Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 41763 

19 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 59987 

(May 27, 2009), 74 FR 26902 (June 4, 2009) (order 

approving FINRA 2009–016). 

5See Securities Exchange Act Release No. 56148 

(July 26, 2007), 72 FR 42146 (August 1, 2007) (order 

approving the Agreement) and Securities Exchange 

Act Release No. 56147 (July 26, 2007), 72 FR 42166 

(August 1, 2007) (SR–NASD–2007–054) (order 

approving the incorporation of certain NYSE Rules 

as ‘‘Common Rules’’). Paragraph 2(b) of the 17d–2 

Agreement sets forth procedures regarding 

proposed changes by either NYSE or FINRA to the 

substance of any of the Common Rules. 

6FINRA’s rulebook currently has three sets of 

rules: (1) NASD Rules, (2) FINRA Incorporated 

NYSE Rules, and (3) consolidated FINRA Rules. 

The FINRA Incorporated NYSE Rules apply only to 

those members of FINRA that are also members of 

the NYSE (‘‘Dual Members’’), while the 

consolidated FINRA Rules apply to all FINRA 

members. For more information about the FINRA 

rulebook consolidation process, see FINRA 

Information Notice, March 12, 2008. 

7NYSE Amex LLC has submitted a companion 

rule filing to conform its corresponding NYSE 

Continued 

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–CBOE–2009–058 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–CBOE–2009–058. 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 the CBOE. 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–CBOE–2009–058 and 

should be submitted on or before 

September 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19692 Filed 8–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60457; File No. SR–NYSE– 

2009–76] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Deleting NYSE 

Rule 409A and Adopting New Rule 

2266 To Correspond With Rule 

Changes Recently Filed by the 

Financial Industry Regulatory 

Authority, Inc. 

August 7, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’)2 and Rule 19b–4 thereunder,3

notice is hereby given that, on July 28, 

2009, 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 self-regulatory 

organization. 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 proposes to 

[sic] delete NYSE Rule 409A and to 

adopt new Rule 2266 to correspond 

with rule changes recently filed by the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and approved 

by the Commission.4 The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com. 

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 those 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 parts 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 delete NYSE Rule 409A and 

to adopt new Rule 2266 to correspond 

with rule changes recently filed by 

FINRA and approved by the 

Commission. 

Background 

On July 30, 2007, FINRA’s 

predecessor, the National Association of 

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

NYSE Regulation, Inc. (‘‘NYSER’’) 

consolidated their member firm 

regulation operations into a combined 

organization, FINRA. Pursuant to Rule 

17d–2 under the Act, NYSE, NYSER and 

FINRA entered into an agreement (the 

‘‘Agreement’’) to reduce regulatory 

duplication for their members by 

allocating to FINRA certain regulatory 

responsibilities for certain NYSE rules 

and rule interpretations (‘‘FINRA 

Incorporated NYSE Rules’’).5 As part of 

its effort to reduce regulatory 

duplication and relieve firms that are 

members of both FINRA and the 

Exchange of conflicting or unnecessary 

regulatory burdens, FINRA is now 

engaged in the process of reviewing and 

amending the NASD and FINRA 

Incorporated NYSE Rules in order to 

create a consolidated FINRA rulebook.6

Proposed Conforming Amendments to 

NYSE Rules 

As discussed in more detail below, 

FINRA amended certain NASD and 

FINRA Incorporated NYSE Rules and 

adopted consolidated FINRA Rules to 

replace them. The NYSE hereby 

proposes to delete NYSE Rule 409A and 

to adopt new Rule 2266 to conform to 

the changes adopted by FINRA.7


jlentini on DSKJ8SOYB1PROD with NOTICES
41764 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 

Amex Equities Rules to the changes proposed in 

this filing. See SR–NYSE–Amex-2009–52, formally 

submitted July 28, 2009). 

8 In its filing, FINRA also adopted NASD Rules 

2130 (Obtaining an Order of Expungement of 

Customer Dispute Information from the Central 

Registration Depository (CRD System)), 2810 (Direct 

Participation Programs) and 3115 (Requirements for 

Alternative Trading Systems to Record and 

Transmit Order and Execution Information for 

Security Futures) as consolidated FINRA Rules 

2080, 2310 and 4551, respectively. See Securities 

Exchange Act Release No. 59987 (May 27, 2009), 74 

FR 26902 (June 4, 2009). NYSE is not adopting 

these FINRA Rules. 

9See Securities Exchange Act Release No. 59987 

(May 27, 2009), 74 FR 26902 (June 4, 2009). 

10See Securities Exchange Act Release No. 59987 

(May 27, 2009), 74 FR 26902 (June 4, 2009). 

11See Securities Exchange Act Release No. 59987 

(May 27, 2009), 74 FR 26902 (June 4, 2009). 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

14 15 U.S.C. 78k–1(a)(1). 

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

16 17 CFR 240.19b–4(f)(6). 

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

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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 Exchange has satisfied the 

requirement. 

18 17 CFR 240.19b–4(f)(6). 

19 17 CFR 240.19b–4(f)(6)(iii). 

20For purposes only of waiving the 30-day 

operative delay of the proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition and capital formation. 15 

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

In relevant part, FINRA adopted 

NASD Rule 2342 (SIPC Information) as 

consolidated FINRA Rule 2266.8 FINRA 

Rule 2266 requires all FINRA members, 

except for those members that are not 

Securities Investor Protection 

Corporation (‘‘SIPC’’) members or whose 

business consists exclusively of the sale 

of investments that are not subject to 

SIPC protection, to advise all new 

customers in writing at the time they 

open an account that they may obtain 

information about SIPC by contacting 

SIPC and to provide such customers 

with SIPC’s contact information. Such 

information must also be provided 

annually to all existing customers. 

Where both an introducing firm and a 

clearing firm service the same account, 

the firms may assign these requirements 

to one or the other firm.9

Because it is substantively similar to 

this new FINRA Rule, FINRA deleted 

FINRA Incorporated NYSE Rule 409A 

(SIPC Disclosures). In particular, FINRA 

Incorporated NYSE Rule 409A requires 

member organizations to advise each 

customer in writing, upon the opening 

of an account and annually thereafter, 

that they may obtain information about 

SIPC and to provide such customers 

with SIPC’s contact information. Similar 

to FINRA Rule 2266, where a clearing 

agreement is in place, these 

requirements may be assigned to either 

the introducing or clearing firm. 

However, FINRA Incorporated NYSE 

Rule 409A does not contain the 

exclusions in FINRA Rule 2266.10

FINRA deleted FINRA Incorporated 

NYSE Rule 409A because it believes 

that FIRNA [sic] Rule 2266, which 

includes the exclusionary provisions for 

non-SIPC members or members that sell 

exclusively non-SIPC securities, is the 

more appropriate rule for its members.11

To harmonize the NYSE Rules with 

the approved FINRA Rules, the 

Exchange correspondingly proposes to 

delete NYSE Rule 409A and to adopt 

proposed NYSE Rule 2266, which is 

substantially similar to the new FINRA 

Rule. As proposed, NYSE Rule 2266 

adopts the same language as FINRA 

Rule 2266, except for substituting for or 

adding to, as needed, the term ‘‘member 

organization’’ for the term ‘‘member’’, 

and making corresponding technical 

changes. As with the consolidated 

FINRA Rule, under proposed NYSE 

Rule 2266 Exchange members and 

member organizations will be required 

to provide SIPC disclosures to all new 

customers upon opening an account and 

to existing customers on an annual 

basis. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with Section 6(b) of the Act,12 in 

general, and further the objectives of 

Section 6(b)(5) of the Act,13 in 

particular, in that they are designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The proposed rule 

changes also support the principles of 

Section 11A(a)(1) 14 of the Act in that 

they seek to ensure the economically 

efficient execution of securities 

transactions and fair competition among 

brokers and dealers and among 

exchange markets. 

The Exchange believes that the 

proposed rule changes support the 

objectives of the Act by providing 

greater harmonization between NYSE 

Rules and FINRA Rules (including 

Common Rules) of similar purpose, 

resulting in less burdensome and more 

efficient regulatory compliance for Dual 

Members. To the extent the Exchange 

has proposed changes that differ from 

the FINRA version of the Rule, such 

changes are technical in nature and do 

not change the substance of the 

proposed NYSE Rule. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 15 and Rule 

19b–4(f)(6) thereunder.16 Because the 

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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.17

A proposed rule change filed under 

Rule 19b–4(f)(6) 18 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),19 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. The 

Commission believes waiving the 30- 

day operative delay is consistent with 

the protection of investors and the 

public interest. Acceleration of the 

operative date will allow the immediate 

change of the NYSE’s rule to make it 

consistent with the FINRA rule, thereby 

making compliance for dual members 

less burdensome. For these reasons, the 

Commission designates the proposal to 

be effective and operative upon filing.20


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Notices 41765 

21 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

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–NYSE–2009–76 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–NYSE–2009–76. 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 the filing also will be available 

for inspection and copying at the 

principal office of NYSE. 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–NYSE– 

2009–76 and should be submitted on or 

before September 8, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19730 Filed 8–17–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60465; File No. SR–BX– 

2009–041] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

of Proposed Rule Change To Eliminate 

Chapter V, Section 13 (Unusual Market 

Conditions) of the BOX Trading Rules 

and To Modify Related Rules 

August 10, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on August 3, 

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 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 purpose of the proposed rule 

change is to eliminate Chapter V, 

Section 13 (Unusual Market Conditions) 

of the Trading Rules of the Boston 

Options Exchange Group, LLC (‘‘BOX’’) 

and to modify related rules. 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 

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 is 

to eliminate Chapter V, Section 13, as 

well as certain ancillary rules, which 

deal with so-called ‘‘fast markets.’’ The 

Exchange believes that ‘‘fast market’’ 

conditions do not occur on the 

electronic and automated BOX market. 

In cases in which a system malfunction 

or other occurrence caused a delay in 

disseminating accurate quotes, rather 

than relying on the current rules in 

Chapter V, Section 13, the Exchange 

would halt trading until the issue could 

be resolved. 

The Exchange proposes to eliminate 

Chapter V, Section 13, as well as certain 

ancillary rules relating to fast markets. 

The Exchange has never declared a fast 

market. Generally, a fast market is 

characterized by heavy trading and high 

price volatility in which orders may be 

submitted to market makers at such a 

rapid pace that a backlog of orders 

builds, causing delays in execution. If 

such a fast market occurred, delays 

could in turn cause significant price 

differentials between the quoted price 

and executed price. Generally, Chapter 

V, Section 13 provides that if the 

Exchange declared a fast market, it may 

inform traders that quotes are not firm 

and to take other actions as necessary in 

furtherance of a fair and orderly market. 

Chapter V, Section 13 provides for an 

Options Official to determine that the 

level of trading activity or the existence 

of unusual market conditions is such 

that BOX is incapable of collecting, 

processing, and making available to 

quotation vendors the data for the 

option in a manner that accurately 

reflects the current state of the market 

on BOX. Pursuant to current rules, if an 

Options Official determined the market 

in the option to be ‘‘fast,’’ the Official 

could take various steps including 

suspending minimum size requirements 

for quotations, turning off the Price 

Improvement Period (‘‘PIP’’) process, or 

taking other actions in order to promote 

a fair and orderly market. 

In an electronic market such as BOX, 

during trading hours, orders are 


jlentini on DSKJ8SOYB1PROD with NOTICES