Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 28825 

1 17 CFR 240.17g–5(a)(3). 

2See Securities Exchange Act Release No. 61050 

(Nov. 23, 2009), 74 FR 63832 (Dec. 4, 2009) 

(‘‘Adopting Release’’). 

3 In the Adopting Release, the Commission stated 

that it intended the term ‘‘security or money market 

instrument issued by an asset pool or as part of any 

asset-backed or mortgage-backed securities 

transaction,’’ which mirrors, in part, the text of 

Section 15E(i)(1)(B) of the Exchange Act (15 U.S.C. 

78o–7(i)(1)(B)), to cover the full range of structured 

finance products, including, but not limited to, 

securities collateralized by static and actively 

managed pools of loans or receivables (e.g., 

commercial and residential mortgages, corporate 

loans, auto loans, education loans, credit card 

receivables, and leases), collateralized debt 

obligations, collateralized loan obligations, 

collateralized mortgage obligations, structured 

investment vehicles, synthetic collateralized debt 

obligations that reference debt securities or indexes, 

and hybrid collateralized debt obligations. 

4 17 CFR 240.17g–5(b) and (c). 

5 17 CFR 240.17g–5(a). 

6 15 U.S.C. 78o–7(a)(1)(B)(vi). 

7 17 CFR 240.17g–1. 

8 15 U.S.C. 78o–7(h). 

9See 17 CFR 240.17g–5(a)(3); see also Adopting 

Release at 63844–45. 

The entire meeting will be open to 

public attendance. 

The agenda for the subject meeting 

shall be as follows: 

Tuesday, June 8, 2010, 8:30 a.m.–12:00 

p.m. 

The Subcommittee will discuss the 

Duane Arnold Energy Center License 

Renewal Application and the associated 

Safety Evaluation Report (SER) with 

Open Items prepared by the staff. The 

Subcommittee will hear presentations 

by and hold discussions with 

representatives of the NRC staff, FPL 

Energy Duane Arnold, LLC, and other 

interested persons regarding this matter. 

The Subcommittee will gather 

information, analyze relevant issues and 

facts, and formulate proposed positions 

and actions, as appropriate, for 

deliberation by the Full Committee. 

Members of the public desiring to 

provide oral statements and/or written 

comments should notify the Designated 

Federal Official (DFO), Mrs. Kathy 

Weaver (Telephone 301–415–6236 or email Kathy.Weaver@nrc.gov) five days 

prior to the meeting, if possible, so that 

appropriate arrangements can be made. 

Thirty-five hard copies of each 

presentation or handout should be 

provided to the DFO thirty minutes 

before the meeting. In addition, one 

electronic copy of each presentation 

should be emailed to the DFO one day 

before the meeting. If an electronic copy 

cannot be provided within this 

timeframe, presenters should provide 

the DFO with a CD containing each 

presentation at least 30 minutes before 

the meeting. Electronic recordings will 

be permitted only during those portions 

of the meeting that are open to the 

public. Detailed procedures for the 

conduct of and participation in ACRS 

meetings were published in the Federal 

Register on October 14, 2009 (74 FR 

58268–58269). 

Detailed meeting agendas and meeting 

transcripts are available on the NRC 

Web site at http://www.nrc.gov/readingrm/doc-collections/acrs. Information 

regarding topics to be discussed, 

changes to the agenda, whether the 

meeting has been canceled or 

rescheduled, and the time allotted to 

present oral statements can be obtained 

from the website cited above or by 

contacting the identified DFO. 

Moreover, in view of the possibility that 

the schedule for ACRS meetings may be 

adjusted by the Chairman as necessary 

to facilitate the conduct of the meeting, 

persons planning to attend should check 

with these references if such 

rescheduling would result in a major 

inconvenience. 

Dated: May 14, 2010. 

Alesha Bellinger, 

Acting Executive Director, Advisory 

Committee on Reactor Safeguards. 

[FR Doc. 2010–12377 Filed 5–21–10; 8:45 am] 

BILLING CODE 7590–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62120; File No. S7–04–09] 

Order Granting Temporary Conditional 

Exemption for Nationally Recognized 

Statistical Rating Organizations From 

Requirements of Rule 17g–5 Under the 

Securities Exchange Act of 1934 and 

Request for Comment 

May 19, 2010. 

I. Introduction 

The Securities and Exchange 

Commission (‘‘Commission’’) is 

conditionally exempting, with respect to 

certain credit ratings and until 

December 2, 2010, nationally recognized 

statistical rating organizations 

(‘‘NRSROs’’) from requirements in Rule 

17g–5(a)(3) 1 under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’) 

discussed below that have a compliance 

date of June 2, 2010.2 Starting on that 

date, Rule 17g–5(a)(3) will apply when 

an issuer, sponsor, or underwriter (each 

an ‘‘arranger’’) hires an NRSRO to 

determine an initial credit rating for a 

security or money market instrument 

issued by an asset pool or as part of any 

asset-backed or mortgage-backed 

securities transaction (a ‘‘structured 

finance product’’).3 However, under this 

order, an NRSRO is not required to 

comply with Rule 17g–5(a)(3) until 

December 2, 2010 with respect to credit 

ratings where: (1) The issuer of the 

structured finance product is a non-U.S. 

person; and (2) the NRSRO has a 

reasonable basis to conclude that the 

structured finance product will be 

offered and sold upon issuance, and that 

any arranger linked to the structured 

finance product will effect transactions 

of the structured finance product after 

issuance, only in transactions that occur 

outside the U.S. The Commission also is 

soliciting comment regarding the 

application of Rule 17g–5(a)(3) to 

transactions outside of the U.S. 

II. Background 

Rule 17g–5 identifies, in paragraphs 

(b) and (c) of the rule, a series of 

conflicts of interest arising from the 

business of determining credit ratings.4

Paragraph (a) of Rule 17g–5 5 prohibits 

an NRSRO from issuing or maintaining 

a credit rating if it is subject to the 

conflicts of interest identified in 

paragraph (b) of Rule 17g–5 unless the 

NRSRO has taken the steps prescribed 

in paragraph (a)(1) (i.e., disclosed the 

type of conflict of interest in Exhibit 6 

to Form NRSRO in accordance with 

Section 15E(a)(1)(B)(vi) of the Exchange 

Act 6 and Rule 17g–1) 7 and paragraph 

(a)(2) (i.e., established and is 

maintaining and enforcing written 

policies and procedures to address and 

manage conflicts of interest in 

accordance with Section 15E(h) of the 

Exchange Act).8 Paragraph (c) of Rule 

17g–5 specifically prohibits outright 

seven types of conflicts of interest. 

Consequently, an NRSRO is prohibited 

from issuing or maintaining a credit 

rating when subject to these conflict 

regardless of whether it had disclosed 

them and established procedures 

reasonably designed to address them. 

In December 2009, the Commission 

adopted subparagraph (a)(3) of Rule 

17g–5, which added new provisions to 

Rule 17g–5. These provisions require an 

NRSRO that is hired by an arranger to 

determine an initial credit rating for a 

structured finance product to take 

certain steps designed to allow an 

NRSRO that is not hired by the arranger 

to nonetheless determine an initial 

credit rating—and subsequently monitor 

that credit rating—for the structured 

finance product.9 In particular, under 

Rule 17g–5(a)(3), an NRSRO is 

prohibited from issuing or maintaining 

a credit rating when it is subject to the 

conflict of interest identified in 

paragraph (b)(9) of Rule 17g–5 (i.e., 

being hired by an arranger to determine 

a credit rating for a structured finance 

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28826 Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 

10Paragraph (b)(9) Rule 17g–5 identifies the 

following conflict of interest: Issuing or maintaining 

a credit rating for a security or money market 

instrument issued by an asset pool or as part of any 

asset-backed or mortgage-backed securities 

transaction that was paid for by the issuer, sponsor, 

or underwriter of the security or money market 

instrument. 17 CFR 240.17g–5(b)(9). 

11 17 CFR 240.17g–5(a)(3). 

12Paragraph (e) of Rule 17g–5 requires that an 

NRSRO seeking to access the hired NRSRO’s 

Internet web site during the applicable calendar 

year must furnish the Commission with the 

following certification: 

The undersigned hereby certifies that it will 

access the Internet Web sites described in 17 CFR 

240.17g–5(a)(3) solely for the purpose of 

determining or monitoring credit ratings. Further, 

the undersigned certifies that it will keep the 

information it accesses pursuant to 17 CFR 

240.17g–5(a)(3) confidential and treat it as material 

nonpublic information subject to its written policies 

and procedures established, maintained, and 

enforced pursuant to section 15E(g)(1) of the Act (15 

U.S.C. 78o–7(g)(1)) and 17 CFR 240.17g–4. Further, 

the undersigned certifies that it will determine and 

maintain credit ratings for at least 10% of the issued 

securities and money market instruments for which 

it accesses information pursuant to 17 CFR 

240.17g–5(a)(3)(iii), if it accesses such information 

for 10 or more issued securities or money market 

instruments in the calendar year covered by the 

certification. Further, the undersigned certifies one 

of the following as applicable: (1) In the most recent 

calendar year during which it accessed information 

pursuant to § 17 CFR 240.17g–5(a)(3), the 

undersigned accessed information for [Insert 

Number] issued securities and money market 

instruments through Internet Web sites described in 

17 CFR 240.17g–5(a)(3) and determined and 

maintained credit ratings for [Insert Number] of 

such securities and money market instruments; or 

(2) The undersigned previously has not accessed 

information pursuant to 17 CFR 240.17g–5(a)(3) 10 

or more times during the most recently ended 

calendar year. 

13 In particular, under paragraph (a)(3)(iii) of Rule 

17g–5, the arranger must represent to the hired 

NRSRO that it will: 

(1) Maintain the information described in 

paragraphs (a)(3)(iii)(C) and (a)(3)(iii)(D) of Rule 

17g–5 available at an identified password-protected 

Internet Web site that presents the information in 

a manner indicating which information currently 

should be relied on to determine or monitor the 

credit rating; 

(2) Provide access to such password-protected 

Internet Web site during the applicable calendar 

year to any NRSRO that provides it with a copy of 

the certification described in paragraph (e) of Rule 

17g–5 that covers that calendar year, provided that 

such certification indicates that the nationally 

recognized statistical rating organization providing 

the certification either: (i) Determined and 

maintained credit ratings for at least 10% of the 

issued securities and money market instruments for 

which it accessed information pursuant to 

paragraph (a)(3)(iii) of Rule 17g–5 in the calendar 

year prior to the year covered by the certification, 

if it accessed such information for 10 or more 

issued securities or money market instruments; or 

(ii) has not accessed information pursuant to 

paragraph (a)(3) of Rule 17g–5 10 or more times 

during the most recently ended calendar year. 

(3) Post on such password-protected Internet Web 

site all information the arranger provides to the 

NRSRO, or contracts with a third party to provide 

to the NRSRO, for the purpose of determining the 

initial credit rating for the security or money market 

instrument, including information about the 

characteristics of the assets underlying or 

referenced by the security or money market 

instrument, and the legal structure of the security 

or money market instrument, at the same time such 

information is provided to the NRSRO; and 

(4) Post on such password-protected Internet Web 

site all information the arranger provides to the 

NRSRO, or contracts with a third party to provide 

to the NRSRO, for the purpose of undertaking credit 

rating surveillance on the security or money market 

instrument, including information about the 

characteristics and performance of the assets 

underlying or referenced by the security or money 

market instrument at the same time such 

information is provided to the NRSRO. 

14Adopting Release at 63844. 

15 Id. 

16 Id. 

17 Id. 

18 Id. 

19 Id. 

20 Id. 

21See letter dated March 30, 2010 from Richard 

Watson, Managing Director and Chief Operating 

Officer, Association for Financial Markets in 

Europe/European Securitsation Forum (AFME/ 

ESF); letter dated April 30, 2010 from Christopher 

Killian, Vice President, Securitization Group of the 

Securities Industry and Financial Markets 

Association (SIFMA); letter dated April 30, 2010 

from Neal Sullivan, Bingham McCutchen LLP on 

behalf of Rating and Investment Information, Inc.; 

letter dated May 3, 2010 from Tom Deutsch, 

Executive Director, American Securitization Forum; 

letter dated May 5, 2010 from Richard Watson, 

Managing Director and Chief Operating Officer, 

AFME/ESF; and letter dated May 12, 2010 from 

Guido Ravoet, European Banking Federation (‘‘EBF 

Letter’’). These letters, as well as other comments 

received by Commission staff in connection with 

subparagraph (a)(3) of Rule 17g–5 are available on 

product) 10 unless it has taken the steps 

prescribed in paragraphs (a)(1) and (2) 

of Rule 17g–5 (discussed above) and the 

steps prescribed in new paragraph (a)(3) 

of Rule 17g–5.11 Rule 17g–5(a)(3), 

among other things, requires that the 

NRSRO must: 

• Maintain on a password-protected 

Internet Web site a list of each 

structured finance product for which it 

currently is in the process of 

determining an initial credit rating in 

chronological order and identifying the 

type of structured finance product, the 

name of the issuer, the date the rating 

process was initiated, and the Internet 

Web site address where the arranger 

represents the information provided to 

the hired NRSRO can be accessed by 

other NRSROs; 

• Provide free and unlimited access 

to such password-protected Internet 

Web site during the applicable calendar 

year to any NRSRO that provides it with 

a copy of the certification described in 

paragraph (e) of Rule 17g–5 that covers 

that calendar year; 12 and 

• Obtain from the arranger a written 

representation that can reasonably be 

relied upon that the arranger will, 

among other things, disclose on a 

password-protected Internet Web site 

the information it provides to the hired 

NRSRO to determine the initial credit 

rating (and monitor that credit rating) 

and provide access to the web site to an 

NRSRO that provides it with a copy of 

the certification described in paragraph 

(e) Rule 17g–5.13

The Commission stated in the 

Adopting Release that subparagraph 

Rule 17g–5(a)(3) is designed to address 

conflicts of interest and improve the 

quality of credit ratings for structured 

finance products by making it possible 

for more NRSROs to rate structured 

finance products.14 For example, the 

Commission noted that when an NRSRO 

is hired to rate a structured finance 

product, some of the information it 

relies on to determine the rating is 

generally not made public.15 As a result, 

structured finance products frequently 

are issued with ratings from only the 

one or two NRSROs that have been 

hired by the arranger, with the attendant 

conflict of interest that creates.16

Consequently, the Commission stated 

that subparagraph Rule 17g–5(a)(3) was 

designed to increase the number of 

credit ratings extant for a given 

structured finance product and, in 

particular, to promote the issuance of 

credit ratings by NRSROs that are not 

hired by the arranger.17 The 

Commission’s goal in adopting the rule 

was to provide users of credit ratings 

with more views on the 

creditworthiness of the structured 

finance product.18 In addition, the 

Commission stated that Rule 17g–5(a)(3) 

was designed to reduce the ability of 

arrangers to obtain better than 

warranted ratings by exerting influence 

over NRSROs hired to determine credit 

ratings for structured finance 

products.19 Specifically, by opening up 

the rating process to more NRSROs, the 

Commission intended to make it easier 

for the hired NRSRO to resist such 

pressure by increasing the likelihood 

that any steps taken to inappropriately 

favor the arranger could be exposed to 

the market through the credit ratings 

issued by other NRSROs.20

Rule 17g–5(a)(3) became effective on 

February 2, 2010, and the compliance 

date for Rule 17g–5(a)(3) is June 2, 2010. 

III. Basis for Relief 

As discussed above, Rule 17g–5(a)(3) 

requires the hired NRSRO to obtain 

certain representations from an arranger 

in order to determine an initial credit 

rating for a structured finance product. 

Staff from the U.K. Financial Services 

Authority (‘‘U.K. FSA’’), the Japan 

Financial Services Authority (‘‘Japan 

FSA’’), Ontario Securities Commission 

(‘‘OSC’’) and the German Federal 

Financial Services Authority (‘‘BaFin’’) 

(collectively, the ‘‘Foreign Securities 

Regulators’’), as well as a number of 

market participants,21 have notified the 

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Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 28827 

the Commission’s Internet Web site, located at 

http://www.sec.gov/comments/s7-04-09/ 

s70409.shtml and for Web site viewing and printing 

in the Commission’s Public Reference Room in its 

Washington, DC headquarters. 

22See, e.g., EBF Letter. 

23See Adopting Release at 63834. 24 17 CFR 240.17g–5(a)(3). 

25 17 CFR 230.902(k). 

26 17 CFR. 230.903; 17 CFR 230.904. 

Commission staff that arrangers of 

structured finance products located 

outside the U.S. generally were not 

aware that they would be required to 

make the representations prescribed in 

Rule 17g–5 in order to obtain credit 

ratings from NRSROs. These Foreign 

Securities Regulators and market 

participants have informed the 

Commission staff that many foreign 

arrangers are not prepared to make and 

adhere to the prescribed representations 

beginning on June 2, 2010 in terms of 

establishing the requisite Internet Web 

sites, implementing other systems 

requirements necessary to make the 

disclosures and analyzing the 

application of local laws to their 

adherence to the disclosure 

requirements. Consequently, they have 

expressed concern that local 

securitization markets may be disrupted 

because the arrangers would not able to 

make and adhere to the representations 

necessary to obtain credit ratings from 

NRSROs for new issuances of structured 

finance products. Foreign Securities 

Regulators and European issuers have 

also expressed concern about the 

potential conflict between the 

requirements of Rule 17g–5(a)(3) and 

European Union (‘‘EU’’) data protection 

and bank secrecy law and EU rating 

regulation, in addition to explaining 

that additional time is needed to 

identify other potential conflicts with 

EU and national laws.22

In the Adopting Release, the 

Commission noted that it was providing 

a delayed compliance date—180 days 

after publication of certain rule 

amendments, including Rule 17g– 

5(a)(3), in the Federal Register—to 

allow NRSROs sufficient time to 

implement the new requirements.23

Despite this delayed compliance date, 

overseas arrangers and market 

participants are not ready to comply 

with Rule 17g–5(a)(3), and Foreign 

Securities Regulators have expressed 

their respective belief that, absent relief, 

these arrangers and market participants 

will be unable to comply with Rule 17g– 

5(a)(3) with the result that overseas 

securitization markets may be 

disrupted. Section 36 of the Exchange 

Act authorizes the Commission to 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of the Exchange Act or 

any rule thereunder to the extent that 

such exemption is necessary or 

appropriate in the public interest, and is 

consistent with the protection of 

investors. Given the risk of serious 

disruptions to local securitization 

markets that have been described by 

Foreign Securities Regulators, the 

Commission believes that it is in the 

public interest, and consistent with the 

protection of investors, to delay the 

application of Rule 17g–5(a)(3) to 

certain overseas transactions and 

entities. Accordingly, the Commission is 

conditionally exempting, with respect to 

certain credit ratings and until 

December 2, 2010, NRSROs from 

requirements in Rule 17g–5(a)(3) 24 with 

respect to certain overseas transactions 

that are more fully described below. 

IV. Description of the Conditional 

Temporary Exemption 

The Commission is conditionally 

exempting NRSROs from Rule 17g– 

5(a)(3) until December 2, 2010 with 

respect to credit ratings where: (1) The 

issuer of the structured finance product 

is a non-U.S. person; and (2) the NRSRO 

has a reasonable basis to conclude that 

the structured finance product will be 

offered and sold upon issuance, and that 

any arranger linked to the structured 

finance product will effect transactions 

in the structured finance product after 

issuance, only in transactions that occur 

outside the U.S. These conditions are 

designed to confine the exemption’s 

application to credit ratings of 

structured finance products issued in, 

and linked to, financial markets outside 

the U.S. 

The Commission notes that this 

exemption only applies to subparagraph 

(a)(3) of Rule 17g–5. It does not cover 

any other requirements in Rule 17g–5. 

Consequently, if an NRSRO determines 

a credit rating for a structured finance 

product that is exempt from Rule 17g– 

5(a)(3), the NRSRO remains subject to 

all the other prohibitions in Rule 

17g–5. 

A. The Issuer Must Be a Non-U.S. 

Person 

The first condition of the exemption 

is that the issuer of the structured 

finance product must be a non-U.S. 

person. The Commission understands 

that preparations for compliance with 

Rule 17g–5(a)(3) are lacking with 

respect to overseas issuers. This 

condition—that the issuer be a non-U.S. 

person—is designed to provide the 

necessary relief for overseas issuers 

while circumscribing the relief to the 

scope of the problem that has been 

described to the Commission staff so 

that Rule 17g–5(a)(3) may go into effect 

to the extent possible. Further, the 

requirement is designed to suit the 

nature of the structured finance issuers. 

Many structured finance product issuers 

are bankruptcy remote special purpose 

vehicles. As such, they are primarily 

legal constructions as compared with 

operating companies that have 

employees, principal places of business, 

and physical locations. Consequently, 

rather than impose a condition that the 

issuer be located outside the U.S., the 

Commission is establishing a condition 

that the issuer be a non-U.S. person. To 

this end, and for the purposes of this 

order, the Commission intends a ‘‘U.S. 

person’’ to have the same definition as 

under Regulation S under the Securities 

Act.25 Consequently, to satisfy this 

exemption, the NRSRO must be 

determining a credit rating for a 

structured finance product issued by a 

person that is not a U.S. person. 

B. Transactions Must Be Outside the 

U.S. 

The second condition of the 

exemption is that the NRSRO has a 

reasonable basis to conclude that the 

structured finance product will be 

offered and sold upon issuance, and that 

any arranger linked to the structured 

finance product will effect transactions 

of the structured finance product after 

issuance, only in transactions that occur 

outside the U.S. The Commission is 

confining the relief to only those 

transactions that occur outside the U.S. 

because it understands that it is with 

respect to overseas transactions that 

compliance preparations are lacking. 

Thus, circumscribing the relief to only 

those transactions that occur outside the 

U.S. will provide the necessary relief 

but still allow Rule 17g–5(a)(3) to come 

into effect where there are no such 

problems. An example of a transaction 

that occurs outside the U.S. would be a 

transaction that complies with the 

applicable safe harbor under Rules 903 

and 904 of Regulation S.26

The question of whether an NRSRO 

has a ‘‘reasonable basis’’ to conclude that 

the structured finance product will be 

offered and sold upon issuance, and 

than any arranger linked to the 

structured finance product will effect 

transactions of the structured finance 

product after issuance, in transactions 

that occur outside the U.S. will depend 

on the facts and circumstances of a 

given situation. In order to have a 

reasonable basis to make these 

conclusions, the NRSRO should discuss 

with any arranger linked to the 

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28828 Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

3The text of the proposed rule change is available 

from BX’s Web site at http:// 

nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/ 

Filings/, at the Exchange’s principal office, and at 

the Commission’s Public Reference Room. 

structured finance product (i.e., the 

sponsor, underwriter, and issuer) how 

they intend to market and sell the 

structured finance product and how 

they intend to engage in any secondary 

market activities (i.e., re-sales) of the 

structured finance product. An NRSRO 

may choose to obtain from the arranger 

a representation upon which the 

NRSRO can reasonably rely that sales of 

the structured finance product will meet 

this condition. Factors relevant to the 

analysis of whether such reliance would 

be reasonable would include, but not be 

limited to: (1) Ongoing or prior failures 

by the arranger to adhere to its 

representations; or (2) a pattern of 

conduct by the arranger where it fails to 

promptly correct breaches of its 

representations. 

V. Request for Comment 

The Commission notes that it intends 

to monitor the use of this temporary 

exemption to evaluate whether it is 

being used for transactions that meet the 

above-described conditions. If the 

Commission discovers that this 

temporary exemption is being used 

otherwise, it will consider whether 

further action is appropriate, including 

whether to revise or revoke the 

exemption. In this connection, the 

Commission requests comment on the 

following: 

• With respect to foreign regulators, 

regulations, and laws, what specific 

conflicts, if any, will arise from the 

application of Rule 17g–5(a)(3)? 

• Do any NRSROs, or credit rating 

agencies considering applying for 

registration as an NRSRO, intend to use 

information required to be provided on 

password-protected Internet Web sites 

by Rule 17g–5(a)(3) to determine and 

monitor credit ratings with respect to 

credit ratings that are being exempted 

from the requirements of Rule 17g– 

5(a)(3)? NRSROs or credit rating 

agencies that intend to use such 

information to determine and monitor 

credit ratings with respect to credit 

ratings that are being exempted are 

asked to provide specific details on 

when they expect to be ready to 

determine and monitor such credit 

ratings. 

• What are the different types of 

structured finance and similar products 

used outside the U.S.? What factors 

should determine whether an 

instrument sold entirely or primarily 

outside of the U.S. is a structured 

finance product? 

• What actions are NRSROs taking to 

prepare to comply with Rule 17g– 

5(a)(3)’s application to credit ratings 

that are being exempted by this order? 

What specific costs—compliance, 

operational, and any others—will be 

associated with that compliance, 

including costs to arrangers? 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/exorders.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number S7–04–09 on the subject line; 

or 

• Use the Federal eRulemaking Portal 

(http://www.regulations.gov). Follow the 

instructions for submitting comments. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F St., NE., Washington, DC 20549– 

1090. 

All submissions should refer to File 

Number S7–04–09. This file number 

should be included on the subject line 

if e-mail is used. To help us 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/ 

exorders.shtml). Comments are also 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F St., 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. 

VI. Conclusion 

For the foregoing reasons, the 

Commission believes it would be 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors to grant a 

temporary exemption from the 

requirements in Rule 17g–5(a)(3) with 

respect to certain credit ratings. 

Accordingly, it is hereby ordered, 

pursuant to Section 36 of the Exchange 

Act, that a nationally recognized 

statistical rating organization is exempt 

until December 2, 2010 from the 

requirements in Rule 17g–5(a)(3) (17 

CFR 240.17g–5(a)(3)) for credit ratings 

where: 

(1) The issuer of the security or 

money market instrument is not a U.S. 

person (as defined under Securities Act 

Rule 902(k)); and 

(2) The nationally recognized 

statistical rating organization has a 

reasonable basis to conclude that the 

structured finance product will be 

offered and sold upon issuance, and that 

any arranger linked to the structured 

finance product will effect transactions 

of the structured finance product after 

issuance, only in transactions that occur 

outside the U.S. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–12373 Filed 5–21–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62124; File No. SR–BX– 

2010–037] 

Self-Regulatory Organizations; Notice 

of Filing of a Proposed Rule Change by 

NASDAQ OMX BX, Inc. To Adopt Rule 

4120(a)(11) Concerning Individual 

Stock Trading Pauses and To Adopt 

Related IM–4120–3 

May 19, 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 18, 

2010, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’ or ‘‘BX’’) 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 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 is filing this proposed 

rule change to adopt Rule 4120(a)(11) 

concerning individual stock trading 

pauses in certain securities, and to 

adopt related IM–4120–3. 

The text of the proposed rule change 

is below. Proposed new language is in 

italics and proposed deletions are in 

[brackets].3

* * * * * 

4120. Trading Halts 

(a) Authority to Initiate Trading Halts or 

Pauses 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES