Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 26823 

national securities exchange, including the rules 

governing the EDGX Exchange. See Securities 

Exchange Act Release No. 61698, 75 FR 13151 

(March 18, 2010). In the approval order, the 

Commission noted that EDGX Exchange Rule 8.15 

provides for the imposition of fines for minor rule 

violations pursuant to a minor rule violation plan. 

Accordingly, the Commission noted that, EDGX 

Exchange Rule 8.15 provides for the imposition of 

fines for minor rule violations pursuant to a minor 

rule violation plan. Accordingly, the Commission 

noted that as a condition to the operation of EDGX 

Exchange, the Exchange must file a minor rule 

violation plan with the Commission. 

7EDGX Exchange attached a sample form of the 

quarterly report with its submission to the 

Commission. 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78f(b)(1) and 78f(b)(6). 

10 15 U.S.C. 78f(b)(7) and 78f(d)(1). 

11 17 CFR 240.19d–1(c)(2). 

12 Id. 

13 17 CFR 200.30–3(a)(44). 

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

2 17 CFR 240.19b–4. 

Pursuant to the Exchange’s proposed 

MRVP, under Rule 8.15, the Exchange 

may impose a fine (not to exceed 

$2,500) on a member, an associated 

person of a member, or a registered or 

non-registered employee of a member 

with respect to any rule listed in Rule 

8.15.01. The Exchange shall serve the 

person against whom a fine is imposed 

with a written statement setting forth 

the rule or rules allegedly violated, the 

act or omission constituting each such 

violation, the fine imposed, and the date 

by which such determination becomes 

final or by which such determination 

must be contested. If the person against 

whom the fine is imposed pays the fine, 

such payment shall be deemed to be a 

waiver of such person’s right to a 

disciplinary proceeding and any review 

of the matter under Exchange rules. Any 

person against whom a fine is imposed 

may contest the Exchange’s 

determination by filing with the 

Exchange a written response, at which 

point the matter shall become a 

disciplinary proceeding. 

Upon approval of the plan, the 

Exchange will provide the Commission 

a quarterly report of actions taken on 

minor rule violations under the plan. 

The quarterly report will include the 

Exchange’s internal file number for the 

case, the name of the individual and/or 

organization, the nature of the violation, 

the specific rule provision violated, the 

sanction imposed, the number of times 

the rule violation has occurred, and the 

date of disposition.7

The Commission finds that the 

proposed MRVP is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange. In 

particular, the Commission believes that 

the proposal is consistent with Section 

6(b)(5) of the Act,8 which requires that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to remove impediments and to 

perfect the mechanism of a free and 

open market and national market 

system, and, in general, to protect 

investors and the public interest. The 

Commission also believes that the 

proposal is consistent with Sections 

6(b)(1) and 6(b)(6) of the Act 9 which 

require that the rules of an exchange 

enforce compliance with, and provide 

appropriate discipline for, violations of 

the Commission and Exchange rules. In 

addition, because the MRVP offers 

procedural rights to a person sanctioned 

under Rule 8.15, the Commission 

believes that Rule 8.15 provides a fair 

procedure for the disciplining of 

members and persons associated with 

members, consistent with Sections 

6(b)(7) and 6(d)(1) of the Act.10

Finally, the Commission finds that the 

proposal is consistent with the public 

interest, the protection of investors, or 

otherwise in furtherance of the purposes 

of the Act, as required by Rule 19d– 

1(c)(2) under the Act,11 because the 

MRVP strengthens EDGX Exchange’s 

ability to carry out its oversight and 

enforcement responsibilities as an SRO 

in cases where full disciplinary 

proceedings are unsuitable in view of 

the minor nature of the particular 

violation. 

In approving this proposal, the 

Commission in no way minimizes the 

importance of compliance with 

Exchange rules and all other rules 

subject to the imposition of sanctions 

under Rule 8.15. The Commission 

believes that the violation of an SRO’s 

rules, as well as Commission rules, is a 

serious matter. However, Rule 8.15 

provides a reasonable means of 

addressing violations that do not rise to 

the level of requiring formal 

disciplinary proceedings, while 

providing greater flexibility in handling 

certain violations. The Commission 

expects that EDGX Exchange will 

continue to conduct surveillance with 

due diligence and make determinations 

based on its findings, on a case-by-case 

basis, whether a sanction under the 

MRVP is appropriate, or whether a 

violation requires formal disciplinary 

action. 

It is therefore ordered, pursuant to 

Rule 19d–1(c)(2) under the Act,12 that 

the proposed MRVP for EDGX 

Exchange, File No. 4–594, be, and 

hereby is, approved and declared 

effective. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11259 Filed 5–11–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62044; File No. SR– 

NASDAQ–2010–057] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Rules 9552, 9554 and 9559 To Conform 

NASDAQ’s Rules to Recent Changes 

to the Rules of FINRA 

May 5, 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 May 3, 

2010, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by NASDAQ. 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 

NASDAQ is proposing to amend 

Rules 9552, 9554 and 9559 to conform 

NASDAQ’s rules to recent changes to 

the rules of the Financial Industry 

Regulatory Authority (‘‘FINRA’’). The 

text of the proposed rule change is 

below. Proposed new language is 

italicized and proposed deletions are in 

brackets. 

* * * * * 

9550. Expedited Proceedings 

* * * * * 

9552. Failure To Provide Information 

or Keep Information Current 

(a)–(g) No change. 

(h) Defaults 

A member or person who is 

suspended under this Rule and fails to 

request termination of the suspension 

within three[six] months of issuance of 

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26824 Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 

3Securities Exchange Act Release No. 61242 

(December 28, 2009), 75 FR 167 (January 4, 2010) 

(SR–FINRA–2009–076). 

4 Id. 

the original notice of suspension will 

automatically be expelled or barred. 

* * * * * 

9554. Failure To Comply with an 

Arbitration Award or Related 

Settlement or an Order of Restitution 

or Settlement Providing for 

Restitution 

(a) Notice of Suspension or[,] 

Cancellation[ or Bar] 

If a member, person associated with a 

member or person subject to Nasdaq’s 

jurisdiction fails to comply with an 

arbitration award or a settlement 

agreement related to an arbitration or 

mediation under the Nasdaq By-Laws, 

or a FINRA order of restitution or FINRA 

settlement agreement providing for 

restitution, Nasdaq Regulation staff may 

provide written notice to such member 

or person stating that the failure to 

comply within 21 days of service of the 

notice will result in a suspension or 

cancellation of membership or a 

suspension [or bar] from associating 

with any member. 

(b) Service of Notice of Suspension 

or[,] Cancellation[ or Bar] 

Nasdaq Regulation staff shall serve 

the member or person with such notice 

in accordance with Rule 9134. A copy 

of a notice under this Rule that is served 

on a person associated with a member 

also shall be served on such member. 

(c) No change. 

(d) Effective Date of Suspension or[,] 

Cancellation[ or Bar] 

The suspension or[,] cancellation [or 

bar ]referenced in a notice issued and 

served under this Rule shall become 

effective 21 days after service of the 

notice, unless stayed by a request for a 

hearing pursuant to Rule 9559. 

(e) No change. 

(f) Failure to Request Hearing 

If a member or person does not timely 

request a hearing, the suspension or[,] 

cancellation [or bar ]specified in the 

notice shall become effective 21 days 

after the service of the notice and the 

notice shall constitute final Nasdaq 

action. 

(g) No change. 

* * * * * 

9559. Hearing Procedures for Expedited 

Proceedings Under the Rule 9550 Series 

(a)–(e) No change. 

(f) Time of Hearing 

(1)–(2) No change. 

(3) A hearing shall be held within 

30[60] days after a respondent subject to 

a notice issued under Rules 9551 

through 9555 files a written request for 

a hearing with the Office of Hearing 

Officers. 

(4) No change. 

(g) No change. 

(h) Transmission of Documents 

(1) Not less than two business days 

before the hearing in an action brought 

under Rule 9557, not less than seven 

days before the hearing in an action 

brought under Rules 9556 and 9558, and 

not less than 14[40] days before the 

hearing in an action brought under 

Rules 9551 through 9555, Nasdaq 

Regulation staff shall provide to the 

respondent who requested the hearing, 

by facsimile or overnight courier, all 

documents that were considered in 

issuing the notice unless a document 

meets the criteria of Rule 9251(b)(1)(A), 

(B) or (C). A document that meets such 

criteria shall not constitute part of the 

record, but shall be retained until the 

date upon which the Nasdaq’s final 

decision is served or, if applicable, upon 

the conclusion of any review by the 

Securities and Exchange Commission or 

the federal courts. 

(2) Not less than two business days 

before the hearing in an action brought 

under Rule 9557, not less than three 

days before the hearing in an action 

brought under Rules 9556 and 9558, and 

not less than seven[14] days before the 

hearing in an action brought under 

Rules 9551 through 9555, the parties 

shall exchange proposed exhibit and 

witness lists. The exhibit and witness 

lists shall be served by facsimile or by 

overnight courier. 

(i)–(s) 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, 

NASDAQ included statements 

concerning the purpose of, and basis for, 

the proposed rule change. The text of 

these statements may be examined at 

the places specified in Item IV below, 

and is set forth in Sections A, B, and C 

below. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ proposes certain 

conforming changes to its rules 

concerning expedited hearings in light 

of changes made to the rules of FINRA. 

Many of NASDAQ’s rules are based on 

rules of FINRA (formerly the National 

Association of Securities Dealers 

(‘‘NASD’’)). NASDAQ endeavors to keep 

such common rules identical to the 

extent practicable. FINRA recently 

amended certain rules under its Rule 

9000 Series concerning expedited 

proceedings, which are closely mirrored 

in NASDAQ’s Rule 9000 Series.3

Accordingly, NASDAQ is proposing to 

amend its analogous rules consistent 

with the changes made by FINRA, as 

discussed below. 

The expedited proceedings rules of 

FINRA, and in turn of NASDAQ, 

address certain types of misconduct 

more quickly than would be possible 

under the ordinary disciplinary process, 

while also affording members numerous 

procedural protections. In its rule 

change,4 FINRA modified various time 

requirements regarding expedited 

proceedings, added an expedited 

proceeding for failure to pay restitution, 

and harmonized a remedy in an 

expedited procedure with a remedy in 

the FINRA By-Laws. With respect to 

modifying time requirements, FINRA 

amended Rule 9552 to shorten the 

period before a suspension 

automatically turns into an expulsion or 

bar from six to three months. In 

addition, FINRA amended Rule 9559 to 

shorten the timeframe within which a 

hearing must be held from 60 days after 

a hearing request to 30 days after the 

request. As consequence of shortening 

the timeframe for hearings, FINRA also 

shortened the timeframes under Rule 

9559(h) concerning the pre-hearing 

exchange of documents between the 

parties to the expedited proceeding. 

FINRA amended Rule 9554, which 

contains expedited procedures for 

failure to pay FINRA arbitration awards, 

to also permit FINRA to take expedited 

action for failure to comply with a 

FINRA order of restitution or a FINRA 

settlement providing for restitution. 

FINRA noted that it did not have 

explicit authority to take expedited 

action against firms or associated 

persons who fail to pay restitution to a 

third party (usually investors who have 

been harmed), and that its only recourse 

was to initiate an ordinary disciplinary 

action, which can take several months 

to conclude. In adding the new 

expedited procedure, FINRA stated it 

believed that firms and associated 

persons should not be permitted to 

continue doing business for prolonged 

periods when they have failed to pay 

restitution to third parties. 

FINRA also eliminated from Rule 

9554 the remedy of barring an 

individual for failure to pay an 

arbitration award. FINRA noted that it 

had no such authority under its by-laws, 

and as such that it was harmonizing the 

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Federal Register / Vol. 75, No. 91 / Wednesday, May 12, 2010 / Notices 26825 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

9The Commission believes that this statement is 

incorrect. The proposed rule change does not 

simply eliminate erroneous citations; instead, the 

proposed rule change makes specific changes to 

align Nasdaq’s rules with that of FINRA. 

10 17 CFR 240.19b–4(f)(6)(iii). 

11For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 12 17 CFR 200.30–3(a)(12). 

remedy for this misconduct with the 

remedy provided in its by-laws. 

NASDAQ is proposing to incorporate all 

the changes made by FINRA to its 

expedited proceedings rules into the 

analogous NASDAQ Rules 9552, 9554, 

and 9559. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,5 in 

general and with Section 6(b)(5) of the 

Act,6 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 regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. The 

proposed changes will conform 

NASDAQ’s rules to recent changes 

made to corresponding FINRA rules, 

which will promote the application of 

consistent regulatory standards. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ 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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing 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, it has 

become effective pursuant to Section 

19(b)(3)(A) 7 of the Act and Rule 19b– 

4(f)(6) thereunder.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 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. NASDAQ has 

provided the Commission written notice 

of its 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. 

NASDAQ believes that the proposed 

rule change does not significantly affect 

the protection of investors or the public 

interest because it merely eliminates 

erroneous citations that, if left in the 

rule text, would cause investor 

confusion.9

NASDAQ asks that the Commission 

waive the 30-day pre-operative waiting 

period contained in Exchange Act Rule 

19b–4(f)(6)(iii).10 NASDAQ requests this 

waiver so that these corrections can be 

both immediately effective and 

operative, thus minimizing any 

confusion that may be caused by the 

differing rule sets. 

The Commission acknowledges that 

the proposal presents no novel issues, 

and that it will provide a benefit to 

market participants by aligning 

Nasdaq’s rules with those of FINRA. For 

these reasons, the Commission believes 

it is consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay, and 

hereby grants such waiver.11

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–NASDAQ–2010–057 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–NASDAQ–2010–057. 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. 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– 

NASDAQ–2010–057 and should be 

submitted on or before June 2, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–11255 Filed 5–11–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62038; File No. SR–NYSE– 

2010–22] 

Self-Regulatory Organizations; New 

York Stock Exchange, LLC; Order 

Approving Proposed Rule Change To 

Make Permanent a Unit-of-Count 

Metric Alternative for NYSE OpenBook 

Products 

May 5, 2010. 

I. Introduction 

On March 11, 2010, the New York 

Stock Exchange, LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES