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Nasdaq Applies for Registration as a National Securities Exchange
Washington, DC, June 14, 2001 - The Securities and Exchange Commission has published a notice soliciting comments on the Nasdaq Stock Market’s application for registration as a national securities exchange. Comments on the exchange application are due to the SEC no later than July 30.
Nasdaq is currently exempt from the definition of "exchange" under the Securities Exchange Act of 1934 because NASD operates it. Before NASD can follow through on plans to relinquish control of the Nasdaq Stock Market, however, Nasdaq must register as a national securities exchange.
The exchange application provides detailed information about Nasdaq and how it would satisfy the requirements of the Exchange Act. The SEC notice states that there are a number of implications to Nasdaq's separation from the NASD and its application to register and operate as a national securities exchange. The SEC release notes:
- Nasdaq must demonstrate that it has the capacity to comply, and enforce compliance by its members, with the Exchange Act and its own rules.
- Nasdaq’s members will be subject to additional requirements under the Exchange Act when trading Nasdaq stocks.
- While the exchange application contemplates that Nasdaq will be an exchange trading Nasdaq National Market securities and Nasdaq SmallCap securities, the future operation of the Over-the-Counter Bulletin Board must be addressed.
- Before Nasdaq can register as a national securities exchange, it must be able to satisfy its obligations under Section 11A of the Exchange Act relating to securities information processors.