Federal Register / Vol. 73, No. 116 / Monday, June 16, 2008 / Notices 34061 

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

2 17 CFR 240.19b–4. 

3FINRA has filed with the Commission a 

proposed rule change (SR–FINRA–2008–021) in 

which FINRA proposes, among other things, to 

adopt NASD IM–9216 as FINRA Rule 9217, without 

material change. Assuming Commission approval of 

this proposed rule change prior to the approval of 

SR–FINRA–2008–021, FINRA will amend SR–

FINRA–2008–021, as necessary, to reflect such 

approval. 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Harbour Intermodal, 

Ltd.; Order of Suspension of Trading 

June 12, 2008. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Harbour 

Intermodal, Ltd. because it has not filed 

any periodic reports since the period 

ended September 30, 2002. 

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 

company. 

Therefore, it is ordered, pursuant to 

Section 12(k) of the Securities Exchange 

Act of 1934, that trading in the abovelisted company is suspended for the 

period from 9:30 a.m. EDT on June 12, 

2008, through 11:59 p.m. EDT on June 

25, 2008. 

By the Commission. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 08–1361 Filed 6–12–08; 12:18pm] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–57935; File No. SR–FINRA–

2008–023] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Order Granting Accelerated Approval 

of a Proposed Rule Change Relating to 

Violations Appropriate for Disposition 

Under FINRA’s Minor Rule Violation 

Plan 

June 6, 2008. 

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 May 27, 

2008, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) filed with the 

Securities and Exchange Commission 

(‘‘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 to 

solicit comments on the proposed rule 

change from interested persons and to 

approve the proposal on an accelerated 

basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA proposes to amend NASD 

Interpretive Material (‘‘IM’’) 9216 3 to 

expand FINRA’s Minor Rule Violation 

Plan (‘‘MRVP’’) to include violations of 

options position and exercise limits and 

contrary exercise advice procedures. 

The text of the proposed rule change is 

available at FINRA, the Commission’s 

Public Reference Room, and http:// 

www.finra.org. 

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 those 

statements may be examined at the 

places specified in Item III below. 

FINRA has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The proposed rule change would 

amend NASD IM–9216 to include in 

FINRA’s MRVP violations of (1) options 

position and exercise limits under 

NASD Rule 2860(b)(3) and (b)(4), and 

(2) contrary exercise advice procedures 

under NASD Rule 2860(b)(23). NASD 

Rule 9216 sets forth FINRA’s MRVP, 

which allows FINRA to impose a fine of 

up to $2,500 on any member or person 

associated with a member for a minor 

violation of the rules identified in IM–

9216 (known as ‘‘Minor Rule 

Violations’’). The purpose of the MRVP 

is to provide meaningful sanctions for 

minor or technical violations of rules 

when the initiation of a formal 

disciplinary proceeding would be more 

significant than warranted. Minor Rule 

Violation letters also represent a useful 

tool for implementing the concept of 

progressive discipline. 

Inclusion of a rule in the MRVP does 

not mean that all violations of that rule 

should be treated as Minor Rule 

Violations, and, in fact, significant 

violations would not be handled under 

the MRVP. Accordingly, under the 

MRVP, FINRA retains the discretion to 

bring full disciplinary proceedings for 

any violation of a rule included in the 

MRVP. 

The NASD options rules contain 

provisions imposing limits on the size 

of an options position, and limits on the 

number of options contracts that can be 

exercised into shares of the underlying 

security during a fixed period. To 

address inadvertent violations of these 

rules, due to among other things, 

miscounting, technical problems, or a 

misinterpretation of the position limit 

calculation methodologies, that in the 

judgment of FINRA do not materially 

affect the market, FINRA proposes 

adding violations of options position 

and exercise limits as eligible for 

disposition under the MRVP. Violations 

of these rules deemed to have a 

manipulative effect or intent would not 

be treated as Minor Rule Violations. 

Options issued by The Options 

Clearing Corporation (i.e., exchangetraded options) have specific terms 

regarding whether options that can be 

settled only by delivery of the asset 

underlying the option (typically an 

equity security) will be automatically 

exercised at settlement. The NASD 

options rule has detailed ‘‘contrary 

exercise advice’’ (‘‘CEA’’) procedures 

describing the manner in which an 

option holder can elect not to exercise 

an option that normally would be 

exercised, or exercise an option contract 

that normally would expire worthless. 

To prevent option holders from unfairly 

exploiting after-hours news or market 

information that affects the price of the 

underlying security, the CEA notices 

must be submitted to the broker-dealer 

and by the broker-dealer to the OCC by 

certain specified cut-off times. 

Occasionally, due to technical problems 

or other inadvertent errors, firms fail to 

submit CEA notices within the 

applicable time limits. For those 

instances, FINRA proposes to have the 

flexibility to treat the violation as a 

Minor Rule Violation. Violations of the 

CEA rules that exploit or are intended 

to exploit after-hours news would not be 

treated as Minor Rule Violations. 

FINRA notes that position and 

exercise limits and CEA violations are 

part of the MRVP of the options 


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