Federal Register / Vol. 74, No. 97 / Thursday, May 21, 2009 / Notices 23909 

5See Securities Exchange Act Release No. 55415 

(March 7, 2007), 72 FR 11411 (March 13, 2007) (SR– 

BSE–2006–03). 

6 In SR–BSE–2006–56, the Commission, among 

other things, approved the current Supplementary 

Material .03 to Chapter V, Section 18 of the BOX 

Rules. If Supplementary Material .03, previously 

approved in SR–BSE–2006–03, was reflected in the 

BOX Rules at the time when SR–BSE–2006–56 was 

ultimately approved, then current Supplementary 

Material .03 should have been included within 

Section 18 as Supplementary Material .04. See 

Securities Exchange Act Release No. 56186 (August 

2, 2007), 72 FR 44593 (August 8, 2007) (SR–BSE– 

2006–56). 

7The insertion of the clerical corrections to the 

Supplementary Material as .03 and renumbering of 

current Supplementary Material .03 as 

Supplementary Material .04 will not affect the 

meaning, interpretation or function of Chapter V, 

Section 18 of the BOX Rules or any other sections 

of the BOX Rules. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 11 17 C.F.R. 210.19b–4(f)(3) [sic]. 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 Exchange proposes to make 

clerical corrections to the rule text of 

Chapter V, Section 18 of the BOX Rules 

and the supplementary material thereto. 

These changes had been previously 

approved by the Commission.5

Subsequent to the Commission’s 

approval of the amendments to Chapter 

V, Section 18 of the BOX Rules and the 

supplementary material thereto, the 

Commission approved, further 

amendments to Chapter V, Section 18 of 

the BOX Rules and the supplementary 

material thereto.6 The later amendments 

are currently reflected in the BOX Rules. 

The Exchange proposes to make clerical 

corrections to Supplementary Material 

.03, as originally proposed, and 

renumber current Supplementary 

Material .03 as Supplementary Material 

.04.7

2. Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,8

in general, and Section 6(b)(5) of the 

Act,9 in particular, in that it is designed 

to promote just and equitable principles 

of trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

prevent fraudulent and manipulative 

acts, 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 

proposed rule change will allow the 

Exchange to properly reflect the 

appropriate approved text in the BOX 

Rules. 

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 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Pursuant to Section 19(b)(3)(A) of the 

Act 10 and Rule 19b–4(f)(3) 

thereunder,11 the Exchange has 

designated this proposal as one that is 

concerned solely with the 

administration of the self-regulatory 

organization. Accordingly, the Exchange 

believes that its proposal should become 

immediately effective. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

may summarily abrogate the rule change 

if it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

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–BX–2009–024 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–2009–024. 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, 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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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– 

2009–024 and should be submitted on 

or before June 11, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–11809 Filed 5–20–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59920; File No. SR–CBOE– 

2009–029] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing of a 

Proposed Rule Change To 

Permanently Establish the Quarterly 

Option Series Pilot Program 

May 14, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 7, 

2009, the Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 


dwashington3 on PROD1PC60 with NOTICES
23910 Federal Register / Vol. 74, No. 97 / Thursday, May 21, 2009 / Notices 

3See Securities Exchange Act Release No. 54123 

(July 11, 2006), 71 FR 40558, (July 17, 2006) (SR– 

CBOE–2006–65). The QOS Program has since been 

extended and is currently scheduled to expire on 

July 10, 2009. See Securities Exchange Act Release 

Nos. 56035 (July 10, 2007), 72 FR 38851, (July 16, 

2007) (SR–CBOE–2007–70) (immediately effective 

rule change extending the QOS Program through 

July 10, 2008) and 58018 (June 25, 2008), 73 FR 

38010 (July 2, 2008) (SR–CBOE–2008–62) 

(immediately effective rule change extending the 

QOS Program through July 10, 2009). 

4See Securities Exchange Act Release No. 57410 

(March 3, 2008), 73 FR 12483 (March 7, 2008) (SR– 

CBOE–2007–96) (amended QOS Program to permit 

the listing of additional Quarterly Option Series in 

ETF options). 

5See id. 

6See Securities Exchange Act Release No. 58887 

(October 30, 2008), 73 FR 66083 (November 6, 2008) 

(SR–CBOE–2008–111) (temporary increase to the 

number of additional Quarterly Option Series in 

ETF options). 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change, as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. 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 is proposing to make 

permanent its Quarterly Option Series 

pilot program (‘‘QOS Program’’). The 

text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.org/Legal), at the 

Office of the Secretary, CBOE and at the 

Commission. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to make 

the QOS Program permanent. On July 7, 

2006, the Exchange filed with the 

Commission SR–CBOE–2006–65, which 

was effective on filing and established 

the QOS Program.3 The QOS Program 

allows CBOE to list and trade Quarterly 

Option Series, which expire at the close 

of business on the last business day or 

a calendar quarter. Under the QOS 

Program, CBOE may select up to five (5) 

currently listed exchange traded fund 

(‘‘ETF’’) or index option classes on 

which Quarterly Option Series may be 

opened. In addition, CBOE may also list 

Quarterly Option Series on any options 

classes that are selected by other 

securities exchanges that employ a 

similar pilot program under their 

respective rules. 

The Exchange may list series that 

expire at the end of the next consecutive 

four (4) calendar quarters, as well as the 

fourth quarter of the next calendar year. 

For example, if the Exchange is trading 

Quarterly Options Series in the month 

of May 2009, it may list series that 

expire at the end of the second, third, 

and fourth quarters of 2009, as well as 

the first and fourth quarters of 2010. 

Following the second quarter 2009 

expiration, the Exchange could add 

series that expire at the end of the 

second quarter of 2010. 

Quarterly Option Series are P.M. 

settled. 

Quarterly Option Series in ETF Options 

If an ETF option is selected for 

participation in the QOS Program, the 

strike price of each Quarterly Option 

Series is fixed at a price per share, with 

at least two strike prices above and two 

strike prices below the approximate 

value of the underlying security at about 

the time the Quarterly Options Series is 

opened for trading on the Exchange. 

CBOE shall list strikes prices for a 

Quarterly Option series that are within 

$5 from the closing price of the 

underlying on the preceding day. 

The Exchange may open for trading 

additional Quarterly Options Series of 

the same class when the Exchange 

deems it necessary to maintain an 

orderly market, to meet customer 

demand or when the market price of the 

underlying security moves substantially 

from the initial exercise price or prices. 

To the extent that any additional strike 

prices are listed by the Exchange, such 

additional strike prices shall be within 

thirty percent (30%) above or below the 

closing price of the underlying ETF (or 

‘‘Units’’ as defined in Rule 5.3.06) on 

the preceding day.4 The Exchange may 

also open additional strike prices of 

Quarterly Option Series in ETF options 

that are more than 30% above or below 

the current price of the underlying ETF 

provided that demonstrated customer 

interest exists for such series, as 

expressed by institutional, corporate or 

individual customers or their brokers. 

Market-Makers trading for their own 

account shall not be considered when 

determining customer interest under 

this provision. The opening of the new 

Quarterly Options Series shall not affect 

the series of options of the same class 

previously opened. In addition to the 

initial listed series, the Exchange may 

list up to sixty (60) additional series per 

expiration month for each Quarterly 

Options Series in ETF options. 

The interval between strike prices on 

Quarterly Options Series shall be the 

same as the interval for strike prices for 

series in that same options class that 

expire in accordance with the normal 

monthly expiration cycle. 

The Exchange has adopted a delisting 

policy with respect to QOS in ETF 

options.5 On a monthly basis, the 

Exchange reviews series that are outside 

a range of five (5) strikes above and five 

(5) strikes below the current price of the 

underlying ETF, and delists series with 

no open interest in both the put and the 

call series having a: (i) Strike higher 

than the highest strike price with open 

interest in the put and/or call series for 

a given expiration month; and (ii) strike 

lower than the lowest strike price with 

open interest in the put and/or call 

series for a given expiration month. 

Notwithstanding the delisting policy, 

customer requests to add strikes and/or 

maintain strikes in QOS in ETF options 

in series eligible for delisting shall be 

granted. 

Further, in connection with the 

delisting policy, if the Exchange 

identifies series for delisting, the 

Exchange shall notify other options 

exchanges with similar delisting 

policies regarding eligible series for 

listing, and shall work with such other 

exchanges to develop a uniform list of 

series to be delisted, so as to ensure 

uniform series delisting of multiply 

listed options classes. 

During the last quarter of 2008 (and 

for the new expiration month added 

after December Quarterly Option Series 

expiration), the Exchange was permitted 

to list up to one hundred (100) 

additional series per expiration month 

for each Quarterly Options Series in 

ETF options.6

Quarterly Option Series in Index 

Options 

If an index option is selected for 

participation in the QOS Program, the 

strike price of each Quarterly Option 

Series will be fixed at a price per share, 

with at least two, but no more than five, 

strike prices above and at least two, but 

no more than five, strike prices below 

the value of the underlying index at 


dwashington3 on PROD1PC60 with NOTICES
Federal Register / Vol. 74, No. 97 / Thursday, May 21, 2009 / Notices 23911 

7 15 U.S.C. 78s(b)(1). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

about the time that a Quarterly Options 

Series is opened for trading on the 

Exchange. The Exchange shall list strike 

prices for Quarterly Options Series that 

are reasonably related to the current 

index value of the underlying index to 

which such series relates at about the 

time such series of options is first 

opened for trading on the Exchange. The 

term ‘‘reasonably related to the current 

index value of the underlying index’’ 

means that the exercise price is within 

thirty percent (30%) of the current 

index value. 

The Exchange may open for trading 

additional Quarterly Options Series of 

the same class when the Exchange 

deems it necessary to maintain an 

orderly market, to meet customer 

demand or when the market price of the 

underlying security moves substantially 

from the initial exercise price or prices. 

The Exchange may also open for trading 

additional Quarterly Options Series that 

are more than thirty percent (30%) of 

the current index value, provided that 

demonstrated customer interest exists 

for such series, as expressed by 

institutional, corporate, or individual 

customers or their brokers. MarketMakers trading for their own account 

shall not be considered when 

determining customer interest under 

this provision. 

The Exchange may open additional 

strike prices of a Quarterly Option 

Series that are above the value of the 

underlying index provided that the total 

number of strike prices above the value 

of the underlying index is no greater 

than five. The Exchange may open 

additional strike prices of a Quarterly 

Option Series that are below the value 

of the underlying index provided that 

the total number of strike prices below 

the value of the underlying index is no 

greater than five. The opening of any 

new Quarterly Option Series shall not 

affect the series of options of the same 

class previously opened. 

By definition, Quarterly Option Series 

on an option class can never expire in 

the same week in which monthly option 

series on the same class expires. The 

same, however, is not the case with 

regards to Short Term Option Series. 

Quarterly Option Series and Short Term 

Option Series on the same options class 

may expire concurrently. However, to 

avoid any confusion in the market 

place, the Exchange will not list a Short 

Term Option Series on an options class 

whose expiration coincides with that of 

a Quarterly Option Series on the same 

options class. In other words, the 

Exchange will not list a Short Term 

Options Series on an ETF or an index 

if a Quarterly Option Series on that ETF 

or index were to expire on a Friday, the 

only day of the week during which both 

Quarterly Option Series and a P.M.- 

settled Short Term Option Series can 

potentially expire concurrently. 

There being one exception to this 

rule. The Exchange may list a P.M.- 

settled Quarterly Option Series on an 

options class concurrent with an A.M.- 

settled Short Term Options Series on 

that same options class, both of which 

may expire on a Friday. In other words, 

the Exchange may list a P.M.-settled 

Quarterly Option Series on an ETF on 

an index concurrent with an A.M.- 

settled Short Term Option Series on that 

ETF or index and both of which expire 

on a Friday. The Exchange believes that 

the concurrent listing of an A.M.-settled 

Short Term Option Series and a P.M.- 

settled Quarterly Option Series on the 

same underlying ETF or index will 

provide investors with yet another 

hedging mechanism. Finally, the 

interval between strike prices on 

Quarterly Option Series shall be the 

same as the interval for strike prices for 

series in the same options class that 

expires in accordance with the normal 

monthly expiration cycles. 

The Exchange has selected the 

following five ETF option classes to 

participate in the QOS Program: 

DIAMONDS Trust (DIA) options, 

Standard and Poor’s Depositary 

Receipts/SPDRs (SPY) options, iShares 

Russell 2000 Index Fund (IWM) options, 

PowerShares QQQ Trust (QQQQ) 

options and Energy Select SPDR (XLE) 

options. CBOE believes the QOS 

Program has been successful and well 

received by its members and the 

investing public for the nearly three 

years that it has been in operation as a 

pilot. 

CBOE is now proposing to make the 

QOS Program permanent. In support of 

approving the QOS Program on a 

permanent basis, the Exchange has 

submitted to the Commission a Pilot 

Program Report (‘‘Report’’) detailing the 

Exchange’s experience with the QOS 

Program. Specifically, the Report 

contains data and written analysis 

regarding the five ETF option classes 

included in the QOS Program. The 

Report was submitted under separate 

cover and seeks confidential treatment 

under the Freedom of Information Act. 

The Exchange believes there is 

sufficient investor interest and demand 

in the QOS Program to warrant its 

permanent approval. The Exchange 

believes that, for the nearly three years 

that it has been in operation, the QOS 

Program has provided investors with 

additional means of managing their risk 

exposures and carrying out their 

investment objectives. Furthermore, the 

Exchange has not experienced any 

capacity-related problems with respect 

to Quarterly Option Series. The 

Exchange also represents that it has the 

necessary system capacity to continue to 

support the option series listed under 

the QOS Program. 

In seeking permanent approval, the 

Exchange is taking this opportunity to 

update the expiration examples 

provided in Rules 5.5, and 24.9. The 

revisions do not change the substance of 

the QOS Program. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 7

and the rules and regulations 

thereunder and, in particular, the 

requirements of Section 6(b) of the Act.8

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 9 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts, to remove 

impediments to and to perfect the 

mechanism for a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Exchange believes 

that permanent approval of the QOS 

Program will result in an ongoing 

benefit to investors, and will continue to 

allow them additional means to manage 

their risk exposures and carry out their 

investment objectives. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE 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 

The Exchange neither solicited nor 

received comments on the proposal. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 


dwashington3 on PROD1PC60 with NOTICES
23912 Federal Register / Vol. 74, No. 97 / Thursday, May 21, 2009 / Notices 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 The 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 members, 

unless such rules have a more limited application 

by their terms. For more information about the 

rulebook consolidation process, see FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

4 For convenience, the proposed rule change 

refers to Incorporated NYSE Rules as NYSE Rules. 

organization consents, the Commission 

will: 

(A) By order approve such proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–CBOE–2009–029 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–CBOE–2009–029. 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, 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 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–CBOE–2009–029 and 

should be submitted on or before June 

11, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–11811 Filed 5–20–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59921; File No. SR–FINRA– 

2009–028] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Adopt 

FINRA Rule 2231 (Customer Account 

Statements) in the Consolidated FINRA 

Rulebook 

May 14, 2009. 

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

Securities Exchange Act of 1934 (‘‘SEA’’ 

or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 22, 

2009, 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’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

prepared by FINRA. 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 adopt NASD 

Rule 2340 (Customer Account 

Statements) with certain changes as 

FINRA Rule 2231 in the new 

consolidated FINRA rulebook 

(‘‘Consolidated FINRA Rulebook’’).3 The 

proposed rule change would also delete 

NYSE Rule 409 4 (Statements of 

Accounts of Customers), except for 

paragraph (f), and certain of its related 

interpretations. 

The text of the proposed rule change 

is available at FINRA, the Commission’s 

Public Reference Room, and http:// 

www.finra.org. 

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 

As part of the process of developing 

a new consolidated rulebook, FINRA is 

proposing to adopt NASD Rule 2340 

(Customer Account Statements) with 

certain changes as FINRA Rule 2231 in 

the Consolidated FINRA Rulebook. The 

proposed rule change would also delete: 

(1) NYSE Rule 409 (Statements of 

Accounts to Customers), except for 

paragraph (f) and its related 

supplementary material; and (2) NYSE 

Rule Interpretations 409(a) and 409(b), 

except for paragraphs 409(a)/01 and 

409(a)/03, as the rule and its related 

interpretations are, in main part, 

duplicative of NASD Rule 2340. 

However, as further described herein, 

the proposed rule change would 

incorporate certain provisions of NYSE 

Rule 409 and its interpretations into 

new FINRA Rule 2231. 

PROPOSED FINRA RULE 2231 

(CUSTOMER ACCOUNT 

STATEMENTS) 

Frequency of Delivery of Account 

Statements and Disclosures 

NASD Rule 2340 generally requires 

each general securities member to send 

customers at least once each calendar 

quarter account statements containing a 

description of any securities positions, 

money balances or account activity in 

the accounts since the prior account 

statements were sent. NYSE Rule 409(a) 


dwashington3 on PROD1PC60 with NOTICES