40256 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The 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). 

4For purposes of the rule, a non-institutional 

customer means a customer that does not qualify as 

an ‘‘institutional account’’ under NASD Rule 

3110(c)(4). NASD rule 3110(c)(4) provides, ‘‘the 

term ‘institutional account’ shall mean the account 

of: (A) A bank, savings and loan association, 

insurance company, or registered investment 

company; (B) an investment adviser registered 

either with the Securities and Exchange 

Commission under Section 203 of the Investment 

Advisers Act of 1940 or with a state securities 

commission (or any agency or office performing like 

functions); or (C) any other entity (whether a 

natural person, corporation, partnership, trust, or 

otherwise) with total assets of at least $50 million.’’ 

FINRA is proposing to adopt NASD Rule 3110(c)(4) 

as FINRA Rule 4512(c). See Regulatory Notice 08– 

25 (May 2008). 

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–NYSEAmex–2009–53 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–NYSEAmex–2009–53. 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 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 the Exchange. 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– 

NYSEAmex–2009–53 and should be 

submitted on or before September 1, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19148 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60437; File No. SR–FINRA– 

2009–052] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Adopt 

FINRA Rule 2264 (Margin Disclosure 

Statement) in the Consolidated FINRA 

Rulebook 

August 5, 2009. 

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 July 29, 

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’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items substantially 

have been prepared by FINRA. 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 to adopt NASD 

Rule 2341 (Margin Disclosure 

Statement) with minor changes as 

FINRA Rule 2264 in the consolidated 

FINRA rulebook. 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 

As part of the process of developing 

a new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt NASD 

Rule 2341 (Margin Disclosure 

Statement) with minor changes as 

FINRA Rule 2264 in the Consolidated 

FINRA Rulebook. 

NASD Rule 2341 requires members 

that open margin accounts for or on 

behalf of non-institutional customers 4

to deliver to such customers, prior to or 

at the time of opening the account, a 

specified margin disclosure statement to 

highlight the risks involved in trading 

securities in a margin account. Members 

must disclose that the securities 

purchased on margin are the firm’s 

collateral for the loan and that, if the 

securities in the margin account decline 

in value, the firm can take action, such 

as issuing a margin call and/or selling 

securities or other assets in any of the 

customer’s other accounts, to maintain 

the required equity in the account. 

The disclosure statement includes six 

specific points of information that must 

be disclosed to non-institutional 

customers before or at the time a margin 

account is opened for or on behalf of 

such customer: 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 40257 

5 In 2001, FINRA issued interpretive guidance 

that, while the rule requires the initial disclosure 

statement to be provided in a separate document, 

the disclosure statement can be provided with or as 

part of another document provided that it is 

contained by itself on a separate page. The 

interpretation also clarified that the annual 

disclosure statement may be provided within other 

documentation, such as the account statement, and 

does not have to be on a separate page. Regulatory 

and Compliance Alert (Summer 2001). 6 15 U.S.C. 78o–3(b)(6). 

• You can lose more funds than you 

deposit in the margin account. A 

decline in the value of securities that are 

purchased on margin may require you to 

provide additional funds to the firm that 

has made the loan to avoid the forced 

sale of those securities or other 

securities or assets in your account(s). 

• The firm can force the sale of 

securities or other assets in your 

account(s). If the equity in your account 

falls below the maintenance margin 

requirements, or the firm’s higher 

‘‘house’’ requirements, the firm can sell 

the securities or other assets in any of 

your accounts held at the firm to cover 

the margin deficiency. You also will be 

responsible for any short fall in the 

account after such a sale. 

• The firm can sell your securities or 

other assets without contacting you. 

Some investors mistakenly believe that 

a firm must contact them for a margin 

call to be valid, and that the firm cannot 

liquidate securities or other assets in 

their accounts to meet the call unless 

the firm has contacted them first. This 

is not the case. Most firms will attempt 

to notify their customers of margin calls, 

but they are not required to do so. 

However, even if a firm has contacted a 

customer and provided a specific date 

by which the customer can meet a 

margin call, the firm can still take 

necessary steps to protect its financial 

interests, including immediately selling 

the securities without notice to the 

customer. 

• You are not entitled to choose 

which securities or other assets in your 

account(s) are liquidated or sold to meet 

a margin call. Because the securities are 

collateral for the margin loan, the firm 

has the right to decide which security to 

sell in order to protect its interests. 

• The firm can increase its ‘‘house’’ 

maintenance margin requirements at 

any time and is not required to provide 

you advance written notice. These 

changes in firm policy often take effect 

immediately and may result in the 

issuance of a maintenance margin call. 

Your failure to satisfy the call may cause 

the member to liquidate or sell 

securities in your account(s). 

• You are not entitled to an extension 

of time on a margin call. While an 

extension of time to meet margin 

requirements may be available to 

customers under certain conditions, a 

customer does not have a right to the 

extension. 

Members also must provide the 

margin disclosure statement (or an 

abbreviated version as provided by the 

rule) to non-institutional margin 

account customers not less than once a 

calendar year. The rule provides 

members with the flexibility to use an 

alternative disclosure statement to the 

language specified in the rule provided 

that the alternative disclosures are 

substantially similar to the disclosures 

specified in the rule. Members must 

deliver the initial and annual disclosure 

statement, in writing or electronically, 

to customers covered by the rule on an 

individual basis. 

In addition, the rule requires members 

that permit non-institutional customers 

to open accounts online, or engage in 

transactions in securities online, to post 

the margin disclosure statement on their 

Web sites in a clear and conspicuous 

manner. This provision was added to 

NASD Rule 2341 in 2002 based on a 

recommendation by the General 

Accountability Office (GAO) as a means 

to allow a broader array of persons to 

review the disclosures. 

NASD Rule 2341 was approved by the 

SEC on April 26, 2001, and was the 

product of notice and comment 

rulemaking. FINRA proposes to adopt 

the requirements set forth in NASD Rule 

2341 as FINRA Rule 2264 in the 

Consolidated FINRA Rulebook with 

minor changes. The minor changes, 

consistent with prior interpretive 

guidance, clarify that the initial margin 

disclosure statement may be furnished 

to customers in a separate document (or 

contained by itself on a separate page as 

part of another document), and that the 

annual disclosure statement may be 

provided within other documentation, 

such as the account statement, and does 

not have to be on a separate page.5 In 

addition, FINRA is proposing a minor 

change to clarify and update the rule 

text provisions stating that disclosure 

statements may be provided to 

individuals either ‘‘in writing or 

electronically.’’ Because electronic 

documents may be considered a form of 

‘‘writing,’’ FINRA is proposing to amend 

the text to state that the documents may 

be provided ‘‘in paper or electronic 

form.’’ 

FINRA will announce the 

implementation date of the proposed 

rule change in a Regulatory Notice to be 

published no later than 90 days 

following 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,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. FINRA believes that the 

required margin disclosures provide 

investors with important information 

with which they can better understand 

the operation of margin accounts and 

the risks associated with margin trading. 

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 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–2009–052 on the 

subject line. 


sroberts on DSKD5P82C1PROD with NOTICES
40258 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5A recent proposal submitted by the Exchange for 

immediately effectiveness removed the following 

three (3) exchange-traded fund share classes from 

the Liquidity Make or Take pricing structure: (1) 

Standard & Poor’s Depositary Receipts® (SPY); (2) 

Powershares® QQQ Trust Series 1 (QQQQ); and (3) 

iShares Russell 2000® Index Fund (IWM). See 

Securities Exchange Act Release No. 60221 (July 1, 

2009), 74 FR 32996 (July 9, 2009) (SR–BX–2009– 

033). These three classes will remain subject only 

to ‘standard’ fees. 

6Corresponding changes to Sections 1, 2, 3, and 

4 of the Fee Schedule are being proposed to reflect 

the addition of the Non-Penny Pilot Class Pricing 

Structure. The Volume Discount will continue to be 

applicable for classes not included in The Liquidity 

Make or Take Pricing Structure of Section 7 of the 

Fee Schedule. 

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–2009–052. 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 

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–2009–052 and 

should be submitted on or before 

September 1, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19147 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60444; File No. SR–BX– 

2009–044] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Fee Schedule of the Boston Options 

Exchange Facility To Implement The 

Non-Penny Pilot Class Pricing 

Structure 

August 5, 2009. 

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 July 30, 

2009, NASDAQ OMX BX, Inc. (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 self-regulatory 

organization. The Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A)(ii) of the Act,3 and 

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Fee Schedule of the Boston Options 

Exchange Group, LLC (‘‘BOX’’). The text 

of the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s Internet Web site at http:// 

nasdaqomxbx.cchwallstreet.com/

NASDAQOMXBX/Filings/. 

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 

self-regulatory organization 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 self-regulatory organization 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 Exchange proposes to add the 

Non-Penny Pilot Class Pricing Structure 

as Section 8 of the BOX Fee Schedule. 

The Non-Penny Pilot Class Pricing 

Structure will apply to all classes listed 

for trading on BOX that are not included 

in the Penny Pilot Program, as 

referenced in Chapter V, Section 33 of 

the BOX Rules (‘‘Non-Penny Pilot 

Classes’’).5 The Exchange requests that 

the effective date of the proposed rule 

change be August 3, 2009. 

In proposed Section 8, for Non-Penny 

Pilot Classes, the Exchange will charge 

a fee of $0.30 for transactions that add 

liquidity to the BOX Book and provide 

a credit of $0.30 for transactions that 

remove liquidity from the BOX Book. 

These fees and credits will apply 

equally to all account types, whether 

Public Customer, Firm or Market Maker 

and will be in addition to any 

applicable ‘standard’ trading fees and/or 

volume discounts, as described in 

Sections 1 through 4 of the BOX Fee 

Schedule.6

For example, a Public Customer order 

is entered into the BOX Trading Host 

and executes against a Broker Dealer’s 

order resting on the BOX Book. The 

Public Customer is the remover of 

liquidity and the Broker Dealer is the 

adder of liquidity. The Public Customer 

will receive a $0.30 credit and the 

Broker Dealer will be charged a $0.30 

fee according to the Non-Penny Pilot 

Class pricing structure. The Public 

Customer will receive a $0.30 credit and 

the broker dealer will be charged $0.50 

(the $0.30 Non-Penny Pilot Class Pricing 

Structure removal fee in addition to the 

standard $0.20 transaction fee). 

The Exchange believes that the 

proposed fees are competitive, fair and 

reasonable, and non-discriminatory in 


sroberts on DSKD5P82C1PROD with NOTICES