Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 10319 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4The 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 FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

5See Securities Exchange Act Rel. No. 59446 

(February 25, 2009) (File No. SR–NYSE–2009–17). 

6 Incorporated NYSE Rule 12 defines the term 

‘‘business day.’’ 

7 Incorporated NYSE Rule 177 states the delivery 

time for ‘‘cash’’ contracts. 

8 Incorporated NYSE Rule 282 sets forth buy-in 

procedures. 

9See supra note 3 [sic]. The Commission notes 

that the correct cross-reference is to note 5. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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 

No. SR–FINRA 2009–006 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 No. 

SR–FINRA–2009–006. 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 changes 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 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 No. 

SR–FINRA–2009–006 and should be 

submitted on or before March 31, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4961 Filed 3–9–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59490; File No. SR–FINRA– 

2009–007] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Incorporated 

NYSE Rules 12 (‘‘Business Day’’) and 

282 (Buy-in Procedures) and To Delete 

Incorporated NYSE Rule 177 (Delivery 

Time—‘‘Cash’’ Contracts) Relating to 

the Elimination of NYSE Members’ 

Ability To Enter Orders on the NYSE 

With Settlement Instructions of 

‘‘Cash,’’ ‘‘Next Day’’ and ‘‘Seller’s 

Option’’ 

March 3, 2009. 

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 

20, 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’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ rule 

change under paragraph (f)(6) of Rule 

19b–4 under the Act,3 which renders 

the proposal effective upon receipt of 

this filing by the Commission. 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 

Incorporated NYSE Rules 12 (‘‘Business 

Day’’) and 282 (Buy-in Procedures), and 

to delete Incorporated NYSE Rule 177 

(Delivery Time—‘‘Cash’’ Contracts) 4 to 

conform to the proposed rule change by 

the New York Stock Exchange, LLC 

(‘‘NYSE’’) to its versions of Rules 12, 

177 and 282.5

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 

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 changes to 

Incorporated NYSE Rules 12,6 177 7 and 

282 8 to conform these rules to recent 

amendments made by NYSE. The 

NYSE’s amendments remove references 

to certain settlement instructions that 

are no longer compatible with the 

NYSE’s electronic market. These 

include instructions to settle on ‘‘cash,’’ 

‘‘next day’’ or ‘‘seller’s option’’ basis. 

As described by the NYSE in its 

filing,9 in the NYSE’s current 

environment, orders received by NYSE 

systems that are marketable upon entry 

are eligible to be immediately and 

automatically executed. According to 

the NYSE, order types and settlement 

instructions that require manual 

intervention pose significant 

10320 Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 

10 Id. 

11Pursuant to Rule 17d–2 under the Exchange 

Act, NASD, NYSE, and NYSE Regulation, Inc. 

entered into an agreement (‘‘Agreement’’) to reduce 

regulatory duplication for firms that are Dual 

Members by allocating certain regulatory 

responsibilities for selected NYSE rules from NYSE 

Regulation to FINRA. The Agreement includes a list 

of all those rules (‘‘Common Rules’’) for which 

FINRA has assumed examination, enforcement and 

surveillance responsibilities under the Agreement 

relating to compliance by Dual Members to the 

extent that such responsibilities involve member 

firm regulation. See Securities Exchange Act 

Release No. 56148 (July 26, 2007), 72 FR 42146 

(August 1, 2007) (Notice of Filing and Order 

Approving and Declaring Effective a Plan for the 

Allocation of Regulatory Responsibilities). The 

Common Rules are the same NYSE rules that 

FINRA has incorporated into its rulebook. See 

Securities Exchange Act Release No. 56147 (July 26, 

2007), 72 FR 42166 (August 1, 2007) (Notice of 

Filing and Order Granting Accelerated Approval of 

Proposed Rule Change to Incorporate Certain NYSE 

Rules Relating to Member Firm Conduct; File No. 

SR–NASD–2007–054). 

12 15 U.S.C. 78o–3(b)(6). 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6). 

16 17 CFR 240.19b–4(f)(6)(iii) In addition, Rule 

19b–4(f)(6)(iii) 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 this requirement. 

17See Securities Exchange Act Release No. 59446 

(Feb. 25, 2009) (File No. SR–NYSE–2009–17). 

18For 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). 

impediments to the efficient functioning 

of the NYSE’s market. In addition, the 

NYSE states that the ability to have 

market participants’ orders executed in 

the most efficient manner necessitates 

the elimination of cash, next day and 

seller’s option as valid settlement 

instructions for orders submitted to the 

NYSE. It adds that because these 

instructions result in the orders printing 

to paper, the manual intervention 

required in the processing of these 

orders puts the orders at the very real 

risk of ‘‘missing the market’’ as a result 

of the current speed of order execution 

in the NYSE market. Under the NYSE 

filing, references to cash, next day and 

seller’s option were deleted from NYSE 

Rules 12 (‘‘Business Day’’) and 282 

(Buy-in Procedures) as valid settlement 

instructions for orders submitted to the 

NYSE. In addition, the NYSE eliminated 

NYSE Rule 177 (Delivery Time—‘‘Cash’’ 

Contracts).10

Given these changes, FINRA is 

proposing to make conforming changes 

to Incorporated NYSE Rules 12, 177 and 

282 to ensure consistency with NYSE’s 

versions of Rules 12, 177 and 282.11

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,12 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 the 

proposed rule change is necessary and 

appropriate to reduce the risk of 

customers missing the market and 

possibly receiving inferior priced 

executions because of legacy NYSE 

settlement instructions and to maintain 

consistency with the NYSE’s 

amendments to its Rules 12, 177 and 

282. 

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 

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 for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) 13 of the Act and Rule 19b– 

4(f)(6) thereunder.14

A proposed rule change filed under 

Rule 19b-4(f)(6) normally does not 

become operative until 30 days after the 

date of filing.15 However, Rule 19b– 

4(f)(6)(iii) 16 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. FINRA 

has requested that the Commission 

waive the 30-day operative delay so that 

the proposed rule change may become 

operative on March 13, 2009, the same 

date that NYSE’s amendments are 

implemented. The Commission believes 

that allowing the proposed rule change 

to become operative on March 13, 2009 

is consistent with the protection of 

investors and the public interest. The 

Commission notes that FINRA is merely 

revising its rules to conform to a 

proposed rule change by the NYSE that 

will be operative on March 13, 2009,17

which will allow FINRA’s Incorporated 

NYSE Rules to maintain their status as 

Common Rules under the Agreement. 

Accordingly, the Commission 

designates the proposed rule change to 

be operative on March 13, 2009.18

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–FINRA–2009–007 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–2009–007. 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 

Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 10321 

19 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78s(b)(3)(A)(iii). 

3 17 CFR 240.19b–4(f)(4). 4Recitals F and G of the FICC/CME Agreement. 

5 15 U.S.C. 78q–1. 

6 15 U.S.C. 78s(b)(3)(A)(iii). 

7 17 CFR 240.19b–4(f)(4). 

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 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 available publicly. All 

submissions should refer to File 

Number SR–FINRA–2009–007 and 

should be submitted on or before March 

31, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4965 Filed 3–9–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59498; File No. SR–FICC– 

2009–01] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating To 

Modifying the Appendix of the GSD– 

CME Cross-Margining Agreement, 

Deletion of the GSD–TCC CrossMargining Arrangement, and Technical 

Changes and Corrections 

March 4, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

January 13, 2009, the Fixed Income 

Clearing Corporation (‘‘FICC’’) 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 primarily by FICC. 

FICC filed the proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 2 and Rule 19b–4(f)(4) 

thereunder 3 so that the proposal was 

effective upon filing with the 

Commission. 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 proposed rule change will amend 

the appendix of the cross-margining 

agreement between FICC and the 

Chicago Mercantile Exchange, Inc. 

(‘‘CME’’) (‘‘FICC/CME Agreement’’), and 

to make additional technical changes 

and corrections. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of and 

Statutory Basis for the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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. FICC 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 

FICC is proposing to amend its 

Divisions’ rules as follows: 

1. Revisions to Appendix A of the CrossMargining Agreement With the Chicago 

Mercantile Exchange, Inc. 

Through its Government Securities 

Division (‘‘GSD’’), FICC currently 

participates in a cross-margining 

arrangement with the CME. The FICC/ 

CME Agreement, which governs the 

arrangement, contains an Appendix A, 

which requires the parties to list other 

cross-margining or loss sharing 

arrangements to which they are parties 

and the order in which they will be 

considered when the parties calculate 

their available resources under the 

FICC/CME Agreement. The FICC/CME 

Agreement further provides that the 

parties may amend Appendix A without 

prior approval of the other party by 

giving notice to the other party.4

FICC has notified CME that it has 

amended Appendix A of the Agreement 

to: (1) Remove references to the crossmargining agreement with The Clearing 

Corporation (‘‘TCC’’) as that agreement 

is no longer in effect, (2) remove a 

reference to a multilateral netting 

contract and limited cross-guaranty 

agreement with the now-defunct 

Emerging Markets Clearing Corporation, 

(3) change the priority of the 

multilateral cross-guaranty agreements 

that FICC participates, and (4) make 

reference to the upcoming portfolio 

margining between GSD and FICC’s 

Mortgage-Backed Securities Division 

(‘‘MBSD’’). This rule change 

incorporates these changes into the 

FICC/CME Agreement, which is a part 

of the GSD’s rules. 

2. Correction to MBSD Rules 

FICC is also correcting a reference in 

MBSD’s rules to reflect actual practice. 

While MBSD’s fee schedule accurately 

labels a ‘‘fee’’ for non-compliance with 

MBSD trade input requirements, its 

rules incorrectly label this a ‘‘fine.’’ The 

proposed rule change corrects the fine 

reference. 

3. Clarifications to GSD’s Schedule of 

Time Frames 

FICC is updating its Schedule of Time 

Frames to correct the time during which 

FICC’s comparison, netting, settlement, 

and margining output normally is made 

available to members and to make clear 

that the funds-only settlement process 

occurs through the Federal Reserve’s 

National Settlement Service. 

FICC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 5

and the rules and regulations 

thereunder because it will make certain 

rule corrections and address the crossmargining agreements and therefore will 

support the prompt and accurate 

clearance and settlement of securities 

transactions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

FICC has not solicited or received 

written comments relating to the 

proposed rule change. FICC will notify 

the Commission of any written 

comments it receives. 

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)(iii) of the Act 6 and Rule 

19b–4(f)(4) 7 thereunder because it 

effects a change in an existing service of 

a registered clearing agency that does