45506 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with 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, or such 

shorter time as designated by the Commission. The 

Exchange has fulfilled this requirement. 

13For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. See 

15 U.S.C. 78c(f). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4The current FINRA rulebook consists of two sets 

of rules: (1) NASD Rules and (2) rules incorporated 

from NYSE (‘‘Incorporated NYSE Rules’’). While the 

NASD Rules generally apply to all FINRA members, 

the Incorporated NYSE Rules apply only to 

members of both FINRA and the NYSE, referred to 

as Dual Members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of 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 forgoing 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 after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 11 and Rule 19b–4(f)(6) 

thereunder.12

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b–

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay, which 

would make the change operative upon 

filing. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver will allow the 

customer portfolio margining program 

to continue uninterrupted as it would 

otherwise expire on July 31, 2008.13

Accordingly, the Commission 

designates the proposed rule change 

effective upon filing with the 

Commission. 

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. 

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–CBOE–2008–73 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2008–73. 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. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of CBOE. 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–CBOE–2008–73 and should 

be submitted on or before August 26, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17841 Filed 8–4–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58251; File No. SR–FINRA–

2008–041] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating To Making the 

Portfolio Margin Pilot Permanent 

July 30, 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 July 25, 

2008, 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’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

substantially prepared by FINRA. 

FINRA has designated the proposed rule 

change as constituting a ‘‘noncontroversial’’ rule change under 

paragraph (f)(6) of Rule 19b–4 under the 

Act,3 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 proposes to make permanent 

the portfolio margin pilot program set 

forth in NASD Rule 2520(g) and 

Incorporated NYSE Rule 431(g).4 The 


dwashington3 on PRODPC61 with NOTICES
Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices 45507 

5See Exchange Act Release No. 55471 (March 14, 

2007), 72 FR 13149 (March 20, 2007) (Notice of 

Filing and Immediate Effectiveness of SR–NASD–

2007–013). 

6See Exchange Act Release No. 54918 (December 

12, 2006), 71 FR 75790 (December 18, 2006) (SR–

NYSE–2006–13, relating to further amendments to 

the NYSE’s portfolio margin pilot program); 

Exchange Act Release No. 54125 (July 11, 2006), 71 

FR 40766 (July 18, 2006) (SR–NYSE–2005–93, 

relating to amendments to the NYSE’s portfolio 

margin pilot program); Exchange Act Release No. 

52031 (July 14, 2005) 70 FR 42130 (July 21, 2005) 

(SR–NYSE–2002–19, relating to the NYSE’s original 

portfolio margin pilot). See also Exchange Act 

Release No. 54919 (December 12, 2006), 71 FR 

75781 (December 18, 2006) (SR–CBOE–2006–14, 

relating to amendments to the CBOE’s portfolio 

margin pilot); Exchange Act Release No. 52032 (July 

14, 2005) 70 FR 42118 (July 21, 2005) (SR–CBOE–

2002–03, relating to the CBOE’s original portfolio 

margin pilot). 

7See Exchange Act Release No. 56108 (July 19, 

2007) 72 FR 41375 (July 27, 2007) (Notice of Filing 

and Immediate Effectiveness of SR–NASD–2007–

045). See also Exchange Act Release No. 56107 (July 

19, 2007) 72 FR 41377 (July 27, 2007) (Notice of 

Filing and Immediate Effectiveness of SR–NYSE–

2007–56, relating to extension of the NYSE portfolio 

margin pilot program to July 31, 2008) and 

Exchange Act Release No. 56109 (July 19, 2007) 72 

FR 41365 (July 27, 2007) (Notice of Filing and 

Immediate Effectiveness of SR–CBOE–2007–75, 

relating to extension of the CBOE portfolio margin 

pilot program to July 31, 2008). 

8 15 U.S.C. 78o–3(b)(6). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with 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, or such 

shorter time as designated by the Commission. 

FINRA has fulfilled this requirement. 

11For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition and capital formation. See 

15 U.S.C. 78c(f). 

portfolio margin pilot program permits 

members to margin certain products 

according to a prescribed portfolio 

margin methodology and is set to expire 

on July 31, 2008. There is no change to 

the rule text with this proposed rule 

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 

On February 12, 2007, FINRA (then 

known as NASD) filed SR–NASD–2007–

013 for immediate effectiveness to 

establish a portfolio margin pilot 

program that permits member firms to 

elect to margin certain products 

according to a prescribed portfolio 

margin methodology.5 The portfolio 

margin pilot program is substantially 

similar to margin rule amendments by 

the NYSE and the Chicago Board 

Options Exchange (‘‘CBOE’’), which 

were approved by the Commission.6

Consistent with the amended NYSE and 

CBOE portfolio margin programs, the 

pilot, as proposed in SR–NASD–2007–

013, started on April 2, 2007 and ended 

on July 31, 2007. The pilot program was 

extended for a one-year period to July 

31, 2008, also consistent with the NYSE 

and CBOE portfolio margin programs.7

FINRA is proposing to make 

permanent the pilot program contained 

in NASD Rule 2520(g) and Incorporated 

NYSE Rule 431(g). FINRA has not 

encountered any problems or 

difficulties relating to the pilot program 

since its inception and believes that the 

program better aligns margin 

requirements with the actual risk of 

hedged products. For these reasons, 

FINRA proposes to adopt the portfolio 

margin program on a permanent basis. 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

implementation date of the proposed 

rule change is August 1, 2008. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,8 which 

requires, among other things, that 

FINRA 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. FINRA believes making 

the portfolio margin program permanent 

is appropriate as the program better 

aligns the margin requirements with 

actual risk. 

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. 

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 forgoing 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 after the date of 

the filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 9 and Rule 19b–4(f)(6) thereunder.10

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b–

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. FINRA 

requests that the Commission waive the 

30-day operative delay, which would 

make the change operative upon filing. 

The Commission believes that waiving 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest because such waiver will 

allow the customer portfolio margining 

program to continue uninterrupted as it 

would otherwise expire on July 31, 

2008.11 Accordingly, the Commission 

designates the proposed rule change 

effective upon filing with the 

Commission. 

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. 

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 


dwashington3 on PRODPC61 with NOTICES
45508 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3An exceptional system message is defined as 

any system (i.e., SuperDOT, the Exchange’s 

Designated Order Turnaround System) message, as 

measured by mnemonic (mnemonics, which are 

alphabetical identifiers issued by the NYSE to its 

member firms and their customers, are required for 

order entry and identification purposes) on a daily 

basis, that exceeds the following criteria: (i) The 

ratio of a mnemonic’s share of the total system 

messages to the mnemonic’s share of total executed 

system volume exceeds 10:1; and (ii) the 

mnemonic’s cancelled system orders as a 

percentage of its total system orders exceeds 90.0%. 

See Securities Exchange Act Release No. 53071 

(January 6, 2006), 71 FR 2281 (January 13, 2006) 

(SR–NYSE–2005–91). 

4 15 U.S.C. 78f. 

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

Number SR–FINRA–2008–041 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–FINRA–2008–041. 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. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of FINRA. 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–FINRA–2008–041 and 

should be submitted on or before 

August 26, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17890 Filed 8–4–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58246; File No. SR–NYSE–

2008–64] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Eliminate 

the Exceptional Messaging Fee 

July 29, 2008. 

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 July 28, 

2008, the New York Stock Exchange 

LLC (the ‘‘Exchange’’ or the ‘‘NYSE’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III 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 eliminate 

the exceptional system message fee of 

$0.01 per exceptional system message. 

While the change to the Exchange’s 

2008 Price List pursuant to this proposal 

will be effective upon filing, the change 

will become operative as of August 1, 

2008. The text of the proposed rule 

change is available on the Exchange’s 

Web site (http://www.nyse.com), at the 

Exchange’s Office of the Secretary, 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 these statements may be examined at 

the places specified in Item IV below. 

The NYSE 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 

The Exchange proposes to eliminate 

the exceptional system message fee of 

$0.01 per exceptional system message.3

This fee was originally introduced to 

compensate the Exchange for the cost of 

the incremental system capacity that 

needed to be readily available to 

accommodate trading strategies that 

resulted in significant volumes of 

system messages and cancellations. 

Since that time, the Exchange has 

increased its system capacity to a degree 

that it no longer incurs significant costs 

in maintaining system capacity to 

accommodate these sorts of trading 

strategies. As such, the Exchange no 

longer needs the fee revenue to cover 

the related costs. While the change to 

the Exchange’s 2008 Price List pursuant 

to this proposal will be effective upon 

filing, the change will become operative 

as of August 1, 2008. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of section 6 4 of the Act, 

in general, and furthers the objectives of 

section 6(b)(4),5 in particular, in that it 

is designed provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. The 

Exchange believes that the proposed 

elimination of the exceptional message 

fee is equitable as the costs it was 

designed to defray are not now material 

to the Exchange and, therefore, the 

Exchange will not have to recoup the 

lost revenues through the imposition of 

any other fees or charges. 

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 


dwashington3 on PRODPC61 with NOTICES