Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 63873 

29See Securities Exchange Act Release No. 40594 

(October 23, 1998), 63 FR 59362, 59380 (November 

3, 1998) (adopting rules relating to OTC Derivatives 

Dealers). 

30 15 U.S.C. 78s(b)(3)(A). 

31 17 CFR 240.19b–4(f)(6). 

32 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to 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 of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

33 Id. 

34See Securities Exchange Act Release No. 62190 

(May 27, 2010), 75 FR 31826 (June 4, 2010) (SR– 

CBOE–2010–21). See also Securities Exchange Act 

Release No. 62504 (July 15, 2010), 75 FR 42797 

(July 22, 2010) (SR–PHLX–2010–93). 

35For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

36 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. 62830 

(September 2, 2010), 75 FR 54930 (the 

‘‘Commission’s Notice’’). 

the calculation of an equity option’s net 

delta would enable eligible market 

participants to more fully realize the 

benefit of the delta based equity hedge 

exemption. The proposed delta-based 

index hedge exemption would be 

substantially similar to the delta-based 

equity hedge exemption under ISE Rule 

413. Also, the Commission has 

previously stated its support for 

recognizing options positions hedged on 

a delta neutral basis as properly 

exempted from position limits.29

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any 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 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing 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 after the date of 

this filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 30 and Rule 19b– 

4(f)(6) thereunder.31

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.32 However, Rule 19b– 

4(f)(6)(iii) 33 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. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

Commission notes that it has approved 

a substantially similar proposal filed by 

the Chicago Board Options Exchange, 

Incorporated,34 and therefore believes 

that no significant purpose is served by 

a 30-day operative delay. For these 

reasons, the Commission designates the 

proposed rule change to be operative 

upon filing with the Commission.35

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 

Number SR–ISE–2010–97 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–ISE–2010–97. 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 such 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–ISE– 

2010–97 and should be submitted on or 

before November 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26108 Filed 10–15–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63073, File No. SR–MSRB– 

2010–07] 

Self-Regulatory Organizations; 

Municipal Securities Rulemaking 

Board; Order Granting Approval of 

Proposed Rule Change Relating to 

Rule G–37, on Political Contributions 

and Prohibitions on Municipal 

Securities Business 

October 12, 2010. 

I. Introduction 

On August 25, 2010, the Municipal 

Securities Rulemaking Board (‘‘MSRB’’), 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange Act’’),1

and Rule 19b–4 thereunder,2 a proposed 

rule change which consists of an 

interpretive notice regarding Rule G–37, 

on political contributions and 

prohibitions on municipal securities 

business. The proposed rule change was 

published for comment in the Federal 

Register on September 9, 2010.3 The 

mstockstill on DSKH9S0YB1PROD with NOTICES

63874 Federal Register / Vol. 75, No. 200 / Monday, October 18, 2010 / Notices 

4Rule G–37 defines municipal securities business 

as: (i) The purchase of a primary offering of 

municipal securities from an issuer on other than 

a competitive bid basis; (ii) the offer or sale of a 

primary offering of municipal securities on behalf 

of an issuer; (iii) the provision of financial advisory 

or consultant services to or on behalf of an issuer 

with respect to a primary offering of municipal 

securities in which the dealer was chosen to 

provide such services on other than a competitive 

bid basis; or (iv) the provision of remarketing agent 

services to or on behalf of an issuer with respect 

to a primary offering of municipal securities in 

which the dealer was chosen to provide such 

services on other than a competitive bid basis. 

5The MSRB has previously stated that the matter 

of control depends upon whether or not the dealer 

or the MFP has the ability to direct or cause the 

direction of the management or policies of the PAC 

(MSRB Question & Answer No. IV. 24—Dealer 

Controlled PAC). 

6Rule G–37(d) provides that no broker, dealer or 

municipal securities dealer or any municipal 

finance professional shall, directly or indirectly, 

through or by any other person or means, do any 

act which would result in a violation of sections (b) 

or (c) of the rule. Section (b) relates to the ban on 

business and Section (c) relates to the prohibition 

on soliciting and coordinating contributions. 

7 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). 

8 15 U.S.C. 78o–4(b)(2)(C). 

9 Id. 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Commission received no comment 

letters about the proposed rule change. 

This order approves the proposed rule 

change. 

II. Description of the Proposed Rule 

Change 

The proposed rule change consists of 

an interpretive notice regarding Rule G– 

37, on political contributions and 

prohibitions on municipal securities 

business.4 Under Rule G–37, certain 

contributions to elected officials of 

municipal securities issuers made by 

brokers, dealers and municipal 

securities dealers (‘‘dealers’’), municipal 

finance professionals (‘‘MFPs’’) 

associated with dealers, and political 

action committees (‘‘PACs’’) controlled 

by dealers and their MFPs (‘‘dealercontrolled PACs’’) 5 may result in 

prohibitions on dealers from engaging in 

municipal securities business with such 

issuers for a period of two years from 

the date of any triggering contributions. 

Rule G–37 requires dealers to disclose 

certain contributions to issuer officials, 

state or local political parties, and bond 

ballot campaigns, as well as other 

information, on Form G–37 to allow 

public scrutiny of such contributions 

and the municipal securities business of 

a dealer. In addition, dealers and MFPs 

generally are prohibited from soliciting 

others (including affiliates of the dealer 

or any PACs) to make contributions to 

officials of issuers with which the dealer 

is engaging or seeking to engage in 

municipal securities business, or to 

political parties of a state or locality 

where the dealer is engaging or seeking 

to engage in municipal securities 

business. Dealers and MFPs are 

prohibited from circumventing Rule G– 

37 by direct or indirect actions through 

any other persons or means.6

Due to changes in the financial 

markets since the adoption of Rule G– 

37 and recent market turmoil, many 

dealers have become affiliated with a 

broad range of other entities in 

increasingly diverse organizational 

structures. Some of these affiliated 

entities (including but not limited to 

banks, bank holding companies, 

insurance companies and investment 

management companies) have formed or 

otherwise maintain relationships with 

PACs (‘‘affiliated PACs’’) and other 

political organizations, many of which 

may make contributions to issuer 

officials. Such relationships raise 

questions regarding the extent to which 

affiliated PACs may effectively be 

controlled by dealers or their MFPs and 

thereby constitute dealer-controlled 

PACs whose contributions are subject to 

Rule G–37. Further, such relationships 

raise concerns regarding whether the 

contributions of such affiliated PACs, 

even if not viewed as dealer-controlled 

PACs, may be used by dealers or their 

MFPs to circumvent Rule G–37 as 

indirect contributions for the purpose of 

obtaining or retaining municipal 

securities business. As a result, the 

MSRB has filed the proposed rule 

change to provide additional guidance 

with regard to the potential for affiliated 

PACs to be viewed as dealer-controlled 

PACs. A more complete description of 

the proposal is contained in the 

Commission’s Notice. 

The MSRB has requested an effective 

date for the proposed rule change of 

sixty days after Commission approval of 

the proposed rule change. 

III. Discussion and Commission 

Findings 

The Commission has carefully 

considered the proposed rule change 

and finds that the proposed rule change 

is consistent with the requirements of 

the Exchange Act and the rules and 

regulations thereunder applicable to the 

MSRB 7 and, in particular, the 

requirements of Section 15B(b)(2)(C) of 

the Exchange Act 8 and the rules and 

regulations thereunder. Section 

15B(b)(2)(C) of the Exchange Act 

requires, among other things, that the 

MSRB’s rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

municipal securities, to remove 

impediments to and perfect the 

mechanism of a free and open market in 

municipal securities, and, in general, to 

protect investors and the public 

interest.9 The Commission believes that 

the proposed rule change is consistent 

with the Exchange Act because it will 

help to inhibit practices constituting 

real and perceived attempts to influence 

the awarding of municipal securities 

business through contributions made by 

or through dealer-affiliated PACs. The 

Commission also believes that the 

proposed rule change will facilitate 

dealer compliance with Rule G–37 and 

Rule G–27, on supervision. The 

proposal will become effective sixty 

days after Commission approval of the 

proposed rule change, as requested by 

the MSRB. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,10

that the proposed rule change (SR– 

MSRB–2010–07), be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–26131 Filed 10–15–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63076; File No. SR– 

NYSEArca–2010–79] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Granting Approval of 

a Proposed Rule Change To List and 

Trade Shares of Cambria Global 

Tactical ETF 

October 12, 2010. 

I. Introduction 

On August 23, 2010, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) 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 proposed rule 

change to list and trade shares (‘‘Shares’’) 

of the Cambria Global Tactical ETF 

(‘‘Fund’’) under NYSE Arca Equities 

Rule 8.600. The proposed rule change 

was published for comment in the 

mstockstill on DSKH9S0YB1PROD with NOTICES