46106 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

5This document is located at http:// 

www.nyse.com/pdfs/PortfolioMargin_101707.pdf. 

6The Exchange understands that FINRA 

proposed similar rule changes that, if approved, 

would continue to provide a uniform approach with 

respect to portfolio margining. See (SR–FINRA–

2008–042). 

7 15 U.S.C. 78f(b). 

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

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

10 17 CFR 240.19b–4(f)(1). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

provisions to those rules that are 

currently included in the ‘‘Frequently 

Asked Questions’’ regarding portfolio 

margin requirements published by the 

New York Stock Exchange.5

Specifically, the Exchange proposes to 

amend Rule 12.4(i)(5) to specify that a 

portfolio margin account has three days 

to meet a requisite margin call incurred 

as a result of a day trade. The Exchange 

proposes to amend Rule 15.8A(c) to 

specify that a member organization shall 

monitor the credit exposure resulting 

from concentrated positions within both 

individual portfolio margin accounts 

and across all portfolio margin 

accounts.6 The effective date of the 

proposed rule change shall be August 1, 

2008. 

2. Statutory Basis 

Because the proposed rule change 

codifies previously issued SRO 

guidance regarding portfolio margining, 

the Exchange believes the proposed rule 

change is consistent with Section 6(b) of 

the Exchange,7 in general, and furthers 

the objectives of Section 6(b)(5) of the 

Act 8 in particular, in that it is designed 

to perfect the mechanism of a free and 

open market and to protect investors 

and the public interest. 

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 the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change constitutes a stated policy, 

practice or interpretation with respect to 

the meaning, administration, or 

enforcement of an existing rule, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 9 and paragraph 

(f)(1) of Rule 19b–4 thereunder.10

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–2008–74 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–2008–74. 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–2008–74 and should 

be submitted on or before August 28, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18074 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58245; File No. SR–FINRA–

2008–026] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of a 

Proposed Rule Change and 

Amendment No. 1 Thereto, To Adopt 

the FINRA Rule 0100 Series (General 

Standards) in the Consolidated FINRA 

Rulebook 

July 29, 2008. 

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

Securities Exchange Act of 1934 (‘‘Act’’

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on June 16, 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’’ or ‘‘SEC’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. On July 16, 2008, 

FINRA filed Amendment No. 1 to the 

proposed rule change. The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA proposes to adopt the NASD 

Rule 0100 Series as FINRA rules in the 

consolidated FINRA rulebook. The 

proposed rule change would renumber 

the NASD Rule 0100 Series as the 

FINRA Rule 0100 Series in the 

consolidated FINRA rulebook. The text 

of the proposed rule change is available 

at FINRA, the Commission’s Public 

Reference Room, and www.finra.org. 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 46107 

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 the 

FINRA Information Notice, March 12, 2008 

(Rulebook Consolidation Process). 

4See SR–FINRA–2008–021 (Proposed Rule 

Change Relating to the Adoption of NASD Rules 

4000 through 10000 Series and the 12000 through 

14000 Series as FINRA Rules in the New 

Consolidated FINRA Rulebook), discussing ‘‘Rules 

of General Applicability.’’

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of, and basis for, the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in Sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Background 

As part of the process of developing 

the new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt the NASD 

Rule 0100 Series (General Provisions) as 

FINRA rules in the Consolidated FINRA 

Rulebook, with the exception of NASD 

Rule 0120, which will be addressed at 

a later date in a separate filing. The 

NASD Rule 0100 Series governs the 

adoption, application and interpretation 

of NASD rules and sets forth certain 

definitions not contained in the FINRA 

By-Laws. Additionally, these rules 

address FINRA’s delegation of certain 

responsibilities to its subsidiaries, and 

its authority and access with respect to 

its subsidiaries. FINRA is proposing to 

transfer this rule series as the FINRA 

Rule 0100 Series, renamed as ‘‘General 

Standards,’’ to the Consolidated FINRA 

Rulebook, with only minor changes, as 

described below. The proposed rule 

change would not impose any new 

requirements on FINRA members, but 

would clarify and streamline these rules 

for inclusion in the Consolidated FINRA 

Rulebook. FINRA notes that, 

notwithstanding their transfer to the 

Consolidated FINRA Rulebook, these 

rules of general applicability would 

apply equally to both the Transitional 

Rulebook and the Consolidated FINRA 

Rulebook.4

Proposal 

NASD Rule 0111 (Adoption of Rules) 

provides that the provisions of the 

rulebook are adopted pursuant to 

Article VII, Section 1, of the By-Laws. 

This section of the By-Laws grants the 

FINRA Board of Governors (‘‘Board’’) 

authority to, among other things, adopt 

such FINRA rules, and changes or 

additions thereto, as it deems necessary 

or appropriate, provided, however, that 

the Board may at its option submit to 

the membership any such adoption, 

change or addition to such rules. FINRA 

is proposing that this rule be transferred 

into the Consolidated FINRA Rulebook 

with only minor, non-substantive 

changes (e.g. , replacing references to 

NASD with FINRA and certain 

renumbering to reflect the new 

organizational structure of the 

Consolidated FINRA Rulebook). 

NASD Rule 0112 (Effective Date) 

states that the rules shall become 

effective as provided in Article XI, 

Section 1, of the By-Laws. This section 

of the By-Laws provides that, if rules, or 

amendments to such, are approved by 

the Commission, they will become 

effective as of such date as the Board 

may prescribe. Historically, it has been 

FINRA’s general practice to state the 

effective date for a rule change in a 

Regulatory Notice following approval by 

the Commission, and FINRA intends to 

continue this practice. Accordingly, 

FINRA is proposing that this rule be 

transferred into the Consolidated FINRA 

Rulebook with only minor, nonsubstantive changes. 

NASD Rule 0113 (Interpretation) 

states that the rules shall be interpreted 

in such manner as will aid in 

effectuating the purposes and business 

of NASD, and so as to require that all 

practices in connection with the 

investment banking and securities 

business shall be just, reasonable and 

not unfairly discriminatory. FINRA 

proposes to eliminate the express 

reference to ‘‘practices in connection 

with the investment banking and 

securities business’’ in the rule to reflect 

that certain FINRA rules, such as the 

requirement to adhere to just and 

equitable principles of trade, are not 

limited in scope to such activities. The 

proposal would further provide that 

FINRA rules shall be interpreted in light 

of the purposes sought to be achieved by 

the rules and to further FINRA’s 

regulatory programs. FINRA is 

proposing this rule change to better 

reflect that FINRA will continue to 

interpret its rules in a manner that 

promotes the purpose of the rules and 

FINRA’s regulatory programs. 

NASD Rule 0114 (Effect on 

Transactions in Municipal Securities) 

provides, in part, that the rules shall not 

be construed to apply to transactions in 

municipal securities. NASD Rule 0116 

(Application of Rules of the Association 

to Exempted Securities) states that the 

terms ‘‘exempted securities’’ and 

‘‘municipal securities’’ shall have the 

meanings specified in Exchange Act 

Sections 3(a)(12) and 3(a)(29), 

respectively, and includes a list of 

NASD rules applicable to transactions 

and business activities relating to 

exempted securities, except municipal 

securities. FINRA is proposing to 

incorporate the statement in Rule 0114 

that the FINRA rules are not applicable 

to transactions in municipal securities 

into Rule 0116, and transfer Rule 0116, 

as amended, to the Consolidated FINRA 

Rulebook. 

The remainder of Rule 0114 states 

that the rules shall not be construed to 

apply to contracts made prior to the 

effective date of the rules. FINRA is 

proposing to eliminate this provision in 

Rule 0114 as unnecessary because the 

rules by their own terms determine their 

applicability. 

NASD Rule 0115 (Applicability) 

provides that the rules shall apply to all 

members and persons associated with a 

member and that persons associated 

with a member shall have the same 

duties and obligations as a member. 

Rule 0115 goes on to prescribe the loss 

of membership and registration 

privileges for members or persons 

associated with a member who have 

been expelled, suspended, cancelled or 

revoked from membership or 

registration. FINRA is proposing that 

this rule be transferred into the 

Consolidated FINRA Rulebook with 

only minor, non-substantive changes. 

NASD Rule 0121 (Definitions in 

NASD By-Laws) states that, unless the 

context otherwise requires, or unless 

otherwise defined in these rules, terms 

used in the rules and interpretive 

material, if defined in the By-Laws, 

shall have the meaning as defined in the 

By-Laws. FINRA is proposing nonsubstantive changes to Rule 0121 to 

simplify the rule language. 

NASD Rule 0130 (Delegation, 

Authority and Access) delegates 

authority to certain NASD subsidiaries 

to act on behalf of NASD as set forth in 

a Plan of Allocation and Delegation 

adopted by the Board of Governors and 

approved by the SEC. Further, the rule 

provides that, notwithstanding any 

delegation of authority under the rule, 

the staff, books, records and premises of 


sroberts on PROD1PC70 with NOTICES
46108 Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices 

5 15 U.S.C. 78o–3(b)(6). 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3On May 23, 2008, FINRA filed with the 

Commission a proposed rule change (SR–FINRA–

2008–021) in which FINRA proposed, among other 

things, to adopt without material change NASD 

Rule 6200 Series and NASD Rule 6230 as, 

respectively, FINRA Rule 6700 Series and FINRA 

Rule 6730. If the Commission approves this 

proposed rule change prior to approving SR–

FINRA–2008–021, FINRA will amend SR–FINRA–

2008–021 as necessary to reflect such approval. If 

the Commission approves SR–FINRA–2008–021 

prior to approving this proposed rule change, 

FINRA will amend this proposed rule change as 

necessary to reflect such approval. 

4The term ‘‘TRACE-eligible security’’ is defined 

in NASD Rule 6210(a). 

the subsidiaries are that of NASD, 

subject to oversight pursuant to the 

Exchange Act, and all officers, directors, 

employees and agents of the 

subsidiaries are that of NASD for 

purposes of the Exchange Act. FINRA is 

proposing that this rule be transferred 

into the Consolidated FINRA Rulebook 

with only minor, non-substantive 

changes. 

FINRA will announce the 

implementation date of the proposed 

rule change in a Regulatory Notice to be 

published no later than 60 days 

following Commission approval. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,5 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 will clarify and 

streamline the General Provisions rules 

for adoption as FINRA rules in the new 

Consolidated FINRA Rulebook. 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reason for so finding or (ii) 

as to which FINRA consents, the 

Commission will: 

A. By order approve such proposed rule 

change; or 

B. institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–FINRA–2008–026 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–2008–026. 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 the 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–

2008–026 and should be submitted on 

or before August 28, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–18152 Filed 8–6–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58283; File No. SR–FINRA–

2008–040] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Eliminate 

the Requirement To Report Yield to 

TRACE and for FINRA To Calculate 

Yield That Will Be Disseminated by 

TRACE 

August 1, 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 17, 

2008, the 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 

prepared by FINRA. 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: (a) Amend 

NASD Rule 6230(c) 3 to eliminate the 

requirement to report yield to the Trade 

Reporting and Compliance Engine 

(‘‘TRACE’’) system (‘‘TRACE System’’) 

when a member reports a transaction in 

a TRACE-eligible security 4 and (b) 

implement a policy to disseminate yield 


sroberts on PROD1PC70 with NOTICES