Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20757 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 64039 

(March 4, 2011), 76 FR 13251. 

4 15 U.S.C. 78s(b)(2). 

5 15 U.S.C. 78s(b)(2)(A)(ii)(I). 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 64011 

(March 2, 2011), 76 FR 12775 (‘‘Notice’’). 

4See letter from Randall Mayne, Blue Capital 

Group, to Elizabeth M. Murphy, Secretary, 

Commission, dated March 18, 2011; letter from 

Andrew Stevens, Legal Counsel, IMC Chicago, LLC, 

to Elizabeth M. Murphy, Secretary, Commission, 

dated March 24, 2011. 

5 15 U.S.C. 78s(b)(2). 

6 15 U.S.C. 78s(b)(2)(A)(ii)(I). 

7 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64273; File No. SR–NYSE– 

2011–09] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change Amending Exchange 

Rule 103B To Modify the Application of 

the Exchange’s Designated Market 

Maker Allocation Policy in the Event of 

a Merger Involving One or More Listed 

Companies 

April 8, 2011. 

On February 24, 2011, New York 

Stock Exchange LLC (‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘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 amend Exchange Rule 103B to 

modify the application of the 

Exchange’s Designated Market Maker 

allocation policy in the event of a 

merger involving one or more listed 

companies. The proposed rule change 

was published for comment in the 

Federal Register on March 10, 2011.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day for this filing 

is April 24, 2011. 

The Commission is hereby extending 

the 45-day period for Commission 

action on the proposed rule change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change. In particular, the extension 

of time will ensure that the Commission 

has sufficient time to consider and take 

action on the Exchange’s proposal. 

Accordingly, pursuant to Section 

19(b)(2)(A)(ii)(I) of the Act 5 and for the 

reasons stated above, the Commission 

designates June 8, 2011, as the date by 

which the Commission should either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

File No. SR–NYSE–2011–09. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8920 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64266; File No. SR–C2– 

2011–008] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Designation of a Longer 

Period for Commission Action on a 

Proposed Rule Change To Allow the 

Listing and Trading of a P.M.-Settled 

S&P 500 Index Option Product 

April 8, 2011. 

I. Introduction 

On February 28, 2011, C2 Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘C2’’) filed with the Securities and 

Exchange Commission (‘‘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 permit the 

listing and trading of P.M.-settled S&P 

500 Index options on C2. The proposed 

rule change was published for comment 

in the Federal Register on March 8, 

2011.3 The Commission received two 

comments on the proposal.4

Section 19(b)(2) of the Act 5 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day for this filing 

is April 22, 2011. 

The Commission is hereby extending 

the 45-day period for Commission 

action on the proposed rule change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change. In particular, the extension 

of time will ensure that the Commission 

has sufficient time to consider and take 

action on the Exchange’s proposal in 

light of, among other things, the 

comments received on the proposal. 

Accordingly, pursuant to Section 

19(b)(2)(A)(ii)(I) of the Act 6 and for the 

reasons stated above, the Commission 

designates June 6, 2011, as the date by 

which the Commission should either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

File No. SR–C2–2011–008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8918 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64225; File No. SR–FINRA– 

2011–006] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Granting 

Approval of a Proposed Rule Change 

Relating To Motions in Arbitration 

April 7, 2011. 

I. Introduction 

On February 4, 2011, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) 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 

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 proposed rule 

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20758 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

3See Exchange Act Release No. 63910 (February 

15, 2011), 76 FR 9840 (February 22, 2010) 

(‘‘Notice’’). 4See letter from William A. Jacobson, Esq., 

Associate Clinical Professor and Director, Cornell 

Securities Law Clinic, and Negisa Balluku, Cornell 

Law School, dated March 15, 2011 (‘‘Cornell 

Letter’’); letter from Lisa A. Catalano, Esq., Director 

and Associate Professor of Clinical Legal Education, 

Christine Lazaro, Esq., Supervising Attorney, Clair 

S. Seu, Student Intern, and Stephen Chou, Student 

Intern, St. John’s University School of Law 

Securities Arbitration Clinic, dated March 15, 2011 

(‘‘St. John’s Letter’’); and letter received by FINRA 

from David M. Foster, Esq. dated March 21, 2011, 

which addressed issues beyond the scope of the 

proposed rule change. 

5See letter from Margo A. Hassan, Assistant Chief 

Counsel, FINRA, to Elizabeth M. Murphy, 

Secretary, Commission, dated April 1, 2011 

(‘‘FINRA Response’’). 

6Rules 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. 

7Rules 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. 

8See http://www.finra.org/ArbitrationMediation/ 

Parties/ArbitrationProcess/NoticesToParties/ 

P121652. 

9Cornell Letter. 

10FINRA Response. 

11St. John’s Letter. 

12FINRA Response. 

13St. John’s Letter. 

14Telephone conversation with Margo Hassan of 

FINRA on April 6, 2011. 

15FINRA Response. 

16St. John’s Letter. 

17FINRA Response. 

18 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

19 15 U.S.C. 78o–3(b)(6). 

change was published for comment in 

the Federal Register on February 22, 

2011.3 The Commission received three 

comment letters on the proposed rule 

change.4 FINRA responded to these 

comments in a letter dated April 1, 

2011.5 This order approves the 

proposed rule change. 

II. Description of Proposal 

The Codes specify time periods for a 

party to respond to a motion,6 including 

a motion to dismiss.7 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 proposed 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 website stating that 

moving parties have five calendar days 

from receipt of a response to a motion 

to submit a reply to the response.8 After 

the five-day period, FINRA forwards to 

the panel at the same time the motion, 

any response to the motion, and any 

reply. If FINRA receives a reply after the 

five-day 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 FINRA’s experience with 

the subpoena rules and its revised 

practice relating to replies to responses, 

FINRA does not expect the proposed 

five-day period to result in undue 

delays. 

III. Discussion of Comment Letters 

One commenter asked FINRA to 

consider amending the subpoena rules 

to provide for a five-day period to reply 

to responses to motions in order to 

maintain consistency in the Codes’ 

timeframes.9 FINRA stated that as it is 

not amending the subpoena rules in the 

proposed rule change, the Cornell Letter 

is outside the scope of the proposal. 

However, FINRA did express its 

intention to consider the suggestion 

made in the Cornell Letter for possible 

future rulemaking.10

One commenter raised a concern that 

the proposed five-day period may not 

provide pro se claimants with adequate 

time to prepare their replies.11 FINRA 

responded that pro se claimants would 

have enough time to reply under the 

proposed rule change, noting that pro se 

claimants would already be aware of the 

issues raised in a response, having 

drafted the initial motion, and that if 

pro se claimants need additional time to 

reply to a response, the Director may 

extend the deadline for good cause 

pursuant to FINRA Rule 12207(c).12

This commenter also suggested that pro 

se claimants receive additional guidance 

regarding their procedural rights, 

including those not expressly codified 

in a rule, such as the ability to file a surreply.13 In response, FINRA indicated 

that sur-replies and additional guidance 

regarding sur-replies are outside the 

scope of the current rulemaking,14

noting that it did not wish to encourage 

additional filings by addressing surreplies in the Codes at this time.15

Finally, the commenter asked that 

FINRA amend the rules to include 

express language limiting the scope of 

motion replies to those issues and facts 

previously raised in the motion and 

response.16 FINRA responded that it 

does not intend to amend the proposal 

in response to this comment, as it 

believes that arbitrators are in the best 

position to determine the scope of 

motions and replies thereto and would 

address any such concerns directly with 

the parties.17

IV. Discussion and Commission 

Findings 

The Commission has carefully 

reviewed the proposed rule change, the 

comments received, and FINRA’s 

response to the comments, and finds 

that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities association.18 In particular, 

the Commission finds that the proposed 

rule change is consistent with Section 

15A(b)(6) of the Act,19 which, among 

other things, requires that FINRA rules 

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. More 

specifically, the Commission finds that 

the proposed rule change codifies 

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Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20759 

20 15 U.S.C. 78s(b)(2). 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4See Securities Exchange Act Release No. 63325 

(November 17, 2010), 75 FR 71479 (November 23, 

2010) (Order Approving File No. SR–FINRA–2010– 

039). 

5The current FINRA rulebook consists of (1) 

FINRA rules; (2) NASD rules; and (3) rules 

incorporated from NYSE (‘‘Incorporated NYSE 

rules’’) (together, the NASD Rules, and Incorporated 

NYSE Rules are referred to as the ‘‘Transitional 

Rulebook’’). While the NASD rules generally apply 

to all FINRA member firms, the Incorporated NYSE 

rules apply only to those members of FINRA that 

are also members of the NYSE (‘‘Dual Members’’). 

The FINRA rules apply to all FINRA member, 

unless such rules have a more limited application 

by their terms. For more information about the 

rulebook consolidation process, see Information 

Notice, March 12, 2008 (Rulebook Consolidation 

Process). 

6 15 U.S.C. 78o–3(b)(6). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6)(iii). Among other 

things, Rule 19b–4(f)(6)(iii) requires that a selfregulatory organization submit to the Commission 

written notice of its intent to file the proposed rule 

change, along with a brief description and text of 

the proposed rule change, at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Commission notes that FINRA 

has satisfied the pre-filing notice requirement. 

existing practice and helps to promote 

a fair and efficient process for the 

resolution of claims. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,20 that the 

proposed rule change (SR–FINRA– 

2011–006), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8896 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64260; File No. SR–FINRA– 

2011–016] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Delay the 

Implementation date of FINRA Rule 

2090 (Know Your Customer) and 

FINRA Rule 2111 (Suitability) 

April 8, 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 April 7, 

2011, 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 and 

II below, which Items have been 

substantially prepared by FINRA. 

FINRA has designated the proposed rule 

change as constituting a ‘‘noncontroversial’’ rule change under 

paragraph (f)(6) of Rule 19b–4 under the 

Act,3 which renders the proposal 

effective upon receipt of this filing by 

the Commission. 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 a rule change to 

delay the implementation date for 

FINRA Rule 2090 (Know Your 

Customer) and FINRA Rule 2111 

(Suitability), as approved in SR–FINRA– 

2010–039, until July 9, 2012. 

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 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. 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 

On November 17, 2010, the SEC 

approved FINRA’s proposal to adopt 

rules governing know-your-customer 

and suitability obligations 4 for the 

consolidated FINRA rulebook.5 On 

January 10, 2011, FINRA issued 

Regulatory Notice 11–02, which 

provided guidance regarding the new 

rules and announced an implementation 

date of October 7, 2011. Following SEC 

approval of the rules and publication of 

the Regulatory Notice, numerous firms 

requested that the approved rules’ 

implementation date be delayed to 

allow firms additional time to determine 

the types of systems and procedural 

changes they need to make, implement 

those changes, and educate associated 

persons and supervisors regarding 

compliance with the rules. FINRA is 

filing this rule change to move the 

implementation date for Rules 2090 and 

2111 from October 7, 2011, to July 9, 

2012, and has filed it as a ‘‘noncontroversial’’ rule change that is 

effective upon filing. 

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. The proposed rule 

change furthers these purposes because 

it will allow firms to better prepare 

procedures and systems and better 

educate associated persons to comply 

with the requirements of these 

important rules. 

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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed under 

Rule 19b–4(f)(6) 9 normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) 10 permits the Commission to 

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