62902 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 

4 15 U.S.C. 78o–3(b)(6). 

5 15 U.S.C. 78s(b)(3)(A). 

6 17 CFR 240.19b–4(f)(6). 7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

The System’s User Guide explains, in 

detail, the methods for filing a claim. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,4 which 

requires, among other things, that the 

rules of a national securities association 

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 assist in the efficient administration 

of arbitrations by updating the relevant 

rule language to reflect that claimants 

may file all of the initial documents 

electronically through the System. 

FINRA believes these technical, nonsubstantive amendments will enhance 

the Codes by making them easier to 

understand and apply. 

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 

Because the foregoing proposed rule 

change 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 5 and Rule 19b– 

4(f)(6) thereunder.6

At any time within 60 days of the 

filing of the 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–FINRA–2010–050 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–2010–050. 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). Comments are also 

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–2010–050 and 

should be submitted on or before 

November 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25625 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63052; File No. SR–BX– 

2010–067] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend BX 

Rule 4751 To Include Order Collar 

Functionality 

October 6, 2010. 

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 

1, 2010, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’ or ‘‘BX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated the proposed rule change as 

constituting a non-controversial rule 

change under Rule 19b–4(f)(6) under the 

Act,3 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 

The exchange proposes to amend BX 

Rule 4751 to include Order Collar 

functionality that cancels any portion of 

any Unpriced orders (also known as 

market orders) submitted to the 

Exchange that would execute at a price 

that is more than $0.25 or 5 percent 

worse than the national best bid and 

offer at the time the order initially 

reaches the Exchange, whichever is 

greater. The text of the proposed rule 

change is available at http:// 

nasdaqomxbx.cchwallstreet.com, at 

BX’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange 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. The 

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Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 62903 

4See NASDAQ Rule 4751(f)(13); BATS Rule 11.9; 

NYSE Arca Equities Rule 7.31(a). 

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

6 15 U.S.C. 78(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). In addition, BX has 

given the Commission written notice of its intent 

to file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date on 

which the Exchange filed the proposed rule change. 

9 17 CFR 240.19b–4(f)(6)(iii). 

10 Id. 

11For the purposes only of waiving the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

Exchange 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 

The purpose of the proposed rule 

change is to protect market participants 

by reducing the risk that unpriced 

orders, also known as market orders, 

will execute at prices that are 

significantly worse than the national 

best bid and offer (‘‘NBBO’’) at the time 

the Exchange receives the order. BX 

believes that most market participants 

expect that their order will be executed 

at its full size at a price reasonably 

related to the prevailing market. 

However, participants may not be aware 

that there is insufficient liquidity at or 

near the NBBO to fill the entire order, 

particularly for more thinly-traded 

securities. These Unpriced orders can be 

disruptive both to the BX and to other 

markets that are impacted by BX’s 

participation in the national market 

system. 

BX is proposing to implement order 

collar functionality that cancels any 

portion of any unpriced orders that 

would execute on BX at a price that is 

the greater of $0.25 or 5 percent worse 

than the NBBO at the time BX receives 

the order. Unpriced orders that would 

be subject to this calculation and 

potential cancellation are defined in 

new BX Rule 4751(f)(10). 

The following example illustrates the 

Order Collar functionality. A market 

participant submits an Unpriced order 

to buy 500 shares. The NBBO is $6.00 

bid by $6.05 offer, with 100 shares 

available on each side. Both sides of the 

NBBO are set by BX and BX has 100 

shares available at the $6.05 to sell at 

the offer price and also has reserve 

orders to sell 100 shares at $6.32 and 

400 shares at $6.40. No other market 

center is publishing offers to sell the 

security in between $6.05 and $6.40. 

In this example, the Unpriced Order 

would be executed in the following 

manner: 

• 100 shares would be executed by 

BX at the $6.05; 

• 100 shares executed by BX at $6.32 

(more than $0.25 but less than 5 percent 

worse than the NBBO); and 

• 300 shares, representing the 

remainder of the Unpriced Order, would 

be cancelled because the remaining 

liquidity available at $6.40 is more than 

5 percent worse than the NBBO. 

BX believes that market participants 

who wish to trade at prices further away 

from the NBBO than the Unpriced Order 

thresholds would permit, may still 

accomplish their strategy by submitting 

a marketable limit order to BX. In the 

example above, a market participant 

with such a strategy could have input a 

limit order with a price of $7.00, which 

would have executed up to its full size 

provided liquidity is available. BX’s 

proposal is similar to a rule change 

already implemented by NASDAQ, 

BATS Exchange, Inc. and NYSE Arca, 

Inc.4

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act in general,5 and furthers the 

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

in particular,6 in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest, by 

avoiding execution of unpriced orders 

on the Exchange at prices that are 

significantly worse than the NBBO at 

the time the order is initially received 

by the Exchange. The Exchange believes 

that the NBBO provides reasonable 

guidance of the current value of a given 

security and therefore that market 

participants should have confidence 

that their unpriced orders will not be 

executed at a significantly worse price 

than the NBBO. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange 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, as amended. 

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 

Because the foregoing proposed rule 

change does not: (1) Significantly affect 

the protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.9 However, Rule 19b– 

4(f)(6)10 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposal may become 

operative upon filing. The Commission 

notes (i) the proposal is similar to 

existing thresholds on market orders 

adopted by The NASDAQ Stock Market 

LLC, BATS Exchange, Inc., and NYSE 

Arca, Inc; (ii) it presents no novel 

issues; and (iii) the functionality is 

voluntary, and it may provide a benefit 

to market participants. For these 

reasons, the Commission believes it is 

consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay, and 

hereby grants such waiver.11

At any time within 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 

mstockstill on DSKH9S0YB1PROD with NOTICES

62904 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 

12The text of the proposed rule change is 

available on Exchange’s Web site at http:// 

nasdaqomxbx.cchwallstreet.com, on the 

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

BX, and at the Commission’s Public Reference 

Room. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4Specifically, OTC equity transactions are: (1) 

Transactions in NMS stocks, as defined in SEC Rule 

600(b) of Regulation NMS, effected otherwise than 

on an exchange, which are reported through the 

Alternative Display Facility (‘‘ADF’’) or a Trade 

Reporting Facility (‘‘TRF’’); and (2) transactions in 

‘‘OTC Equity Securities,’’ as defined in FINRA Rule 

6420 (i.e., non-NMS stocks such as OTC Bulletin 

Board and Pink Sheets securities), which are 

reported through the OTC Reporting Facility 

(‘‘ORF’’). 

5See Securities Exchange Act Release No. 61819 

(March 31, 2010), 75 FR 17806 (April 7, 2010) 

(Notice of Filing of Amendment No. 2 and Order 

Granting Accelerated Approval; File No. SR– 

FINRA–2009–061). 

6See Securities Exchange Act Release No. 61979 

(April 23, 2010), 75 FR 23316 (May 3, 2010) (Order 

Approving Proposed Rule Change, as Modified by 

Amendment Nos. 1 and 2; File No. SR–FINRA– 

2010–003). 

Number SR–BX–2010–067 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–BX–2010–067. 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,12 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 the filing also 

will 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–BX– 

2010–067 and should be submitted on 

or before November 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25742 Filed 10–12–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63039; File No. SR–FINRA– 

2010–051] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Reconcile Certain 

Amendments Approved Pursuant to 

SR–FINRA–2009–061 and SR–FINRA– 

2010–003 

October 5, 2010. 

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 

1, 2010, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 FINRA. FINRA has 

designated the proposed rule change as 

constituting a ‘‘non-controversial’’ rule 

change under paragraph (f)(6) of Rule 

19b–4 under the Act,3 which renders 

the proposal effective upon receipt of 

this filing by 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 make 

conforming changes to FINRA Rules 

6420, 6610, 6622, 7310 and 7410 to 

reconcile amendments approved 

pursuant to two recent proposed rule 

changes: SR–FINRA–2010–003, which 

was implemented on June 28, 2010, and 

SR–FINRA–2009–061, which will be 

implemented on November 1, 2010. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA and at the 

Commission’s Public Reference Room. 

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 

On September 16, 2009, FINRA filed 

proposed rule change SR–FINRA–2009– 

061 to amend its trade reporting rules to 

(1) require that members report overthe-counter (‘‘OTC’’) equity 

transactions 4 to FINRA within 30 

seconds of execution and report certain 

trade cancellations to FINRA within 30 

seconds of cancellation; (2) require that 

members report secondary market 

transactions in non-exchange-listed 

direct participation program (‘‘DPP’’) 

securities to FINRA within 30 seconds 

of execution; and (3) make certain 

conforming changes to the rules relating 

to the OTC Reporting Facility (‘‘ORF’’). 

In that filing, FINRA proposed, among 

other things, to amend Rules 6420, 

6610, 6622, 6623, 7310, 7330 and 7410. 

SR–FINRA–2009–061 was approved by 

the Commission on March 31, 2010,5

and will be implemented on November 

1, 2010. 

On January 15, 2010, FINRA filed 

proposed rule change SR–FINRA–2010– 

003, in pertinent part, to (1) amend 

Rules 6610, 6622, 6623, 7310 and 7330 

regarding reporting transactions in 

restricted equity securities to the ORF; 

and (2) update the definition of ‘‘OTC 

Equity Security’’ in Rules 6420 and 

7410. SR–FINRA–2010–003 was 

approved by the Commission on April 

23, 2010,6 and was implemented on 

June 28, 2010. The underlying text of 

SR–FINRA–2010–003 did not reflect the 

amendments that were approved 

pursuant to SR–FINRA–2009–061, 

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