38252 Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 

10The Commission notes that in connection with 

these changes to the trade reporting rules FINRA is 

also moving language from Rule 6282(a)(1) to Rule 

6282(a)(6) concerning patterns or practices of late 

trade reporting. Rule 6282(a)(1) currently states that 

‘‘[a] pattern or practice of late trade reporting 

without exceptional circumstances shall be 

considered conduct inconsistent with high 

standards of commercial honor and just equitable 

principles of trade violation of Rule 2010.’’ The 

change FINRA is proposing would replace the word 

‘‘shall’’ with ‘‘may,’’ and applies the lower standard 

not only to a pattern or practice of late trade 

reporting outside of normal market hours, but to a 

pattern or practice of late trade reporting during 

normal market hours. Rule 6282 concerns 

transactions reported only to TRACS, and FINRA 

has informed the Commission staff that the change 

is designed to make the rule consistent with the 

FINRA/NASDAQ, FINRA/NYSE, and OTC Trade 

Reporting Facilities, all of which currently have the 

identical language to proposed Rule 6282(a)(6). 

Telephone call between Stephanie Dumont, Senior 

Vice President and Director of Capital Markets 

Policy, FINRA, and Kathy England, Assistant 

Director, Commission, May 29, 2009. The 

Commission expects FINRA to continue pursuing 

violations of its trade reporting rules and to 

continue, as appropriate, charging violations of 

Rule 2010 (Standards of Commercial Honor and 

Principles of Trade). The Commission notes that it 

has routinely upheld appeals from FINRA 

disciplinary actions when FINRA has charged 

respondents with violations of Rule 2010 based 

solely on an underlying violation of another SRO 

rule. See e.g., Stephen J. Gluckman, 54 S.E.C. 175, 

185 (1999), Exchange Act Release No. 41628 (July 

20, 1999). 

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

3 17 CFR 240.19b–4(f)(4). 

4Commodity Futures Trading Commission 

Release No. 5662–09 (May 28, 2009). 5The clearing agreement is attached as Exhibit 5A 

to OCC’s rule filing with the Commission. OCC 

states that the clearing agreement is generally 

similar to corresponding agreements between OCC 

and other futures exchanges. 

and reported at 9:20 a.m. Under the 

proposed rule change, a trade executed 

between midnight and 8 a.m. that is 

reported at 9:20 a.m. would be marked 

late, thus distinguishing it from a trade 

executed and reported real-time at 9:20 

a.m. The Commission believes that this 

change will enhance market 

transparency by eliminating 

systematically imposed delays in the 

reporting of ‘‘outside normal market 

hours’’ trades to the FINRA/Nasdaq TRF 

and ORF. 

The Commission believes that by 

conforming the reporting requirements 

and systems functionality with respect 

to ‘‘outside normal market hours’’ trades 

across FINRA Facilities, the proposed 

rule change will promote more 

consistent trade reporting by members 

and a more complete and accurate audit 

trail.10

IV. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–FINRA– 

2009–031), as amended, 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. E9–18270 Filed 7–30–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60386; File No. SR–OCC– 

2009–13] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Relating to 

the Clearance and Settlement of 

Treasury Futures Contracts 

July 24, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

July 1, 2009, The Options Clearing 

Corporation (‘‘OCC’’) filed with the 

Securities and Exchange Commission 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared primarily by OCC. 

OCC filed the proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 2 and Rule 19b–4(f)(4) 

thereunder 3 so that the proposal was 

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 proposed rule change will 

establish parameters for OCC to clear 

and settle futures contracts based on 

U.S. Treasury Notes and Bonds 

(‘‘Treasury Futures’’). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

OCC 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. OCC 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 

The purpose of this proposed rule 

change is to establish new provisions to 

OCC’s rules in order for OCC to provide 

clearance and settlement services for 

Treasury Futures transactions that are 

proposed to be traded by ELX Futures 

LP. (‘‘ELX’’), an electronic futures 

market that was designated as a contract 

market by the Commodity Futures 

Trading Commission (‘‘CFTC’’) on May 

22, 2009.4 Under the terms of its 

clearing agreement with ELX dated 

December 5, 2008,5 OCC will operate as 

the exclusive provider of clearance and 

settlement services through physical 

delivery for Treasury Futures and other 

futures, futures options, or commodity 

options that may be traded on ELX. As 

such, ELX will send OCC matched trade 

data so that OCC can margin the 

contracts and inform ELX members their 

payment and securities delivery 

obligations. 

1. Delivery of Underlying Treasury 

Securities 

As detailed in proposed modifications 

to Chapter 13 of its Rules, OCC clearing 

members may satisfy their delivery 

obligations with respect to Treasury 

Futures by delivering different treasury 

securities provided the securities meet 

certain specifications. Since there is not 

an established delivery date to deliver 

the underlying treasury securities, OCC 

proposes to permit a seller of Treasury 

Futures to elect to deliver on any 

business day during the delivery month, 

which, in the case of certain Treasury 

Futures, includes up to the third 

business day of the following month. 

Delivery of the treasury securities 

underlying Treasury Futures will be 

effected directly between OCC clearing 

members rather than through the 

facilities of OCC. The delivery process 

will occur over a period of three 

business days and will be initiated by 

the submission of a delivery intent by 

the clearing member holding a short 

position in the Treasury Futures. After 

a delivery intent is submitted to OCC, 

OCC will assign the delivery intent to an 

open long position in Treasury Futures 

beginning with long positions with the 

oldest trading date. On the second 

business day of the delivery process, the 

delivering clearing members will be 


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Federal Register / Vol. 74, No. 146 / Friday, July 31, 2009 / Notices 38253 

6 15 U.S.C. 78q–1. 

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

8 17 CFR 240.19b–4(f)(4). 9 17 CFR 200.30–3(a)(12). 

required to submit invoices identifying 

the specific treasury securities to be 

delivered and the amounts the receiving 

clearing members must pay in 

settlement of the actual deliveries. On 

the second business day following the 

submission of a delivery intent, the 

treasury securities will be delivered and 

payment will be made through the 

correspondent banks of the delivering 

and receiving clearing members. 

2. Settlement Failure 

OCC is also proposing to add rules to 

Chapter 13 to address the direct 

settlement between clearing members 

for the delivery of the underlying 

treasury securities upon maturity of the 

Treasury Futures and to address failure 

to complete settlement. Specifically, in 

the event that either the delivering 

clearing member or the receiving 

clearing member with respect to a 

physically-settled futures contract 

believes that a failure to settle has 

occurred without proper cause, such 

clearing member will need to notify 

OCC of such failure by a set cut-off time. 

Then, OCC will determine whether 

delivery has in fact failed and if 

necessary determine the damages. 

OCC’s transactional guarantee will be 

limited to paying reasonable damages as 

determined by OCC in accordance with 

Rule 1308B. Rule 1308B provides that in 

the event of such a failure OCC will 

make payment to the non-defaulting 

clearing member in an amount equal to 

the damages incurred by the nondefaulting clearing member from such 

failure as determined by OCC. Such 

damages would be charged by OCC to 

the defaulting clearing member. OCC is 

proposing to add provisions to its Bylaws addressing inabilities to deliver 

underlying treasury securities similar to 

the provisions of Articles XIII of the ByLaws addressing the inability to 

delivery treasury securities upon the 

exercise of options on treasury 

securities. 

OCC states that the proposed changes 

to OCC’s By-Laws and Rules are 

consistent with the purposes and 

requirements of Section 17A of the Act 6

because the changes are designed to 

permit OCC to perform clearing services 

for products that are subject to the 

jurisdiction of the CFTC without 

adversely affecting OCC’s obligations 

with respect to the prompt and accurate 

clearance and settlement of securities 

transactions or the protection of 

investors and the public interest. The 

changes accomplish this purpose by 

applying substantially the same rules 

and procedures to transactions in 

Treasury Futures as OCC applies to 

transactions in security futures and 

securities options. The proposed rule 

change is not inconsistent with any 

rules of OCC including any rules 

proposed to be amended. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

OCC does not believe that the 

proposed rule change would impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

OCC has not solicited or received 

written comments relating to the 

proposed rule change. OCC will notify 

the Commission of any written 

comments it receives. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

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

19b–4(f)(4) 8 thereunder because it 

effects a change in an existing service of 

a registered clearing agency that does 

not adversely affect the safeguarding of 

securities and funds in the custody or 

control of the clearing agency or for 

which it is responsible and does not 

significantly affect the respective rights 

or obligations of the clearing agency or 

persons using the service. 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 

No. SR–OCC–2009–13 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–OCC–2009–13. 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 inspection and copying 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 

OCC’s principal office and on OCC’s 

Web site at http://www.theocc.com/ 

publications/rules/proposed_changes/ 

proposed_changes.jspU. 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 No. SR–OCC–2009– 

01 and should be submitted on or before 

August 21, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18279 Filed 7–30–09; 8:45 am] 

BILLING CODE 8010–01–P 

SOCIAL SECURITY ADMINISTRATION 

[Docket No. SSA–2009–0033] 

Occupational Information Development 

Advisory Panel Meeting 

AGENCY: Social Security Administration 

(SSA). 


PWALKER on DSK8KYBLC1PROD with NOTICES