Proposed Rule Change to Reflect the Complete Separation of Nasdaq from NASD upon the Operation of Nasdaq as a National Securities Exchange for All Exchange-Listed Securities

NASD is filing with the Securities and Exchange Commission ("SEC" or "Commission") a proposed rule change to (1) delete the Nasdaq By-Laws and amend the Plan of Allocation and Delegation of Functions by NASD to Subsidiaries ("Delegation Plan"), the By-Laws of NASD, NASD Regulation and NASD Dispute Resolution, and NASD rules to reflect The Nasdaq Stock Market Inc.'s ("Nasdaq") separation from NASD upon the operation of The NASDAQ Stock Market LLC (the "Nasdaq Exchange") as a national securities exchange for non-Nasdaq exchange-listed securities; (2) amend NASD rules relating to quoting and trading otherwise than on an exchange in non-Nasdaq exchange-listed securities to reflect changes in the services provided by NASD in this regard; and (3) expand the scope of the NASD/Nasdaq Trade Reporting Facility rules to include trade reporting in non-Nasdaq exchange-listed securities.