Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 62911 

6 15 U.S.C. 78s(b)(3)(A)(ii). 

7 17 CFR 240.19b–4. 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 62655 

(August 5, 2010), 75 FR 48731 (August 11, 2010). 

4See Letter from Howard Spindel, Senior 

Managing Director, and Cassondra E. Joseph, 

Managing Director, Integrated Management 

Solutions USA LLC, dated August 30, 2010 (‘‘IMS 

letter’’). 

5See Amendment No. 1 dated October 1, 2010 

(‘‘Amendment No. 1’’). The text of Amendment No. 

1 is available on FINRA’s Web site at http:// 

www.finra.org, at the principal office of FINRA, and 

on the Commission’s Web site, http://www.sec.gov/ 

rules/sro.shtml. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The proposed rule change has taken 

effect upon filing pursuant to Section 

19(b)(3)(A)(ii) of the Act 6 and 

subparagraph (f)(2) of Rule 19b–4 7

thereunder, because, as provided in 

(f)(2), it changes ‘‘a due, fee or other 

charge applicable only to a member’’ 

(known on the Exchange as an ETP 

Holder). At any time within sixty (60) 

days of the filing of such proposed rule 

change, the Commission summarily may 

temporarily suspend 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–NSX–2010–13 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–9303. 

All submissions should refer to File 

No. SR–NSX–2010–13. This file number 

should be included in the subject line 

if e-mail is used. To help the 

Commission process and review 

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 website viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street, NE., 

Washington, DC 20549. Copies of such 

filings will also be available for 

inspection and copying at the principal 

office of the Exchange. 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–NSX– 

2010–13 and should be submitted on or 

before November 3, 2010. 

For the Commission by the Division of 

Trading and Markets, pursuant to the 

delegated authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25622 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63044; File No. SR–FINRA– 

2010–042] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, Relating to FINRA 

Rule 4160 (Verification of Assets) 

October 5, 2010. 

I. Introduction 

On August 4, 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 

that provides that a member, when 

notified by FINRA, may not continue to 

custody or retain record ownership of 

assets, at a non-member financial 

institution, which, upon FINRA staff’s 

request, fails promptly to provide 

FINRA with written verification of 

assets maintained by the member at 

such financial institutions. The 

proposed rule change was published for 

comment in the Federal Register on 

August 11, 2010.3 The Commission 

received one comment on the proposed 

rule change.4 On October 1, 2010, 

FINRA responded to the comments and 

filed Amendment No. 1 to the proposed 

rule change.5 The Commission is 

publishing this notice and order to 

solicit comments on Amendment No. 1 

and to approve the proposed rule 

change, as modified by Amendment No. 

1, on an accelerated basis. 

II. Description of Proposed Rule 

Change, as Modified by Amendment 

No. 1 

FINRA has proposed to adopt FINRA 

Rule 4160 (Verification of Assets). The 

proposed rule provides that a member, 

when notified by FINRA, may not 

continue to custody or retain record 

ownership of assets, at a non-member 

financial institution, which, upon 

FINRA staff’s request, fails promptly to 

provide FINRA with written verification 

of assets maintained by the member at 

such financial institution. The proposed 

rule change also would add a 

supplementary material section to the 

new rule. 

FINRA proposes new paragraph (b) in 

its Amendment No. 1. Paragraph (b)(1) 

expressly excludes from the rule 

proprietary assets of members that are 

treated as non-allowable assets pursuant 

to Rule 15c3–1 under the Act. Paragraph 

(b)(2) provides that the rule would not 

apply in instances where FINRA 

determines that there is no other 

available independent custody or record 

ownership of the assets. Amendment 

No. 1 would also designate the original 

rule text as paragraph (a). Finally, the 

Supplementary Material remains 

unchanged by Amendment No. 1. 

The text of the proposed rule change, 

as modified by Amendment No. 1, is 

below. Proposed new language is 

underlined. 

* * * * * 

4000. FINANCIAL AND 

OPERATIONAL RULES 

4100. FINANCIAL CONDITION 

* * * * * 

4160. Verification of Assets 

(a) A member, when notified by 

FINRA, may not continue to custody or 

retain record ownership of assets, 

whether such assets are proprietary or 

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62912 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 

6 IMS letter. 

7 Id. 

8 Id. 

9 Id. 

10 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

11 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78s(b)(2). 

customer assets, at a financial 

institution that is not a member of 

FINRA, which, upon FINRA staff’s 

request, fails promptly to provide 

FINRA with written verification of 

assets maintained by the member at 

such financial institution. 

(b) The Rule shall not apply: 

(1) to proprietary assets of members 

that are treated as non-allowable assets 

under SEA Rule 15c3–1; or 

(2) in instances where FINRA 

determines that there is no independent 

custody or record ownership of the 

assets. 

••• Supplementary Material: 

.01 Asset Transfers. Any member 

required to transfer its proprietary and/ 

or customer assets pursuant to this Rule 

shall effect such transfer within a 

reasonable period of time. 

.02 Member Obligations Under SEA 

Rule 15c3–3. Nothing in this Rule shall 

be construed as altering in any manner 

a member’s obligations under SEA Rule 

15c3–3. 

* * * * * 

III. Summary of Comment Letters and 

FINRA’s Response 

The Commission received one 

comment to the proposed rule change.6

The commenter opposed the proposal 

and asserted that the harm outweighed 

any benefit of the proposed rule. 

Specifically, the commenter indicated 

that certain assets are hard to verify and 

that the proposed rule failed to 

differentiate among different types of 

assets.7 The commenter suggested, 

among other things, that FINRA not 

apply the rule to proprietary assets that 

are not allowable for net capital 

purposes. The commenter further raised 

concerns that the proposed rule would 

create an unwarranted burden on 

members, because it fails to address 

instances where a particular asset 

cannot be relocated from its country of 

origin or readily moved to another 

financial institution.8 Additionally, the 

commenter asserted that the rule 

‘‘indirectly extends the extraterritorial 

application of the U.S. securities laws,’’ 

and that compliance with the rule may 

violate foreign law. Finally, the 

commenter believed that instead of 

adopting the proposed rule, FINRA 

should look at other asset verification 

options and suggested the alternatives of 

conducting a study regarding the 

necessity of the proposed rule or 

establishing a separate bureau that 

would verify customers’ statements 

against the books and records of their 

broker-dealers.9

FINRA filed Amendment No. 1 and 

responded to the comments. 

Amendment No. 1 specifically 

addresses the commenter’s suggestion 

that the rule should not apply to 

proprietary assets of members that are 

not allowable for net capital purposes. 

Accordingly, FINRA is proposing new 

paragraph (b)(1) of the rule, which 

would expressly exclude from the rule 

proprietary assets of members that are 

treated as non-allowable assets pursuant 

to Rule 15c3–1 of the Act. Moreover, in 

response to the commenter’s concerns 

regarding the application of the 

proposed rule to assets that cannot be 

relocated to another financial 

institution, such as many limited 

partnership or hedge fund investments, 

FINRA is proposing new paragraph 

(b)(2) of the rule, which provides that 

the rule would not apply in instances 

where FINRA determines that there is 

no independent custody or record 

ownership of the assets. 

IV. Discussion and Commission 

Findings 

After carefully considering the 

proposal, as modified by Amendment 

No. 1, the comments, and FINRA’s 

response, 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.10 In particular, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,11 which requires, among other 

things, that the rules of an exchange be 

designed to promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest. The proposed rule change is 

consistent with FINRA’s statutory 

obligations under the Act to protect 

investors and the public interest 

because it would enhance FINRA’s 

ability to verify assets at a financial 

institution which is not a member of 

FINRA. 

The Commission believes that FINRA 

adequately addressed the concerns 

raised by the commenter. The rule 

language in Amendment No. 1 

specifically excludes proprietary assets 

that are not allowable for net capital 

purposes. It also adequately addresses 

the commenter’s concerns regarding the 

application of the proposed rule to 

assets that cannot be relocated to 

another financial institution, by adding 

paragraph (b)(2) of the rule clarifies that 

the rule would not apply in instances 

where FINRA determines that there is 

no other independent custody or record 

ownership of the assets. The 

Commission believes the proposed rule, 

as modified by Amendment No. 1, 

further strengthens FINRA’s ability to 

effectively detect fraud and protect 

investors. 

V. Accelerated Approval 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act 12

for approving the proposed rule change, 

as modified by Amendment No. 1 

thereto, prior to the 30th day after 

publication of Amendment No. 1 in the 

Federal Register. The changes proposed 

in Amendment No. 1 respond to specific 

concerns raised by the commenter and 

do not raise novel regulatory concerns. 

In particular, Amendment No. 1 further 

clarifies the scope of the asset 

verification rule, which serves to protect 

the capital structure of members and to 

safeguard the custody of customer 

assets. 

Accordingly, the Commission finds 

that good cause exists to approve the 

proposal, as modified by Amendment 

No. 1, on an accelerated basis. 

VI. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether Amendment No. 1 to 

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–2010–042 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. All submissions should 

refer to File Number SR–FINRA–2010– 

042. This file number should be 

included on the subject line if e-mail is 

used. To help the Commission process 

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Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 62913 

13 15 U.S.C. 78(b)(2). 

14 17 CFR 200.30–3(a)(12). 

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 Web site viewing and 

printing 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–2010–042 

and should be submitted on or before 

November 3, 2010. 

VII. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (SR–FINRA– 

2010–042), as modified by Amendment 

No. 1, be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25623 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 7205] 

30-Day Notice of Proposed Information 

Collection: Form DS–5504, Application 

for a U.S. Passport: Name Change, 

Data Correction, and Limited Passport 

Book Replacement, OMB Control 

Number 1405–0160 

ACTION: Notice of request for public 

comment and submission to OMB of 

proposed collection of information. 

SUMMARY: The Department of State has 

submitted the following information 

collection request to the Office of 

Management and Budget (OMB) for 

approval in accordance with the 

Paperwork Reduction Act of 1995. 

• Title of Information Collection: 

Application for a U.S. Passport: Name 

Change, Data Correction, and Limited 

Passport Book Replacement. 

• OMB Control Number: 1405–0160. 

• Type of Request: Revision of a 

Currently Approved Collection. 

• Originating Office: Bureau of 

Consular Affairs, Passport Services CA/ 

PPT. 

• Form Number: DS–5504. 

• Respondents: Individuals or 

Households. 

• Estimated Number of Respondents: 

181,000 respondents per year. 

• Estimated Number of Responses: 

181,000 responses per year. 

• Average Hours per Response: 30 

minutes. 

• Total Estimated Burden: 90,500 

hours per year. 

• Frequency: On occasion. 

• Obligation to Respond: Required to 

Obtain or Retain a Benefit. 

DATES: Submit comments to the Office 

of Management and Budget (OMB) for 

up to 30 days from October 13, 2010. 

ADDRESSES: Direct comments to the 

Department of State Desk Officer in the 

Office of Information and Regulatory 

Affairs at the Office of Management and 

Budget (OMB). You may submit 

comments by the following methods: 

• E-mail: 

oira_submission@omb.eop.gov. You 

must include the DS form number, 

information collection title, and OMB 

control number in the subject line of 

your message. 

• Fax: 202–395–5806. Attention: Desk 

Officer for Department of State. 

FOR FURTHER INFORMATION CONTACT: You 

may obtain copies of the proposed 

information collection and supporting 

documents from the Passport Forms 

Management Officer who may be 

reached on 202–663–2457 or at 

PPTFormsOfficer@state.gov. 

SUPPLEMENTARY INFORMATION: We are 

soliciting public comments to permit 

the Department to: 

• Evaluate whether the proposed 

information collection is necessary to 

properly perform our functions. 

• Evaluate the accuracy of our 

estimate of the burden of the proposed 

collection, including the validity of the 

methodology and assumptions used. 

• Enhance the quality, utility, and 

clarity of the information to be 

collected. 

• Minimize the reporting burden on 

those who are to respond. 

Abstract of proposed collection: The 

information collected on the DS–5504 is 

used to facilitate the re-issuance of 

passports to U.S. citizens and nationals 

when (a) the passport holder’s name has 

changed within the first year of the 

issuance of the passport (b) the passport 

holder needs correction of descriptive 

information on the data page of the 

passport (c) the passport holder wishes 

to obtain a fully valid passport after 

obtaining a full-fee passport with a 

limited validity of two years or less. The 

primary purpose of soliciting the 

information is to establish citizenship, 

identity, and entitlement of the 

applicant to the U.S. passport or related 

service, and to properly administer and 

enforce the laws pertaining to the 

issuance thereof. 

Methodology: Passport Services 

collects information from U.S. citizens 

and non-citizen nationals when they 

complete and submit the Application 

for a U.S. Passport: Name Change, Data 

Correction, And Limited Passport Book 

Replacement. Passport applicants can 

either download the DS–5504 from the 

internet or obtain one from an 

Acceptance Facility/Passport Agency. 

The form must be completed, signed, 

and submitted along with the 

applicant’s valid U.S. passport and 

supporting documents for corrective 

action. 

Dated: October 1, 2010. 

Barry J. Conway, 

Acting Deputy Assistant Secretary for 

Passport Services, Bureau of Consular Affairs, 

Department of State. 

[FR Doc. 2010–25750 Filed 10–12–10; 8:45 am] 

BILLING CODE 4710–06–P 

DEPARTMENT OF STATE 

[Public Notice: 7206] 

30-Day Notice of Proposed Information 

Collection: Form DS–3053, Statement 

of Consent or Special Circumstances: 

Issuance of a Passport to a Minor 

Under Age 16, OMB Control Number 

1405–0129 

ACTION: Notice of request for public 

comment and submission to OMB of 

proposed collection of information. 

SUMMARY: The Department of State has 

submitted the following information 

collection request to the Office of 

Management and Budget (OMB) for 

approval in accordance with the 

Paperwork Reduction Act of 1995. 

• Title of Information Collection: 

Statement of Consent or Special 

Circumstances: Issuance of a Passport to 

a Minor Under Age 16. 

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