51032 Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Notices 

16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f)(6). 18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 58134 (Jul. 

10, 2008), 73 FR 40892 (Jul. 16, 2008) (SR–FINRA–

2008–025). 

4See submission via SEC WebForm from Dan 

Mayfield, President, Sanderlin Securities, dated 

July 24, 2008. 

5The 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 

regarding the rulebook consolidation process, see 

FINRA Information Notice March 12, 2008 

(Rulebook Consolidation Process). 

burden on competition 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 

The Exchange neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule does not (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

for 30 days from the date on which it 

was filed, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, provided that the selfregulatory organization has given the 

Commission written notice of its intent 

to file 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 proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 16 and 

Rule 19b–4(f)(6) thereunder.17 At any 

time within 60 days of the filing of such 

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–2008–89 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–2008–89. 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 the 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–2008–89 and should 

be submitted on or before September 19, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–20064 Filed 8–28–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58421; File No. SR–FINRA–

2008–025] 

Self Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change Relating to the 

Adoption of NASD Rule 2790 as FINRA 

Rule 5130 (Restrictions on the 

Purchase and Sale of Initial Public 

Offerings) in the Consolidated FINRA 

Rulebook 

August 25, 2008. 

I. Introduction 

On June 12, 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 (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposal to adopt 

NASD Rule 2790 (Restrictions on the 

Purchase and Sale of Initial Equity 

Public Offerings) (‘‘Rule’’) as FINRA 

Rule 5130 in the consolidated FINRA 

rulebook, with only minor changes. This 

proposal was published for comment in 

the Federal Register on July 16, 2008.3

The Commission received one comment 

on the proposal.4 This order approves 

this proposed rule change. 

II. Description of the Proposed Rule 

Change 

As part of the process of developing 

the new consolidated rulebook (the 

‘‘Consolidated FINRA Rulebook’’),5

FINRA proposed to adopt the Rule as 

FINRA Rule 5130 in the Consolidated 

FINRA Rulebook with only minor 

changes. The Rule is designed to protect 

the integrity of the initial public offering 

(‘‘IPO’’) process by ensuring that FINRA 

member firms make bona fide public 

offerings of securities at the offering 

price, such firms do not withhold 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 169 / Friday, August 29, 2008 / Notices 51033 

6See Securities Exchange Act Release No. 48701 

(October 24, 2003), 68 FR 62126 (October 31, 2003) 

(Order Approving File No. SR–NASD–99–60); see 

also NASD Notice to Members 03–79 (December 

2003) (SEC Approves New Rule 2790 (Restrictions 

on the Purchase and Sale of IPOs of Equity 

Securities); Replaces Free-Riding and Withholding 

Interpretation). 

7 Incorporated NYSE Rules only apply to FINRA 

members who are also members of the NYSE. All 

FINRA members are subject to existing NASD rules. 

See Note 5, supra. Thus, the movement of a rule 

that existed only the NASD rulebook but was not 

an Incorporated NYSE Rule into the Consolidated 

FINRA Rulebook does not create any new 

obligations for FINRA members. 

8See Note 4, supra. 

9 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

10 15 U.S.C. 78o–3(b)(6). 

11See Note 6, supra. 

12 15 U.S.C. 78s(b)(2). 

13 17 CFR 200.30–3(a)(12). 

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

217 CFR 240.19b–4. 

securities in a public offering for their 

own benefit or use such securities to 

reward persons who are in a position to 

direct future business to firms, and 

industry insiders, including FINRA 

member firms and their associated 

persons, do not take advantage of their 

insider position to purchase new issues 

for their own benefit at the expense of 

public customers. Because of these 

controls, FINRA believes that the Rule 

plays an important part in maintaining 

investor confidence in the capital 

raising and IPO process. 

The Rule was originally adopted in 

2003, replacing NASD IM–2110–1 (the 

Free-Riding and Withholding 

Interpretation) in its entirety.6 The Rule 

was subject to extensive input from the 

industry and other interested persons 

during a four-year rulemaking process, 

and FINRA believes that there is broad 

support for it. The Rule provides 

necessary predictability and certainty in 

support of capital formation. Based on 

FINRA’s experience, the Rule is 

achieving its purpose and is 

significantly easier than NASD IM–

2110–1 for FINRA member firms and 

the investing public to understand and 

follow. Among other things, FINRA has 

seen a significant reduction in the 

number of interpretive and exemptive 

issues that have arisen with respect to 

the IPO allocation process since the 

Rule became effective. There is no 

Incorporated NYSE Rule equivalent to 

the Rule.7

For the reasons discussed above, 

FINRA proposed to transfer NASD Rule 

2790 to the Consolidated FINRA 

Rulebook in substantially the same 

form. As part of this transfer, FINRA 

proposed minor changes to the Rule to 

reflect the registration of the NASDAQ 

Stock Market LLC (‘‘NASDAQ’’) as a 

national securities exchange. The Rule 

currently refers to the NASDAQ Global 

Market because at the time the Rule was 

adopted, references to the listing 

standards of a national securities 

exchange did not include NASDAQ’s 

Global Market. Since NASDAQ 

completed its registration as a national 

securities exchange, the references to 

the NASDAQ Global Market in the Rule 

are no longer necessary. In addition, 

FINRA proposed certain minor, 

technical changes to the Rule. 

FINRA represented that it would 

announce the effective date of the 

proposed rule change in a Regulatory 

Notice to be published no later than 60 

days following Commission approval of 

the proposed rule change. 

III. Summary of Comments 

The Commission received one 

comment letter on the proposal.8 The 

commenter urged that FINRA amend the 

proposal to except FINRA members that 

are not underwriters from the Rule. 

FINRA has considered the comment and 

determined that it is not germane to the 

proposal in that the comment relates to 

the substantive requirements of the Rule 

which FINRA did not propose to change 

other than in minor, technical ways. 

IV. Discussion and Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act, and the rules and regulations 

thereunder that are applicable to a 

national securities association.9 In 

particular, the Commission believes that 

the proposed rule change is consistent 

with the provisions of Section 15A(b)(6) 

of the Act,10 which requires, among 

other things, that FINRA rules 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. The 

Commission notes that it has previously 

approved the Rule,11 and the proposal 

merely moves the Rule nearly verbatim 

from the NASD rulebook to the 

Consolidated FINRA Rulebook. The 

Commission believes that the move 

proposed in this filing is primarily 

ministerial and only aids FINRA 

members in complying with existing 

obligations. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,12 that the 

proposed rule change (File No. SR–

FINRA–2008–025) be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–20084 Filed 8–28–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58413; File No. SR–NYSE 

Arca–2008–84] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. To Discontinue Its Policy of 

Requiring Legal Opinions in 

Connection With Listings of Securities 

August 22, 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 August 

8, 2008, NYSE Arca, Inc. (‘‘NYSE Arca’’

or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘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 

and order to solicit comments on the 

proposal from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

NYSE Arca, through its wholly-owned 

subsidiary NYSE Arca Equities, Inc. 

(‘‘NYSE Arca Equities’’), proposes to 

discontinue its practice of requiring the 

delivery of an opinion of counsel in 

connection with any application to list 

securities on the Exchange. In lieu 

thereof, the Exchange will require 

companies to (i) furnish the Exchange 

with copies of opinions of counsel filed 

in connection with recent public 

offerings or private placements or (ii) if 

no opinions of counsel exist, provide to 

the Exchange a certificate of good 

standing from the company’s 

jurisdiction of incorporation. In 

addition, the Exchange is discontinuing 

its policy of requiring an opinion of 

counsel to the effect that the company 

is in compliance with all of the 

Exchange’s corporate governance 

requirements at the time of listing and, 

in lieu thereof, will require that 

companies provide a revised form of 

initial written affirmation evidencing 

mstockstill on PROD1PC66 with NOTICES