Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Notices 44791 

4 If the Fund has been in operation fewer than two 

years, the measured period will begin immediately 

following the Fund’s first public offering. 

5 If the Fund has been in operation fewer than five 

years, the measured period will begin immediately 

following the Fund’s first public offering. 

1 5 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

consolidation, acquisition, spin-off or 

reorganization of the Fund; or 

C. An offering other than an offering 

described in conditions VI.A and VI.B 

above, unless, with respect to such other 

offering: 

1. The Fund’s average annual 

distribution rate for the six months 

ending on the last day of the month 

ended immediately prior to the most 

recent distribution declaration date 4, 

expressed as a percentage of NAV per 

share as of such date, is no more than 

1 percentage point greater than the 

Fund’s average annual total return for 

the 5-year period ending on such date 5; 

and 

2. The transmittal letter 

accompanying any registration 

statement filed with the Commission in 

connection with such offering discloses 

that the Fund has received an order 

under section 19(b) to permit it to make 

periodic distributions of long-term 

capital gains with respect to its common 

stock as frequently as twelve times each 

year, and as frequently as distributions 

are specified in accordance with the 

terms of any outstanding preferred stock 

that such Fund may issue. 

VII. Amendments to Rule 19b–1: The 

requested relief will expire on the 

effective date of any amendment to rule 

19b–1 that provides relief permitting 

certain closed-end investment 

companies to make periodic 

distributions of long-term capital gains 

with respect to their outstanding 

common stock as frequently as twelve 

times each year. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17539 Filed 7–30–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Roundtable on 

International Financial Reporting 

Standards on Monday, August 4, 2008 

beginning at 1 p.m. 

The Roundtable will take place in the 

Auditorium of the Commission’s 

headquarters at 100 F Street, NE., 

Washington DC. The Roundtable will be 

open to the public with seating on a 

first-come, first-served basis. Doors will 

open at 12:30 p.m. Visitors will be 

subject to security checks. 

The roundtable will consist of an 

open discussion on International 

Financial Reporting Standards (IFRS) 

and an update on IFRS developments, 

including the experience with use of 

IFRS during the recent period of market 

turmoil. The roundtable will be 

organized as two panels, each consisting 

of investors, issuers, auditors and other 

parties with experience in IFRS 

reporting. 

For further information, please 

contact the Office of the Secretary at 

(202) 551–5400. 

Dated: July 28, 2008. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E8–17600 Filed 7–30–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58226; File No. SR–FINRA–

2008–037] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Amendments 

to NASD Rule 11890 (Clearly 

Erroneous Transactions) 

July 25, 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 8, 

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 prepared 

by FINRA. FINRA designated the 

proposed rule change as ‘‘noncontroversial’’ under Section 

19(b)(3)(A)(iii) of the Act 3 and Rule 

19b-4(f)(6) thereunder,4 which renders 

the proposal effective upon filing with 

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 amend NASD 

Rule 11890 (Clearly Erroneous 

Transactions) to: (1) Extend the time 

limit that FINRA has to take action on 

a transaction under the rule; and (2) 

clarify the circumstances under which 

FINRA initiates a review of a 

transaction. 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 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 

NASD Rule 11890 provides that, in 

the event of a disruption or malfunction 

in the use or operation of any quotation, 

communication, or trade reporting 

system owned or operated by FINRA, or 

under extraordinary market conditions, 

officers of FINRA can review an overthe-counter (‘‘OTC’’) transaction arising 

out of or reported through any such 

quotation, communication, or trade 

reporting system, and may declare the 

transaction null and void or modify the 

terms if any such officer determines that 

the transaction is clearly erroneous or 

such action is necessary for the 

maintenance of a fair and orderly 

market or the protection of investors 

and the public interest. Rule 11890 

requires a FINRA officer acting pursuant 

to the rule to cancel or adjust an 

erroneous transaction to do so ‘‘within 

thirty (30) minutes of detection of the 

transaction,’’ except in the case of 

extraordinary circumstances, in which 

case the FINRA officer has until 3 p.m., 

Eastern Time (ET), on the next trading 

day after the date of the transaction at 

issue. 


jlentini on PROD1PC65 with NOTICES
44792 Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Notices 

5The Commission recently approved 

amendments to the clearly erroneous rule of The 

NASDAQ Stock Market LLC (‘‘Nasdaq’’) (Nasdaq 

Rule 11890). As part of those amendments, Nasdaq 

deleted the requirement that a Nasdaq officer must 

make a determination regarding whether a 

transaction was ‘‘clearly erroneous’’ under the rule 

within 30 minutes of detection. See Securities 

Exchange Act Release No. 57826 (May 15, 2008), 73 

FR 29802 (May 22, 2008) (‘‘Release 34–57826’’) 

(SR–NASDAQ–2007–001). 

6 15 U.S.C. 78o–3(b)(6). 7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 9 17 CFR 240.19b–4(f)(6)(iii). 

10See id. 

11 Id. 

12See Release 34–57826, supra note 5. 

13For 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). 

FINRA is proposing to amend Rule 

11890 to replace the language that 

FINRA must, except in extraordinary 

circumstances, take action under the 

subsection within thirty (30) minutes of 

detection of an erroneous transaction, 

with language that FINRA shall act as 

soon as possible after becoming aware of 

the transaction, but in all cases by 3 

p.m., Eastern Time (ET) on the next 

trading day after the date of the 

transaction at issue. Although FINRA 

believes that determinations under the 

rule should always be made in a timely 

manner, FINRA has found that most 

transactions reviewed under Rule 11890 

involve coordination between multiple 

market centers and the time required to 

gather and evaluate the information 

necessary to make an informed 

determination is often in excess of 30 

minutes. Accordingly, FINRA does not 

believe that the rule’s strict 30-minute 

time limit is in the best interests of the 

marketplace or investors.5

Also as a practical matter, because 

FINRA, as the regulator of the OTC 

market, does not operate a listed market, 

it generally does not ‘‘detect’’ erroneous 

transactions, particularly those 

involving listed securities executed 

OTC. Rather, in most cases, other 

market centers notify FINRA staff of the 

potential for such transactions, and 

FINRA staff coordinates its review with 

such market center(s). Similarly, for 

potentially erroneous transactions 

involving only OTC trades, the 

information typically comes from other 

sources, such as market participants, 

and FINRA does not ‘‘detect’’

potentially erroneous transactions. 

Accordingly, FINRA proposes to amend 

Rule 11890 to more accurately reflect 

the operation of the rule by deleting the 

‘‘detection’’ language from the text of 

the rule. 

Lastly, FINRA is proposing certain 

technical, non-substantive changes to 

the text of Rule 11890. Given that many 

clearly erroneous transactions are 

caused by trader errors and not 

disruptions or malfunctions of FINRA 

systems, the proposed rule change 

amends the rule text to reflect the 

manner in which FINRA applies it to a 

clearly erroneous authority. 

Additionally, FINRA is proposing to 

amend the text of Rule 11890(a) to 

replace the word ‘‘approved’’ with the 

word ‘‘authorized’’ to reflect that, 

technically, not all FINRA system rules 

are ‘‘approved’’ by the Commission, but, 

for example, a system’s rules may take 

effect upon filing with the Commission 

(e.g., for immediate effectiveness 

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

Act). 

As noted above, FINRA has filed the 

proposed rule change for immediate 

effectiveness. FINRA proposes to make 

the rule change operative on the date of 

filing. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,6 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 that the 

proposed rule change better reflects the 

application of Rule 11890 and provides 

additional time to resolve clearly 

erroneous transactions. 

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 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 

filing, 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 7 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.8 As required under Rule 

19b–4(f)(6)(iii),9 FINRA provided 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, prior to the 

filing of the proposed rule change. 

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to the 30th day 

after the date of filing.10 However, Rule 

19b–4(f)(6)(iii) 11 permits the 

Commission to designate a shorter time 

if such action is consistent with the 

protection of investors and the public 

interest. FINRA requested that the 

Commission waive the 30-day operative 

delay and make the proposed rule 

change effective and operative upon 

filing because the proposed rule change 

clarifies the current application of Rule 

11890 and better reflects the time 

necessary to address potentially clearly 

erroneous transactions. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. In particular, the 

Commission does not believe that the 

rule change presents any novel issues 

and notes that it recently approved 

revisions to Nasdaq’s clearly erroneous 

transactions rule that, among other 

things, revised the time frame for a 

Nasdaq officer to make a determination 

regarding whether a transaction is 

‘‘clearly erroneous’’ under the Nasdaq 

rule.12 Accordingly, the Commission 

designates the proposed rule change 

operative upon filing with the 

Commission.13

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the 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 


jlentini on PROD1PC65 with NOTICES
Federal Register / Vol. 73, No. 148 / Thursday, July 31, 2008 / Notices 44793 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The current FINRA rulebook consists of two sets 

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

from NYSE (‘‘Incorporated NYSE Rules’’) (together 

referred to as the ‘‘Transitional Rulebook’’). The 

Incorporated NYSE Rules apply only to those 

members of FINRA that are also members of the 

NYSE (‘‘Dual Members’’). Dual Members also must 

comply with NASD Rules. For more information 

about the rulebook consolidation process, see 

FINRA Information Notice, March 12, 2008 

(Rulebook Consolidation Process). 

4 Incorporated NYSE Rules 421(2) and 421.40 

require members carrying margin accounts for 

customers to report certain aggregate debit and free 

credit balances. Those provisions will be addressed 

in a separate filing and therefore are not being 

addressed here. 

5Short positions required to be reported under 

the rules are those resulting from ‘‘short sales’’ as 

the term is defined in Rule 200(a) of Regulation 

SHO, subject to certain limited exceptions. See 

NASD Rule 3360(b)(1). 

6The term ‘‘OTC Equity Securities’’ refers to any 

equity security that is not listed on a national 

securities exchange. See NASD Rule 3360(b)(3). 

7 It is the responsibility of each member firm to 

ensure that it is reporting accurate short interest 

data, including confirming that issue symbols are 

active and valid as of the designated settlement 

date. See Notice to Members 06–20 (April 2006). 

8Non-self-clearing broker-dealers generally are 

considered to have satisfied their reporting 

requirement by making appropriate arrangements 

with their respective clearing organizations. See 

Notice to Members 03–08 (February 2003). 

9A schedule of FINRA’s designated settlement 

dates can be found on its Web site at http:// 

www.finra.org. See also Notice to Members 07–24 

(May 2007). 

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

Number SR–FINRA–2008–037 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–2008–037. 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–2008–037 and 

should be submitted on or before 

August 21, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–17501 Filed 7–30–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58227; File No. SR–FINRA–

2008–033] 

Self-Regulatory Organizations: 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change and 

Amendment No. 1 Thereto, To Adopt 

FINRA Rule 4560 (Short-Interest 

Reporting) in the Consolidated FINRA 

Rulebook 

July 25, 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 June 23, 

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. On 

July 16, 2008, FINRA submitted 

Amendment No. 1 to the proposed rule 

change. 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 adopt the short 

interest reporting requirements (NASD 

Rule 3360 and Incorporated NYSE Rules 

421(1) and 421.10) as FINRA Rule 4560 

in the consolidated FINRA rulebook. 

The text of the proposed rule change 

is attached as Exhibit 5 to this rule 

filing. 

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 

is available at FINRA, the Commission’s 

Public Reference Room, and http:// 

www.finra.org/RulesRegulation/ 

RuleFilings/2008RuleFilings/P038813. 

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 

As part of the process of developing 

the new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt the short 

interest reporting requirements in NASD 

Rule 3360 and Incorporated NYSE Rules 

421(1) and 421.10 as FINRA Rule 4560 

in the Consolidated FINRA Rulebook. 

NASD Rule 3360 and Incorporated 

NYSE Rules 421(1) and 421.10 set forth 

FINRA’s short interest reporting 

requirements.4 NASD Rule 3360 

requires members to report short 

positions 5 in OTC Equity Securities 6

and exchange-listed securities not 

otherwise reported to another selfregulatory organization (‘‘SRO’’),7 and 

Incorporated NYSE Rules 421(1) and 

421.10 require members to report short 

positions in NYSE-listed securities. 

Members must report total short 

positions in all customer and 

proprietary accounts as of the 

designated settlement dates and in the 

manner so prescribed.8 Currently, the 

rules require such information to be 

reported twice a month, which in turn, 

is then made publicly available on an 

aggregate basis twice a month.9


jlentini on PROD1PC65 with NOTICES