15806 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3FINRA describes the eligibility rule using the 

rule number from the Customer Code for simplicity. 

However, the proposal also applies to the identical 

eligibility rule of the Industry Code. See Rule 

13206. 

4See also Rule 13206(c) of the Industry Code. 

5 64 F. Supp. 2d 338 (S.D.N.Y. 1999). The case 

involved claims under Section 10(b) of the 

Securities Exchange Act of 1934. 

6Rule 10307(a) (Tolling of Time Limitation(s) for 

the Institution of Legal Proceedings and Extension 

of Time Limitation(s) for Submission to Arbitration) 

states in relevant part that: 

Where permitted by applicable law, the time 

limitations which would otherwise run or accrue 

for the institution of legal proceedings shall be 

tolled where a duly executed Submission 

Agreement is filed by the CLaimant(s). The tolling 

shall continue for such period as the Association 

shall retain jurisdiction upon the matter submitted. 

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– 

NYSEAmex–2009–05 and should be 

submitted on or before April 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7732 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59672; File No. SR–FINRA– 

2009–013] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Amend the 

Tolling Provisions in Rules 12206 and 

13206 of the Codes of Arbitration 

Procedure for Customer and Industry 

Disputes 

April 1, 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 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’’) 

on March 11, 2009, 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 Dispute Resolution is 

proposing to amend the tolling 

provisions in Rules 12206 and 13206 of 

the Code of Arbitration Procedure for 

Customer Disputes (‘‘Customer Code’’) 

and for Industry Disputes (‘‘Industry 

Code’’), respectively, to clarify that the 

rules toll the applicable statutes of 

limitation when a person files an 

arbitration claim with FINRA. 

Below is the text of the proposed rule 

change. Proposed deletions are in 

brackets. 

* * * * * 

12206. Time Limits 

(a)–(b) No change. 

(c) Effect of Rule on Time Limits for 

Filing Claim in Court 

The rule does not extend applicable 

statutes of limitations; nor shall the sixyear time limit on the submission of 

claims apply to any claim that is 

directed to arbitration by a court of 

competent jurisdiction upon request of 

a member or associated person. 

However, [where permitted by 

applicable law,] when a claimant files a 

statement of claim in arbitration, any 

time limits for the filing of the claim in 

court will be tolled while FINRA retains 

jurisdiction of the claim. 

(d) No change. 

* * * * * 

13206. Time Limits 

(a)–(b) No change. 

(c) Effect of Rule on Time Limits for 

Filing Claim in Court 

The rule does not extend applicable 

statutes of limitations; nor shall the sixyear time limit on the submission of 

claims apply to any claim that is 

directed to arbitration by a court of 

competent jurisdiction upon request of 

a member or associated person. 

However, [where permitted by 

applicable law,] when a claimant files a 

statement of claim in arbitration, any 

time limits for the filing of the claim in 

court will be tolled while FINRA retains 

jurisdiction of the claim. 

(d) No change. 

* * * * * 

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 

Currently, Rule 12206, the ‘‘eligibility 

rule,’’ provides that, ‘‘no claim shall be 

eligible for submission to arbitration 

under the Code where six years have 

elapsed from the occurrence or event 

giving rise to the claim.’’ 3 The 

eligibility rule does not extend 

applicable statutes of limitation, but 

Rule 12206(c) does provide that, ‘‘where 

permitted by applicable law, when a 

claimant files a statement of claim in 

arbitration, any time limits for the filing 

of the claim in court will be tolled while 

FINRA retains jurisdiction of the 

claim.’’ 4 This means that, where 

permitted by applicable law, state 

statutes of limitation will be tolled (i.e., 

temporarily suspended) when a person 

files an arbitration claim with FINRA. 

For many years, FINRA has 

interpreted the rule to mean that any 

applicable statutes of limitation would 

be tolled in all cases when a person files 

an arbitration claim with FINRA. In 

Friedman v. Wheat First Securities, Inc., 

however, the court found that the 

phrase ‘‘where permitted by applicable 

law,’’ means that State or Federal law, 

as applicable, must permit tolling 

expressly, or the period will not be 

tolled.5 In light of the court’s 

interpretation of the phrase and the 

negative effect it could have on 

investors’ arbitration claims, FINRA is 

proposing to remove the phrase, ‘‘where 

permitted by applicable law,’’ from 

Rules 12206(c) and 13206(c) to make 

tolling automatic as part of the 

arbitration agreement. 

The Friedman court granted the 

defendant’s request to dismiss the 

plaintiff’s complaint on statute of 

limitations grounds. In arguing against 

dismissal, the plaintiff sought to rely on 

old Rule 10307(a) 6 of the Code of 

Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 15807 

7 64 F. Supp. 2d at 343. 

8 Id. 

9 Id. at 347. 

10 1998 U.S. App. Lexis 12618. 

11On July 26, 2007, the Commission approved a 

proposed rule change filed by NASD to amend 

NASD’s Certificate of Incorporation to reflect its 

name change to FINRA in connection with the 

consolidation of the member firm regulatory 

functions of NASD and NYSE Regulation, Inc. See 

Securities Exchange Act Rel. No. 56146 (July 26, 

2007), 72 FR 42190 (August 1, 2007) (SR–NASD– 

2007–053). 

12 Id. 

13 2004 U.S. Dist. Lexis 5031. The case also 

involved claims under Section 10(b) of the 

Securities Exchange Act of 1934. 

14 Id. In this case, the plaintiff filed an arbitration 

claim against the defendants at the New York Stock 

Exchange, Inc. (‘‘NYSE’’). The plaintiff argued that 

the limitations period should have been tolled 

under New York law for the period during which 

the arbitration was pending, and cited NYSE Rule 

606(a), which is similar to old Rule 10307(a), and 

states in pertinent part: 

Where permitted by applicable law, the time 

limitation(s) which would otherwise run or accrue 

for the institution of legal proceedings shall be 

tolled when a duly executed Submission Agreement 

is filed by the Claimant(s). 

15The rule states that ‘‘dismissal of a claim under 

this rule does not prohibit a party from pursuing the 

claim in court. By filing a motion to dismiss a claim 

under this rule, the moving party agrees that if the 

panel dismisses a claim under this rule, the nonmoving party may withdraw any remaining related 

claims without prejudice and may pursue all of the 

claims in court.’’ See also Rule 13206(b). 

16See Securities Exchange Act Rel. No. 50714 

(November 22, 2004), 69 FR 69971 (December 1, 

2004) (SR–NASD–2001–101). 

17Friedman, 64 F. Supp. 2d 338, 343 n.4 (1999). 

The court indicates that it likely would accept the 

amended language as representing an agreement of 

the parties: 

The precise meaning of Rule 10307(a) is not 

entirely clear. If the phrase ‘‘where permitted by 

applicable law’’ did not precede the remainder of 

the paragraph, the rule would simply be read as an 

explicit agreement between the parties to toll the 

limitations period, regardless of what the applicable 

State or Federal tolling principles provide. 

However, by including the phrase the drafters 

seemed to limit tolling to situations in which tolling 

is expressly permitted by applicable law, thereby 

making an explicit agreement between the parties 

unnecessary. 18 15 U.S.C. 78o–3(b)(6). 

Arbitration Procedure, which was 

updated and is currently designated as 

Rules 12206(c) and 13206(c), to support 

his position that filing an arbitration 

claim tolls the applicable statute of 

limitations.7 The court determined, 

however, that the language of old Rule 

10307(a) does not toll the statute of 

limitations unless such tolling is 

‘‘permitted by applicable law.’’ 8 After 

further analysis, the court found that no 

Federal or State statute tolled the 

applicable statute of limitations and 

granted the defendant’s dismissal 

request.9

Other courts have reached the same 

conclusion in interpreting old Rule 

10307(a) and the phrase ‘‘where 

permitted by law.’’ In Individual 

Securities v. Ross,10 the plaintiff, in 

appealing a judgment of a New York 

district court that dismissed the 

complaint as time-barred, claimed that 

the statute of limitations was tolled 

while his matter was in arbitration with 

then-NASD.11 The court cited old Rule 

10307(a) and noted that the ‘‘where 

permitted by law’’ language referred to 

the applicable law in New York, which 

prevented tolling of the limitations 

period.12 In Rampersad v. Deutsche 

Bank Securities, Inc.,13 the court, citing 

Friedman, determined that, used in a 

similar context, the phrase meant that 

Federal law, not State law, governs the 

availability of tolling the limitations 

period in a Section 10(b) cause of 

action.14

FINRA is concerned that courts may 

begin citing this interpretation to 

dismiss claims filed in court, as would 

otherwise be permitted under the 

eligibility rule.15 FINRA does not 

believe this outcome would be 

consistent with the original intent of the 

tolling provision or of amendments to 

the eligibility rule that allow customers 

to take their claims to court if their 

claims are dismissed in arbitration on 

eligibility grounds.16 Rather, FINRA 

believes that, in such a situation, the 

rule should be read to provide that a 

firm or associated person has implicitly 

agreed to suspend any statute of 

limitations defense for the time period 

that the matter was in FINRA’s 

jurisdiction. Amending the eligibility 

rule, as proposed, would make this 

clear. 

Moreover, FINRA is concerned that 

the Friedman interpretation could limit 

or foreclose customers’ access to other 

judicial forums to address their 

disputes, which would be an unfair 

result. Most brokerage firms require 

customers to arbitrate their disputes, a 

process that can take more than a year. 

Customers may be disadvantaged in a 

subsequent court proceeding if the 

panel dismisses the arbitration case on 

eligibility grounds and the statute of 

limitations is not tolled for the period of 

time that the customers were in 

arbitration. In addition to being an 

unfair result, FINRA believes this would 

undermine the intent of the eligibility 

rule, which gives customers the option 

of taking their claims to court when a 

case is dismissed on eligibility grounds. 

Therefore, FINRA is proposing to 

delete the phrase ‘‘where permitted by 

applicable law’’ from Rules 12206(c) 

and 13206(c). FINRA notes that the 

Friedman interpretation suggests that, 

but for the phrase, the rule would be 

read as an explicit agreement between 

the parties to toll the statute of 

limitations period.17 FINRA believes 

that the proposed rule change would 

leave the parties in the same position in 

court as they were at the start of the 

arbitration with regard to any statutes of 

limitation: the time period before the 

claim was filed in arbitration would not 

be extended by the proposed changes, 

but applicable statutes of limitation 

would not run while the matter was in 

arbitration. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,18 which 

requires, among other things, that the 

Association’s 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. The proposed rule 

change is consistent with FINRA’s 

statutory obligations under the Act to 

protect investors and the public interest 

because the proposal would preserve 

fairness in the arbitration process by 

ensuring that investors maintain their 

right to have their claims heard in court 

by tolling the applicable statutes of 

limitation while the dispute is in 

arbitration. 

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, as amended. 

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 by FINRA. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 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 such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

15808 Federal Register / Vol. 74, No. 65 / Tuesday, April 7, 2009 / Notices 

19 17 CFR 200.30–3(a)(12). 

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–2009–013 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–2009–013. 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 

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. 

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 the File 

Number SR–FINRA–2009–013 and 

should be submitted on or before April 

28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–7773 Filed 4–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SOCIAL SECURITY ADMINISTRATION 

Agency Information Collection 

Activities: Proposed Request and 

Comment Request 

The Social Security Administration 

(SSA) publishes a list of information 

collection packages requiring clearance 

by the Office of Management and 

Budget (OMB) in compliance with 

Public Law (Pub. L.) 104–13, the 

Paperwork Reduction Act of 1995, 

effective October 1, 1995. This notice 

includes revisions and extensions of 

OMB-approved Information Collections 

and a new collection. 

SSA is soliciting comments on the 

accuracy of the agency’s burden 

estimate; the need for the information; 

its practical utility; ways to enhance its 

quality, utility, and clarity; and ways to 

minimize the burden on respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. Mail, e-mail, or 

fax your comments and 

recommendations on the information 

collection(s) to the OMB Desk Officer 

and the SSA Reports Clearance Officer 

to the addresses or fax numbers listed 

below. 

(OMB), Office of Management and 

Budget. Attn: Desk Officer for SSA. 

Fax: 202–395–6974. E-mail Address: 

OIRA_Submission@omb.eop.gov. 

(SSA), Social Security Administration, 

DCBFM, Attn: Reports Clearance 

Officer, 1332 Annex Building, 6401 

Security Blvd., Baltimore, MD 21235. 

Fax: 410–965–6400. E-mail Address: 

OPLM.RCO@ssa.gov. 

I. The information collection below is 

pending at SSA. SSA will submit it to 

OMB within 60 days from the date of 

this notice. To be sure we consider your 

comments, we must receive them no 

later than June 8, 2009. Individuals can 

obtain copies of the collection 

instrument by calling the SSA Reports 

Clearance Officer at 410–965–3758 or by 

writing to the e-mail address listed 

above. 

1. Statement of Claimant or Other 

Person—20 CFR 404.702 & 416.570— 

0960–0045 

SSA uses the SSA–795 to obtain 

information from claimants or other 

persons having knowledge of facts in 

connection with claims for 

Supplemental Security Income (SSI) or 

Social Security benefits when there is 

no standard form to collect the needed 

information. SSA then uses the 

information to process claims for 

benefits or for ongoing issues related to 

the above programs. The respondents 

are applicants/recipients of SSI or 

Social Security benefits, or others who 

are in a position to provide information 

pertinent to the claim(s). 

Type of Request: Revision of an OMBapproved information collection. 

Number of Respondents: 305,500. 

Frequency of Response: 1. 

Average Burden per Response: 15 

minutes. 

Estimated Annual Burden: 76,375 

hours. 

2. Statement of Employer—20 CFR 

404.801–404.803—0960–0030 

SSA uses Form SSA–7011–F4 to 

substantiate allegations of wages paid to 

workers when those wages do not 

appear in SSA’s records of earnings and 

the worker does not have proof of those 

earnings. SSA uses the information 

received on this form to process claims 

for Social Security benefits and to 

resolve discrepancies in the individual’s 

Social Security earnings record. We 

only send Form SSA–7011–F4 to 

employers if we deem it necessary; in 

many situations, we are able to locate 

the earnings information within our 

records without having to contact the 

employer. The respondents are 

employers who can verify wage 

allegations made by wage earners. 

Type of Request: Extension of an 

OMB-approved information collection. 

Number of Respondents: 925,000. 

Frequency of Response: 1. 

Average Burden per Response: 20 

minutes. 

Estimated Annual Burden: 308,333 

hours. 

3. Statement of Self-Employment 

Income—20 CFR 404.101, 404.110, 

404.1096(a)–(d)—0960–0046 

SSA collects the information on Form 

SSA–766 to expedite the payment of 

benefits to an individual who is selfemployed and who is establishing 

insured status. The form elicits the 

information necessary to determine if 

the individual will have the minimum 

amount of self-employment income for 

quarters of coverage. Respondents are