Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 6769 

12The text of the proposed rule change is 

available on ISE’s Web site at http://www.ise.com, 

on the Commission’s Web site at http:// 

www.sec.gov, at ISE, and at the Commission’s 

Public Reference Room. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 74 FR 69184 (Dec. 30, 2009). 

4See letters from Steven B. Caruso, Maddox 

Hargett Caruso, P.C., dated December 29, 2009; 

Scott R. Shewan, President, Public Investors 

Arbitration Bar Association (‘‘PIABA’’), dated 

January 19, 2010; and Jill I. Gross, Director, The 

Investors Rights Clinic at Pace University Law 

School, dated January 20, 2010. 

5Hoboken, New Jersey is less than a mile by ferry 

across the Hudson River from FINRA’s New York 

City hearing location. 

6 If the customer requests a different hearing 

location other than the location closest to the 

customer’s residence at the time of the events giving 

rise to the dispute and makes the request before the 

arbitrator or arbitrators are selected, the Director 

will grant the request. If the customer requests a 

different hearing location other than the location 

closest to the customer’s residence at the time of the 

events giving rise to the dispute and makes the 

request after the arbitrator or arbitrators are 

selected, the customer must submit the request to 

the arbitrator or panel. 

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,12 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 the filing also 

will be available for inspection and 

copying at the principal office of the 

ISE. 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–ISE–2010–10 and should be 

submitted on or before March 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2947 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61497; File No. SR–FINRA– 

2009–073] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change To Amend the 

Hearing Location Rules of the Codes 

of Arbitration Procedure for Customer 

and Industry Disputes 

February 4, 2010. 

I. Introduction 

On October 28, 2009, Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) (f/k/a National Association of 

Securities Dealers, Inc. (‘‘NASD’’)) 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 Rules 

12213(a) and 13313(a) of the Code of 

Arbitration Procedure for Customer 

Disputes (‘‘Customer Code’’) and the 

Code of Arbitration Procedure for 

Industry Disputes (‘‘Industry Code’’), 

respectively, to expand the criteria for 

selecting a hearing location for an 

arbitration proceeding. The proposed 

rule change was published for comment 

in the Federal Register on December 30, 

2009.3 The Commission received three 

comment letters, all of which supported 

the proposed rule change.4 This order 

approves the proposed rule change. 

II. Description of the Proposed Rule 

Change 

Hearing Location Selection Under the 

Customer Code 

Currently, Rule 12213(a) of the 

Customer Code states that generally, the 

Director of FINRA Dispute Resolution 

(‘‘Director’’) will select the hearing 

location closest to the customer’s 

residence at the time of the events 

giving rise to the dispute. FINRA has 

determined that its policy concerning 

selection of a hearing location under the 

Customer Code may be broader than the 

rule describes. 

Under the current rule in the 

Customer Code, for example, if a 

customer in an arbitration proceeding 

lives in Hoboken, New Jersey, the 

Director will select the New York City 

hearing location, because this hearing 

location is closer to the customer’s 

residence, Hoboken,5 than FINRA’s 

Newark, New Jersey hearing location. 

There have been instances, however, 

in which the Director has granted 

customers’ requests to select a hearing 

location in their state of residence at the 

time of the events giving rise to the 

dispute, even though the in-state 

hearing location may not be the closest 

hearing location. Thus, in the example 

above, if the customer requests the 

Newark, New Jersey hearing location, 

the Director generally will grant the 

request, even though the closest hearing 

location is the New York City location. 

The Director typically attempts to honor 

such requests as a convenience to public 

customers. 

FINRA is proposing, therefore, to 

amend Rule 12213(a) of the Customer 

Code to add this criterion for selecting 

a hearing location. The proposed 

amendment to the rule would state that 

the Director will select the hearing 

location closest to the customer’s 

residence at the time of the events 

giving rise to the dispute, unless the 

hearing location closest to the 

customer’s residence is in a different 

state. In that case, the customer may 

request a hearing location in the 

customer’s state of residence at the time 

of the events giving rise to the dispute. 

Under the proposal, the Director 

would continue to select the hearing 

location closest to the customer’s 

residence at the time of the events 

giving rise to the dispute. However, the 

Director would honor a customer’s 

request for a different hearing location 

in the customer’s state of residence.6

FINRA believes the proposal is 

customer-friendly because it gives 

customers more control over the 

arbitration process, by providing them 

with a choice of hearing locations. 

Hearing Location Selection Under the 

Industry Code 

Rule 13213(a) of the Industry Code 

states, in relevant part, that in cases 

involving an associated person, the 

Director will generally select the hearing 

location closest to where the associated 

person was employed at the time of the 

events giving rise to the dispute. FINRA 

has not received requests from 

associated persons for different hearing 

locations, other than the closest hearing 

location under the current rule. 

However, FINRA believes that 

associated persons also should have the 

option to select a hearing location in 

their state of employment at the time of 

the events giving rise to the dispute, if 

the closest hearing location to their 

employment is in a different state. 

Thus, FINRA is proposing to amend 

Rule 13213(a) of the Industry Code in 

two ways. First, FINRA would broaden 

the criteria for selecting the appropriate 

hearing location by referring to the time 


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6770 Federal Register / Vol. 75, No. 27 / Wednesday, February 10, 2010 / Notices 

7 If the associated person requests a different 

hearing location other than the location closest to 

where the associated person was employed at the 

time of the of the events giving rise to dispute and 

makes the request before the arbitrator or arbitrators 

are selected, the Director will grant the request. If 

the associated person requests a different hearing 

location other than the location closest to where the 

associated person was employed at the time of the 

of the events giving rise to dispute and makes the 

request after the arbitrator or arbitrators are 

selected, the associated person must submit the 

request to the arbitrator or panel. 

8 In its comment, PIABA also recommended that 

FINRA consider additional changes in a future rule 

filing. Those suggestions are outside the scope of 

the current proposed rule change. 

9 In approving the 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). 

10 15 U.S.C. 78o–3(b)(6). 

11 15 U.S.C. 78s(b)(2). 

12 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). 

4An SQT is an Exchange Registered Options 

Trader (‘‘ROT’’) who has received permission from 

the Exchange to generate and submit option 

quotations electronically through an electronic 

interface with AUTOM via an Exchange approved 

proprietary electronic quoting device in eligible 

options to which such SQT is assigned. See 

Exchange Rule 1014(b)(ii)(A). 

5An RSQT is an ROT that is a member or member 

organization with no physical trading floor 

presence who has received permission from the 

Exchange to generate and submit option quotations 

electronically through AUTOM in eligible options 

to which such RSQT has been assigned. An RSQT 

may only submit such quotations electronically 

from off the floor of the Exchange. See Exchange 

Rule 1014(b)(ii)(B). 

of the events giving rise to the dispute. 

FINRA notes that this amendment 

clarifies current practice and makes the 

rule language under the Industry Code 

consistent with the comparable rule 

under the Customer Code. The second 

change to Rule 13213(a) would allow an 

associated person to request a different 

hearing location, other than the closest 

hearing location. Specifically, the 

proposal would state that the Director 

will select the hearing location closest 

to where the associated person was 

employed at the time of the events 

giving rise to the dispute, unless the 

hearing location closest to the 

associated person’s employment is in a 

different state. In that case, the 

associated person may request a hearing 

location in his or her state of 

employment at the time of the events 

giving rise to the dispute. 

Under the proposal, the Director 

would continue to select the hearing 

location closest to where the associated 

person was employed at the time of the 

events giving rise to the dispute. 

However, the Director would honor an 

associated person’s request for a 

different hearing location in the 

associated person’s state of 

employment.7 FINRA believes the 

proposal would benefit associated 

persons by providing them with a 

choice of hearing locations. 

Three commenters addressed the 

proposed rule change and all three 

urged the Commission to approve it.8

III. Discussion and Commission 

Findings 

The Commission finds the proposed 

rule change to be consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities association.9 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with the provisions of Section 15A(b)(6) 

of the Act,10 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 

Commission believes that the proposed 

rule change is consistent with FINRA’s 

statutory obligations under the Act to 

protect investors and the public interest 

because the proposal would assist in the 

efficient administration of the 

arbitration process by further clarifying 

the procedures of selecting hearing 

locations. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,11 that the 

proposed rule change (SR–FINRA– 

2009–073) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–2867 Filed 2–9–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61492; File No. SR–Phlx– 

2010–10] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX, Inc. Relating to the 

Exchange’s Quote Lock Counting 

Period 

February 4, 2010. 

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 January 

29, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. Phlx has 

designated the proposed rule change as 

constituting a rule change under Rule 

19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with 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 

The Exchange proposes to amend 

Commentaries .02 and .03 to Exchange 

Rule 1082, Firm Quotations, to modify 

the duration of the ‘‘counting period’’ 

that is initiated when electronically 

submitted quotations of specialists, 

Streaming Quote Traders (‘‘SQTs’’),4 and 

Remote Streaming Quote Traders 

(‘‘RSQTs’’) 5 interact with one another 

and result in a locked market (e.g., $1.00 

bid—1.00 offer) or crossed market (e.g., 

$1.10 bid—1.00 offer). The Exchange 

also proposes technical amendments as 

described below. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

principal office of the Exchange, 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, the 

Exchange 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. The 

Exchange 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 purpose of the proposed rule 

change is to give the Exchange the 

ability to improve the speed with which 

the Exchange’s systems can 

automatically execute locked or crossed 

quotations against one another. 


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