Federal Register / Vol. 73, No. 200 / Wednesday, October 15, 2008 / Notices 61177 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(3). 

5On September 25, 2008, the SEC approved 

proposed rule change SR–FINRA–2008–021, in 

which FINRA proposed, among other things, to 

adopt the NASD Marketplace Rules (the NASD Rule 

4000 through 7000 Series) as the FINRA Rule 6000 

through 7000 Series in the Consolidated FINRA 

Rulebook. See Securities Exchange Act Release No. 

58643 (September 25, 2008), 73 FR 57174 (October 

1, 2008) (order approving SR–FINRA–2008–021; 

SR–FINRA–2008–022; SR–FINRA–2008–026; SR– 

FINRA–2008–028 and SR–FINRA–2008–029). As 

part of that proposed rule change, FINRA adopted 

new FINRA Rule 6120 (Trading Halts), which 

consolidates its trading halt rules relating to OTC 

trading in NMS stocks (i.e., NASD Rules 4120A, 

4633, 4633C and 4633E). 

6FINRA’s Policy Statement on Market Closings, 

which was adopted under FINRA’s authority in 

Article VII, Section 3 of the By-Laws, provided, 

among other things, that, when other major 

securities markets initiate market-wide trading halts 

in response to extraordinary market conditions, 

FINRA will, upon SEC request, halt domestic 

trading in all securities in equity and equity-related 

securities in the OTC market. As part of the 

approval order, the SEC requested that FINRA 

impose a trading halt as quickly as practicable 

whenever the NYSE and other equity markets have 

suspended trading. See Securities Exchange Act 

Release No. 26198 (October 19, 1988), 53 FR 41637 

(October 24, 1988) (order approving SR–NASD–88– 

46). The Policy Statement, which was adopted on 

a pilot basis and extended numerous times, expired 

on December 31, 1997. See Securities Exchange Act 

Release No. 36563 (December 7, 1995), 60 FR 64084 

(December 13, 1995) (order approving SR–NASD– 

95–57). FINRA has represented orally and in 

writing that it will continue to follow, upon SEC 

request, a trading halt during the triggering of 

intermarket circuit breakers. See Letter from 

Richard Ketchum, Chief Operating Officer and 

Executive Vice President, NASD, dated January 23, 

1998. The language in the Policy Statement was 

subsequently codified, on a pilot basis, in 

Interpretive Material (IM) 4120–3 (later renumbered 

IM–4120–4). See Securities Exchange Act Release 

No. 39846 (April 9, 1998), 63 FR 18477 (April 15, 

1998) (order approving SR–NASD–98–27). The IM– 

4120–3 pilot, which also was extended numerous 

times, expired on April 30, 2002. 

7See, e.g., NYSE Rule 80B, NYSE Arca Equities 

Rule 7.12 and NASDAQ Exchange Rule 4121. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

October 16, 2008 will be: 

Formal orders of investigation; 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings of an 

enforcement nature; 

Adjudicatory matters; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: October 9, 2008. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24443 Filed 10–14–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58753; File No. SR–FINRA– 

2008–048] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Adopt FINRA Rule 

6121 (Trading Halts Due to 

Extraordinary Market Volatility) 

October 8, 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 October 

7, 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. FINRA has 

designated the proposed rule change as 

concerned solely with the 

administration of the self-regulatory 

organization under Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(3) 

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 adopt FINRA 

Rule 6121 (Trading Halts Due to 

Extraordinary Market Volatility) to 

permit FINRA to halt over-the-counter 

(‘‘OTC’’) trading in NMS stocks, as 

defined in Rule 600(b)(47) of SEC 

Regulation NMS, if other major U.S. 

securities markets initiate market-wide 

trading halts in response to 

extraordinary market conditions. 

Below is the text of the proposed rule 

change. Proposed new language is in 

italics.5

* * * * * 

6000. Quotation and Transaction 

Reporting Facilities 

6100. Quoting and Trading in NMS 

Stocks 

* * * * * 

6121. Trading Halts Due to 

Extraordinary Market Volatility 

Pursuant to the procedures set forth in 

Rule 6120(b), FINRA shall halt all 

trading otherwise than on an exchange 

in any NMS stock, as defined in Rule 

600(b)(47) of SEC Regulation NMS, if 

other major securities markets initiate 

market-wide trading halts in response to 

their rules or extraordinary market 

conditions or if otherwise directed by 

the Securities and Exchange 

Commission. 

* * * * * 

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 

In 1988, the SEC approved several 

rule proposals by the national securities 

exchanges, along with a policy 

statement by FINRA (then known as 

NASD),6 which provide trading halt 

authority in the event of severe market 

declines (referred to as ‘‘circuit 

breakers’’). These provisions were 

adopted in response to the severe 

market decline that occurred in October 

1987. The provisions were intended to 

enable the self-regulatory organizations 

(‘‘SROs’’) to provide coordinated means 

to address potentially destabilizing 

market volatility. 

National securities exchanges 

generally have circuit breaker rules 

whereby the trading in all exchangelisted securities is halted based on a 

one-day decline of 10%, 20% and 30% 

of the Dow Jones Industrial Average 

(‘‘DJIA’’), with the percentage value 

based on the average closing value of 

the DJIA for the month prior to the 

beginning of the quarter, or have other 

general authority to halt trading in 

response to similar extraordinary market 

conditions.7 Unlike the exchanges, 

FINRA does not have an express circuit 


jlentini on PROD1PC65 with NOTICES
61178 Federal Register / Vol. 73, No. 200 / Wednesday, October 15, 2008 / Notices 

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)(3). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(1). 

breaker rule; however, FINRA’s Board 

has authority to act in certain 

emergency or extraordinary market 

conditions pursuant to Article VII, 

Section 3 of FINRA’s By-Laws. 

FINRA is proposing to adopt new 

FINRA Rule 6121, which would 

authorize FINRA to halt OTC trading of 

NMS stocks if other major U.S. 

securities markets initiate market-wide 

trading halts in response to their rules 

or extraordinary market conditions or if 

otherwise directed by the SEC. FINRA 

believes that such generalized authority 

is appropriate and necessary to provide 

adequate flexibility to deal with 

extraordinary market conditions. FINRA 

also believes the proposed rule change 

will further the goal of coordinated SRO 

action to address potentially 

destabilizing market volatility, 

consistent with the circuit breaker 

trading halt authority of the exchanges. 

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

operative date of the proposed rule 

change is 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,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 that the 

proposed rule change is consistent with 

the circuit breaker rules of other SROs 

and will further the goal of investor 

protection by providing a coordinated 

means to address potentially 

destabilizing market volatility. 

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 

The proposed rule change is effective 

upon filing pursuant to Section 

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

(f)(3) of Rule 19b–4 thereunder,10 in that 

the proposed rule change is concerned 

solely with the administration of the 

self-regulatory organization. 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–FINRA–2008–048 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–2008–048. 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, 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– 

2008–048 and should be submitted on 

or before November 5, 2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24376 Filed 10–14–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58754; File No. SR–FINRA– 

2008–049] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to UPC Advisory 

on Trading Halts in OTC Equity 

Securities 

October 8, 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 October 

7, 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. FINRA has 

designated the proposed rule change as 

constituting a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule under 

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

19b–4(f)(1) 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 filing a Uniform Practice 

Code (UPC) Advisory that provides 


jlentini on PROD1PC65 with NOTICES