BILLING CODE 8010–01–P
The requirements of the Order Audit 10, 2006 as the effective date of the
Trail System shall be effective in amendments to NASD’s rules relating to
accordance with the following schedule: OATS requirements approved by the
SECURITIES AND EXCHANGE Commission on September 28, 2005 and
COMMISSION (a) and (b) No Change.
(c) Manual Orders March 30, 2006. Specifically, on
[Release No. 34–53819; File No. SR–NASD– The requirements of the Order Audit September 28, 2005, the SEC approved
2006–052] Trail System shall be effective on July amendments to NASD Rules 6950
10, 2006[six months after publication of through 6957 (‘‘OATS Rules’’).9 The
Self-Regulatory Organizations; the revised OATS Reporting Technical amendments to the OATS Rules: (1)
National Association of Securities Specifications relating to SR–NASD–00– Implement the OATS reporting
Dealers, Inc.; Notice of Filing and 23,] for all manual orders, provided that requirements for manual orders (‘‘OATS
Immediate Effectiveness of Proposed Phase III’’); (2) provide that members are
Rule Change and Amendment No. 1 3 15U.S.C. 78s(b)(3)(A)(i). required to capture and report the time
Thereto to Reflect the Revised 4 17CFR 240.19b–4(f)(1). the order is received by the member
Effective Date of Certain Amendments 5 In Amendment No. 1, NASD made certain
from the customer for all orders; (3)
to NASD’s Order Audit Trail System technical and clarifying changes to the rule text and
expand the order transmittal
Rules throughout the proposed rule change. For purposes
of calculating the 60-day period within which the requirements to include orders routed to
May 17, 2006. Commission may summarily abrogate the proposed a member’s trading desk or trading
rule change under Section 19(b)(3)(C) of the Act, the department; (4) exclude certain
Pursuant to Section 19(b)(1) of the Commission considers the period to commence on
Securities Exchange Act of 1934 May 15, 2006, the date on which the Exchange filed
members from the definition of
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). ‘‘Reporting Member’’ for those orders
notice is hereby given that on April 20, 6 See Securities Exchange Act Release No. 52521 that meet specified conditions and are
2006, the National Association of (September 28, 2005), 70 FR 57909 (October 4, recorded and reported to OATS by
2005) (SR–NASD–00–23). See also Notice to another member; and (5) permit NASD
Securities Dealers, Inc. (‘‘NASD’’) filed Members 05–78 (November 2005).
with the Securities and Exchange 7 See Securities Exchange Act Release No. 53580 to grant exemptive relief from the OATS
Commission (‘‘SEC’’ or ‘‘Commission’’) (March 30, 2006), 71 FR 17529 (April 6, 2006) (SR– reporting requirements in certain
circumstances to members that meet
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the proposed rule change as described NASD–2006–040). See also Notice to Members 06–
15 (April 2006). specified criteria.
in Items I, II, and III below, which Items 8 The proposed changes indicated below are
On March 30, 2006, the SEC approved
based on rule text approved by the SEC on
14 17 CFR 200.30–3(a)(12). September 28, 2005 and March 30, 2006, which, but further amendments to the OATS Rules
1 15 U.S.C. 78s(b)(1). for this subsequent filing, would have become
2 17 CFR 240.19b–4. effective May 8, 2006. See supra notes 5 and 6. 9 See supra note 5.

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29698 Federal Register / Vol. 71, No. 99 / Tuesday, May 23, 2006 / Notices

that expand NASD’s OATS exemptive necessary or appropriate in furtherance Electronic Comments
authority to include electronic recording of the purposes of the Act.
requirements.10 As amended, NASD has • Use the Commission’s Internet
C. Self-Regulatory Organization’s comment form (http://www.sec.gov/
the authority to grant exemptive relief
Statement on Comments on the rules/sro.shtml); or
from the OATS electronic recording and
Proposed Rule Change Received from
reporting requirements for manual
Members, Participants, or Others • Send an e-mail to rule-
orders to members that meet specified comments@sec.gov. Please include File
criteria. While NASD did not specifically Number SR–NASD–2006–052 on the
The current effective date of these solicit comment on the proposed rule subject line.
amendments is May 8, 2006. Since change, NASD received one written
approval of these amendments, several comment letter regarding certain Paper Comments
firms and service bureaus have implementation issues and concerns.12
requested that the effective date of the Specifically, the commenter contends • Send paper comments in triplicate
amended OATS requirements be that release of the OATS Reporting to Nancy M. Morris, Secretary,
extended, noting the significant Technical Specifications and Securities and Exchange Commission,
technological changes required to subsequent clarification from NASD 100 F Street, NE., Washington, DC
implement the OATS requirements for staff regarding the OATS reporting 20549–1090.
manual orders in particular. NASD requirements highlighted new All submissions should refer to File
understands the concerns raised and development requirements that were not Number SR–NASD–2006–052. This file
believes that extending the effective accounted for in their original number should be included on the
date of the recent amendments to the implementation planning. As such, the subject line if e-mail is used. To help the
OATS Rules until July 10, 2006 will commenter requests that NASD extend Commission process and review your
greatly assist firms and service bureaus the time for testing and extend the comments more efficiently, please use
by providing additional time to ensure compliance date for the amended OATS only one method. The Commission will
that all the necessary system changes reporting requirements. As described post all comments on the Commission’s
can be tested and implemented, thereby herein, NASD is proposing to extend the Internet Web site (http://www.sec.gov/
helping to ensure the integrity and effective date of the recent amendments
rules/sro.shtml). Copies of the
accuracy of OATS data. to the OATS Rules to provide additional
Accordingly, NASD is proposing to submission, all subsequent
time for firms and service bureaus to
establish July 10, 2006 as the effective make necessary system changes to amendments, all written statements
date of the amendments to NASD’s ensure compliance with the amended with respect to the proposed rule
OATS Rules approved by the OATS requirements. change that are filed with the
Commission on September 28, 2005 and Commission, and all written
March 30, 2006. In doing so, NASD also III. Date of Effectiveness of the communications relating to the
is proposing amendments to NASD Proposed Rule Change and Timing for proposed rule change between the
Rules 6957(c) and 6958(c) to reflect the Commission Action Commission and any person, other than
amended effective date. The foregoing rule change has become those that may be withheld from the
NASD has filed the proposed rule effective pursuant to Section 19(b)(3)(A) public in accordance with the
change for immediate effectiveness. of the Act 13 and paragraph (f)(1) of Rule provisions of 5 U.S.C. 552, will be
NASD announced the revised effective 19b–4 thereunder,14 in that the available for inspection and copying in
date in its Notice to Members 06–17 proposed rule change constitutes a the Commission’s Public Reference
(April 2006). stated policy, practice, or interpretation Room. Copies of such filing also will be
2. Statutory Basis with respect to the meaning, available for inspection and copying at
administration, or enforcement of an the principal office of NASD. All
NASD believes that the proposed rule existing rule of NASD. At any time comments received will be posted
change is consistent with the provisions within 60 days of the filing of the
of Section 15A(b)(6) of the Act,11 which without change; the Commission does
proposed rule change, the Commission not edit personal identifying
requires, among other things, that NASD may summarily abrogate such rule
rules be designed to prevent fraudulent information from submissions. You
change if it appears to the Commission should submit only information that
and manipulative acts and practices, to that such action is necessary or
promote just and equitable principles of you wish to make available publicly. All
appropriate in the public interest, for
trade, and, in general, to protect submissions should refer to File No.
the protection of investors, or otherwise
investors and the public interest. NASD SR–NASD–2006–052 and should be
in furtherance of the purposes of the
believes that extending the effective Act. submitted on or before June 13, 2006.
date of the recent amendments to the For the Commission, by the Division of
OATS Rules will provide firms and IV. Solicitation of Comments Market Regulation, pursuant to delegated
service bureaus more time to make Interested persons are invited to authority.15
necessary system changes to ensure submit written data, views and Nancy M. Morris,
compliance with the amended OATS arguments concerning the foregoing, Secretary.
requirements. including whether the proposed rule
[FR Doc. E6–7817 Filed 5–22–06; 8:45 am]
B. Self-Regulatory Organization’s change, as amended, is consistent with
BILLING CODE 8010–01–P
Statement on Burden on Competition the Act. Comments may be submitted by
any of the following methods:
NASD does not believe that the
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proposed rule change will result in any 12 See Letter from Financial Information Forum,
burden on competition that is not on behalf of FIF Service Bureau Committee, to Paul
McKenney, NASD, dated March 29, 2006.
10 See supra note 6. 13 15 U.S.C. 78s(b)(3)(A).
11 15 U.S.C. 78o–3(b)(6). 14 17 CFR 240.19b–4(f)(1). 15 17 CFR 200.30–3(a)(12).

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