52040 Federal Register / Vol. 76, No. 161 / Friday, August 19, 2011 / Notices 

21FINRA has implemented increased sales 

practice and customer margin requirements for 

FINRA members applicable to leveraged ETFs 

(which include the Shares) and options on 

leveraged ETFs, as described in FINRA Regulatory 

Notices 09–31 (June 2009), 09–53 (August 2009) 

and 09–65 (November 2009) (‘‘FINRA Regulatory 

Notices’’). The Exchange represents that ETP 

Holders that carry customer accounts will be 

required to follow the FINRA guidance set forth in 

these notices. 

22The Commission notes that it does not regulate 

the market for futures in which the Fund plans to 

take positions, which is the responsibility of the 

Commodity Futures Trading Commission (‘‘CFTC’’). 

The CFTC has the authority to set limits on the 

positions that any person may take in futures. These 

limits may be directly set by the CFTC or by the 

markets on which the futures are traded. The 

Commission has no role in establishing position 

limits on futures, even though such limits could 

impact an exchange-traded product that is under 

the jurisdiction of the Commission. 

23 15 U.S.C. 78f(b)(5). 

24 15 U.S.C. 78s(b)(2). 

25 17 CFR 200.30–3(a)(12). 

securities, thus rendering trading in the 

Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. In support of this 

proposal, the Exchange has made 

representations, including: 

(1) The Funds will be subject to the 

criteria in NYSE Arca Equities Rule 

8.200 and Commentary .02 thereto for 

initial and continued listing of the 

Shares. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) The Exchange’s surveillance 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

(4) Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders of the suitability 

requirements of NYSE Arca Equities 

Rule 9.2(a) in an Information Bulletin. 

Specifically, ETP Holders will be 

reminded in the Information Bulletin 

that, in recommending transactions in 

the Shares, they must have a reasonable 

basis to believe that (a) the 

recommendation is suitable for a 

customer given reasonable inquiry 

concerning the customer’s investment 

objectives, financial situation, needs, 

and any other information known by 

such member, and (b) the customer can 

evaluate the special characteristics, and 

is able to bear the financial risks, of an 

investment in the Shares. In connection 

with the suitability obligation, the 

Information Bulletin will also provide 

that members must make reasonable 

efforts to obtain the following 

information: (i) The customer’s financial 

status; (ii) the customer’s tax status; (iii) 

the customer’s investment objectives; 

and (iv) such other information used or 

considered to be reasonable by such 

member or registered representative in 

making recommendations to the 

customer.21 Further, the Exchange’s 

Information Bulletin regarding the 

Funds will provide information 

regarding the suitability of an 

investment in the Shares, as stated in 

the Registration Statements. 

(5) With respect to the Funds’ futures 

contracts traded on exchanges, not more 

than 10% of the weight of such futures 

contracts in the aggregate shall consist 

of components whose principal trading 

market is not a member of the 

Intermarket Surveillance Group or is a 

market with which the Exchange does 

not have a comprehensive surveillance 

sharing agreement. 

(6) Prior to the commencement of 

trading, the Exchange will inform its 

ETP Holders in an Information Bulletin 

of the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Bulletin 

will discuss the following: (a) The risks 

involved in trading the Shares during 

the Opening and Late Trading Sessions 

when an updated IFV will not be 

calculated or publicly disseminated; (b) 

the procedures for purchases and 

redemptions of Shares in creation 

baskets and redemption baskets (and 

that Shares are not individually 

redeemable); (c) NYSE Arca Equities 

Rule 9.2(a), which imposes a duty of 

due diligence on its ETP Holders to 

learn the essential facts relating to every 

customer prior to trading the Shares; (d) 

how information regarding the IFV is 

disseminated; (e) a static IFV will be 

disseminated between the close of 

trading of Natural Gas Futures Contracts 

on NYMEX and the close of the NYSE 

Arca Core Trading Session; (f) the 

requirement that ETP Holders deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; and (g) trading information. 

In addition, the Information Bulletin 

will reference the FINRA Regulatory 

Notices regarding sales practice and 

customer margin requirements for 

FINRA members applicable to leveraged 

products. 

(7) A minimum of 100,000 Shares will 

be outstanding as of the start of trading 

on the Exchange. 

(8) For the initial and continued 

listing of the Shares, the Funds will be 

in compliance with NYSE Arca Equities 

Rule 5.3 and Rule 10A–3 under the Act. 

This approval order is based on the 

Exchange’s representations.22

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 23 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,24 that the 

proposed rule change (SR–NYSEArca– 

2011–24) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21175 Filed 8–18–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65137; File No. SR–FINRA– 

2011–040] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Order Granting Accelerated Approval 

of Proposed Rule Change To Amend 

the Supplementary Material to FINRA 

Rule 1230(b)(6) (Operations 

Professional) 

August 15, 2011. 

On August 12, 2011, Financial 

Industry Regulatory Authority, Inc. 

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

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by FINRA. The 

Commission is publishing this notice 

and order to solicit comment on the 

proposed rule change and approve the 

proposed rule change on an accelerated 

basis. 

I. Description of Proposed Rule Change 

FINRA is proposing to amend the 

supplementary material to FINRA Rule 

1230(b)(6) (Operations Professional), 

FINRA Rule 1230.06 (Scope of 

Operations Professional Requirement), 

to clarify the application of the 

Operations Professional requirements to 

employees of a foreign broker-dealer 

whose activities, relating to certain 

transactions in foreign securities on 

behalf of a member’s customers, as 

further detailed herein, are limited to 

facilitating the clearance and settlement 

of such transactions. 

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. 


jlentini on DSK4TPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 161 / Friday, August 19, 2011 / Notices 52041 

1See Securities Exchange Act Release No. 64687 

(June 16, 2011), 76 FR 36586 (June 22, 2011) (Order 

Approving Proposed Rule Change; File No. SR– 

FINRA–2011–013). This rule change also 

established continuing education requirements for 

Operations Professionals and adopted NASD Rule 

1120 (Continuing Education Requirements) as 

FINRA Rule 1250 (Continuing Education 

Requirements) in the consolidated FINRA rulebook 

with certain changes. 

2See Regulatory Notice 11–33 (July 2011). 

3We are approving this rule change as it 

addresses the application of FINRA Rule 1230(b)(6) 

to the fact pattern described above. No statement in 

the proposed rule or this order otherwise affects the 

Commission’s interpretation of any provision of the 

Securities Exchange Act of 1934, or any rule 

thereunder, including Rule 15c3–3 (17 CFR 

240.15c3–3). 

4 15 U.S.C. 78o–3(b)(6). 

5 15 U.S.C. 78o–3. 

6 15 U.S.C. 78s(b)(2). 

7See Regulatory Notice 11–33 (July 2011) 

(Operations Professionals). 

8 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

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 

On June 16, 2011, the Commission 

approved SR–FINRA–2011–013, which 

adopted FINRA Rule 1230(b)(6) 

(Operations Professional), and its 

accompanying supplementary material 

in FINRA Rule 1230.06 (Scope of 

Operations Professional Requirement), 

to establish a registration category and 

qualification examination requirement 

for certain operations personnel 

(Operations Professionals).1 FINRA Rule 

1230(b)(6), and its accompanying 

supplementary material in FINRA Rule 

1230.06, takes effect on October 17, 

2011.2

Questions have been raised regarding 

the application of the Operations 

Professional requirements to employees 

of a foreign broker-dealer whose 

activities, relating to certain transactions 

in foreign securities on behalf of a 

member’s customers, are limited to 

facilitating the clearance and settlement 

of such transactions. These 

arrangements between the member and 

the foreign broker-dealer involve 

transactions in foreign securities to be 

executed by the foreign broker-dealer on 

the foreign market, where the foreign 

broker-dealer accepts the member’s 

customer’s instructions to settle the 

transactions on a DVP/RVP basis 

through the foreign clearing system and 

settle directly with the customer’s 

custodian. 

To provide clarification with respect 

to the application of FINRA Rule 

1230(b)(6) to such arrangements, the 

proposed rule change would amend 

supplementary material .06 to FINRA 

Rule 1230(b)(6) to provide that an 

employee of a foreign broker-dealer 

whose activities, relating to a 

transaction in foreign securities on 

behalf of a customer of a member, are 

limited to facilitating the clearance and 

settlement of the transaction shall not be 

required to register as an Operations 

Professional pursuant to FINRA Rule 

1230(b)(6)(A) where: (1) The member 

sending the order for a transaction in 

foreign securities on behalf of the 

customer to the foreign broker-dealer is 

not a direct participant of the applicable 

foreign clearing system; and (2) in 

executing such order in the foreign 

market, the foreign broker-dealer 

accepts the member’s customer’s 

instructions to settle the transaction in 

foreign securities on a DVP/RVP basis 

through the foreign clearing system and 

settle directly with a custodian for the 

customer.3

The effective date of the proposed 

rule change will be October 17, 2011, 

the effective date of FINRA Rule 

1230(b)(6) (Operations Professional) and 

its accompanying supplementary 

material in FINRA Rule 1230.06 (Scope 

of Operations Professional 

Requirement). 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,4 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 the 

proposed rule change would provide 

clarification in response to questions 

raised regarding the application of the 

Operations Professional requirements to 

employees of a foreign broker-dealer 

facilitating the clearance and settlement 

of certain transactions in foreign 

securities on behalf of a member’s 

customers pursuant to the arrangements 

described above. 

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. Commission’s Findings 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to FINRA and, in particular, 

the requirements of Section 15A of the 

Act 5 and the rules and regulations 

thereunder. 

FINRA has requested that the 

Commission find good cause pursuant 

to Section 19(b)(2) of the Act 6 for 

approving the proposed rule change 

prior to the 30th day after publication in 

the Federal Register. The Commission 

finds good cause, pursuant to Section 

19(b)(2), for approving the proposed 

rule change prior to the 30th day after 

publication of notice of the filing in the 

Federal Register. The proposed rule 

change is intended to clarify the scope 

of application of FINRA’s Rule 

1230(b)(6), which rule comes into effect 

on October 17, 2011.7 By accelerating 

the approval of the proposed rule, and 

allowing it to become effective on 

October 17, 2011, the Commission can 

eliminate uncertainty about the rule’s 

applicability to the persons who are the 

subject of this interpretation, improve 

the ability of FINRA members to plan 

accordingly for the upcoming 

compliance date of Rule 1230(b)(6), and 

avoid undue burdens associated with 

preparing for the registration of persons 

who will not be required to register 

under this interpretation.8

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: 


jlentini on DSK4TPTVN1PROD with NOTICES
52042 Federal Register / Vol. 76, No. 161 / Friday, August 19, 2011 / Notices 

9 15 U.S.C. 78s(b)(2). 

10 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(2). 

2 17 CFR 200.30–3(a)(12). 

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–2011–040 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–FINRA–2011–040. 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 website (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 website 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 

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–2011–040 and 

should be submitted on or before 

September 9, 2011. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,9 that the 

proposed rule change (SR–FINRA– 

2011–040) is approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21176 Filed 8–18–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64892A; File No. SR– 

FINRA–2011–034] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Order Granting Accelerated Approval 

of Proposed Rule Change To Amend 

FINRA Rule 4240 (Margin 

Requirements for Credit Default 

Swaps); Correction 

August 15, 2011. 

FR Doc. No. 2011–18221, beginning 

on page 43360 for Wednesday, July 20, 

2011, contained an error. Release No. 

34–64892 (‘‘Release’’) approved a 

proposed rule change on an accelerated 

basis filed by FINRA (File No. SR– 

FINRA–2011–034). Section V of the 

Release was inadvertently omitted. 

Accordingly, the conclusion of the 

Release is added to read as noted below. 

On page 43363, column 1, following 

line 6, insert: 

‘‘V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,1 that the 

proposed rule change (SR–FINRA– 

2011–034), be, and hereby is, approved 

on an accelerated basis.’’ 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.2

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21190 Filed 8–18–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

Auriga Laboratories, Inc., Curon 

Medical, Inc., Goldstate Corp., 

OneWorld Systems, Inc., and 

PracticeXpert, Inc.; Order of 

Suspension of Trading 

August 17, 2011. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Auriga 

Laboratories, Inc. because it has not 

filed any periodic reports since the 

period ended March 31, 2008. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Curon 

Medical, Inc. because it has not filed 

any periodic reports since the period 

ended June 30, 2006. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Goldstate 

Corp. because it has not filed any 

periodic reports since the period ended 

March 31, 2002. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of OneWorld 

Systems, Inc. because it has not filed 

any periodic reports since the period 

ended December 31, 1999. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of 

PracticeXpert, Inc. because it has not 

filed any periodic reports since the 

period ended June 30, 2006. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

companies. Therefore, it is ordered, 

pursuant to Section 12(k) of the 

Securities Exchange Act of 1934, that 

trading in the securities of the abovelisted companies is suspended for the 

period from 9:30 a.m. EDT on August 

17, 2011, through 11:59 p.m. EDT on 

August 30, 2011. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–21336 Filed 8–17–11; 4:15 pm] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #12734 and #12735] 

Iowa Disaster #IA–00035 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of Iowa Dated. 

Incident: Severe Storms and Flash 

Flooding. 

Incident Period: 07/27/2011 through 

07/28/2011. 


jlentini on DSK4TPTVN1PROD with NOTICES