10542 Federal Register / Vol. 75, No. 44 / Monday, March 8, 2010 / Notices 

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)(iii). 12Nasdaq currently has rules under its 4000 

series, so to mirror the changes made by FINRA as 

closely as possible, Nasdaq created a new Rule 

4000A series. 

13See supra, note 3. 

14For 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). 

15 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 61415 

(January 25, 2010), 75 FR 4896. 

3Rule 9 provides that except as NSCC may 

determine to be appropriate or necessary, NSCC 

will not examine the contents of the envelopes or 

verify the amounts of money shown on the credit 

list, and it shall not be responsible with respect 

thereto except to deliver the envelopes accepted by 

it to the authorized representatives of the members 

to whom they are addressed. 

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) 9 of the Act and Rule 19b– 

4(f)(6) thereunder.10

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. Nasdaq has 

provided 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. 

Nasdaq believes that the proposed 

rule change does not significantly affect 

the protection of investors or the public 

interest because it merely eliminates 

erroneous citations that, if left in the 

rule text, would cause investor 

confusion. 

Nasdaq requests that the Commission 

waive the 30-day pre-operative waiting 

period contained in Exchange Act Rule 

19b–4(f)(6)(iii).11 Nasdaq requests this 

waiver so that these corrections can be 

both immediately effective and 

operative, thus minimizing any 

confusion that may be caused by the 

erroneous citations. The Commission 

notes the proposed rule changes make 

technical non-substantive changes to 

Rule 9557. As noted above on January 

20, 2010, Nasdaq filed a proposed rule 

change to make conforming changes to 

its rules, which included adopting a 

new Rule 4000A series12 and certain 

amendments to Rules 9557 and 9559.13

The proposed changes were 

immediately effective and became 

operative on February 19, 2010. The 

Commission believes the earlier 

operative date is consistent with the 

protection of investors and the public 

interest because the proposed rule 

change permits Nasdaq to implement 

the rule without further delay and in a 

timely manner for the operative date of 

the financial responsibility rules.14

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, 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–NASDAQ–2010–026 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–NASDAQ–2010–026. 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 

Nasdaq. 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–NASDAQ–2010–026 

and should be submitted on or before 

March 29, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4734 Filed 3–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61618; File No. SR–NSCC– 

2010–01] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Order Approving 

Proposed Rule Change To Eliminate 

Guarantee of Payment in Connection 

With the Envelope Settlement Service 

March 1, 2010. 

I. Introduction 

On January 4, 2010, the National 

Securities Clearing Corporation 

(‘‘NSCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

proposed rule change SR–NSCC–2010– 

01 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’).1 The proposed rule change was 

published for comment in the Federal 

Register on January 29, 2010.2 No 

comment letters were received on the 

proposal. This order approves the 

proposal. 

II. Description 

NSCC’s the Envelope Settlement 

Service (‘‘ESS’’) allows an NSCC member 

to physically deliver through the 

facilities of NSCC a sealed envelope 3

containing securities and such other 

items as NSCC may permit from time to 

time to a specified receiving member. 

NSCC then delivers the envelope to the 

receiving member. ESS is provided for 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 44 / Monday, March 8, 2010 / Notices 10543 

4 15 U.S.C. 78q–1. 

5 15 U.S.C. 78q–1(b)(3)(F). 

6 15 U.S.C. 78q–1. 

7 15 U.S.C. 78s(b)(2). 

8 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

primarily pursuant to Rule 9 and 

Addendum D with related provisions in 

Addendum D with related provisions in 

Addendum K and Procedure XV. The 

primary substantive changes of this 

proposed rule change are in Rule 9, 

Addendum D, and Addendum K with a 

conforming change to Procedure XV. 

Technical clean-up changes are also 

being made in each. 

The delivering member must attach to 

each envelope, a credit list (in 

duplicate), which reflects the total 

money value, if any, of the envelope’s 

contents. If after receipt of the envelope 

NSCC determines that the envelope is 

properly listed on the accompanying 

credit list, NSCC stamps the duplicate 

credit list and makes it immediately 

available to the delivering member’s 

representative. An envelope listed on 

the credit list shall be deemed to have 

been accepted by NSCC when the 

duplicate credit list is stamped. 

As a related feature of ESS, the 

payment shown on the credit list is 

processed as part of the members’ daily 

end of day net money settlement 

obligations in reliance on the agreement 

between the delivering and receiving 

parties outside NSCC that the amount 

listed is the contract amount. 

In order to protect the NSCC against 

the risk of member non-payment NSCC 

is amending Rule 9 and related 

provisions so that NSCC does not 

guarantee the payment obligation to the 

receiving member in an ESS delivery 

and so that the credits and debits of the 

payment amount of an envelope may be 

reversed. The payment reversal may be 

effected by NSCC even if the receiving 

member has taken possession of the 

envelope; however, if the receiving 

member has not yet taken possession of 

the envelope at the time of a payment 

reversal, NSCC will return the envelope 

to the delivering member. Any dispute 

between the delivering and receiving 

members must be resolved by them 

outside the facilities of the NSCC. 

Changes to Rule 9 affirmatively 

provide that NSCC does not guarantee 

the payment obligation in ESS and that 

payment credits and debits may be 

reversed. Technical and conforming 

changes clarify the concepts of 

delivering and receiving members and 

that settlement processing is subject not 

only to the rights of NSCC in Section 2 

of Rule 12 but also to the new reversal 

provision in Section 4 of Rule 9. 

To conform to amended Rule 9, 

Addendum D is similarly being 

amended to state that ESS is not 

guaranteed and that payment credits 

and debits may be reversed as provided 

in Rule 9. Language making it clear that 

settlement processing is subject to the 

rights of NSCC under new Section 4 of 

Rule 9 and Section 2 of Rule 12, was 

also carried over to Addendum D. 

Because Addendum D also covers other 

services for which no change is made by 

this filing, certain of the revisions to 

Addendum D clarify that the revisions 

are limited to ESS. Historical statements 

in Addendum D are being eliminated. 

The change to Addendum K is to 

delete the provision whereby NSCC 

provided a guarantee for ESS and 

thereby deemed ESS to be a ‘‘System’’ 

within the meaning of Rule 4. Without 

the guarantee, ESS is not considered to 

be a ‘‘System.’’ Consistent with the 

change, Procedure XV is modified so 

that when the clearing fund component 

titled ‘‘For Other Transactions’’ (that is, 

for other than CNS transactions and 

balance order transactions) is computed, 

ESS will not be included. 

In considering the elimination of the 

guarantee, NSCC surveyed selected 

members and learned that they did not 

consider it vital that NSCC be 

responsible for their ESS payment 

obligations and that they do not rely on 

the NSCC to guarantee such payments. 

However, these members expressed a 

strong desire for NSCC to maintain the 

centralized delivery service. NSCC 

designed the proposed rule changes to 

meet the expressed need of certain 

members while reducing risk to NSCC 

and its members generally. NSCC 

believes that it is shifting the burden of 

risk to those that should bear it and to 

outside NSCC’s facilities. 

III. Discussion 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act 4 and the 

rules and regulations thereunder 

applicable to NSCC. In particular, the 

Commission believes that by amending 

its rules, NSCC’s exposure to potential 

losses from member defaults, 

insolvencies, mistakes, and fraud will 

be reduced and the risk of such 

potential losses will be appropriately 

shifted to the contracting members in an 

ESS transaction outside NSCC. The 

proposal is therefore consistent with the 

requirements of Section 17A(b)(3)(F),5

which requires, among other things, that 

the rules of a clearing agency are 

designed to promote the prompt and 

accurate clearance and settlement of 

securities transactions. 

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposal is 

consistent with the requirements of the 

Act and in particular with the 

requirements of Section 17A of the Act 6

and the rules and regulations 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,7 that the 

proposed rule change (File No. SR– 

NSCC–2010–01) be, and hereby is, 

approved.8

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–4738 Filed 3–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61612; File No. SR–NYSE– 

2010–11] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending NYSE 

Rule 123C(9)(a)(1) To Extend the 

Operation of the Pilot Operating 

Pursuant the Rule Until the Earlier of 

Securities and Exchange Commission 

Approval To Make Such Pilot 

Permanent or June 1, 2010 

March 1, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that, on February 

24, 2010, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been 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 amend 

NYSE Rule 123C(9)(a)(1) to extend the 

operation of the pilot operating 

pursuant the Rule until the earlier of 

Securities and Exchange Commission 

approval to make such pilot permanent 

or June 1, 2010. The text of the proposed 


srobinson on DSKHWCL6B1PROD with NOTICES