Notices. SECURITIES AND EXCHANGE COMMISSION

7,513 words·~34 min read·/register/2006/06/15/06-5419

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 8010-01-M SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53961; File No. SR-MSRB-2005-11] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change and Amendment Nos. 1 and 2 Thereto Relating to Definition of Solicitation Under MSRB Rules G-37 and G-38 June 8, 2006. On June 10, 2005, the Municipal Securities Rulemaking Board (“MSRB” or “Board”), filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change consisting of an interpretive notice relating to the definition of solicitation for purposes of MSRB Rules G-37 and G-38.

On December 7, 2005, the MSRB filed Amendment No. 1 to the proposed rule change. 3 The proposed rule change, incorporating Amendment No. 1 (the “original proposed rule change”), was published for comment in the **Federal Register** on December 20, 2005. 4 The Commission received one comment letter regarding the proposal. 5 On March 17, 2006, the MSRB filed Amendment No. 2 to the proposed rule change in response to comments on the original proposed rule change. 6 The proposed rule change, incorporating Amendment No. 2, was published for comment in the **Federal Register** on May 5, 2006. 7 The Commission received no comment letters on the proposed rule change as amended by Amendment No. 2.

This order approves the proposed rule change as amended by Amendment Nos. 1 and 2. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 clarifies that the central element in determining whether a communication is a solicitation is whether the communication occurs with the purpose of obtaining or retaining municipal securities business, and makes certain other changes. 4 *See* Securities Exchange Act Release No. 52948 (December 13, 2005), 70 FR 75514 (December 20, 2005) (the “Commission's Original Notice”). 5 * See* letter to Jonathan G.

Katz, Secretary, Commission, from Leslie M. Norwood, Vice President and Assistant General Counsel, The Bond Market Association, dated January 10, 2006. 6 Amendment No. 2 deletes the footnote in the original proposed rule change referencing guidance on the meaning of solicitation under Rule G-37 previously provided in certain Question and Answer interpretations (the “Rule G-37 solicitation Qs&As”) and instead inserts the substantive language of such Qs&As into the text of the solicitation guidance provided in proposed rule change.

The MSRB filed a companion proposed rule change ( *see* File No. SR-MSRB-2006-01) to withdraw the Rule G-37 solicitation Qs&As and the former Rule G-38 Question and Answer interpretations relating to consultants. 7 *See* Securities Exchange Act Release No. 53747 (May 1, 2006), 71 FR 26575 (May 5, 2006). The proposed rule change makes clear that the central element in determining whether a communication is a solicitation is whether the communication occurs with the purpose of obtaining or retaining municipal securities business.

In addition, the proposed rule change consolidates the MSRB's guidance on the definition of solicitation for purposes of Rules G-37 and G-38. The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to the MSRB 8 and, in particular, the requirements of Section 15B(b)(2)(C) of the Act and the rules and regulations thereunder. 9 Section 15B(b)(2)(C) of the Act requires, among other things, that the MSRB's rules be 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 municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest. 10 In particular, the Commission finds that the proposed rule change will help dealers understand their obligations under MSRB rules designed to maintain standards of fair practice and professionalism, thereby helping to maintain public trust and confidence in the integrity of the municipal securities market. 8 In approving this rule the Commission notes that it has considered the proposed rule's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78o-4(b)(2)(C). 10 *Id.* *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 11 that the proposed rule change (SR-MSRB-2005-11), as amended, be, and hereby is, approved. 11 15 U.S.C. 78s(b)(2). 12 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-9347 Filed 6-14-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53959, File No. SR-MSRB-2006-03] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change Consisting of Interpretive Guidance on Customer Protection Obligations of Brokers, Dealers and Municipal Securities Dealers Relating to the Marketing of 529 College Savings Plans June 8, 2006.

On March 31, 2006, the Municipal Securities Rulemaking Board (“MSRB” or “Board”), filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change consisting of interpretive guidance on customer protection obligations of brokers, dealers and municipal securities dealers (“dealers”) relating to the marketing of 529 college savings plans. The proposed rule change was published for comment in the **Federal Register** on May 2, 2006. 3 The Commission received six comment letters regarding the proposal. 4 On June 1, 2006, the MSRB filed a response to the comment letters. 5 This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 *See* Securities Exchange Act Release No. 53715 (April 25, 2006), 71 FR 25867 (May 2, 2006) (the “Commission's Notice”). 4 *See* letter from David J.

Pearlman, Chairman, College Savings Foundation (“CSF”), dated April 24, 2006; letter from Frank Traynor, dated April 28, 2006; letter from Patricia D. Struck, President, North American Securities Administrators Association, Inc. (“NASAA”), dated May 22, 2006; letter from Tamara K. Salmon, Senior Associate Counsel, Investment Company Institute (“ICI”), dated May 22, 2006; letter from Dale E. Brown, Executive Director & CEO, Financial Services Institute (“FSI”), dated May 23, 2006; and letter from Elizabeth Varley, Vice President and Director of Retirement Policy, and Michael D.

Udoff, Vice President, Associate General Counsel and Secretary, Securities Industry Association (“SIA”), dated May 31, 2006. 5 *See* letter from Ernesto A. Lanza, Senior Associate General Counsel, MSRB, to Martha M. Haines, Chief, Office of Municipal Securities, Commission, dated June 1, 2006 (“MSRB's Response Letter”). The MSRB's Response Letter does not address SIA's comment letter because the Commission received SIA's comment letter after the comment period for the filing had closed.

The proposed rule change consists of interpretive guidance on customer protection obligations of dealers relating to the marketing of 529 college savings plans. The MSRB proposed an effective date for the proposed rule change of 60 calendar days after Commission approval. A full description of the proposal is contained in the Commission's Notice. CSF, ICI, FSI and SIA supported the proposed rule change. Mr. Traynor's comment letter requested clarity concerning the meaning of the proposed rule change, stating that the proposal was 34 pages long.

The MSRB noted in its response that the Commission's Notice in the **Federal Register** 6 contains a two-page brief summary of the proposed rule change in Section II.A.1, and that the remainder of the notice consists of information required to be included in the notice under the MSRB's regulatory obligations established by the Commission, including an extensive discussion of the comments received on earlier draft versions of the proposed rule change that, among other things, explains the rationale for the MSRB's rulemaking determinations.

In addition, the MSRB stated that it provides comprehensive information on the regulatory duties of dealers in connection with the marketing of 529 college savings plans and other information useful to investors on its Web site at *http://www.msrb.org/msrb1/mfs* , and that any member of the public seeking an explanation of the proposal or any existing MSRB rule should not hesitate to contact MSRB staff at

(703)797-6600. 6 *See supra* note 3. NASAA's comment letter expressed support for the efforts made by the MSRB to strengthen the marketing rules and disclosure requirements in connection with the offer and sale of 529 plans. Nonetheless, NASAA said they were concerned that certain key disclosure obligations set forth in earlier drafts of the MSRB's guidance 7 were omitted from the proposed rule change. NASAA more specifically stated that they believe removing the comparative suitability analysis requirement and alleviating a broker-dealer's obligation to provide specific information regarding home state 529 plan benefits will have a detrimental effect on customers. 7 *See* MSRB Notice 2005-28 (May 19, 2005) (the “2005 Notice”). The MSRB's Response Letter states that the MSRB noted in its filing the potential adverse impact of the comparative suitability and specific home state disclosure proposals as an important factor in its approval of the disclosure and suitability language included in the proposed rule change. The MSRB stated that the comparative suitability and home state disclosure proposals from the 2005 Notice would have imposed unprecedented new obligations on dealers to become sufficiently knowledgeable about many or potentially all investment options available in the 529 college savings plan market (including a large number of 529 college savings plans that the dealer does not offer) in order to provide accurate disclosures and to arrive at appropriate conclusions in connection with a comparative suitability analysis. The MSRB stated that some state plans expressed objections over a provision that would require dealers that do not market their plans to make disclosures about such plans. The MSRB also noted a number of press reports detailing the negative impact of the comparative suitability proposal and anecdotal evidence that some dealers had been withdrawing from, or considering limiting their offerings in, the 529 college savings market at least in part due to the proposal in the 2005 Notice. Further, the MSRB stated that, as noted in the filing, there is a potential for over-emphasizing the importance of a particular state's beneficial state tax treatment of an investment in its 529 college savings plan. NASAA's comment letter also stated that while they are encouraged by the point-of-sale disclosures outlined in the Commission's Notice, they believe that these disclosures would better serve the interests of investors if they were provided in a more effective and timely manner. NASAA questioned the effectiveness of providing the out-of-state plan disclosures at the time of the transaction. NASAA stated that they believe the out-of-state disclosures should be made well before the trade to achieve maximum effectiveness, and that the mechanism for this disclosure should be more specific and concrete. The proposal provides that the out-of-state disclosure obligation may be met if the disclosure appears in the program disclosure document, so long as the program disclosure document has been delivered to the customer at or prior to the time of trade and the disclosure appears in the program disclosure document in a manner that is reasonably likely to be noted by an investor. NASAA stated that it is left open to question whether or not customers will, in fact, take note of these disclosures. NASAA recommended that broker-dealers be required to make a disclosure separate from the plan document before their disclosure obligations are deemed fulfilled. The MSRB's Response Letter stated that with respect to the manner and timing of the proposed time-of-trade disclosures to customers, the MSRB believes that it has achieved an appropriate balance that ensures that the required disclosures are made in a timely and balanced manner without potentially over-emphasizing the home state tax element as compared to the other numerous items of important information provided to customers. The MSRB stated that it continues to monitor the Commission's proposed point-of-sale disclosure obligations in connection with mutual fund, variable annuity and 529 college savings plan sales under proposed Exchange Act Rule 15c2-3, which under certain circumstances could provide for the making of disclosures at a time prior to the time-of-trade. The MSRB stated that it has taken NASAA's suggestions in this regard under advisement pending final action by the SEC on proposed Rule 15c2-3. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to the MSRB 8 and, in particular, the requirements of Section 15B(b)(2)(C) of the Act and the rules and regulations thereunder. 9 Section 15B(b)(2)(C) of the Act requires, among other things, that the MSRB's rules be 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 municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest. 10 In particular, the Commission finds that the proposed rule change is consistent with the Act because it will further investor protection by strengthening and clarifying dealers' customer protection obligations relating to the marketing of 529 college savings plans, including but not limited to the duty to provide important disclosures to customers investing in out-of-state 529 college savings plans relating to state tax treatment and other benefits and to undertake active suitability analyses for recommended transactions based on appropriately weighted factors. 8 In approving this rule the Commission notes that it has considered the proposed rule's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78o-4(b)(2)(C). 10 *Id.* *It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, 11 that the proposed rule change (SR-MSRB-2006-03) be, and hereby is, approved. 11 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 12 12 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-9352 Filed 6-14-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53960, File No. SR-MSRB-2006-01] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Order Approving Proposed Rule Change and Amendment No. 1 Relating to Withdrawal of Obsolete Question-and-Answer Interpretive Guidance Under Former Rule G-38, on Consultants, and Certain Question-and-Answer Interpretive Guidance Relating to the Definition of “Solicitation” Under Rule G-37, on Political Contributions and Prohibitions on Municipal Securities Business June 8, 2006. On March 28, 2006, the Municipal Securities Rulemaking Board (“MSRB” or “Board”), filed with the Securities and Exchange Commission (“SEC” or “Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), 1 and Rule 19b-4 thereunder, 2 a proposed rule change to delete obsolete Question-and-Answer (“Q&A”) interpretive guidance under former Rule G-38, on consultants, and certain Q&A interpretive guidance relating to the definition of “solicitation” under Rule G-37, on political contributions and prohibitions on municipal securities business. On April 20, 2006, the MSRB filed Amendment No. 1 to the proposed rule change. 3 The proposed rule change was published for comment in the **Federal Register** on May 5, 2006. 4 The Commission received no comment letters regarding the proposal. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 deletes one additional Q&A providing interpretive guidance under Rule G-37 and former Rule G-38. 4 *See* Securities Exchange Act Release No. 53746 (May 1, 2006), 71 FR 26577 (May 5, 2006). The proposed rule change deletes obsolete Q&A interpretive guidance under former Rule G-38, on consultants, and certain Q&A interpretive guidance relating to the definition of “solicitation” under Rule G-37. On August 29, 2005, new Rule G-38, on solicitation of municipal securities business, became effective, superseding former Rule G-38 on consultants. 5 The MSRB had previously published a number of Q&A interpretations on the former rule, none of which continue to apply to new Rule G-38 since the consultant provisions to which they relate are no longer in effect. Accordingly, the MSRB is deleting all obsolete Rule G-38 Qs&As. 5 Securities Exchange Act Release No. 52278 (August 17, 2005); 70 FR 49342 (August 23, 2005). The MSRB filed a related proposed rule change 6 relating to the definition of solicitation under MSRB Rules G-37 and G-38 (the “companion proposed rule change”). The companion proposed rule change inserts the substantive language of the Rule G-37 solicitation Qs&As deleted in this proposal into the text of the solicitation guidance provided in the companion proposed rule change. Accordingly, the proposed rule change and the companion proposed rule change consolidate the MSRB's guidance on the definition of solicitation for purposes of Rules G-37 and G-38. 6 *See* File No. SR-MSRB-2005-11. The Commission finds that the proposed rule change, as amended, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to the MSRB 7 and, in particular, the requirements of Section 15B(b)(2)(C) of the Act 8 and the rules and regulations thereunder. Section 15B(b)(2)(C) of the Act requires, among other things, that the MSRB's rules be 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 municipal securities, to remove impediments to and perfect the mechanism of a free and open market in municipal securities, and, in general, to protect investors and the public interest. 9 In particular, the Commission finds that the proposed rule change will help dealers understand their obligations under MSRB rules designed to maintain standards of fair practice and professionalism, thereby helping to maintain public trust and confidence in the integrity of the municipal securities market. 7 In approving this rule the Commission notes that it has considered the proposed rule's impact on efficiency, competition and capital formation. 15 U.S.C. 78c(f). 8 15 U.S.C. 78o-4(b)(2)(C). 9 *Id.* *It is therefore ordered* , pursuant to Section 19(b)(2) of the Act, 10 that the proposed rule change (SR-MSRB-2006-01), as amended, be, and hereby is, approved. 10 15 U.S.C. 78s(b)(2). 11 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 11 J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-9353 Filed 6-14-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53964; File No. SR-NASDAQ-2006-005] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change and Amendment Nos. 1 and 2 Thereto To Modify Nasdaq's Delisting Procedures To Conform to Recent Amendments To Commission Rules Regarding Removal From Listing and Withdrawal From Registration June 8, 2006. 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 April 4, 2006, The NASDAQ Stock Market LLC (“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 Nasdaq. On May 5, 2006, Nasdaq filed Amendment No. 1 to the proposal. 3 On May 17, 2006, Nasdaq filed Amendment No. 2 to the proposal. 4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 Amendment No. 1 replaced the original proposed rule change in its entirety. 4 In Amendment No. 2, Nasdaq amended the implementation date of the proposed rule change to the later of Commission approval or the date Nasdaq begins to operate as a national securities exchange. I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq proposes to modify Nasdaq's delisting procedures to comply with Rule 12d2-2 under the Act, 5 which became effective on April 24, 2006. 5 17 CFR 240.12d2-2. Nasdaq would implement the proposed rule change upon the later of its approval or the date Nasdaq begins to operate as a national securities exchange. The text of the proposed rule change is below. Proposed new language is in *italics;* proposed deletions are in brackets. 6 6 Changes are marked to the rule text that appears in the electronic manual of The NASDAQ Stock Market, LLC found at *http://www.nasdaqtrader.com.* These rules will become effective when Nasdaq fulfills certain conditions and commences operations as a national securities exchange as set forth in Securities Exchange Act Release No. 53128 (January 13, 2006), 71 FR 3550 (January 23, 2006). Rules of The NASDAQ Stock Market LLC [4480.] *4380.* Termination Procedure

(a)Failure to maintain compliance with the *applicable* provisions of [Rules 4350, 4450, or 4360] *the Rule 4300, 4400 and 4500 Series* will result in the termination of an issue's listing unless an exception is granted as provided in the Rule 4800 Series. Termination shall become effective in accordance with the procedures set forth in the Rule 4800 Series, *including IM-4800.*

(b)( *1* ) An issuer may voluntarily terminate its listing upon [written notice to Nasdaq and application to the Commission.] *compliance with all requirements of Rule 12d2-2(c) under the Exchange Act. In part, Rule 12d2-2(c) requires that the issuer may delist by filing an application on Form 25 with the Commission, provided that the issuer:

(i)Complies with all applicable laws in effect in the state in which it is incorporated and with the applicable Nasdaq Rules;

(ii)provides notice to Nasdaq no fewer than 10 days before the issuer files the Form 25 with the Commission, including a statement of the material facts relating to the reasons for delisting; and

(iii)contemporaneous with providing notice to Nasdaq, publishes notice of its intent to delist, along with its reasons therefore, via a press release and on its web site, if it has one. Any notice provided on the issuers web site pursuant to Rule 12d2-2(c) must remain available until the delisting has become effective. The issuer must also provide a copy of the Form 25 to Nasdaq simultaneously with its filing with the Commission. Nasdaq will provide notice on its web site of the issuer's intent to delist as required by Rule 12d2-2(c)(3).* *

(2)An issuer that seeks to voluntarily delist a class of securities pursuant to Rule 4380(b)(1) that has received notice from Nasdaq, pursuant to the Rule 4800 Series or otherwise, that it fails to comply with one or more requirements for continued listing, or that is aware that it is below such continued listing requirements notwithstanding that it has not received such notice from Nasdaq, must disclose this fact (including the specific continued listing requirements that it is below) in:

(i)its statement of all material facts relating to the reasons for withdrawal from listing provided to Nasdaq along with written notice of its determination to withdraw from listing required by Rule 12d2-2(c)(2)(ii) under the Exchange Act; and

(ii)its press release and web site notice required by Rule 12d2-2(c)(2)(iii) under the Exchange Act. * *IM-4800. Removal from Listing.* *Rules 4804(e), 4806(e), 4807(f) and 4809(c) provide that Nasdaq will delist an issuer in certain circumstances, following Nasdaq's determination that the issuer no longer meets the requirements for continued listing and after the issuer has received notice of that determination and an opportunity to appeal the determination pursuant to this Rule 4800 Series. This interpretive material describes the steps Nasdaq will follow to effect such a delisting. Consistent with Exchange Act Rule 12d2-2, to effect a delisting, Nasdaq will provide public notice of its final determination to remove a security from listing by issuing a press release and posting notice on its web site. This public notice will be disseminated no fewer than 10 days before the delisting becomes effective and will remain posted until the delisting is effective. Following such public notification, Nasdaq will file an application on Form 25 with the Commission to delist the security, and will promptly provide a copy of that Form 25 to the issuer. The Form 25, and the delisting of the security, will become effective 10 days after it is filed pursuant to Exchange Act Rule 12d2-2(d)(1), unless the Commission postpones such delisting pursuant to Rule 12d2-2(d)(3).* 4804. Written Notice of Staff Determination (a)-(d) No change.

(e)If an issuer receives a Staff Determination (other than a Staff Determination that serves as a public reprimand letter as described in Rule 4801(k)(2)) and does not request a hearing within the period specified in Rule 4805, the securities of the issuer will be suspended and Nasdaq will *follow the procedures described in IM-4800 and* submit an application *on Form 25* to the Securities and Exchange Commission to strike the security from listing. [A copy of such application will be furnished to the issuer in accordance with Section 12 of the Act and the rules thereunder.] 4805. Request for Hearing No change. 4806. The Listing Qualifications Panel (a)-(d) No change.

(e)If the Panel determines to delist the issuer and the issuer does not timely request review by the Listing Council and the Listing Council does not call the matter for review *or withdraws its call for review* , Nasdaq will *follow the procedures described in IM-4800 and* submit an application *on Form 25* to the Securities and Exchange Commission to strike the security from listing. [A copy of such application will be furnished to the issuer in accordance with Section 12 of the Act and the rules thereunder.] 4807. Review by the Nasdaq Listing and Hearing Review Council (a)-(e) No change.

(f)If the Listing Council determines to delist the issuer and the Nasdaq Board does not call the matter for review *or withdraws its call for review* , Nasdaq will *follow the procedures described in IM-4800 and* submit an application *on Form 25* to the Securities and Exchange Commission to strike the security from listing. [A copy of such application will be furnished to the issuer in accordance with Section 12 of the Act and the rules thereunder.] 4808. Reconsideration by the Listing Qualifications Panel and the Listing and Hearing Review Council No change. 4809. Discretionary Review by Nasdaq Board

(a)A Listing Council Decision may be called for review by the Nasdaq Board solely upon the request of one or more Director not later than the next Nasdaq Board meeting that is 15 calendar days or more following the date of the Listing Council Decision. Such review shall be undertaken solely at the discretion of the Nasdaq Board and will not operate as a stay of the Listing Council Decision, unless the call for review specifies to the contrary. *At the sole discretion of the Nasdaq Board, the call for review of a Listing Council Decision may be withdrawn at any time prior to the issuance of a decision.*

(b)No change.

(c)If the Nasdaq Board conducts a discretionary review, the issuer shall be provided with a written decision that meets the requirements of Rule 4811. The Nasdaq Board may affirm, modify or reverse the Listing Council Decision and may remand the matter to the Listing Council, Listing Qualifications Panel, or staff of the Listing Department with appropriate instructions. [This] *The decision of the Nasdaq Board will take immediate effect, unless it specifies to the contrary, and* [decision] represents the final action of Nasdaq [and will take immediate effect unless it specifies to the contrary]. If the Nasdaq Board determines to delist the issuer, the securities of the issuer will be immediately suspended, unless the Nasdaq Board specifies to the contrary, and Nasdaq will *follow the procedures described in IM-4800 and* submit an application *on Form 25* to the Commission to strike the security from listing. [A copy of such application will be furnished to the issuer in accordance with Section 12 of the Act and the rules thereunder.] [(d) If the Nasdaq Board declines to conduct a discretionary review or withdraws its call for review, the issuer shall be promptly provided with written notice that the Listing Council Decision represents the final action of Nasdaq.] II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq 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. 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. Purpose On July 14, 2005, the Commission adopted amendments to its rules governing delisting from a national securities exchange. 7 These amendments, which became effective on April 24, 2006, modified the procedures surrounding the way an issuer voluntarily delists from a national securities exchange and the way that a national securities exchange delists an issuer for cause. As a result, Nasdaq is proposing certain changes to its rules to incorporate the requirements of Commission Rule 12d2-2. 8 Specifically, Nasdaq proposes to require public notice of Nasdaq's final determination to delist an issuer, no fewer than 10 days before the delisting becomes effective, via a press release and posting on Nasdaq's Web site. 9 This notice will remain posted on the Web site until the delisting is effective. Nasdaq also proposes to clarify that it will follow these same procedures upon the withdrawal of a call for review by the Nasdaq Listing and Hearing Review Council or the Nasdaq Board, as is permitted by existing Nasdaq Rules 4807(b) and 4809(d). 7 *See* Securities Exchange Act Release No. 52029 (July 14, 2005), 70 FR 42456 (July 22, 2005). 8 17 CFR 240.12d2-2. 9 *See* 17 CFR 240.12d2-2(b)(1). Nasdaq notes that Nasdaq Rule 4804 already requires notice to the issuer of the decision to delist the issuer's securities, and Nasdaq Rules 4805 and 4807 provide an opportunity for the issuer to appeal that decision. In addition, Nasdaq proposes to relocate the existing requirements concerning a voluntary delisting and adopt a new requirement that an issuer must comply with the provisions of Commission Rule 12d2-2(c) 10 when it wishes to voluntarily delist and also notify Nasdaq at the same time that it files a Form 25 with the Commission to voluntarily delist. This requirement will facilitate Nasdaq's compliance with its obligation to provide notice on its Web site that the issuer has determined to withdraw its securities from listing and/or registration on Nasdaq. 11 Nasdaq also proposes to require an issuer that has received notice from Nasdaq that it fails to comply with one or more requirements for continued listing, or that otherwise is aware that it is below such continued listing requirements, to disclose this fact in certain notices required by Commission Rule 12d2-2(c). 10 17 CFR 240.12d2-2(c) 11 17 CFR 240.12d2-2(c)(3). Finally, Nasdaq proposes to remove Nasdaq Rule 4809(d) because it would be redundant. 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with Section 6 of the Act, 12 in general and with Sections 6(b)(5) of the Act, 13 in particular, because it is designed to protect investors and the public interest by following Rule 12d2-2 under the Exchange Act and provide a fair procedure for the prohibition or limitation of listing by Nasdaq. 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(5). 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 the date 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 self-regulatory organization 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. 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-2006-005 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASDAQ-2006-005. 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. 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 available publicly. All submissions should refer to File Number SR-NASDAQ-2006-005 and should be submitted on or before July 6, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 14 14 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. E6-9349 Filed 6-14-06; 8:45 am] BILLING CODE 8010-01-P SECURITIES AND EXCHANGE COMMISSION [Release No. 34-53955; File No. SR-NASD-2006-065] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Relating to the Establishment of an Annual Branch Office System Processing Fee and the Waiver of the Annual Branch Office System Processing Fee and the Annual Branch Office Registration Fee for One Branch Officer per Member per Year June 7, 2006. 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 May 23, 2006, the National Association of Securities Dealers, Inc. (“NASD”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items, I, II and III below, which Items have been prepared by NASD. On May 31, 2006, NASD filed Amendment No. 1 to the proposed rule change. 3 NASD has designated this proposal as establishing or changing a due, fee, or other charge imposed by NASD pursuant to Section 19(b)(3)(A)(ii) of the Act, 4 and Rule 19b-4(f)(2) thereunder, 5 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 In Amendment No. 1, NASD made technical changes to the rule filing, including correcting certain underlining in the rule text. 4 15 U.S.C. 78s(b)(3)(A)(ii). 5 17 CFR 240.19b-4(f)(2). I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASD proposes to amend Section 4 of Schedule A to the NASD By-Laws to:

(1)Establish an annual branch office system processing fee and

(2)waive the annual branch office system processing fee for one branch office per member per year and, as specified in the proposed rule change, as amended, the annual branch office registration fee for one branch office per member per year. NASD intends to implement the proposed rule change, as amended, on July 3, 2006. The text of the proposed rule change, as amended, is available on NASD's Web site ( *http://www.nasd.com* ), at NASD's Office of the Secretary, 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, NASD included statement concerning the purpose of and basis for the proposed rule change, as amended, and discussed any comments it received on the proposed rule change, as amended. The text of these statements may be examined at the places specified in Item IV below. 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 1. Purpose On September 30, 2005, the SEC approved NASD's proposed Uniform Branch Office Registration Form (“Form BR”), which became effective on October 31, 2005. The Form BR replaces Schedule E of the Form BD, the New York Stock Exchange LLC (“NYSE”) Branch Office Application Form, and certain state branch office forms. The Form BR enables firms to register branch offices electronically with NASD, NYSE, and states that require branch registration or reporting via a single filing through the Central Registration Depository (“CRD®” or “CRD system”). Branch office registration through the CRD system creates efficiencies for firms by, among other things, making it easier for firms to register or report branch offices and to manage their ongoing registration and/or reporting responsibilities with regard to those branch offices. In addition to being able to submit a single filing to fulfill the branch office registration requirements of NASD, NYSE, and states, firms benefit from the centralized fee collection, online work queues, electronic notifications and other features available through the CRD system. Firms are also able to link their registered persons to the physical location from which they work via the Form BR, which not only aids regulators' examination efforts, but helps firms in meeting certain recordkeeping requirements. The purpose of the branch office system processing fee is to recover the cost to NASD of developing and implementing the Form BR, as well as ongoing branch office system maintenance and enhancements. NASD staff will monitor this fee to determine whether adjustments are appropriate and will file rule changes to modify this fee, as appropriate. The fee is $20 upon the registration of a branch office and $20 annually thereafter per registered branch. NASD proposes to begin assessing the branch office system processing fee during the third quarter of 2006 for all branch offices in existence as of July 3, 2006. NASD proposes to bill firms for all branch offices in existence as of July 3, 2006 via invoices, rather than through the CRD system. For any branch office that is registered on or after July 3, 2006, NASD proposes to assess and collect the branch office system processing fee through the CRD system at such time as the firm registers that new branch office. 6 Starting in December 2006, all firms will assessed $20 annually for each existing branch office as part of the CRD renewal program. 7 6 The CRD system will be available on July 3, 2006, for purposes of registering branch offices, but will not be available on July 4, 2006. Firms will again be able to register branch offices through the CRD system on July 5, 2006. 7 This proposed rule change, as amended, addresses the assessment and collection of branch office system processing fees and the waiver of both the annual branch office registration fee and the annual branch office system processing fee for one branch office per member per year only with respect to NASD member firms. The manner of assessment and collection of branch office system processing fees from firms that are solely members of other self-regulatory organizations (“SROs”) that require their members to register branch offices via the Form BR (currently, only NYSE) will be addressed by such SROs. In addition, NASD proposes to waive the annual branch office registration fee (for those NASD members who have been assessed such fee pursuant to Section 4(a)(1)(i) of Schedule A to the NASD By-Laws) and the annual branch office system processing fee (for all NASD members) for one branch office per NASD member per year. The fee waiver is prospective only, and will take effect for the year 2006 on July 3, 2006, the implementation date for this proposed rule change, as amended. 8 8 Firms that have already paid their annual $75.00 branch office fees for the year 2006 will receive a $75.00 credit for one branch office. NASD has filed the proposed rule change, as amended, for immediate effectiveness. The implementation date shall be July 3, 2006. 2. Statutory Basis NASD believes that the proposed rule change, as amended, is consistent with the provisions of Section 15A(b)(5) of the Act, 9 which requires, among other things, that NASD rules provide for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility or system that NASD operates or controls. NASD believes that the proposed rule change, as amended, is designed to accomplish these ends by equitably assessing the costs of establishing and maintaining the CRD branch office registration system. 9 15 U.S.C. 78 *o* -3(b)(5). B. Self-Regulatory Organization's Statement on Burden on Competition NASD does not believe that the proposed rule change, as amended, 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 on the proposed rule change, as amended. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The proposed rule change, as amended, has become effective pursuant to Section 19(b)(3)(A)(ii) 10 of the Act and paragraph (f)(2) of Rule 19b-4 thereunder, 11 in that it establishes or changes a due, fee, or other charge applicable to NASD members. NASD intends to implement the proposed rule change, as amended, on July 3, 2006. 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 240.19b-4(f)(2). At any time within 60 days of the filing of the proposed rule change, as amended, 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. 12 12 The effective date of the original proposed rule change is May 23, 2006, and the effective date of Amendment No. 1 is May 31, 2006. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change, as amended, under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on May 31, 2006, the date on which NASD submitted Amendment No. 1. *See* 15 U.S.C. 78s(b)(3)(C). IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, 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-NASD-2006-065 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NASD-2006-065. 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. Copies of such filing also will be available for inspection and copying at the principal office of NASD. 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 available publicly. All submissions should refer to File Number SR-NASD-2006-065 and should be submitted on or before July 6, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. 13 13 17 CFR 200.30-3(a)(12). J. Lynn Taylor, Assistant Secretary. [FR Doc. 06-5419 Filed 6-14-06; 8:45 am]

Connectionstraces to 6

Traces to 6 documents

U.S. Code

CFR