68654 Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4See Securities Exchange Act Release No. 61566 

(February 22, 2010), 75 FR 9262 (March 1, 2010) 

(Order Approving File No. SR–FINRA–2009–065) 

(hereinafter, ‘‘SEC Order Approving TRACE 

Expansion—Asset-Backed Securities’’). 

5See Securities Exchange Act Release No. 60860 

(October 21, 2009), 74 FR 55600 (October 28, 2009) 

(Notice of Filing of File No. SR–FINRA–2009–065). 

6See Letter from Sharon Zackula, Associate Vice 

President and Associate General Counsel, FINRA, to 

Elizabeth M. Murphy, Secretary, SEC, dated 

December 22, 2009. 

7The TRACE ABS filing included amendments 

to: (a) Rule 6710 to amend the defined terms, 

‘‘Asset-Backed Security’’ and ‘‘TRACE-Eligible 

Security’’ to include Asset-Backed Securities as 

TRACE-Eligible Securities, to amend several other 

defined terms, and to add several new defined 

terms, most of which relate to Asset-Backed 

Securities; (b) Rule 6730 to require the reporting of 

Asset-Backed Securities transactions, to establish a 

six-month pilot period for reporting such 

transactions no later than T + 1 during TRACE 

System hours, and to amend certain requirements 

in connection with the reporting of commissions, 

factors, transaction size and settlement terms in 

buffer for MMFs would reduce their net 

yields and possibly motivate 

institutional investors to move assets 

from MMFs to unregulated alternatives 

(particularly if regulatory reform does 

not include new constraints on such 

vehicles). The effect of these competing 

incentives on institutional investors’ 

cash management practices is uncertain, 

but it is at least plausible that a 

reorganization of MMFs as SPBs may 

lead to a net shift of assets to 

unregulated investment vehicles. 

h. Enhanced Constraints on Unregulated 

MMF Substitutes 

New rules intended to reduce the 

susceptibility of MMFs to runs generally 

also will reduce the appeal of the funds 

to many investors. For example, several 

of the reforms recently adopted by the 

SEC probably will reduce the net yields 

that the funds pay to shareholders, and 

a switch to floating NAVs would 

eliminate a feature that some MMF 

shareholders see as essential. 

Reforms that reduce the appeal of 

MMFs may motivate some institutional 

investors to move assets to alternative 

cash management vehicles with stable 

NAVs, such as offshore MMFs, 

enhanced cash funds, and other stable 

value vehicles. These vehicles typically 

invest in the same types of short-term 

instruments that MMFs hold and share 

many of the features that make MMFs 

vulnerable to runs, so growth of 

unregulated MMF substitutes would 

likely increase systemic risks. However, 

such funds need not comply with rule 

2a–7 or other ICA protections and in 

general are subject to little or no 

regulatory oversight. In addition, the 

risks posed by MMF substitutes are 

difficult to monitor, since they provide 

far less market transparency than 

MMFs. 

Thus, effective mitigation of systemic 

risks may require policy reforms 

targeted outside the MMF industry to 

address risks posed by funds that 

compete with MMFs and to combat 

regulatory arbitrage that might offset 

intended reductions in MMF risks. Such 

reforms most likely would require 

legislation and action by the SEC and 

other agencies. For example, 

consideration should be given to 

prohibiting unregistered investment 

vehicles from maintaining stable NAVs, 

perhaps by amending sections 3(c)(1) 

and 3(c)(7) of the ICA to specify that 

exemptions from the requirement to 

register as an investment company do 

not apply to funds that seek a stable 

NAV. Banking and state insurance 

regulators might consider additional 

restrictions to mitigate systemic risk for 

bank common and collective funds and 

other investment pools that seek a stable 

NAV but that are exempt from 

registration under sections 3(c)(3) and 

3(c)(11) of the ICA. 

[FR Doc. 2010–28177 Filed 11–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63223; File No. SR–FINRA– 

2010–054] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the 

Operational Date of SR–FINRA–2009– 

065 

November 1, 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 

27, 2010, the 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, 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 extend the 

period during which FINRA may make 

the rule changes set forth in SR–FINRA– 

2009–065 and approved by the SEC on 

February 22, 2010, effective to no later 

than June 1, 2011.4

The proposed rule change would not 

make any new changes to the text of 

FINRA rules. 

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 October 1, 2009, FINRA filed SR– 

FINRA–2009–065, a proposed rule 

change to expand the Trade Reporting 

and Compliance Engine (‘‘TRACE’’) to 

designate asset-backed securities, 

mortgage-backed securities and other 

similar securities (collectively, ‘‘AssetBacked Securities’’) as eligible for 

TRACE, and to establish reporting, fee 

and other requirements for such 

securities. In SR–FINRA–2009–065, 

FINRA stated that it would announce 

the effective date of the proposed rule 

change in a Regulatory Notice to be 

published ‘‘no later than 60 days 

following Commission approval’’ and 

the effective date would be ‘‘no later 

than 270 days following publication’’ of 

the Regulatory Notice announcing the 

Commission’s approval. 

The proposed rule change was 

published for notice and comment.5

FINRA filed its response to comments 

on December 22, 2009,6 and 

Amendment No. 1 to SR–FINRA–2009– 

065 on January 19, 2010 (hereinafter, 

SR–FINRA–2009–065 and Amendment 

No. 1 thereto are, together, the ‘‘TRACE 

ABS filing’’).7 The Commission 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices 68655 

Asset-Backed Securities transactions; (c) Rule 6750 

to provide that information on a transaction in a 

TRACE-Eligible Security that is an Asset-Backed 

Security will not be disseminated; (d) Rule 6760 to 

amend the notification requirements; (e) Rule 7730 

to establish fees for reporting transactions in AssetBacked Securities; and (f) the Rule 6700 Series and 

Rule 7730 to incorporate certain other technical, 

administrative and clarifying changes. 

8See SEC Order Approving TRACE Expansion— 

Asset-Backed Securities. 

9See Securities Exchange Act Release No. 61948 

(April 20, 2010), 75 FR 22670 (April 29, 2010) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2010–019 to Extend the 

Implementation Period for SR–FINRA–2009–65). 

10 15 U.S.C. 78o–3(b)(6). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). 

13 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory organization to 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 Commission 

has waived the five-day pre-filing period in this 

case. 

14For 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). 

approved the TRACE ABS filing on 

February 22, 2010.8

On April 14, 2010, FINRA filed for 

immediate effectiveness SR–FINRA– 

2010–019, a proposed rule change to 

extend by 45 days the proposed 

implementation period for SR–FINRA– 

2009–065.9 On April 23, 2010, FINRA 

published Regulatory Notice 10–23 

announcing Commission approval of the 

TRACE ABS Filing. Regulatory Notice 

10–23 briefly described the rule 

changes, and, in reliance upon the 45- 

day extension provided for in SR– 

FINRA–2010–019, announced that the 

effective date of such rule changes 

would be February 14, 2011. 

FINRA has determined that it would 

be beneficial to delay the effective date 

of the TRACE ABS filing to no later than 

June 1, 2011. FINRA will publish a 

Regulatory Notice no later than 30 days 

following the operative date of this 

proposed rule change to announce the 

revised effective date of the TRACE ABS 

filing, and to indicate that the 

previously announced effective date, 

February 14, 2011, is no longer valid. 

The complexity and variety of 

structures of Asset-Backed Securities 

present significant operational and 

technical challenges. For example, new 

processes and systems are being 

developed and must be implemented 

across the industry to assure the 

integrity of the Asset-Backed Securities 

reference data that facilitates timely and 

accurate reporting. In addition, FINRA 

believes that it is very important to 

provide extended time for coordinated 

testing among firms and FINRA. 

Accordingly, FINRA believes a delay of 

the effective date until no later than 

June 1, 2011 is warranted. 

FINRA has filed the proposed rule 

change for immediate effectiveness and 

has requested that the SEC waive the 

requirement that the proposed rule 

change not become operative for 30 days 

after the date of the filing, such that 

FINRA can implement the proposed 

rule change immediately. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,10 which 

requires, among other things, that 

FINRA rules must 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. The flexibility to 

establish an effective date no later than 

June 1, 2011 to implement the TRACE 

ABS filing will allow FINRA and 

members sufficient time to make 

additional necessary enhancements to 

the TRACE system and member 

systems, and to engage in coordinated 

testing of the technology. These steps 

will facilitate timely and accurate 

reporting of transactions in AssetBacked Securities, and enhance 

FINRA’s surveillance of the market in 

Asset-Backed Securities for the 

protection of investors and in 

furtherance of the public interest. 

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 

The Exchange represented that the 

proposed rule change qualifies for 

immediate effectiveness pursuant to 

Section 19(b)(3)(A) of the Exchange 

Act 11 and Rule 19b–4(f)(6) thereunder 12

because it: (i) Does not significantly 

affect the protection of investors or the 

public interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not 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.13

The Exchange has requested that the 

Commission waive the 30-day operative 

delay, so that the proposed rule change 

may become operative upon filing. The 

Commission hereby grants the 

Exchange’s request.14 The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. The proposal appears 

reasonably designed to allow firms 

sufficient time to make necessary 

systems and operational changes to 

facilitate the timely and accurate 

reporting of Asset-Backed Securities 

transactions as required by the TRACE 

ABS filing, and waiving the 30-day preoperative period will allow FINRA to 

communicate the new operative date to 

its members without undue delay. 

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–2010–054 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–2010–054. 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 


jlentini on DSKJ8SOYB1PROD with NOTICES
68656 Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices 

15 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. 

4See SR–NYSEAmex–2010–102. 

5 15 U.S.C. 78a. 

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

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 the 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–2010–054 and 

should be submitted on or before 

November 29, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28066 Filed 11–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63229; File No. SR–NYSE– 

2010–71] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC To Increase the 

Maximum Order Size Accepted by 

Floor Broker Systems From 25,000,000 

Shares to 99,000,000 Shares 

November 2, 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 November 

1, 2010, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 

NYSE Rule 1000 regarding the 

maximum order size accepted by Floor 

broker systems from 25,000,000 shares 

to 99,000,000 shares. The text of the 

proposed rule change is available at the 

Exchange, on the Commission’s Web 

site at http://www.sec.gov, at the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 

self-regulatory organization 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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 1000 to provide that Floor broker 

systems shall accept a maximum order 

size of 99,000,000, an increase from the 

current 25,000,000 share limit. 

a. Background 

Floor brokers receive orders from 

customers via telephone and electronic 

delivery to Floor broker systems. Details 

of orders delivered to Floor broker 

systems are automatically transmitted to 

a designated Exchange database as 

required by Rule 123(e). Orders 

delivered telephonically must be 

manually entered by the broker (or 

clerk) into Exchange systems in order to 

capture the order details in the 

designated Exchange database pursuant 

to Rule 123(e) before the broker can 

represent these orders on the Exchange. 

Exchange systems currently accept 

orders up to 25,000,000 shares. 

Exchange systems include Display 

Book®, which is the Exchange’s 

matching engine, and Floor broker 

systems, which are the systems made 

available to Floor brokers to accept 

orders from customers and if warranted, 

enter such orders into the Display Book. 

There is no limit on the size of orders 

that can be transmitted to a Floor broker 

telephonically. Customers who wish to 

send orders in excess of 25,000,000 

shares must break these orders into 

smaller sizes to send electronically or 

submit these orders by telephone to the 

broker. The broker (or clerk) must then 

enter these telephonic orders in smaller 

quantities into Exchange systems. 

b. Proposed Amendment to NYSE Amex 

Equities Rule 1000 

The Exchange proposes to amend 

Rule 1000 to state that Floor broker 

systems shall accept a maximum order 

size up to 99,000,000 shares. This 

enhancement would allow more 

efficient electronic processing of very 

large orders sent to Floor brokers. 

Orders sent to Display Book by Floor 

brokers are subject to the same 

maximum order size of 25,000,000 

shares as all other market participants. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of the NYSE Amex LLC.4

The Exchange will implement the 

systemic changes on or about December 

10, 2010 and will notify Floor brokers 

when the Floor broker systems have 

been modified to accept a maximum 

order size up to 99,000,000 shares. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 5 for 

this proposed rule change is the 

requirement under Section 6(b)(5) 6 that 

an exchange have rules that are 

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. The Exchange believes 

that the proposed rule change 

accomplishes these goals by providing 

efficient methods for customers to 

transmit orders to Floor brokers. 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 


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