12098 Federal Register / Vol. 77, No. 39 / Tuesday, February 28, 2012 / Notices 

8See Securities Exchange Act Release No. 63275 

(November 8, 2010), 75 FR 70048 (November 16, 

2010)(SR–NYSEArca–2010–100) at page 70049. The 

Exchange’s proposed monthly fee of $1,000 for a 

1Gb is less than NYSE’s fee of $5,000 for the same 

bandwidth connection to the data center. 

9 15 U.S.C. 78s(b)(3)(a)(ii) [sic]. 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

market data feeds that can be provided 

over these 1G network connections, as 

per client request, additional NASDAQ 

network resources are required to 

monitor and interface with clients when 

data spikes and data gapping issues 

occur. The Exchange has not increased 

the fees for these services in over six 

years, while the costs have continued to 

rise. In addition, the copper connections 

provide the same services and latency as 

the fiber connections. NASDAQ 

proposes to standardize the fees for 

these connections as it does with the 

inter-cabinet connectivity fees of this 

rule. 

The Exchange further believes that the 

proposed fees are reasonable in that 

NASDAQ’s proposed fees are less than 

those charged by other trading venues 

for comparable services.8

The Exchange also believes the 

proposed increase in the fees for the 

1Gb connectivity to NASDAQ, both 

fiber and copper, is equitably allocated 

and non-discriminatory in that all 

NASDAQ members have the option of 

selecting the 1Gb connections to 

NASDAQ and there is no differentiation 

among members with regard to the fees 

charged for such costs. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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, as amended. 

Moreover, the Exchange believes that its 

changes with respect to fees for the 1Gb 

connectivity will not burden 

competition because the applicable fees 

remain competitive with those charged 

by other venues. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.9 At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or 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 email to rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2012–025 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–NASDAQ–2012–025. This 

file number should be included on the 

subject line if email 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 Web site 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 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 

publicly available. All submissions 

should refer to File Number SR– 

NASDAQ–2012–025, and should be 

submitted on or before March 20, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4686 Filed 2–27–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66441; File No. SR–FINRA– 

2012–011] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Mediator Selection 

February 22, 2012. 

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 February 

9, 2012, 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, II, 

and III below, which Items have been 

substantially 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 amend FINRA 

Rule 14107 of the Code of Mediation 

Procedure (‘‘Mediation Code’’) to 

provide the Director of Mediation 

(‘‘Mediation Director’’) with discretion 

to determine whether parties to a FINRA 

mediation may select a mediator who is 

not on FINRA’s mediator roster. 

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 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 39 / Tuesday, February 28, 2012 / Notices 12099 

3The National Arbitration and Mediation 

Committee (NAMC) makes recommendations to 

FINRA staff regarding recruitment, qualification, 

training, and evaluation of arbitrators and 

mediators. The NAMC also makes 

recommendations on rules, regulations, and 

procedures that govern the conduct of arbitration, 

mediation, and other dispute resolution matters 

before FINRA. 

The NAMC members include investor 

representatives, securities industry professionals 

and FINRA arbitrators and mediators. A majority of 

the NAMC members and its chair are public (nonindustry) representatives. This diverse composition 

ensures a neutral approach in the administration of 

Dispute Resolution’s forum, promoting fairness to 

all parties. 

4Upon approval to join the roster, FINRA 

mediators pay an annual $200 fee to remain active 

on the roster. Additionally, FINRA deducts $150 for 

each FINRA mediation from the mediator’s 

compensation (which typically ranges from $250 to 

$500 per hour). 

5 If the SEC approves the proposed rule change, 

FINRA would require any non-FINRA mediator 

who serves on a case to pay the $200 annual fee 

charged to FINRA mediators who are active on the 

roster prior to serving on the case, as well as the 

$150 mediation case fee. Further, FINRA would 

require the non-FINRA mediator to complete the 

application process for inclusion on the mediator 

roster. 

6See Securities Exchange Act Release No. 63799 

(Jan. 31, 2011), 76 FR 6500 (Feb. 4, 2011) (Order 

Approving File No. SR–FINRA–2010–053). 

7 15 U.S.C. 78o–3(b)(6). 

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 

FINRA is proposing to amend the 

Mediation Code to provide the 

Mediation Director with discretion to 

determine whether parties to FINRA 

mediation may select a mediator who is 

not on FINRA’s mediator roster. 

Currently, the Mediation Code 

permits parties to mediation to select a 

mediator either from a list of FINRA 

mediators supplied by the Mediation 

Director, or from a list or other source 

of their own choosing. Although parties 

usually select a FINRA mediator, under 

the current provision, parties may select 

a mediator who is not on FINRA’s 

roster. In 1995, when FINRA 

implemented its mediation program, 

FINRA determined to permit parties to 

select non-FINRA mediators to ensure 

that parties had access to a sufficient 

number of mediators. 

After over 15 years of administering 

the mediation program, FINRA’s 

mediator roster includes many seasoned 

securities mediators and selection of a 

non-FINRA mediator raises concerns for 

the forum. FINRA staff carefully screens 

every mediator applicant, and the 

National Arbitration and Mediation 

Committee 3 (through its Mediation 

Subcommittee), reviews and approves 

each application before FINRA places 

an applicant on the roster. FINRA staff 

conducts a background check of 

approved applicants before placing 

them on the mediator roster.4 FINRA 

staff elicits evaluations of its mediators 

from parties and counsel and conducts 

periodic quality control reviews of 

FINRA mediators. Non-FINRA 

mediators are not subject to FINRA’s 

screening process, background check, 

and periodic evaluation. 

If a mediator expresses an interest in 

applying to be a FINRA mediator, and 

FINRA’s program would benefit by 

adding the mediator, FINRA staff 

believes it would be prudent to permit 

a non-FINRA mediator to serve on a 

case.5 However, if a mediator has no 

interest in applying for FINRA’s roster 

or FINRA believes the mediator is not 

appropriate for its forum, then the 

Mediation Director should have the 

discretion to deny the parties’ mediator 

selection. Therefore, FINRA is 

proposing to amend Rule 14107(a) to 

state that a mediator may be selected, 

with the Mediation Director’s approval 

upon receipt of the parties’ joint request, 

from a list or other source the parties 

choose. If the Mediation Director rejects 

the mediator selected, the parties would 

still be able to select a FINRA approved 

mediator or a different non-FINRA 

mediator subject to the same conditions 

as the rejected mediator, or to mediate 

their dispute elsewhere. 

FINRA Rule 14107(c) provides that a 

mediator selected or assigned to mediate 

a matter must comply with FINRA rules 

relating to disclosures required of 

arbitrators unless, with respect to a 

mediator selected from a source other 

than a list provided by FINRA, the 

parties elect to waive such disclosure. 

FINRA is proposing to amend Rule 

14107(c) to make clear that the 

paragraph applies to a non-FINRA 

mediator who is approved to serve on a 

FINRA mediation. 

FINRA is also proposing two 

housekeeping amendments to Rule 

14107. First, to improve user citation to 

Rule 14107(a), FINRA is proposing to 

change the bullets in Rule 14107(a) to 

numbers. Second, FINRA is proposing 

to amend Rule 14107(c) to update the 

citation to Rule 12408 of the Customer 

Code of Arbitration Procedure. Rule 

12408 was re-numbered as part of 

another FINRA proposed rule change 

and is now identified as Rule 12405.6

2. Statutory Basis 

FINRA believes 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. FINRA believes that 

giving the Mediation Director discretion 

to determine whether parties may select 

a mediator who is not on FINRA’s 

mediator roster would protect the 

quality and integrity of the process for 

users of FINRA’s mediation program. 

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 45 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 or disapprove 

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: 


tkelley on DSK3SPTVN1PROD with NOTICES
12100 Federal Register / Vol. 77, No. 39 / Tuesday, February 28, 2012 / Notices 

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. 66011 

(December 20, 2011), 76 FR 80999 (December 27, 

2011)(SR–Phlx–2011–142). 

4 Id. at 80999. 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rulecomments@sec.gov. Please include File 

Number SR–FINRA–2012–011 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–2012–011. This file 

number should be included on the 

subject line if email 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 Web site 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–2012–011 and 

should be submitted on or before March 

20, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4595 Filed 2–27–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66438; File No. SR–Phlx– 

2012–16] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Certain External and Inter-Cabinet 

Connectivity Fees 

February 22, 2012. 

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 February 

14, 2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify 

certain external and inter-cabinet 

connectivity fees. The text of the 

proposed rule change is available at 

http://www.nasdaqtrader.com/ 

micro.aspx?id=PHLXRulefilings, at the 

Exchange’s principal office, 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, 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend the 

Phlx Fee Schedule, Section X(b), to 

reduce fees for low latency connectivity 

to Toronto and Chicago venues; and to 

increase certain fees for other forms of 

connectivity. 

Low Latency Connectivity 

On December 20, 2011, the 

Commission approved the Exchange’s 

offering of low latency point-to-point 

telecommunications connectivity from 

the Exchange’s co-location facility to 

select financial trading and co-location 

venues in the metropolitan New York/ 

New Jersey area, Toronto, and Chicago.3

The enhanced point-to-point 

connectivity provides the Exchange’s 

co-location customers the opportunity 

to obtain low latency network 

connectivity with greater ease and at a 

competitive price.4

The Exchange now proposes a passthrough reduction in the fees for 

connectivity to Toronto and Chicago 

venues as follows: (1) For 100MB 

connectivity to the Toronto area, a 

reduction of the installation fee from 

$5,150 to $4,850, and a reduction of the 

per-month connectivity fee from $4,350 

to $4,100; (2) for 1G connectivity to the 

Toronto area, a reduction of the 

installation fee from $8,200 to $7,700, 

and a reduction of the per-month 

connectivity fee from $10,450 to $9,850; 

(3) for 10G connectivity to the Toronto 

area, a reduction of the installation fee 

from $15,150 to $14,200, and a 

reduction of the per-month connectivity 

fee from $32,400 to $28,400; (4) for 

100MB connectivity to the Chicago area, 

a reduction of the installation fee from 

$4,850 to $3,500, and a reduction of the 

per-month connectivity fee from $8,350 

to $7,350; (5) for 1G connectivity to the 

Chicago area, a reduction of the 

installation fee from $5,900 to $4,900, 

and a reduction of the per-month 

connectivity fee from $16,400 to 

$12,800; (6) for 10G connectivity to the 

Chicago area, a reduction of the 

installation fee from of [sic] $12,050 to 

$10,650, and a reduction of the permonth connectivity fee from $39,750 to 

$26,900. 

The reductions in fees are the result 

of the Exchange obtaining a reduction in 

the fees charged to the Exchange by the 

Toronto and Chicago low latency 

telecommunication carriers. The 

Exchange is passing along the entire 

savings of the reduction in fees to the 

subscribers of the Toronto and Chicago 

low latency connectivity service. 

Increasing the 1Gb Connectivity Fees 

The Exchange further proposes to 

raise the 1Gb connectivity fees to The 


tkelley on DSK3SPTVN1PROD with NOTICES