Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Notices 66173 

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

7 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. BYX has satisfied this requirement. 

8 17 CFR 240.19b–4(f)(6). 

9 Id. 

10See NASDAQ Rule 4758. 

11For 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). 

12The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov/rules/sro.shtml. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

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 6 and Rule 19b– 

4(f)(6) thereunder.7

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 8 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 9

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange requests 

that the Commission waive the 30-day 

operative delay in order to allow the 

Exchange to immediately offer Exchange 

Users the routing strategies when BYX, 

commences operations. Further, the 

Exchange believes that the proposed 

TRIM and SLIM routing strategies are 

consistent with routing strategies 

offered by the Nasdaq Stock Market 

(‘‘NASDAQ’’).10 In addition, the 

Exchange believes that its proposed new 

routing strategies will benefit market 

participants and their customers by 

allowing them greater flexibility in their 

efforts to fill orders and minimize 

trading costs. The Exchange expects to 

have technological changes for one or 

more of the new routing strategies in 

place to support the proposed rule 

change in the near future, and believes 

that benefits to Exchange Users 

expected from the proposed rule change 

should not be delayed. In addition, BYX 

states a delay to the implementation 

date would put the Exchange at a 

competitive disadvantage to other 

markets that already offer similar 

functionalities. The Commission 

believes that waiving the 30-day 

operative delay 11 is consistent with the 

protection of investors and the public 

interest and designates the proposal 

operative upon filing. 

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–BYX–2010–003 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–BYX–2010–003. 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, 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–BYX–2010–003 and should 

be submitted on or before November 17, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27143 Filed 10–26–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63150; File No. SR–FINRA– 

2009–058] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Amendment No. 1 to a Proposed Rule 

Change and Order Granting 

Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Adopt FINRA 

Rule 2232 (Customer Confirmations) in 

the Consolidated FINRA Rulebook and 

To Delete NASD Rule 2230, NASD IM– 

2110–6 and Incorporated NYSE Rule 

409(f) 

October 21, 2010. 

I. Introduction 

On August 24, 2009, 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’’), 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to adopt FINRA Rule 2232 

(Customer Confirmations) in the 


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66174 Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Notices 

3See Securities Exchange Act Release No. 60669 

(September 14, 2009), 74 FR 48107 (September 21, 

2009) (‘‘Notice’’). 

4See letter from Tamara K. Salmon, Senior 

Associate Counsel, Investment Company Institute 

(‘‘ICI’’), dated October 9, 2010 (‘‘ICI Letter’’); letter 

from Jonathan Feigelson, Senior Vice President, 

General Counsel, TIAA–CREF, dated October 13, 

2009 (‘‘TIAA–CREF Letter’’); and letter from Clifford 

E. Kirsch and Susan S. Krawcyzk, Sutherland Asbill 

& Brennan on behalf of the Committee of Annuity 

Insurers (‘‘CAI’’), dated October 13, 2009 (‘‘CAI 

Letter’’). 

5See letter from Adam H. Arkel, Assistant 

General Counsel, FINRA, dated September 16, 2010 

(‘‘FINRA’s Response’’). 

6See Amendment No. 1 dated September 16, 

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 Internet Web site (http:// 

sec.gov/rules/sro.shtml). 

7The current FINRA rulebook consists of: (1) 

FINRA Rules; (2) NASD Rules; and (3) rules 

incorporated from NYSE (‘‘Incorporated NYSE 

Rules’’) (together, the NASD Rules and Incorporated 

NYSE Rules are referred to as the ‘‘Transitional 

Rulebook’’). While the NASD Rules generally apply 

to all FINRA members, the Incorporated NYSE 

Rules apply only to those members of FINRA that 

are also members of the NYSE (‘‘Dual Members’’). 

The FINRA Rules apply to all FINRA member firms, 

unless such rules have a more limited application 

by their terms. For more information about the 

rulebook consolidation process, see Information 

Notice, March 12, 2008 (Rulebook Consolidation 

Process). 

8For convenience, the Incorporated NYSE Rules 

are referred to as the ‘‘NYSE Rules.’’ 

9The proposed rule change addresses basic 

customer confirmation requirements. FINRA rules 

separately set forth confirmation requirements that 

are specific to certain types of financial products, 

such as the requirements set forth in FINRA Rule 

2360 (adopted as part of FINRA’s set of 

consolidated rules addressing index warrants, 

options and security futures). See Securities 

Exchange Act Release No. 58932 (November 12, 

2008), 73 FR 69696 (November 19, 2008) (Approval 

Order). 

10Exchange Act Rule 10b–10(d)(2) states that the 

term ‘‘completion of the transaction’’ has the 

meaning set forth in Exchange Act Rule 15c1–1. 

The Rule 15c1–1 definition of ‘‘completion of the 

transaction’’ depends on whether the customer is 

purchasing or selling the security, the time when 

payment is made and the status of the custody/ 

delivery of the security. 

11NASD Rule 2230, formerly designated as 

Section 12 of the NASD Rules of Fair Practice, was 

adopted as part of FINRA’s original rulebook. See 

Certificate of Incorporation and By-Laws, Rules of 

Fair Practice and Code of Procedure for Handling 

Trade Practice Complaints of National Association 

of Securities Dealers, Inc. (August 8, 1939). 

12See Securities Exchange Act Release No. 1330 

(August 4, 1937). 

13See Securities Exchange Act Release No. 13508 

(May 5, 1977) (Securities Confirmations: Final 

Rule). 

14See, e.g., Securities Exchange Act Release No. 

19687 (April 18, 1983), 48 FR 17583 (April 25, 

1983) (Securities Confirmations: Final Rule 

Amendments) (requiring, among things, disclosure 

to investors of certain yield and call feature 

information in connection with transactions in debt 

securities); Securities Exchange Act Release No. 

34962 (November 10, 1994), 59 FR 59612 

(November 17, 1994) (Confirmation of Transactions: 

Final Rule Amendments) (generally requiring, 

among other things, disclosure if a debt security is 

not rated by a nationally recognized statistical 

rating organization, disclosure if a broker-dealer is 

not a member of the Securities Investor Protection 

Corporation, and disclosure with respect to the 

availability of information with respect to 

transactions in collateralized debt securities); 

Securities Exchange Act Release No. 46471 

(September 6, 2002), 67 FR 58302 (September 13, 

2002) (Confirmation Requirements for Transactions 

of Security Futures Products Effected in Futures 

Accounts: Final Rule Amendments) (adopting, 

among others, requirements regarding transactions 

in securities futures products); Securities Exchange 

Act Release No. 51808 (June 9, 2005), 70 FR 37496 

(June 29, 2005) (Regulation NMS: Final Rules and 

Amendments) (making conforming amendments to 

Rule 10b–10 in connection with the adoption of 

Regulation NMS). 

15Callable common stock is stock that is subject 

to being called away from a shareholder, either by 

the issuer or by a third party. 

16See Securities Exchange Act Release No. 42761 

(May 5, 2000), 65 FR 30459 (May 11, 2000) 

(Approval Order). See also NASD Notice to 

Members 00–33 (May 2000) (Callable Common 

Stock). 

consolidated FINRA rulebook and to 

delete NASD Rule 2230, NASD IM– 

2110–6 and Incorporated NYSE Rule 

409(f). The proposed rule change was 

published for comment in the Federal 

Register on September 21, 2009.3 The 

Commission received three comments 

in response to the proposed rule 

change.4 On September 16, 2010, FINRA 

responded to the comments 5 and filed 

Amendment No. 1 to the proposed rule 

change.6 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 the Proposed Rule 

Change 

As part of the process of developing 

a new Consolidated FINRA Rulebook,7

FINRA proposed to adopt a new, 

consolidated customer confirmation 

rule by adopting FINRA Rule 2232 

(Customer Confirmations) and deleting 

NASD Rule 2230, NASD IM–2110–6 and 

NYSE Rule 409(f).8

A. Background 

NASD and NYSE rules set forth 

certain basic requirements with respect 

to confirmations of transactions with 

customers.9

1. NASD Rule 2230 

NASD Rule 2230 provides that a 

member, at or before the completion of 

each transaction 10 with a customer 

shall, give or send to the customer 

written notification (i.e., confirmation) 

disclosing: (a) Whether the member is 

acting as a broker for the customer, as 

a dealer for its own account, as a broker 

for some other person, or as a broker for 

both the customer and some other 

person; and (b) in any case in which the 

member is acting as a broker for the 

customer or for both the customer and 

some other person, either the name of 

the person from whom the security was 

purchased or to whom it was sold for 

the customer and the date and time 

when the transaction took place or the 

fact that such information will be 

furnished upon the request of the 

customer, and the source and amount of 

any commission or other remuneration 

received or to be received by the 

member in connection with the 

transaction. 

When NASD Rule 2230 was adopted 

in 1939 11 its requirements essentially 

duplicated those set forth in Exchange 

Act Rule 15c1–4 as originally adopted 

by the Commission. The primary 

difference between the two rules was 

that the scope of Rule 15c1–4 was 

restricted to over-the-counter 

transactions while the NASD rule by its 

terms extended to all member 

transactions with customers.12 In 1977, 

the Commission rescinded Rule 15c1–4 

and adopted Exchange Act Rule 10b–10, 

indicating that it would apply 

‘‘regardless of the manner in which a 

broker-dealer conducts its business or 

the marketplace where transactions are 

effected.’’ 13 Since then, the Commission 

has amended Rule 10b–10 several 

times.14

2. NASD IM–2110–6 

NASD IM–2110–6 requires that any 

member providing a customer 

confirmation pursuant to Exchange Act 

Rule 10b–10 in connection with any 

transaction in callable common stock 15

must disclose on the confirmation that 

the security is callable common stock 

and that a customer may contact the 

member for more information 

concerning the security. 

When IM–2110–6 was adopted in 

2000, FINRA noted that an investor 

purchasing callable common stock is 

subject to unique risks not typically 

associated with ownership of common 

stock, even when such stock is called 

away at a premium.16 FINRA also stated 

that the ability of an issuer’s common 

stock to be called away from a 

shareholder generally is a material fact 

to an investor. Accordingly, in adopting 

the IM, FINRA stated that high 

standards of commercial honor and just 

and equitable principles of trade would 

require members to provide the 

disclosures as set forth in the IM. FINRA 

further emphasized that the disclosure 

of the call feature on the confirmation 

in no way relieves a member of its 

obligation to consider the callable 

nature of the security when complying 

with any applicable suitability 

obligations. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Notices 66175 

17Exchange Act Section 3(a)(11) defines the term 

‘‘equity security’’ to include, among others, ‘‘any 

stock or similar security.’’ 

18As noted by FINRA in the Notice, Exchange Act 

Rule 10b–10(a)(4) requires that, in the case of any 

transaction in a debt security subject to redemption 

before maturity, the confirmation must include a 

statement to the effect that the debt security may 

be redeemed in whole or in part before maturity, 

that such a redemption could affect the yield 

represented and that additional information is 

available upon request. 

19See supra note 4. 

20See ICI Letter. 

21See CAI Letter. This commenter further 

indicated that variable annuity transactions require 

the purchase or surrender of an insurance policy 

and as such, could not settle the way that other 

securities transactions settle. 

22See TIAA–CREF Letter. In particular, this 

commenter stated that requiring the inclusion of the 

settlement date in customer confirmations would 

cost about $11 to 15 million dollars. 

23See TIAA–CREF Letter. In addition, this 

commenter objected to FINRA not opening the 

proposal to comment by FINRA members and 

generally expressed its view that the proposal was 

inconsistent with the requirements of Exchange Act 

Rule 19b–4. 

24See ICI Letter. 

25See TIAA–CREF Letter. 

26See FINRA’s Response. 

27See 17 CFR 242.600. 

28This statement was confirmed in a telephone 

conversation with Adam Arkel of FINRA on 

October 19, 2010. 

29 15 U.S.C. 78s(b)(1). 

30See supra note 28. 

3. NYSE Rule 409(f) 

NYSE Rule 409(f) requires that 

confirmation of all transactions in 

securities admitted to dealings on the 

NYSE—whether over-the-counter or on 

an exchange—sent by members or 

member organizations to their 

customers, must clearly set forth with a 

suitable legend the settlement date of 

each transaction. The rule provides that 

this requirement also applies to 

confirmations or reports from an 

organization to a correspondent, but 

does not apply to reports made by floor 

brokers to the member organization 

from which the orders were received. 

The rule further contains a general 

cross-reference instructing members to 

refer to Exchange Act Rule 10b–10. 

B. Proposal 

As discussed in the Notice, the 

proposed rule change would delete 

current NASD Rule 2230 from the 

FINRA rulebook and replace it with 

proposed FINRA Rule 2232, which 

would streamline and combine basic 

customer confirmation requirements in 

the NASD and NYSE Rules. 

Specifically: 

• Proposed FINRA Rule 2232 would 

provide that confirmations must be 

given or sent to customers in conformity 

with the requirements of Exchange Act 

Rule 10b–10. FINRA believes that 

incorporating by reference the 

requirements of Rule 10b–10, as 

opposed to replicating Rule 10b–10’s 

detailed requirements in FINRA’s rule, 

would make the proposed rule clear and 

serve the interests of regulatory 

efficiency. 

• The proposed rule change would 

delete NASD IM–2110–6 from the 

FINRA rulebook and transfer its 

requirements to proposed FINRA Rule 

2232. Proposed FINRA Rule 2232 would 

expand the coverage of those 

requirements to make clear that the 

requirement to disclose that the security 

is callable (and that further information 

is available from the member) applies to 

any callable equity security,17 not just 

callable common stock. As stated in the 

Notice, FINRA believes that, from the 

standpoint of investor protection, this 

change is necessary to ensure that the 

rule covers, for instance, callable 

preferred stock.18

• The proposed rule would include 

the requirement in NYSE Rule 409(f) to 

disclose the settlement date of the 

transaction, with two changes. First, 

consistent with FINRA’s investor 

protection mission, the requirement to 

disclose the settlement date of the 

transaction would include all 

transactions in securities, not just 

NYSE-listed securities. Second, because 

the proposed rule would address 

customer confirmations, the elements of 

the NYSE rule addressing member-tomember communications would, 

consistent with the parameters of 

Exchange Act Rule 10b–10, be deleted. 

FINRA will announce the 

implementation date of the proposed 

rule change in a Regulatory Notice to be 

published no later than 90 days 

following Commission approval. The 

implementation date will be no later 

than 240 days following Commission 

approval. 

III. Summary of Comment Letters and 

FINRA’s Response 

The Commission received three 

comments on the proposed rule 

change,19 all of which objected to the 

settlement disclosure requirement of the 

proposed rule, particularly with respect 

to mutual fund and variable annuity 

transactions. Among the reasons cited 

for the objections were differences in 

calculating settlement dates for mutual 

fund purchases through a broker-dealer 

versus those purchased through a 

mutual fund’s underwriter.20 Another 

commenter was of the view that variable 

annuity transactions were not a ‘‘good 

fit’’ because they do not settle like other 

securities transactions.21 One 

commenter also objected to the potential 

costs associated with reprogramming 

and testing automated confirmation 

systems to include settlement date 

information.22 This commenter also 

made a number of procedural 

objections.23 One commenter urged 

FINRA to revise the proposed rule to 

relieve broker-dealers from having to 

disclose the settlement date when that 

date is the same as the trade date, or 

considering the settlement date 

requirement to be satisfied if the trade 

date on the confirmation is the same as 

the settlement date.24 Another 

commenter indicated that there should 

be a two-year implementation timetable 

if the rule change is adopted as 

proposed.25

In its response, FINRA clarified that it 

intended the settlement date provisions 

to apply only to transactions in 

traditional equity securities, whether 

traded on an exchange or over-thecounter where, according to FINRA, the 

disclosure of settlement date serves the 

purposes of investor protection.26

FINRA filed Amendment No. 1 to clarify 

this intent by limiting the settlement 

date provisions of the proposed rule to 

transactions in: (1) Any NMS stock as 

defined in Rule 600 of Regulation 

NMS; 27 and (2) any equity security 

subject to the reporting requirements of 

the FINRA Rule 6600 series, other than 

direct participation programs as defined 

in FINRA Rule 6642. FINRA stated that 

it also made other minor changes to the 

proposed rule in the interest of clarity. 

FINRA also noted that with respect to 

considering the implementation costs of 

a proposed rule filing, in a selfregulatory organization rulemaking, the 

appropriate standard, as stated in 

Section 15A(b)(9) of the Exchange Act, 

is that the rules do not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Exchange Act.28

Moreover, FINRA tailors its proposed 

rule changes as narrowly as possible to 

achieve the intended and necessary 

regulatory benefit. As stated in Item 4 of 

the proposed rule change, 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. FINRA also noted 

that, as required under Section 19(b)(1) 

of the Exchange Act,29 it submitted to 

the Commission a concise general 

statement of the basis and purpose of 

the proposed rule.30

IV. Discussion and Commission Finding 

After carefully considering the 

proposal, as amended by Amendment 

No. 1, the comments, and FINRA’s 


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66176 Federal Register / Vol. 75, No. 207 / Wednesday, October 27, 2010 / Notices 

31 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 17c(f). 

32 15 U.S.C. 78o–3(b)(6). 

33For example, an investor may not be eligible for 

dividend payments if the ex-dividend date falls 

between the transaction date and the settlement 

date. 

34 15 U.S.C. 78s(b)(2). 

35 15 U.S.C. 78s(b)(2). 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Response, the Commission finds that 

the proposed rule change is consistent 

with the requirements of the Exchange 

Act, and the rules and regulations 

thereunder that are applicable to 

national securities associations.31 In 

particular, the Commission believes the 

proposed rule change is consistent with 

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

the Exchange Act,32 which requires, 

among other things, that FINRA rules 

must be designed to prevent fraudulent 

and manipulative acts and practices, 

promote just and equitable principles of 

trade, and in general, to protect 

investors and the public interest. The 

proposed rule change is consistent with 

FINRA’s obligations under the Exchange 

Act to protect investors and the public 

interest because the proposed rule 

streamlines the rules governing brokerdealers’ confirmation requirements by 

cross-referencing Exchange Act Rule 

10b–10 while maintaining the 

additional disclosure requirements of 

NASD IM–2110–6 (i.e., relating to 

callable securities) and extending the 

additional NYSE Rule 409(f) 

requirements (i.e., relating to settlement 

date) to a broader range of equity 

securities. 

The Commission believes that FINRA 

has adequately addressed the concerns 

raised by commenters with respect to 

the application of the settlement date 

provisions to mutual fund and variable 

annuity transactions. In particular, 

Amendment No. 1 limits the settlement 

date disclosure requirement to 

Regulation NMS stock and over-thecounter equity securities subject to the 

FINRA Rule 6600 series. We also believe 

that the proposed rule is consistent with 

the public interest and the protection of 

investors because information regarding 

the callable status of a security is 

generally a material fact for investors. 

Indeed, callable securities can subject 

investors to additional reinvestment risk 

because investors may have less 

attractive alternatives for reinvesting the 

proceeds if the issuer calls the security 

earlier than the investor’s intended sell 

date, even when the security is called 

away at a premium. In addition, the 

disclosure of settlement date on a 

confirmation is important for investors 

because many of the rights and benefits 

associated with the beneficial 

ownership of a security do not confer 

until settlement date.33 Finally, we note 

that the Exchange Act does not require 

a cost/benefit analysis with respect to 

proposed self-regulatory organization 

rules that are filed with, and approved 

by, the Commission. 

V. Accelerated Approval 

The Commission finds good cause, 

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

Exchange Act,34 for approving the 

proposed rule change, as modified by 

Amendment No. 1, 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 

commenters. In particular, Amendment 

No. 1 will limit the application of the 

settlement date provisions to 

transactions in Regulation NMS 

securities and to over-the-counter equity 

securities subject to the reporting 

requirements of the FINRA Rule 6600 

series, other than direct participation 

programs as defined in FINRA Rule 

6642. 

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 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–2009–058 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–2009–058. 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 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 filings 

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–2009–058 and 

should be submitted on or before 

November 17, 2010. 

VII. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Exchange Act,35

that the proposed rule change (SR– 

FINRA–2009–058), 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.36

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–27145 Filed 10–26–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63158; File No. SR–Phlx– 

2010–144] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Codify 

Prices for Co-Location Services 

October 21, 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 

14, 2010, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 


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