Post by hundredtoone on Dec 28, 2007 9:42:54 GMT -5
Here is what we have been trying to achieve...looks like it WAS ACHIEVED...now if our TEAM was not FOS we should get compensated for that HUGE NS we PROVED with our CERT PULL...imagine all the DEALS we missed out on as a company due to a 3-4 TRILLION share O/S...IMO...Thanks to Easterbreezes and Rosencranz on RB for the link...
Automated Liability Notification System
[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Notices]
[Page 73927-73928]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de07-188]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56972; File No. SR-NASD-2007-035]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc. (n/k/a/ Financial Industry Regulatory Authority, Inc.);
Order Granting Approval of a Proposed Rule Change Related to Mandated
Use of an Automated Liability Notification System
December 14, 2007.
I. Introduction
On May 25, 2007, the National Association of Securities Dealers,
Inc. (``NASD'')\1\ filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'').\2\ Notice of the
proposal was published in the Federal Register on October 17, 2007.\3\
For the reasons discussed below, the Commission is granting approval of
the proposed rule change.
---------------------------------------------------------------------------
\1\ On July 26, 2007, the Commission approved a proposed rule
change filed by NASD to amend NASD's Certificate of Incorporation to
reflect its name change to Financial Industry Regulatory Authority,
Inc. (``FINRA'') in connection with the consolidation of the member
firm regulatory functions of NASD and NYSE Regulation, Inc. Exchange
Act Release No. 56146 (July 26, 2007); 72 FR 42190 (Aug. 1, 2007).
\2\ 15 U.S.C. 78s(b)(1).
\3\ Securities Exchange Act Release No. 56639 (October 11,
2007), 72 FR 58918 (October 17, 2007) [File No. SR-NASD-2007-035].
---------------------------------------------------------------------------
II. Description
NASD Rule 11810(i) sets, forth the procedures that must be followed
when a party is owed securities that have become the subject of a
voluntary corporate action, such as a tender or exchange offer is
seeking delivery of those securities. Under Rule 11810(i), the owed
party delivers a liability notice to the owing or failing party. The
liability notice sets a cut off date for the delivery of the securities
by the owing party and provides notice to the owing party that it will
be held liable for any damages caused by its failure to deliver the
securities in time for the owed party to participate in the voluntary
corporate action.
If the owing party delivers the securities in response to the
liability notice, it has met its delivery obligation. If the owing
party fails to deliver the securities in sufficient time for the owed
party to participate in the voluntary corporate action, it will be
liable for any damages that may accrue thereby (i.e., the owing party
must deliver proceeds equivalent to the proceeds that the owed party
would have received if it had been able to participate in the offer).
The owed party has the responsibility to communicate its intentions to
the owing party and to prove, if necessary, that the owing party
received the liability notice.
Prior to this proposed rule change, Rule 11810(i) required broker-
dealers to send liability notices using ``electronic media having
immediate receipt capabilities.'' Although there was no one acceptable
means for sending and tracking liability notices, NASD members advised
the NASD that it was industry practice to send liability notices by
fax. However, sending liability notices by fax is a manual, paper-
intensive process that is subject to error. The financial risk to an
owing firm that misses or incorrectly processes a liability notice
relating to a voluntary corporate action can be considerable.
In response to industry need for a reliable and uniform method of
transmitting liability notices, The Depository Trust Company (``DTC'')
developed the SMART/Track for Corporate Action Liability Notification
Service (``SMART/Track''). SMART/Track is a web-based system for the
communication of corporate action
[[Page 73928]]
liability notices that allows DTC participants and National Securities
Clearing Corporation clearing members to create, send, process, and
tract such notices. Transmitting liability notices through SMART/Track
eliminates paper liability notices and provides firms with an
electronic, centralized system for the distribution, management and
control of liability notices. Use of SMART/Track helps reduce the
risks, costs, and delays resulting from missing or inaccurate
information associated with paper corporate action liability notices.
Specifically, provides participants with (1) more timely receipt and
distribution of corporation action liability notifications, (2) a
centralized system to manage and control all liability notifications on
all issues, (3) immediate identification of the security affected by a
corporate action liability notification, (4) detailed disclosure and
clearer explanation of the terms and conditions of the corporate
action, and (5) an audit trail with a complete record of actions taken
regarding a liability notice.
As amended, NASD Rule 11810(i) mandates the use of the automated
liability notification system of a registered clearing agency when the
parties to a failed contract involving securities that have become the
subject of a voluntary corporate action are both participant in a
clearing agency that has an automated service for corporate action
liability notices.\4\ When either or both parties to such a contract
are not participants in a registered clearing agency that has an
automated service for corporate action liability notices, Rule 11810(i)
continues to require the liability notice to be issued using written or
comparable electronic media having immediate receipt capabilities.
---------------------------------------------------------------------------
\4\ Currently DTC is the only registered clearing agency
operating an automated corporate liability notification service.
---------------------------------------------------------------------------
NASD will announce the effective date of the proposed rule change
in a ``Notice to Members'' that will be published no later than sixty
days from the date of approval of this rule change. The NASD
anticipates that the effective date of the rule change will be thirty
days following publication of the Notice to Members announcing the
Commission's approval.
III. Discussion
Section 15A(b)(6) of the Act requires, among other things, that the
rules of a securities association be designed to remove impediments to
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public
interest.\5\ The proposed rule change is consistent with the provisions
of the Act because by eliminating the use of paper corporate action
liability notices and requiring the use of a registered clearing
agency's automated service for corporate action liability notices where
available, the proposed rule change should help reduce the risks,
costs, and delays resulting from missing or inaccurate information
associated with paper corporate action liability notices.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
Accordingly, for the reasons stated above the Commission finds that
the rule change, is consistent with FINRA's obligation under Section
15A(b)(6) of the Act to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to perfect the mechanism of a free
and open market and a national market system, and, in general, to
protect investors and the public interest.
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular with the requirements of Section 15a(b)(6) of the Act and
the rules and regulations thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NASD-2007-035) be and hereby
is approved.
For the Commission by the Division of Trading and Practices,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-25179 Filed 12-27-07; 8:45 am]
BILLING CODE 8011-01-P
a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-25179.htm
...Flying Moose(cmkxunofficial)
Automated Liability Notification System
[Federal Register: December 28, 2007 (Volume 72, Number 248)]
[Notices]
[Page 73927-73928]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de07-188]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56972; File No. SR-NASD-2007-035]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc. (n/k/a/ Financial Industry Regulatory Authority, Inc.);
Order Granting Approval of a Proposed Rule Change Related to Mandated
Use of an Automated Liability Notification System
December 14, 2007.
I. Introduction
On May 25, 2007, the National Association of Securities Dealers,
Inc. (``NASD'')\1\ filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'').\2\ Notice of the
proposal was published in the Federal Register on October 17, 2007.\3\
For the reasons discussed below, the Commission is granting approval of
the proposed rule change.
---------------------------------------------------------------------------
\1\ On July 26, 2007, the Commission approved a proposed rule
change filed by NASD to amend NASD's Certificate of Incorporation to
reflect its name change to Financial Industry Regulatory Authority,
Inc. (``FINRA'') in connection with the consolidation of the member
firm regulatory functions of NASD and NYSE Regulation, Inc. Exchange
Act Release No. 56146 (July 26, 2007); 72 FR 42190 (Aug. 1, 2007).
\2\ 15 U.S.C. 78s(b)(1).
\3\ Securities Exchange Act Release No. 56639 (October 11,
2007), 72 FR 58918 (October 17, 2007) [File No. SR-NASD-2007-035].
---------------------------------------------------------------------------
II. Description
NASD Rule 11810(i) sets, forth the procedures that must be followed
when a party is owed securities that have become the subject of a
voluntary corporate action, such as a tender or exchange offer is
seeking delivery of those securities. Under Rule 11810(i), the owed
party delivers a liability notice to the owing or failing party. The
liability notice sets a cut off date for the delivery of the securities
by the owing party and provides notice to the owing party that it will
be held liable for any damages caused by its failure to deliver the
securities in time for the owed party to participate in the voluntary
corporate action.
If the owing party delivers the securities in response to the
liability notice, it has met its delivery obligation. If the owing
party fails to deliver the securities in sufficient time for the owed
party to participate in the voluntary corporate action, it will be
liable for any damages that may accrue thereby (i.e., the owing party
must deliver proceeds equivalent to the proceeds that the owed party
would have received if it had been able to participate in the offer).
The owed party has the responsibility to communicate its intentions to
the owing party and to prove, if necessary, that the owing party
received the liability notice.
Prior to this proposed rule change, Rule 11810(i) required broker-
dealers to send liability notices using ``electronic media having
immediate receipt capabilities.'' Although there was no one acceptable
means for sending and tracking liability notices, NASD members advised
the NASD that it was industry practice to send liability notices by
fax. However, sending liability notices by fax is a manual, paper-
intensive process that is subject to error. The financial risk to an
owing firm that misses or incorrectly processes a liability notice
relating to a voluntary corporate action can be considerable.
In response to industry need for a reliable and uniform method of
transmitting liability notices, The Depository Trust Company (``DTC'')
developed the SMART/Track for Corporate Action Liability Notification
Service (``SMART/Track''). SMART/Track is a web-based system for the
communication of corporate action
[[Page 73928]]
liability notices that allows DTC participants and National Securities
Clearing Corporation clearing members to create, send, process, and
tract such notices. Transmitting liability notices through SMART/Track
eliminates paper liability notices and provides firms with an
electronic, centralized system for the distribution, management and
control of liability notices. Use of SMART/Track helps reduce the
risks, costs, and delays resulting from missing or inaccurate
information associated with paper corporate action liability notices.
Specifically, provides participants with (1) more timely receipt and
distribution of corporation action liability notifications, (2) a
centralized system to manage and control all liability notifications on
all issues, (3) immediate identification of the security affected by a
corporate action liability notification, (4) detailed disclosure and
clearer explanation of the terms and conditions of the corporate
action, and (5) an audit trail with a complete record of actions taken
regarding a liability notice.
As amended, NASD Rule 11810(i) mandates the use of the automated
liability notification system of a registered clearing agency when the
parties to a failed contract involving securities that have become the
subject of a voluntary corporate action are both participant in a
clearing agency that has an automated service for corporate action
liability notices.\4\ When either or both parties to such a contract
are not participants in a registered clearing agency that has an
automated service for corporate action liability notices, Rule 11810(i)
continues to require the liability notice to be issued using written or
comparable electronic media having immediate receipt capabilities.
---------------------------------------------------------------------------
\4\ Currently DTC is the only registered clearing agency
operating an automated corporate liability notification service.
---------------------------------------------------------------------------
NASD will announce the effective date of the proposed rule change
in a ``Notice to Members'' that will be published no later than sixty
days from the date of approval of this rule change. The NASD
anticipates that the effective date of the rule change will be thirty
days following publication of the Notice to Members announcing the
Commission's approval.
III. Discussion
Section 15A(b)(6) of the Act requires, among other things, that the
rules of a securities association be designed to remove impediments to
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public
interest.\5\ The proposed rule change is consistent with the provisions
of the Act because by eliminating the use of paper corporate action
liability notices and requiring the use of a registered clearing
agency's automated service for corporate action liability notices where
available, the proposed rule change should help reduce the risks,
costs, and delays resulting from missing or inaccurate information
associated with paper corporate action liability notices.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
Accordingly, for the reasons stated above the Commission finds that
the rule change, is consistent with FINRA's obligation under Section
15A(b)(6) of the Act to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to perfect the mechanism of a free
and open market and a national market system, and, in general, to
protect investors and the public interest.
IV. Conclusion
On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
in particular with the requirements of Section 15a(b)(6) of the Act and
the rules and regulations thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change (File No. SR-NASD-2007-035) be and hereby
is approved.
For the Commission by the Division of Trading and Practices,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-25179 Filed 12-27-07; 8:45 am]
BILLING CODE 8011-01-P
a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-25179.htm
...Flying Moose(cmkxunofficial)