22374 Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 66109 (Jan. 5, 

2012), 77 FR 1773 (Jan. 11, 2012) (Notice of Filing 

of Proposed Rule Change to Amend the Code of 

Arbitration Procedure for Industry Disputes to 

Preclude Collective Action Claims from Being 

Arbitrated) (‘‘Notice’’). The comment period closed 

on February 1, 2012. 

4See Letter from Kevin M. Carroll, Managing 

Director and Associate General Counsel, Securities 

Industry and Financial Markets Association, dated 

February 1, 2012 (‘‘SIFMA Letter’’); and letter from 

Jill I. Gross, Director, Edward Pekarek, Assistant 

Director, and Genavieve Shingle, Student Intern, 

Investor Rights Clinic at Pace Law School, dated 

February 1, 2012 (‘‘PIRC Letter’’). Comment letters 

are available at http://www.sec.gov. 

5See Letter from Mignon McLemore, Assistant 

Chief Counsel, FINRA, FINRA Dispute Resolution, 

to Elizabeth M. Murphy, Secretary, SEC, dated 

March 28, 2012 (‘‘Response to Comments No. 1 and 

Partial Amendment No. 1’’). The text of Response 

to Comments No. 1 and Partial Amendment No. 1 

is available on FINRA’s Web site at http:// 

www.finra.org, at the principal office of FINRA, and 

on the Commission’s Web site at http:// 

www.sec.gov. 

6See Notice (citing FINRA Interpretive Letter to 

Cliff Palefsky, Esq., dated September 21, 1999). 

7 Id. (citing Hugo Gomez et al. v. Brill Securities, 

Inc. et al., No. 10 Civ. 3503, 2010 U.S. Dist. LEXIS 

118162 (S.D.N.Y. Nov. 2, 2010)). 

DCO, which is subject to regulation by 

the CFTC under the CEA. This rule 

change is being made according to 

regulations promulgated by the CFTC, 

which were previously subject to notice 

and comment. Not approving this 

request on an accelerated basis would 

have a significant impact on CME’s 

operations as a DCO. 

The Commission finds good cause for 

approving the proposed rule change 

prior to the 30th day after the date of 

publication of notice in the Federal 

Register because the proposed rule 

change allows CME to implement the 

regulations of another federal regulatory 

agency, the CFTC, in accordance with 

those regulations’ effective date. 

V. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–CME–2012– 

09) is approved on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8879 Filed 4–12–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66774; File No. SR–FINRA– 

2011–075] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, Amending Rule 

13024 of the Code of Arbitration 

Procedure for Industry Disputes To 

Preclude Collective Action Claims 

From Being Arbitrated 

April 9, 2012. 

I. Introduction 

On December 22, 2011, the Financial 

Industry Regulatory Authority, Inc. 

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

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposal to amend 

Rule 13204 of the Code of Arbitration 

Procedure for Industry Disputes 

(‘‘Industry Code’’) to preclude collective 

action claims by employees of FINRA 

members under the Fair Labor 

Standards Act (FLSA), the Age 

Discrimination in Employment Act 

(ADEA), or the Equal Pay Act of 1963 

(EPA) from being arbitrated under the 

Industry Code. Specifically, the 

proposal would, among other things, (1) 

State that collective action claims under 

the FLSA, the ADEA, or the EPA may 

not be arbitrated under the Code; (2) 

provide that any claim involving 

similarly situated plaintiffs against the 

same defendants, such as a courtcertified collective action or a putative 

collective action, would not be 

arbitrated in FINRA’s arbitration forum; 

(3) give arbitrators the authority to 

decide disputes about whether a claim 

is part of a collective action; and (4) 

prohibit a member firm or associated 

person from enforcing any arbitration 

agreement against a member of a 

certified or putative collective action 

with respect to any claim that is the 

subject of the certified or putative 

collective action until either the 

collective certification is denied or the 

group is decertified. 

The proposed rule change was 

published for comment in the Federal 

Register on January 11, 2012.3 The 

Commission received two comments on 

the proposed rule change.4 On March 

29, 2012, FINRA filed a response to 

comments and a partial amendment to 

the proposed rule change (‘‘Amendment 

No. 1’’).5 The Commission is publishing 

this notice and order to solicit comment 

on Amendment No. 1 and to approve 

the proposed rule change, as modified 

by Amendment No. 1, on an accelerated 

basis. 

II. Description of Proposed Rule Change 

As stated in the Notice, Rule 13204 of 

the Industry Code generally provides 

that any claim that is based upon the 

same facts and law, and involves the 

same defendants as in a court-certified 

class action or a putative class action, 

shall not be arbitrated. The Notice also 

stated that in 1999 FINRA issued an 

Interpretive Letter stating that its class 

action rules should include collective 

action claims brought under the FLSA 

and, therefore, considered these claims 

ineligible for arbitration in its forum.6

However, as described in the Notice, the 

United States District Court for the 

Southern District of New York found 

that an FLSA collective action is not a 

class action for purposes of Rule 13204 

of the Industry Code and compelled 

arbitration of such claims in FINRA’s 

dispute resolution forum.7

In response to the court’s finding, 

FINRA is proposing to amend Rule 

13204 to preclude collective action 

claims from being arbitrated in FINRA’s 

forum under the Industry Code. The 

proposed amendments to Rule 13204, 

would separate Rule 13204 into two 

sections: subparagraph (a) for class 

actions, and subparagraph (b) for 

collective actions. Subparagraph (a) 

would be titled, ‘‘Class Actions,’’ and renumbered. Subparagraph (b) would be 

titled, ‘‘Collective Actions,’’ and would 

contain four subparagraphs. 

Proposed subparagraph (b)(1) would 

state that collective action claims under 

the FLSA, the ADEA, or the EPA may 

not be arbitrated under the Industry 

Code. 

Under proposed subparagraph (b)(2), 

any claim that involves plaintiffs who 

are similarly-situated against the same 

defendants as in a court-certified 

collective action or a putative collective 

action, or that is ordered by a court for 

collective action at a forum not 

sponsored by a self-regulatory 

organization, would not be arbitrated 

under the Industry Code, if the party 

bringing the claim has opted in to the 

collective action. 

Under proposed subparagraph (b)(3), 

as originally proposed, the Director 

would have referred to a panel any 

dispute as to whether a claim is part of 

a collective action, unless a party asked 

the court hearing the collective action to 

resolve the dispute within 10 days of 

receiving notice that the Director has 

decided to refer the dispute to a panel. 

Amendment No. 1, however, would 

permit a party to ask any forum (not just 

a court) hearing the collective action to 

resolve the dispute within the specified 

time. 


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Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 22375 

8See 29 U.S.C. 216(b). 

9 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

10 15 U.S.C. 78o–3(b)(6). 11 15 U.S.C. 78s(b)(2). 

Subparagraph (b)(4), as originally 

proposed, would have provided that a 

member or associated person may not 

enforce any arbitration agreement 

against a member of a certified or 

putative collective action with respect 

to any claim that is the subject of the 

certified or putative collective action 

until the collective action certification is 

denied or the collective action is 

decertified. Amendment No. 1, 

however, would specify that 

subparagraph (b)(4) would apply only to 

agreements to arbitrate in the FINRA 

forum, thus not affecting agreements to 

arbitrate in fora other than FINRA’s. 

III. Summary of Comment Letters 

As stated above, the proposed rule 

change was published for comment in 

the Federal Register on January 11, 

2012, and the comment period closed 

on February 1, 2012. The Commission 

received two comment letters in 

response to the proposed rule change. 

On March 28, 2012, FINRA responded 

to the comments and filed Amendment 

No. 1 to the proposed rule change. 

The PIRC Letter strongly supported 

the proposed rule change. 

The SIFMA Letter did not object to 

the proposed rule change, but 

recommended revisions to certain 

language in proposed subparagraph (b). 

First, SIFMA recommended modifying 

proposed subparagraph (b)(2) to replace 

the phrase, ‘‘Any claim that involves 

plaintiffs who are similarly situated 

against the same defendants as in a 

court-certified collective action or a 

putative collection action,’’ with, ‘‘Any 

claim that is the subject of a certified or 

putative collective action.’’ SIFMA 

argued that FINRA’s proposed language 

could be misconstrued to include multiparty litigation outside of the collective 

action context. SIFMA suggested that its 

proposed change would clarify FINRA’s 

intent to limit the application of the 

proposed rule to collective actions. 

In its Response to Comments No. 1, 

FINRA declined to amend its proposed 

subparagraph (b)(2) as SIFMA 

suggested. FINRA stated that the 

revision is unnecessary because as 

proposed the rule already clarifies its 

applicability to only those parties who 

opt in to a collective action; 

furthermore, as proposed the rule would 

preclude those claims from being 

arbitrated in FINRA’s forum only, and 

would not preclude their being 

arbitrated in other fora. FINRA also 

declined to remove the term ‘‘similarly 

situated’’ from proposed subparagraph 

(b)(2) as SIFMA suggested because the 

term is consistent with language used in 

the FLSA to describe party plaintiffs in 

collective actions under the statute,8

and the term helps define the parties to 

whom the proposal would apply. 

Second, SIFMA recommended 

modifying proposed subparagraphs 

(b)(3) and (b)(4) to limit their scope to 

FINRA arbitration. Specifically, SIFMA 

recommended modifying proposed 

subparagraph (b)(3) by replacing ‘‘the 

court hearing the collective action’’ with 

‘‘the court or other forum hearing the 

collective action.’’ SIFMA stated that 

this change would clarify that 

arbitration fora, other than FINRA’s 

forum, accept collective action claims. 

Similarly, SIFMA recommended 

modifying proposed subparagraph (b)(4) 

by replacing ‘‘may not enforce any 

arbitration agreement’’ with ‘‘may not 

enforce an agreement to arbitrate in this 

forum.’’ SIFMA stated that this change 

would clarify that under the proposed 

rule agreements to arbitrate collective 

action claims in arbitration fora other 

than FINRA would remain valid and 

enforceable. 

FINRA agreed to amend proposed 

subparagraphs (b)(3) and (b)(4) as 

SIFMA recommended. FINRA stated 

that it made these changes because the 

proposed rule is designed to prohibit 

collective action claims from being 

arbitrated in its forum only; FINRA 

members and their employees may, 

however, agree to address collective 

action claims either by filing them in a 

court of competent jurisdiction or by 

arbitrating them in other arbitration 

fora. 

IV. Commission’s Findings 

The Commission has carefully 

considered the proposed rule change, 

the comments received, FINRA’s 

Response to Comments No. 1, and 

Amendment No. 1. The Commission 

finds that the proposed rule change, as 

amended, is consistent with the 

requirements of the Exchange Act, and 

the rules and regulations thereunder 

that are applicable to a national 

securities association.9 In particular, the 

Commission finds that the proposal is 

consistent with Section 15A(b)(6) of the 

Act,10 which requires, among other 

things, that the rules of a national 

securities association be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. 

The proposed rule change, as 

amended, would facilitate the efficient 

resolution of collective actions under 

the FLSA, ADEA, or the EPA, as courts 

have established procedures to manage 

these types of representative actions. It 

also would preserve access to courts for 

these types of claims for employees of 

FINRA members. 

The Commission believes that FINRA 

has responded adequately to SIFMA’s 

comments recommending revisions to 

certain language in proposed 

subparagraphs (b)(2), (b)(3) and (b)(4) to 

the proposed rule by explaining, among 

other things, why it is proposing to 

revise proposed subparagraphs (b)(3) 

and (b)(4), but is not proposing to revise 

subparagraph (b)(2). In response to 

SIFMA’s comments, FINRA proposed to 

amend proposed subparagraphs (b)(3) 

and (b)(4) to acknowledge that 

arbitration fora other than FINRA’s 

dispute resolution forum accept 

collective action claims. FINRA has 

suitably explained its reasons for 

declining to amend proposed 

subparagraph (b)(2) as SIFMA 

recommended. 

V. Accelerated Approval 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act 11

for approving the proposed rule change, 

as modified by Amendment No. 1, prior 

to the 30th day after publication of 

Amendment No. 1 in the Federal 

Register. The changes proposed in 

Amendment No. 1 revised proposed 

subparagraphs (b)(3) and (b)(4) in 

response to specific concerns raised by 

SIFMA. The amendment addresses 

these concerns by clarifying that 

arbitration fora, other than FINRA’s 

forum, accept collective action claims, 

and that under the proposed rule 

agreements to arbitrate collective action 

claims in arbitration fora other than 

FINRA would remain valid and 

enforceable. 

Accordingly, the Commission finds 

that good cause exists to approve the 

proposal, as modified by Amendment 

No. 1, on an accelerated basis. 

VI. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether Amendment No. 1 to 

the proposed rule change is consistent 

with the Act. Comments may be 

submitted by any of the following 

methods: 


pmangrum on DSK3VPTVN1PROD with NOTICES
22376 Federal Register / Vol. 77, No. 72 / Friday, April 13, 2012 / Notices 

12 15 U.S.C. 78s(b)(2). 13 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 email to rulecomments@sec.gov. Please include File 

Number SR–FINRA–2011–075 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–2011–075. 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–2011–075 and 

should be submitted on or before May 

4, 2012. 

VII. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,12 that the 

proposed rule change (SR–FINRA– 

2011–075), as modified by Amendment 

No. 1, be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8880 Filed 4–12–12; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice 7845] 

Culturally Significant Objects Imported 

for Exhibition Determinations: 

‘‘Ellsworth Kelly: Plant Drawings’’ 

SUMMARY: Notice is hereby given of the 

following determinations: Pursuant to 

the authority vested in me by the Act of 

October 19, 1965 (79 Stat. 985; 22 U.S.C. 

2459), Executive Order 12047 of March 

27, 1978, the Foreign Affairs Reform and 

Restructuring Act of 1998 (112 Stat. 

2681, et seq.; 22 U.S.C. 6501 note, et 

seq.), Delegation of Authority No. 234 of 

October 1, 1999, and Delegation of 

Authority No. 236–3 of August 28, 2000, 

I hereby determine that the object to be 

included in the exhibition ‘‘Ellsworth 

Kelly: Plant Drawings,’’ imported from 

abroad for temporary exhibition within 

the United States, is of cultural 

significance. The object is imported 

pursuant to a loan agreement with the 

foreign owners or custodians. I also 

determine that the exhibition or display 

of the exhibit object at The Metropolitan 

Museum of Art, New York, New York 

from on or about June 5, 2012, until on 

or about September 3, 2012, and at 

possible additional exhibitions or 

venues yet to be determined, is in the 

national interest. I have ordered that 

Public Notice of these Determinations 

be published in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: For 

further information, including a list of 

the exhibit objects, contact Ona M. 

Hahs, Attorney-Adviser, Office of the 

Legal Adviser, U.S. Department of State 

(telephone: 202–632–6473). The mailing 

address is U.S. Department of State, SA– 

5, L/PD, Fifth Floor (Suite 5H03), 

Washington, DC 20522–0505. 

Dated: April 9, 2012. 

Ann Stock, 

Assistant Secretary, Bureau of Educational 

and Cultural Affairs, Department of State. 

[FR Doc. 2012–8925 Filed 4–12–12; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

[Docket No. FAA–2012–0233] 

Airport Improvement Program (AIP) 

Grant Assurances 

AGENCY: Federal Aviation 

Administration (FAA). 

ACTION: Notice of modification of 

Airport Improvement Program grant 

assurances; opportunity to comment. 

SUMMARY: On February 14, 2012, the 

FAA Modernization and Reform Act of 

2012 was signed into law (Pub. L. 112– 

95). Provisions contained in this law 

necessitate modifications to five grant 

assurances. 

DATES: The effective date the 

modifications to the grant assurances is 

April 13, 2012. The FAA will consider 

comments on the modifications to the 

grant assurances. If necessary, any 

appropriate revisions resulting from the 

comments received will be adopted as 

of the date of a subsequent publication 

in the Federal Register. Comments must 

be submitted on or before May 14, 2012. 

ADDRESSES: You may send comments 

[identified by Docket Number FAA– 

2012–0233] using any of the following 

methods: 

• Government-wide rulemaking web 

site: Go to http://www.regulations.gov 

and follow the instructions for sending 

your comments electronically. 

• Mail: Docket Operations, U.S. 

Department of Transportation, West 

Building, Ground Floor, Room W12– 

140, Routing Symbol M–30, 1200 New 

Jersey Avenue SE., Washington, DC 

20590. 

• Fax: 1–202–493–2251. 

• Hand Delivery: To Docket 

Operations, Room W12–140 on the 

ground floor of the West Building, 1200 

New Jersey Avenue SE., Washington, 

DC 20590, between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. 

FOR FURTHER INFORMATION CONTACT: 

Frank San Martin, Manager, Airports 

Financial Assistance, Federal Aviation 

Administration, 800 Independence 

Avenue SW., Washington, DC 20591, 

telephone (202) 267–3831; facsimile: 

(202) 267–5302. 

Authority for Grant Assurance 

Modifications 

This notice is published under the 

authority described in Subtitle VII, Part 

B, Chapter 471, Sections 47107 and 

47122 of Title 49 United States Code. 

SUPPLEMENTARY INFORMATION: A sponsor 

(applicant) seeking financial assistance 


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