Federal Register / Vol. 74, No. 185 / Friday, September 25, 2009 / Notices 49051 

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). 

4Exchange Act Release No. 60437 (Aug. 5, 2009), 

74 FR 40256 (Aug. 11, 2009). 

5For 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). 

6 In approving this rule proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

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

7 15 U.S.C. 78o–3(b)(6). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60465 

(August 10, 2009), 74 FR 41765 (‘‘Notice’’). 

4 In addition to removing Chapter V, Section 13, 

the proposed rule change also removes certain rules 

related to fast markets. Specifically, the Exchange 

proposes to modify Chapter VI, Section 6(a) to 

remove a fast market rule exception to the general 

rule that all Market Maker bids or offers must be 

of a size of at least ten (10) contracts. The Exchange 

also proposes to: (1) Remove Section 6(c)(ii)(2) of 

Chapter VI to reflect the previously described 

removal of Chapter V, Section 13; (2) replace 

references to Rule 11Ac1–1 with Rule 602 of 

Regulation NMS under the Exchange Act; and (3) 

modify Section 9(b) (Trading Sessions) of Chapter 

XIV (Index Rules) by eliminating the declaration of 

a fast market as a factor in determining whether to 

delay the opening of the index options market. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60697; File No. SR–FINRA– 

2009–052] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Granting 

Approval of Proposed Rule Change To 

Adopt FINRA Rule 2264 (Margin 

Disclosure Statement) in the 

Consolidated FINRA Rulebook 

September 21, 2009. 

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’’) a proposed 

rule change pursuant to Section 19(b)(1) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’) 1 and Rule 19b-4 

thereunder 2 to adopt NASD Rule 2341 

(Margin Disclosure Statement) with 

minor changes as FINRA Rule 2264 as 

part of the process of developing a new 

consolidated rulebook (‘‘Consolidated 

FINRA Rulebook’’).3 Notice of the 

proposal was published for comment in 

the Federal Register on August 11, 

2009.4 The Commission received no 

comments on the proposed rule change. 

This order approves the proposed rule 

change. 

I. Description of the Proposal 

FINRA Rule 2264 requires members 

that open margin accounts for or on 

behalf of non-institutional customers 5

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 

also must provide the margin disclosure 

statement (or an abbreviated version as 

provided by the rule) to noninstitutional 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 noninstitutional 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. 

FINRA stated that it would announce 

the implementation date of the 

proposed rule change in a Regulatory 

Notice to be published no later than 90 

days following Commission approval. 

II. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities association.6 In particular, the 

Commission finds that the proposed 

rule change is consistent with the 

provisions of Section 15A(b)(6) of the 

Act,7 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. These 

margin disclosures are important 

because they provide investors with 

information with which they can better 

understand the operation of margin 

accounts and the risks associated with 

margin trading. 

III. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–FINRA– 

2009–052) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to 

delegated authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–23148 Filed 9–24–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60686; File No. SR–BX– 

2009–041] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Order 

Approving a Proposed Rule Change To 

Eliminate Chapter V, Section 13 

(Unusual Market Conditions) of the 

BOX Trading Rules and To Modify 

Related Rules 

September 18, 2009. 

On August 3, 2009, NASDAQ OMX 

BX, Inc. (the ‘‘Exchange’’), filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b-4 

thereunder,2 a proposed rule change 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 proposed rule 

change was published for comment in 

the Federal Register on August 18, 

2009.3 The Commission received no 

comments on the proposed rule change. 

This order approves the proposed rule 

change. 

The proposed rule eliminates Chapter 

V, Section 13, as well as certain 

ancillary rules, which deal with fast 

markets.4 Chapter V, Section 13 

provides for an Options Official to 

determine that the level of trading 

activity or the existence of unusual 


jlentini on DSKJ8SOYB1PROD with NOTICES