7532 Federal Register / Vol. 75, No. 33 / Friday, February 19, 2010 / Notices 

23 15 U.S.C. 78o–3(b)(6). 

24The text of the proposed rule change is 

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

www.sec.gov/. 

25 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 Regulatory Notice 09–71 (December 2009) 

(SEC Approves Consolidated FINRA Rules 

Governing Financial Responsibility). FINRA 

announced in Regulatory Notice 09–71 that the new 

financial responsibility rules will be implemented 

on February 8, 2010. 

See also Securities Exchange Act Release No. 

60933 (November 4, 2009), 74 FR 58334 (November 

12, 2009) (Order Granting Approval to Proposed 

Rule Change; File No. SR–FINRA–2008–067); 

Securities Exchange Act Release No. 61408 (January 

22, 2010), 75 FR 4596 (January 28, 2010) (Notice of 

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,23 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 ensure that 

FINRA continues to receive important 

information regarding transactions in 

restricted securities traded pursuant to 

SEC Rule 144A. 

FINRA believes that the other 

proposed changes to the definition of 

‘‘OTC Equity Security’’ will ensure that 

the appropriate types of securities are 

addressed in the applicable FINRA rules 

and that key terminology reflects 

current market structure and trends. 

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 35 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 

will: 

(A) by order approve 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 Exchange 

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–2010–003 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–2010–003. 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,24 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 

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–2010–003 and 

should be submitted on or before March 

12, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3142 Filed 2–18–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61513; File No. SR–FINRA– 

2010–008] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Incorporated 

NYSE Rule 312(g)(1) 

February 12, 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 February 

4, 2010, 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 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ 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 proposes to make a technical 

change to the FINRA rulebook. FINRA 

proposes to amend Incorporated NYSE 

Rule 312(g)(1) so as to delete certain 

provisions that are rendered obsolete by 

the adoption of new FINRA Rule 4110 

in FINRA’s consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’).4


pwalker on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 75, No. 33 / Friday, February 19, 2010 / Notices 7533 

Filing and Immediate Effectiveness of Proposed 

Rule Change; File No. SR–FINRA–2010–004). 

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 members, 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 members, 

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). 

6See note 4. 

7FINRA Rule 4110.02 provides that, for purposes 

of the rule, all requirements that apply to a member 

that clears or carries customer accounts also apply 

to any member that, operating pursuant to the 

exemptive provisions of SEA Rule 15c3–3(k)(2)(i), 

either clears customer transactions pursuant to such 

exemptive provisions or holds customer funds in a 

bank account established thereunder. 

8 15 U.S.C. 78o–3(b)(6). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission written 

notice of its intent to file the proposed rule change, 

Continued 

Proposed new language is italicized; 

proposed deletions are in brackets: 

* * * * * 

Rule 312. Changes Within Member 

Organizations 

(a) through (f) No Change. 

(g) A member corporation shall not 

without the prior written approval of 

the Exchange: 

(1) [Reduce its capital or purchase or 

redeem any shares of any class of its 

stock or] I[i]n any way amend its 

charter, certificate of incorporation or 

by-laws[, and the Exchange may at any 

time in its discretion require the 

corporation to restore or increase capital 

or surplus, or both]. 

(2) through (3) No Change. 

The Exchange will approve any action 

described in (1), (2) or (3) above unless 

it determines that such action will 

impair the financial responsibility or 

operational capability of the member 

corporation. 

(h) through (j) No Change. 

* * * * * 

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 

FINRA proposes to make a technical 

change to the FINRA rulebook.5 FINRA 

proposes to delete from Incorporated 

NYSE Rule 312(g)(1) the phrases that 

read ‘‘[r]educe its capital or purchase or 

redeem any shares of any class of its 

stock or’’ and ‘‘and the Exchange may at 

any time in its discretion require the 

corporation to restore or increase capital 

or surplus, or both.’’ FINRA is proposing 

the rule change because the Commission 

has approved for inclusion in the 

Consolidated FINRA Rulebook a set of 

new financial responsibility rules that, 

among other things, regulate 

withdrawals of equity capital by 

members. Accordingly, the new FINRA 

rules render the above-mentioned 

Incorporated NYSE rule provisions 

obsolete.6 Specifically: 

• New FINRA Rule 4110(c)(1) 

prohibits a member from withdrawing 

equity capital for a period of one year 

from the date such equity capital is 

contributed, unless otherwise permitted 

by FINRA in writing. The rule provides 

that, subject to the requirements of 

FINRA Rule 4110(c)(2), members are not 

precluded from withdrawing profits 

earned. FINRA Rule 4110(c)(2) prohibits 

any carrying or clearing member,7

without the prior written approval of 

FINRA, from withdrawing capital, 

paying a dividend or effecting a similar 

distribution that would reduce the 

member’s equity, or making any 

unsecured advance or loan to a 

stockholder, partner, sole proprietor, 

employee or affiliate, where such 

withdrawals, payments, reductions, 

advances or loans in the aggregate, in 

any 35 rolling calendar day period, on 

a net basis, would exceed 10 percent of 

the member’s excess net capital. 

• New FINRA Rule 4110(a) provides 

that, when necessary for the protection 

of investors or in the public interest, 

FINRA may, at any time or from time to 

time with respect to a particular 

carrying or clearing member or all 

carrying or clearing members, pursuant 

to authority exercised by FINRA’s 

Executive Vice President charged with 

oversight for financial responsibility, or 

his or her written officer delegate, 

prescribe greater net capital or net worth 

requirements than those otherwise 

applicable, including more stringent 

treatment of items in computing net 

capital or net worth, or require such 

member to restore or increase its net 

worth. The rule provides that, in any 

such instance, FINRA shall issue a 

notice pursuant to new FINRA Rule 

9557. 

FINRA has filed the proposed rule 

change for immediate effectiveness and 

has requested that the SEC waive the 

requirement that the proposed rule 

change not become operative for 30 days 

after the date of the filing, such that 

FINRA can implement the proposed 

rule change on February 8, 2010. 

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 purposes of the Act because it will 

provide greater clarity to members and 

the public regarding FINRA’s 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 9 and Rule 19b– 

4(f)(6) thereunder.10

A proposed rule change filed under 

19b–4(f)(6) normally does not become 

operative prior to 30 days after the date 

of filing. However, Rule 19b– 

4(f)(6)(iii) 11 permits the Commission to 


pwalker on DSK8KYBLC1PROD with NOTICES
7534 Federal Register / Vol. 75, No. 33 / Friday, February 19, 2010 / Notices 

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 five-day pre-filing notice 

requirement. 

12See notes 4 and 5. 

13 17 CFR 240.19b–4(f)(6)(iii). 

14See FINRA Regulatory Notice 09–71 (December 

2009). 

15For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3For a complete description of Phlx XL II, see 

Securities Exchange Act Release No. 59995 (May 

28, 2009), 74 FR 26750 (June 3, 2009) (SR–Phlx– 

2009–32). The instant proposed fees will apply only 

to options entered into, and routed by, the Phlx XL 

II system. 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. As 

noted above, the Commission approved 

FINRA 4110 as part of a new, 

consolidated set of financial 

responsibility rules, which, among other 

things, regulates withdrawals of equity 

capital.12 FINRA has requested that the 

Commission waive the 30-day operative 

delay set forth in Rule 19b–4(f)(6)(iii) 

under the Act 13 in order for the rule to 

become operative upon filing. The 

Commission notes that the proposed 

rule changes render the abovementioned Incorporated NYSE rule 

provisions obsolete. The Commission 

further notes that the operative date of 

FINRA 4110 was February 8, 2009.14

The Commission believes that the 

earlier operative date is consistent with 

the protection of investors and the 

public interest because it permits 

FINRA to implement the rule without 

further delay and in recognition of the 

operative date of the financial 

responsibility rules was February 8, 

2010.15

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

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–2010–008 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

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–2010–008. 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–2010–008 and 

should be submitted on or before March 

12, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–3230 Filed 2–18–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61509; File No. SR–Phlx2010–15] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX, Inc.; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Routing Fees 

February 5, 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 

26, 2010, NASDAQ OMX PHLX, Inc. 

(‘‘Phlx’’ or ‘‘Exchange’’) 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 the Exchange. 

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 adopt fees 

governing pricing for Exchange 

members using the Phlx XL II system,3

for routing standardized equity and 

index options to away markets for 

execution. 

While changes to the Exchange’s Fee 

Schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated this proposal to be operative 

for trades settling on or after February 

1, 2010. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqtrader.com/ 

micro.aspx?id=PHLXfilings, on the 

Commission’s Web site at http:// 

www.sec.gov, 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 


pwalker on DSK8KYBLC1PROD with NOTICES