Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / Notices 25019 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(5). 

5 15 U.S.C. 78s(b)(3)(A). 

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

19b–4(f)(6) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change, along with a brief 

description and text of 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 the pre-filing requirement. 

7See BATS Rule 11.11 and Nasdaq Rule 

4613(a)(1)(B). 

8For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62006; File No. SR– 

NYSEArca–2010–36] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. To Make a Technical 

Adjustment to Its Rules To Allow SubPenny Quoting of Certain Securities 

April 29, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that, on April 23, 

2010, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

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 Substance of 

the Proposed Rule Change 

The Exchange proposes to make a 

technical adjustment to its rules to 

allow sub-penny quoting of certain 

securities priced less than $1.00. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

http://www.nyse.com, at the Exchange’s 

principal office, on the Commission’s 

Web site at http://www.sec.gov, 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 

self-regulatory organization 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 IV below. 

The Exchange 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to make a 

technical adjustment its rules to allow 

sub-penny quoting of Investment 

Company Units, Portfolio Depositary 

Receipts, and Managed Fund Shares. 

Currently, NYSE Arca Equities Rule 

5.2(j)(3) Commentaries .01(e) and .02(e), 

NYSE Arca Equities Rule 7.6 

Commentary .03, Rule 8.100 

Commentaries .01(e) and .02(e), and 

NYSE Arca Equities Rule 8.600 

Commentary .03 restrict the minimum 

price variation for quoting and order 

entry to $0.01. Consistent with 

Regulation NMS Rule 612, the Exchange 

proposes to remove these provisions to 

allow these securities to be quoted in a 

minimum pricing increment of $0.0001 

for securities priced less than $1.00. The 

Exchange notes that it has not had any 

of the aforementioned securities quote 

below a dollar nor does it anticipate 

such an occurrence in the reasonably 

foreseeable future. The Exchange simply 

seeks to harmonize the minimum price 

variation in the aforementioned 

products with all other equity securities 

traded on the Exchange. 

Moreover, the Exchange notes that 

this approach is substantially similar to 

BATS Rule 11.11 and Nasdaq Rule 

4613(a)(1)(B). 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 3 of the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’), in general, and 

furthers the objectives of Section 

6(b)(5) 4 in particular in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. The Exchange believes that the 

proposed amendment is consistent with 

the goal of removing impediments to a 

free and open market because the 

changes proposed herein will 

substantially harmonize NYSE Arca’s 

sub-penny quoting policy with Rule 612 

of Regulation NMS which allows a 

minimum pricing increment of $0.0001 

for securities priced less than $1.00. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

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 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 from the date on 

which it was filed, or such shorter time 

as the Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 5 and Rule 19b–4(f)(6) 

thereunder.6

The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest, 

because the proposal is consistent with 

Rule 612 of Regulation NMS and the 

rules of other self-regulatory 

organizations previously approved by 

the Commission.7 For these reasons, the 

Commission designates the proposed 

rule change as operative upon filing.8

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 

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25020 Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / Notices 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 240.19b–4(f)(2). 

7See Securities Exchange Act Release No. 56007 

(July 3, 2007), 72 FR 37807 (July 11, 2007) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–NASD–2007–046). SR–NASD–2007–046 

proposed to adopt paragraph (h) of NASD Rule 

6130. Pursuant to SR–FINRA–2008–021, NASD 

Rule 6130 was renumbered as FINRA Rule 7230A. 

See Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (Order Approving File No. SR–FINRA–2008– 

021). 

8Trading on a ‘‘net basis’’ means that the brokerdealer’s compensation is implicitly included in the 

execution price disseminated to the tape and 

reported for clearance and settlement to the 

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–NYSEArca–2010–36 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–NYSEArca–2010–36. 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 Web site viewing and 

printing in the Commission’s Public 

Reference Room, 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–NYSEArca–2010–36 and 

should be submitted on or before May 

27, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–10600 Filed 5–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61997; File No. SR–FINRA– 

2010–017] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Allow FINRA Members 

To Use the OTC Reporting Facility To 

Transfer Transaction Fees Charged by 

One Member to Another Member 

April 28, 2010. 

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 April 12, 

2010, the 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 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 Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6) thereunder,4

which renders the proposal effective 

upon receipt of this filing by the 

Commission. Additionally, FINRA has 

designated the proposed rule change as 

‘‘establishing or changing a due, fee or 

other charge’’ under Section 19(b)(3)(A) 

of the Act 5 and Rule 19b–4(f)(2) 

thereunder,6 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 (1) adopt 

FINRA Rule 7330(i) to permit FINRA 

members to use the OTC Reporting 

Facility (the ‘‘ORF’’) to transfer 

transaction fees charged by one member 

to another member on trades reported to 

the ORF; and (2) amend FINRA Rule 

7710 to establish the fee to be charged 

by the ORF for use of the transaction fee 

transfer service. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, on the 

Commission’s Web site at http:// 

www.sec.gov, 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 

Background: 

Rule 7230A(h) permits FINRA 

members to agree in advance to transfer 

a transaction fee charged by one 

member to another member on a 

transaction in NMS stocks effected 

otherwise than on an exchange through 

the submission of a clearing report to 

the FINRA/Nasdaq Trade Reporting 

Facility (‘‘FINRA/Nasdaq TRF’’). Prior to 

the adoption of Rule 7230A(h) in 2007,7

there was no mechanism for members to 

charge each other commissions or other 

explicit transaction fees through the 

FINRA trade reporting and clearance 

submission process. Generally, members 

wanting to charge other members an 

explicit transaction fee either billed and 

collected those fees directly from the 

other member outside the transaction 

reporting and clearing process or traded 

on a ‘‘net’’ basis.8 Rule 7230A(h) 

mstockstill on DSKH9S0YB1PROD with NOTICES