Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Notices 62439 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 62748 

(Aug. 20, 2010), 75 FR 52574 (Aug. 26, 2010). 

4See Letter from Mike Wiesenberg, dated 

September 8, 2010 (‘‘Wiesenberg Letter’’); Letter 

from Manisha Kimmel, Executive Director, 

Financial Information Forum, to Elizabeth M. 

Murphy, Secretary, Commission, dated September 

17, 2010 (‘‘FIF Letter’’). 

5See Letter from Brant K. Brown, Associate 

General Counsel, FINRA to Elizabeth M. Murphy, 

Secretary, Commission, dated September 28, 2010 

(‘‘FINRA Response Letter’’). 

6See Securities Exchange Act Release No. 61595 

(February 26, 2010), 75 FR 11232 (March 10, 2010). 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #12341 Disaster #ZZ– 

00006] 

The Entire United States and U.S. 

Territories; Military Reservist 

Economic Injury Disaster Loan 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of the Military 

Reservist Economic Injury Disaster 

Loan. Program (MREIDL), dated 10/01/ 

2010. 

DATES: Effective Date: 10/01/2010. 

MREIDL Loan Application Deadline 

Date: 1 year after the essential 

employees is discharged or released 

from active duty. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street, Suite 6050, Washington, 

DC 20416. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of Public 

Law 106–50, the Veterans 

Entrepreneurship and Small Business 

Development Act of 1999, and the 

Military Reservist and Veteran Small 

Business Reauthorization Act of 2008, 

this notice establishes the application 

filing period for the Military Reservist 

Economic Injury Disaster Loan Program 

(MREIDL). 

Effective 10/01/2010, small 

businesses employing military reservists 

may apply for economic injury disaster 

loans if those employees are called—up 

to active duty during a period of 

military conflict or have received notice 

of an expected call-up, and those 

employees are essential to the success of 

the small business daily operations. 

The purpose of the MREIDL program 

is to provide funds to an eligible small 

business to meet its ordinary and 

necessary operating expenses that it 

could have met, but is unable to meet, 

because an essential employee was 

called—up or expects to be called—up 

to active duty in his or her role as a 

military reservist. These loans are 

intended only to provide the amount of 

working capital needed by a small 

business to pay its necessary obligations 

as they mature until operations return to 

normal after the essential employee is 

released from active duty. For 

information/applications contact 

1–800–659–2955 or visit http:// 

www.sba.gov. 

Applications for the Military Reservist 

Economic Injury Disaster Loan Program 

may be filed at the above address. 

The Interest Rate for eligible small 

businesses is 4.000. 

The number assigned is 12341 0. 

(Catalog of Federal Domestic Assistance 

Number 59002) 

James E. Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2010–25436 Filed 10–7–10; 8:45 am] 

BILLING CODE 8025–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

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 Closed Meetings 

on Wednesday, October 13, 2010 at 

11:30 a.m., and Thursday, October 14, 

2010 at 2 p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meetings. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meetings. 

Commissioner Aguilar, as duty 

officer, voted to consider the items 

listed for the Closed Meetings in closed 

sessions. 

The subject matter of the Closed 

Meeting scheduled for Wednesday, 

October 13, 2010 will be: 

Institution of injunctive actions; 

Institution of administrative 

proceedings; and 

Other matters relating to enforcement 

proceedings. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

October 14, 2010 will be: 

Institution and settlement of injunctive 

actions; 

Institution and settlement of 

administrative proceedings; 

An adjudicatory matter; 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 6, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–25594 Filed 10–6–10; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63032; File No. SR–FINRA– 

2010–043] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Reinstitute 

Short Exempt Marking for Trade 

Reporting and OATS 

October 4, 2010. 

I. Introduction 

On August 6, 2010, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend FINRA’s trade reporting and 

Order Audit Trail System (‘‘OATS’’) 

rules, including changes relating to 

recent amendments to SEC Regulation 

SHO. The proposed rule change was 

published for comment in the Federal 

Register on August 26, 2010.3 The 

Commission received two comment 

letters on the proposal,4 and a letter 

from FINRA responding to the 

comments.5 This order approves the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

On February 26, 2010, the SEC 

adopted amendments to SEC Regulation 

SHO.6 These amendments, among other 


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62440 Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Notices 

7NMS stock means any NMS security other than 

an option. Rule 600(b)(46) of SEC Regulation NMS 

defines ‘‘NMS security’’ as any security or class of 

securities for which transaction reports are 

collected, processed, and made available pursuant 

to an effective transaction reporting plan, or an 

effective national market system plan for reporting 

transactions in listed options. See 17 CFR 

242.600(b)(46). 

8The Commission amended Rule 200(g) of 

Regulation SHO to add a ‘‘short exempt’’ marking 

requirement. The amendments to SEC Regulation 

SHO became effective on May 10, 2010 with a 

compliance date of November 10, 2010. See supra 

note 6. 

9SEC staff has confirmed that members may use 

the existing ‘‘.W’’ modifier in connection with the 

VWAP exception of Rule 201(d)(7) of Regulation 

SHO. The use of the .W modifier would be in 

addition to the requirement to report the trade as 

short exempt. 

10See FINRA Rules 6182 (Trade Reporting of 

Short Sales), 6282 (Alternative Display Facility), 

6380A (FINRA/Nasdaq TRF), 6380B (FINRA/NYSE 

TRF), 7230A (FINRA/Nasdaq TRF), and 7230B 

(FINRA/NYSE TRF). 

11FINRA previously required trade reports to 

indicate if a transaction was marked ‘‘short exempt’’; 

however, these requirements were eliminated 

following the repeal of SEC Rule 10a–1. See 

Securities Exchange Act Release No. 56279 (August 

17, 2007), 72 FR 48713 (August 24, 2007) (Notice 

of Filing and Immediate Effectiveness of File No. 

SR–NASD–2007–047). 

12See FINRA Rule 7440(b)(9). 

13Whenever a member transmits an order to 

another member, ECN, non-member or national 

securities exchange for handling or execution, the 

routing member is responsible for recording and 

reporting a route report to OATS. Under the 

proposal, route reports would be required to 

include the price at which the order was routed, 

which may be different from the price received 

from the customer, and whether the routed order is 

short exempt. The short exempt identifier is 

important for purposes of route reports because 

certain short sale orders will be eligible to be 

marked exempt solely as a result of the timing and 

price of the routed order (See Rule 201(c) of SEC 

Regulation SHO). 

14See FINRA Rules 6282, 6380A, 6380B, 6622, 

7230A, 7230B and 7330. 

15The trade comparison functionality allows the 

contra party to accept or decline the trade 

information submitted by the reporting party and 

may only be used by a contra party that is a 

member. FINRA notes that the Alternative Display 

Facility, FINRA/Nasdaq TRF and ORF offer trade 

comparison functionality; the FINRA/NYSE TRF 

does not offer such functionality. Accordingly, 

reporting members are responsible for accurately 

and completely providing all information required 

under the rule for the contra side when reporting 

to the FINRA/NYSE TRF. 

16See Wiesenberg Letter and FIF Letter. 

17See FINRA Response Letter. See also supra 

note 5. 

things, implement a short sale circuit 

breaker for NMS stocks 7 triggered by a 

10% or more decrease in the price of the 

security from such security’s closing 

price as determined by the listing 

market for that security at the end of 

regular trading hours on the prior 

trading day. Once the circuit breaker is 

triggered, Regulation SHO, as amended, 

is designed to generally prohibit the 

execution or display of short sale orders 

of a covered security at a price that is 

less than or equal to the current national 

best bid for the remainder of the day 

and the following day (‘‘short sale price 

test restriction’’). In addition to the short 

sale price test restriction, the 

amendments to Regulation SHO 

reinstitute a short sale exempt marking 

category by providing that a brokerdealer may mark certain qualifying sell 

orders ‘‘short exempt.’’ 8

Paragraphs (c) and (d) of Rule 201 of 

SEC Regulation SHO set forth the 

provisions pursuant to which an order 

may be marked ‘‘short exempt’’ once the 

circuit breaker has been triggered 

pursuant to paragraph (b)(3). These 

provisions include: 

• Broker-dealer policies and 

procedures provision; 

• Seller’s delay in delivery; 

• Odd lot transactions; 

• Domestic arbitrage; 

• International arbitrage; 

• Over-allotments and lay-off sales; 

• Riskless principal transactions; and 

• Transactions on a volume-weighted 

average price basis (or ‘‘VWAP’’).9

In light of the reinstitution of the 

‘‘short exempt’’ marking category, 

FINRA has proposed to amend its trade 

reporting rules applicable to over-thecounter trades in NMS stocks to 

reintroduce the short sale exempt 

category.10 Specifically, FINRA has 

proposed that, for short sales in all NMS 

stocks as defined in Rule 600(b)(47) of 

SEC Regulation NMS, members must 

indicate on trade reports submitted to 

FINRA if a transaction is ‘‘short sale 

exempt’’ (i.e., if it is a short sale 

transaction in a ‘‘covered security’’ that 

may be marked ‘‘short exempt’’ pursuant 

to SEC Regulation SHO).11

Similarly, FINRA has proposed to 

amend its OATS rules to provide that, 

when an order is received or originated, 

members must record the designation of 

an order as a short sale exempt order if 

the order may be marked ‘‘short exempt’’ 

pursuant to SEC Regulation SHO.12

FINRA also has proposed to require that 

members include the price on all route 

reports and a short exempt identifier, if 

applicable.13

FINRA has proposed certain 

additional amendments to its trade 

reporting rules, including those 

applicable to OTC Equity Securities, as 

defined in Rule 6420 (i.e., non-NMS 

stocks) to clarify certain existing 

reporting requirements.14 First, FINRA 

has proposed to clarify that the short 

sale indicator (and short sale exempt 

indicator, for NMS stocks) is required 

on reports of a ‘‘cross,’’ as well as reports 

of a ‘‘sell.’’ 

Second, FINRA has proposed to 

codify the existing requirement that the 

information listed in the rule must be 

provided for each trade that is reported 

to FINRA. Today, trade report 

information can be provided in a single 

report, if the reporting member submits 

trade information for both sides of the 

trade, or it can be provided in a 

combination of reports, if the reporting 

member and contra side each submit 

their own trade information (as 

described more fully below), which will 

be codified in the rule upon 

implementation of the proposed 

changes. For each trade reported to 

FINRA, members must indicate, among 

other things, whether the seller (either 

the reporting member or contra side, 

irrespective of whether the contra side 

is a member) is selling short or, upon 

implementation of the proposed 

changes, short exempt. 

Unless the contra side will have an 

opportunity to provide its own trade 

information (i.e., unless the contra side 

is a member using the trade comparison 

functionality of the facility),15 the 

reporting member is responsible for 

providing complete and accurate 

information for both sides of the trade, 

including information from the contra 

side perspective such as sell short and, 

upon implementation of the proposed 

changes, sell short exempt, as 

applicable. Thus, the reporting member 

is responsible for satisfying any 

applicable contra side information 

requirements where: (1) The trade is 

with a customer or non-member, (2) the 

trade is with a member and is ‘‘locked 

in’’ pursuant to a give up agreement, or 

(3) the trade is reported as ‘‘tape only’’ 

(i.e., for public dissemination purposes 

without clearing) or ‘‘non-tape, nonclearing.’’ This reporting requirement is 

in effect today; however, the proposed 

rule change would make it an express 

requirement in the rule. If the contra 

side is a member and will have an 

opportunity to provide its own trade 

information, then the reporting member 

is responsible only for providing 

information from the reporting side 

perspective (and the contra side will 

provide information from the contra 

side perspective). 

FINRA has stated that the 

implementation date will be November 

10, 2010. 

III. Comment Letters 

The Commission received two 

comment letters in response to the 

proposed rule change.16 The 

Commission also received FINRA’s 

response to comments.17 The comment 

letters, as well as FINRA’s response, are 

discussed below. 

The FIF Letter raises a number of 

concerns regarding the proposal. 


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Federal Register / Vol. 75, No. 195 / Friday, October 8, 2010 / Notices 62441 

18The FIF Letter also raises concerns regarding 

the ISO Indicator on route reports. FINRA notes that 

firms are already required to indicate on route 

reports whether an order is routed as an Intermarket 

Sweep Order. FINRA also points out that the ISO 

indicator is not one of the proposed amendments 

in the proposed rule change and therefore should 

not affect the Commission’s consideration of the 

proposal. 

19FINRA’s OATS Reporting Technical 

Specifications outline detailed reporting 

requirements concerning the OATS rules, 

including, among other things, providing firms with 

record and file formats and transmission 

requirements. 

20See Wiesenberg Letter. 

21The commenter’s suggestion that FINRA re-file 

the proposed rule change would not address the 

addition of the Routed Order Type Indicator, as 

such requirement is contained in FINRA’s OATS 

Reporting Technical Specifications, not the 

proposed rule change. 

22See FINRA Response Letter. 

23 In approving the proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

24 15 U.S.C. 78s(b)(2). 

25 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Specifically, the FIF Letter raises 

concerns regarding the November 10, 

2010 implementation date for the 

proposed rule changes given other 

regulatory initiatives with similar 

implementation timeframes. In response 

to these concerns, FINRA points out that 

the proposed amendments are to 

facilitate its surveillance efforts 

concerning firms’ compliance with 

amendments to Regulation SHO, which 

becomes effective November 10, 2010. 

FINRA believes that it is necessary that 

the implementation date of the 

proposed amendments coincide with 

the implementation date of the 

amendments to Regulation SHO. 

The FIF Letter also raises concerns 

with the amount of time allowed for 

testing prior to implementation of the 

proposed amendments. In response, 

FINRA has represented that it has 

moved up the testing timetable to allow 

firms to begin testing on October 11th, 

rather than on October 20th as initially 

proposed. 

The FIF Letter expresses concerns 

regarding the complexity of the 

proposed changes and cites the creation 

of certain route reports for post trade 

agency allocation as an example of such 

complexity. FINRA explains that the 

requirement to provide the price of a 

routed order on route reports does not 

change any of the reporting 

requirements for orders handled on an 

agency average price or post trade 

allocation basis. FINRA also states that 

it has published a new FAQ on its 

OATS Web site on this issue. 

Lastly, the FIF Letter indicates that 

there may be confusion regarding the 

proposed November 10th 

implementation date of the proposed 

rule change and the November 8th date 

when the changes will be available in 

the OATS production environment.18

FINRA clarifies that although the OATS 

field format changes will be placed in 

the production environment on 

November 8th, they will not be required 

to be populated until the proposed 

November 10th implementation date of 

the proposed rule change. FINRA also 

states that it has published a new FAQ 

on its OATS Web site to this effect. 

The Wiesenberg Letter raises an issue, 

not with respect to one of the proposed 

amendments in the proposed rule 

change, rather with respect to one of the 

proposed requirements in FINRA’s 

OATS Reporting Technical 

Specifications 19 related to the proposed 

rule change, the addition of the Routed 

Order Type Indicator. The commenter 

believes that the proposed requirement 

‘‘can be determined from [other OATS] 

information supplied’’ by the reporting 

member, ‘‘serve[s] no purpose’’ and 

‘‘provides no useful additional 

information.’’ 20 The commenter also 

generally questions whether such 

requirement is consistent with the Act 

and urges FINRA to reconsider the 

proposed requirement in FINRA’s OATS 

Reporting Technical Specifications and 

re-file the proposed rule change 21 or, in 

the alternative, that the Commission 

reject the proposal. FINRA disagrees 

with the commenter and responds that 

the Routed Order Type Indicator ‘‘helps 

FINRA to validate whether a price must 

be included on a Route Report, 

particularly since the order type of a 

route may not be the same as the order 

type of the parent order received from 

the firm.’’ 22

IV. Discussion and Commission’s 

Findings 

After careful review of the proposed 

rule change, the comment letters 

received and the FINRA Response 

Letter, the Commission believes 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.23 In particular, the 

Commission believes that the proposed 

rule change is consistent with the 

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

Act, in that it is 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. 

With regard to the comments 

received, the Commission believes that 

FINRA has adequately responded to the 

commenters’ concerns. Additionally, 

the Commission agrees with FINRA and 

believes that the proposed rule change 

to amend FINRA’s trade reporting and 

OATS rules, including changes relating 

to recent amendments to SEC 

Regulation SHO, will enhance FINRA’s 

surveillance for member compliance, 

including with SEC Regulation SHO. 

For the reasons discussed above, the 

Commission finds that the proposal is 

consistent with the Act. 

V. Conclusion 

It Is Therefore Ordered, pursuant to 

Section 19(b)(2) of the Act,24 that the 

proposed rule change (File No. SR– 

FINRA–2010–043) be and hereby is 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25331 Filed 10–7–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63034; File No. SR–Phlx– 

2010–124] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX PHLX LLC To Send Certain 

Information Over the Specialized 

Quote Feed 

October 4, 2010. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on 

September 22, 2010, NASDAQ OMX 

PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I and II, 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 is filing with the 

Commission a proposal to establish a 

new non-fee liable administrative data 

feed. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Web site at http:// 


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