9838 Federal Register / Vol. 76, No. 35 / Tuesday, February 22, 2011 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Rel. No. 60132 

(June 17, 2009), 74 FR 30191 (June 24, 2009) (File 

No. SR–FINRA–2009–015). FINRA announced 

implementation of New Rule 13806 (Promissory 

Agency name Organization name Position title Authorization No. Effective date 

Centers for Medicare and Medicaid 

Services.

Confidential Assistant, Centers for Medicare and 

Medicaid Services.

DH110013 ............... 12/10/2010 

DEPARTMENT OF HOMELAND 

SECURITY.

Office of the Executive Secretary 

for Operations and Administration.

Secretary Briefing Book Coordinator.DM110023 ............... 12/13/2010 

Office of the Assistant Secretary 

for Public Affairs.

Press Assistant ................... DM110026 ............... 12/13/2010 

Office of the General Counsel ....... Special Assistant ................ DM110028 ............... 12/13/2010 

Immediate Office of the Deputy 

Secretary.

Special Assistant ................ DM110030 ............... 12/29/2010 

Department of Homeland Security Deputy Assistant Secretary 

for Strategic Communications.

DM110031 ............... 12/22/2010 

DEPARTMENT OF HOUSING AND 

URBAN DEVELOPMENT.

Office of the Chief Human Capital 

Officer.

Staff Assistant ..................... DU110010 ............... 12/10/2010 

Office of Sustainable Housing and 

Communities.

Senior Advisor .................... DU110004 ............... 12/10/2010 

Office of Policy Development and 

Research.

Special Assistant ................ DU110011 ............... 12/21/2010 

DEPARTMENT OF THE INTERIOR Office of the Deputy Secretary ...... Special Assistant ................ DI110013 ................. 12/22/2010 

DEPARTMENT OF JUSTICE .......... Office of Public Affairs ................... Press Assistant ................... DJ110023 ................ 12/29/2010 

Office of the Deputy Attorney General.Counsel ............................... DJ110025 ................ 12/30/2010 

Office of the Deputy Attorney General.Senior Counsel ................... DJ100172 ................ 12/21/2010 

Office of Legal Policy ..................... Counsel ............................... DJ110027 ................ 12/30/2010 

DEPARTMENT OF LABOR ............. Office of Congressional and Intergovernmental Affairs.Senior Legislative Officer ... DL110008 ................ 12/17/2010 

SMALL BUSINESS ADMINISTRATION.Office of Communications and 

Public Liaison.

Senior Communications Assistant.SB110005 ................ 12/08/2010 

Office of Field Operations .............. Regional Administrator, Region III, Philadelphia, PA.SB110006 ................ 12/10/2010 

DEPARTMENT OF STATE ............. Foreign Policy Planning Staff ........ Speechwriter ....................... DS110013 ................ 12/03/2010 

DEPARTMENT OF THE TREASURY.Secretary of the Treasury .............. Special Assistant ................ DY110023 ................ 12/20/2010 

Authority: 5 U.S.C. 3301 and 3302; E.O. 

10577, 3 CFR 1954–1958 Comp., p. 218. 

U.S. Office of Personnel Management. 

John Berry, 

Director. 

[FR Doc. 2011–3794 Filed 2–18–11; 8:45 am] 

BILLING CODE 6325–39–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63909; File No. SR–FINRA– 

2011–005] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Promissory Note Proceedings 

February 15, 2011. 

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 February 

4, 2011, the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

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 substantially prepared by 

FINRA. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to amend Rule 

13806 of the Code of Arbitration 

Procedure for Industry Disputes 

(‘‘Industry Code’’) to provide that FINRA 

will appoint a chair-qualified public 

arbitrator to a panel resolving a 

promissory note dispute instead of 

appointing a chair-qualified public 

arbitrator also qualified to resolve a 

statutory discrimination claim. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA, 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, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. 

FINRA 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 

In 2009, FINRA implemented new 

procedures to expedite the 

administration of cases that solely 

involve a broker-dealer’s claim that an 

associated person failed to pay money 

owed on a promissory note.3 Under 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 76, No. 35 / Tuesday, February 22, 2011 / Notices 9839 

Note Proceedings) in Regulatory Notice 09–48. The 

effective date was September 14, 2009. 

4See Rule 13802(c)(3). 

5Under Rule 13806, if an associated person does 

not file an answer, or files an answer but does not 

assert any counterclaims or third party claims, 

regardless of the amount in dispute, a single 

statutory discrimination qualified arbitrator decides 

the case. If an associated person files a counterclaim 

or third party claim, FINRA bases panel 

composition on the amount of the counterclaim or 

third party claim. For counterclaims and third party 

claims that are not more than $100,000, FINRA 

appoints a single statutory discrimination qualified 

arbitrator. For counterclaims and third party claims 

of more than $100,000, FINRA appoints a threearbitrator panel comprised of a statutory 

discrimination qualified arbitrator, a public 

arbitrator, and a non-public arbitrator. 

6Of the first 175 promissory note cases 

completed, arbitrators decided the case on the 

pleadings 76 percent of the time (unless the case 

concluded by settlement or some other means). 

7See Rule 12400(c). 8 15 U.S.C. 78o–3(b)(6). 

these procedures, FINRA appoints a 

single chair-qualified public arbitrator 

from the roster of arbitrators approved 

to hear statutory discrimination claims 

(a statutory discrimination qualified 

arbitrator) 4 to resolve the dispute.5

These specially qualified arbitrators are 

public chair-qualified arbitrators who 

also are attorneys familiar with 

employment law and have at least ten 

years of legal experience. In addition, 

they may not have represented 

primarily the views of employers or of 

employees within the last five years. 

FINRA proposed using statutory 

discrimination qualified arbitrators 

because of the depth of their experience 

and their familiarity with employment 

law. At the time that FINRA filed the 

proposed rule change, these arbitrators 

were underutilized at the forum. 

Since implementing the new 

procedures, FINRA has found that 

promissory note cases do not require 

extensive experience or depth of 

knowledge (or the limitation on 

representation of employers or of 

employees within the last five years). In 

a majority of completed cases, 

arbitrators decided the case on the 

pleadings and the respondent broker did 

not appear.6 Experience with the new 

procedures leads FINRA to propose 

amending the Industry Code to provide 

that FINRA will appoint a chairqualified public arbitrator to a panel 

resolving a promissory note dispute 

instead of appointing a statutory 

discrimination qualified arbitrator. 

Chair-qualified arbitrators have 

completed chair training and are 

attorneys who have served through 

award on at least two cases, or, if not 

attorneys, are arbitrators who have 

served through award on at least three 

cases.7

In addition, the number of promissory 

note cases has more than doubled in the 

past two years. As a result of this 

substantial increase, it is becoming more 

difficult to appoint panels solely with 

statutory discrimination qualified 

arbitrators to these cases. Under the 

proposed rule change, the number of 

arbitrators available for appointment in 

promissory note cases would increase 

significantly. The proposed rule change 

would ensure that FINRA has a 

sufficient number of qualified 

arbitrators readily available to resolve 

these matters. 

FINRA proposes to announce the 

effective date of the proposed rule 

change in a Regulatory Notice to be 

published no later than 60 days 

following Commission approval. The 

effective date will be 30 days following 

publication of the Regulatory Notice 

announcing Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,8 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes that the 

proposed rule change is consistent with 

the provisions of the Act noted above 

because it would ensure that FINRA has 

a sufficient number of qualified 

arbitrators readily available to resolve 

promissory note cases. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA 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 45 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 

shall: 

(A) By order approve or disapprove 

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 rulecomments@sec.gov. Please include File 

Number SR–FINRA–2011–005 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2011–005. 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 Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of 

FINRA. 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–FINRA–2011–005 and 

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9840 Federal Register / Vol. 76, No. 35 / Tuesday, February 22, 2011 / Notices 

9 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Rules 12503(b) and 13503(b) (Responding to 

Motions) provide, generally, that parties have 10 

days from the receipt of a written motion to respond 

to the motion. 

4Rules 12206(b) and 13206(b) (Dismissal under 

Rule) provide that parties have 30 days to respond 

to motions. Rules 12504(a) and 13504(a) (Motions 

to Dismiss Prior to Conclusion of Case in Chief) 

provide that parties have 45 days to respond to 

motions. 

5See http://www.finra.org/ArbitrationMediation/ 

Parties/ArbitrationProcess/NoticesToParties/ 

P121652. 

6 15 U.S.C. 78o–3(b)(6). 

should be submitted on or before March 

15, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–3799 Filed 2–18–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63910; File No. SR–FINRA– 

2011–006] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Motions in Arbitration 

February 15, 2011. 

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 February 

4, 2011, the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

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 substantially prepared by 

FINRA. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to amend FINRA 

Rules 12206, 12503, and 12504 of the 

Code of Arbitration Procedure for 

Customer Disputes, and Rules 13206, 

13503, and 13504 of the Code of 

Arbitration Procedure for Industry 

Disputes (collectively, ‘‘Codes’’), to 

provide moving parties with a five-day 

period to reply to responses to motions. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA, 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, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. 

FINRA 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 

The Codes specify time periods for a 

party to respond to a motion,3 including 

a motion to dismiss.4 They do not 

expressly provide time periods for the 

party that made the original motion (the 

‘‘moving party’’) to reply to a response, 

which happens on occasion. FINRA’s 

practice has been to forward the reply 

to the arbitrators, even when staff 

already have sent the motion and 

response to the arbitrators. Since the 

Codes do not prescribe a time period for 

replying to responses to motions, there 

have been instances where arbitrators 

reviewed the motion papers and even 

ruled on a motion before receiving a 

reply, causing confusion and wasting 

time. 

FINRA is proposing to amend Rules 

12206 and 13206 (Time Limits), Rules 

12503 and 13503 (Motions), and Rules 

12504 and 13504 (Motions to Dismiss), 

to provide a moving party with a fiveday period to reply to a response to a 

motion. The proposed amendments 

would codify FINRA’s practice relating 

to replies to responses to motions and 

make it transparent. The proposal 

would provide parties with an 

opportunity to brief fully the issues in 

dispute, and ensure that arbitrators have 

all of the motion papers before issuing 

a final decision on the motion. 

FINRA considered whether codifying 

a reply period might encourage 

additional replies to responses to 

motions, or cause significant delays in 

the arbitration proceeding. FINRA 

believes that a five-day period for 

replies gives moving parties sufficient 

time to react to responses to motions 

without causing significant delays to 

proceedings. Currently, FINRA Rules 

12512 and 13512 (Subpoenas) provide 

moving parties with a 10-day period in 

which to reply to opposing parties’ 

objections to motions. FINRA has not 

experienced any increase in replies 

related to subpoenas because of these 

rules and the 10-day reply period has 

not caused significant delays. 

Further, on June 21, 2010, FINRA 

revised its practice relating to responses 

to motions and published a Notice to 

Parties on its Web site stating that 

moving parties have five calendar days 

from receipt of a response to a motion 

to submit a reply to the response.5 After 

the five-day period, FINRA forwards the 

motion, any response to the motion, and 

any reply to the panel at the same time. 

If FINRA receives a reply after the fiveday period expires, staff forwards the 

reply to the panel upon its receipt. 

However, FINRA staff does not delay 

sending the motion, response to the 

motion, and reply to the panel after the 

five-day period expires, and the panel 

may issue a decision upon receipt of 

those documents. 

Based on our experience with the 

subpoena rules and our revised practice 

relating to replies to responses, FINRA 

does not expect the proposal to add a 

five-day period for replies to responses 

to motions to result in undue delays. 

FINRA proposes to announce the 

effective date of the proposed rule 

change in a Regulatory Notice to be 

published no later than 60 days 

following Commission approval. The 

effective date will be 30 days following 

publication of the Regulatory Notice 

announcing Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,6 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes that the 

proposed rule change will assist parties 

in arbitrations by codifying FINRA’s 

practice relating to replies to responses 

to motions. The proposed rule change 

would ensure that parties have an 

opportunity to brief fully the issues in 

dispute, and that arbitrators have all of 

the motion papers before issuing a final 

decision on the motion. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

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