Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 54607 

13For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposal’s impact on efficiency, competition, and 

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

14See supra note 3 and accompanying text. 15 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. 60405 

(July 30, 2009), 74 FR 39362 (August 6, 2009) (File 

No. 4–546) (Order Approving the National Market 

System Plan Relating to Options Order Protection 

and Locked/Crossed Market Plan). Terms not 

otherwise defined herein shall have the meaning 

proscribed in the BOX Rules. 

4See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496 (June 29, 2005). 

public interest. BX requests that the 

Commission waive the 30-day operative 

delay so that this proposed rule change 

to implement TradeInfo BX will 

immediately assist BX members in the 

management of their orders. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because it will allow BX 

members the capability to scan their 

orders, cancel open orders (e.g., should 

the member experience technical 

difficulties with its systems or 

connections), and reconcile its record of 

orders against data provide in the 

TradeInfo BX reports.13 Additionally, 

this product will allow subscribing 

members to immediately take advantage 

of the different types of TradeInfo BX 

open order cancellation capabilities: 

either canceling a single open order, 

canceling all open orders associated 

with a particular connection, or 

canceling all open orders associate with 

a particular MPID. Application of the 

new rule should help foster consistency 

among those exchanges that adopt rules 

substantially similar to those previously 

approved by the Commission.14 For 

these reasons, the Commission 

designates that the proposed rule 

change become immediately operative. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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–BX–2009–062 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–2009–062. 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 publicly available. All 

submissions should refer to File 

Number SR–BX–2009–062 and should 

be submitted on or before November 12, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–25339 Filed 10–21–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60832; File No. SR–BX– 

2009–066] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Order Granting Accelerated 

Approval of Proposed Rule Change 

Relating to Chapter XII of the BOX 

Rules 

October 16, 2009. 

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, 2009, NASDAQ OMX BX, Inc. (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons, and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Chapter XII of the Boston Options 

Exchange (‘‘BOX’’) Rules by adding a 

new Section 5. The text of the proposed 

rule change is available at the 

Commission’s Public Reference Room, 

the principal office of the Exchange, and 

on its Web site at http:// 

nasdaqomxbx.cchwallstreet.com/ 

NASDAQOMXBX/Filings. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined in 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 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 amended Chapter XII of 

the BOX Rules to reflect the Exchange’s 

filing to become a participant in the 

Options Order Protection and Locked/ 

Crossed Market Plan (‘‘Decentralized 

Plan’’).3 The Decentralized Plan applies 

many of the Regulation NMS 4 priceVerDate Nov<24>2008 15:13 Oct 21, 2009 Jkt 220001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\22OCN1.SGM 22OCN1

dcolon on DSK2BSOYB1PROD with NOTICES
54608 Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 

5A ‘‘Trade-Through’’ is defined as a transaction 

in an options series, either as principal or agent, at 

a price that is lower than a Protected Bid or higher 

than a Protected Offer. See Section 2(21) of the 

Decentralized Plan; see also Chapter XII, Section 

1(q) of the BOX Rules. A ‘‘Protected Bid’’ or a 

‘‘Protected Offer’’ means a Bid or Offer in an option 

series, respectively, that is disseminated pursuant 

to the OPRA Plan and is the Best Bid or Best Offer, 

respectively, displayed by an Eligible Exchange. See 

Section 2(17) of the Decentralized Plan; see also 

Chapter XII, Section 1(n) of the BOX Rules. A ‘‘Best 

Bid’’ or ‘‘Best Offer’’ means the highest priced Bid 

or the lowest priced Offer. See Section 2(1) of the 

Decentralized Plan; see also Chapter XII, Section 

1(a) of the BOX Rules. A ‘‘Bid’’ or ‘‘Offer’’ means 

the bid price or the offer price communicated by a 

member of an Eligible Exchange to any Broker/ 

Dealer, or to any customer, at which it is willing 

to buy or sell, as either principal or agent, but 

would not include indications of interest. See 

Section 2(2) of the Decentralized Plan; see also 

Chapter XII, Section 1(b) of the BOX Rules. 

6An ‘‘Eligible Options Class’’ is defined as all 

options series overlying a security (as that term is 

defined in Section 3(a)(10) of the Exchange Act) or 

group of securities, including both put options and 

call options, which class is traded on BOX and at 

least one other Eligible Exchange. See Section 2(7) 

of the Decentralized Plan; see also Chapter XII, 

Temporary Section 4(g)(2) of the BOX Rules. An 

‘‘Eligible Exchange’’ means a national securities 

exchange registered with the Commission in 

accordance with Section 6(a) of the Securities 

Exchange Act of 1934 (‘‘Act’’) that is a Participant 

Exchange in OCC (as that term is defined in Section 

VII of the OCC by-laws), is a party to the OPRA Plan 

(as that term is defined in Section I of the OPRA 

Plan), and if the national securities exchange is not 

a party to the Plan, is a participant in another plan 

approved by the Commission providing for 

comparable Trade-Through and Locked and 

Crossed Market protection. See Section 2(6) of the 

Decentralized Plan; see also Chapter XII, Section 

1(f). 

7See Section 5(b) of the Decentralized Plan. 

8See Securities Exchange Act Release No. 60530 

(August 18, 2009), 74 FR 43200 (August 26, 2009) 

(SR–BX–2009–028). 

9See proposed Chapter XII, Section 5 of the BOX 

Rules. 

10Options Participants must indicate for each 

order whether the order is eligible for routing or 

not. 

11At this time BOX will not be sending ISOs to 

Away Markets, as defined in Chapter V, Section 

14(c)(vi) of the BOX Rules. 

12 15 U.S.C. 78f(b)(4) and (5). 

13BOX may not use a Routing Broker for which 

the Exchange or any affiliate of the Exchange is the 

designated examining authority. 

protection provisions to the options 

markets. Similar to Regulation NMS, the 

Decentralized Plan requires Plan 

Participants to, among other things, 

adopt rules ‘‘reasonably designed to 

prevent Trade-Throughs 5 in Eligible 

Options Classes 6’’, while providing 

exceptions for certain transactions that 

track those provided under Regulation 

NMS, correspond with unique aspects 

of the options market, or both.7

The Commission previously approved 

certain Exchange rules and definitions 

necessary to implement the 

Decentralized Plan.8 The purpose of this 

filing is to amend Chapter XII of the 

BOX Rules to provide for the use by 

BOX of certain non-affiliated third party 

routing broker/dealers (‘‘Routing 

Broker(s)’’) to route options orders to 

one or more Away Exchange(s) when 

such Away Exchange(s) display the Best 

Bid or Best Offer in accordance with the 

Decentralized Plan. In particular, the 

Exchange proposes to add to Chapter XII 

of the BOX Rules, a new rule that would 

govern the outbound order routing 

process (‘‘Order Routing Rule’’).9

The use of the Routing Broker to route 

orders to one or more Away Exchange(s) 

will be optional and available only to 

BOX Options Participants. In the event 

an Options Participant does not want to 

use the Routing Broker it must simply 

designate the order as do not route.10

Only orders that are specifically 

designated by Options Participants as 

eligible for routing will be routed to an 

Away Exchange (‘‘Eligible Orders’’). 

However, Market-on-Opening Orders, 

any Improvement Auction orders or any 

order identified with the condition ‘‘Fill 

and Kill’’ shall not be eligible for 

routing. BOX would only route an 

Eligible Order in order to avoid a TradeThrough or a locked or crossed market, 

pursuant to the requirements of Chapter 

XII, Sections 2 and 3 of the BOX Rules 

and consistent with the Decentralized 

Plan, when the order has not been 

executed in its entirety on BOX.11 All 

Eligible Orders entered on BOX that are 

routed via the Routing Broker that result 

in an execution shall be binding on the 

Options Participant that entered such 

Eligible Order. 

The full or remaining quantity of an 

Eligible Order will be routed to one or 

more Away Exchange(s) as Immediate or 

Cancel (‘‘IOC’’) limit order(s) priced at 

the current NBBO. Multiple IOC limit 

order(s) may be routed to Away 

Exchanges with the best Protected Bid 

or Protected Offer until the Eligible 

Order quantity is fully executed or the 

limit price is reached. If the Eligible 

Order is not executed in its entirety at 

the Away Exchange(s) or its limit price 

is reached, then it will be returned to 

BOX and the remainder of the Eligible 

Order will be treated as a new order. 

While an Eligible Order remains outside 

BOX, it would have no time standing 

relative to other orders received from 

Options Participants at the same price 

that could be executed against interest 

on the BOX Book. Requests from 

Options Participants to cancel their 

Eligible Order while routed to one or 

more Away Exchange(s) would be 

processed subject to the applicable 

trading rules of the Away Exchange(s). 

As stated above, the Exchange 

proposes that BOX would route Eligible 

Orders to Away Exchanges under 

certain circumstances (‘‘Routing 

Services’’). BOX would provide its 

Routing Services pursuant to the terms 

of an agreement between BOX and each 

Routing Broker that provides Routing 

Services (‘‘BOX Routing Agreement’’). 

The Exchange proposes that BOX 

provide its Routing Services in 

compliance with its own rules and with 

the provisions of the Act and the rules 

thereunder, including, but not limited 

to, the requirements in Sections 6(b)(4) 

and (5) of the Act 12 that the rules of a 

national securities exchange provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities, and not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

As a provider of Routing Services, the 

Exchange proposes that BOX would 

enter into a Routing Agreement for the 

necessary routing technology to be used 

in connection with its own systems and 

accordingly would control the logic that 

determines when, how, and where 

orders are routed to Away Exchanges. 

The Routing Broker cannot change the 

routing logic. 

The Exchange also proposes that BOX 

establish and maintain procedures and 

internal controls reasonably designed to 

adequately restrict the flow of 

confidential and proprietary 

information between BOX and the 

Routing Broker, and any other entity, 

including any affiliate of the Routing 

Broker, and, to the extent the Routing 

Broker reasonably receives confidential 

and proprietary information, that 

adequately restrict the use of such 

information by the Routing Broker to 

legitimate business purposes necessary 

for routing orders at the direction of 

BOX; and, if the Routing Broker or any 

of its affiliates engages in any other 

business activities other than providing 

routing services to BOX, between the 

segment of the Routing Broker or 

affiliate that provides the other business 

activities and the segment of the 

Routing Broker that provides the routing 

services.13 The Routing Agreement 

would include terms and conditions 

that enable BOX to comply with these 

proposed requirements. 

The Exchange requests that this 

proposal be approved on a pilot basis 

for three (3) months starting from the 

date of the approval of this filing. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of Section 6(b) of the 


dcolon on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 54609 

14 15 U.S.C. 78(f)(b). 

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

16 15 U.S.C. 78k–1(a)(1). 

17 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 18 15 U.S.C. 78f(b)(5). 

19See supra note 10. 

20See supra note 13. 

21See proposed BOX Rule Chapter XII, Section 5, 

Supplementary Material .01(d). 

22 15 U.S.C. 78f(b)(4) and (5). 

23See proposed BOX Rule Chapter XII, Section 5, 

Supplementary Material .01(a). 

24See SR–BX–2009–066, Item 7; see also 

Securities Exchange Act Release No. 60551 (August 

20, 2009), 73 FR 43196 (August 26, 2009) (SR– 

CBOE–2009–040). 

Act,14 in general, and Section 6(b)(5) of 

the Act,15 in particular, in that it will 

promote just and equitable principles of 

trade; facilitate transactions in 

securities; remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system; and, in general, protect 

investors and the public interest. The 

Exchange believes that the proposed 

rule change also is designed to support 

the principles of Section 11A(a)(1) 16 in 

that it seeks to assure economically 

efficient execution of securities 

transactions. In particular, the proposed 

rule change will allow BOX to establish 

and implement mechanisms to remain 

fully compliant with the Decentralized 

Plan, BOX Rules, and its best execution 

obligations. 

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. 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–2009–066 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BX–2009–066. 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 the filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BX– 

2009–066 and should be submitted on 

or before November 12, 2009. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of a 

Proposed Rule Change 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.17 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,18 which requires, 

among other things, that the rules of a 

national securities exchange 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 securities; 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; and are not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

As described above, BOX Options 

Participants may designate orders to be 

routed to another market center when 

trading interest is not available on BOX. 

Orders designated for routing will be 

routed to avoid a Trade-Through or a 

locked or crossed market, when an order 

has not been executed in its entirety on 

BOX. Orders routed to other markets do 

not retain time priority with respect to 

orders on BOX. If a routed order is 

returned to BOX in whole or in part, 

that order (or remainder) will be treated 

as a new order, with a new time stamp. 

All orders entered on BOX that are 

routed via the Routing Broker that result 

in an execution shall be binding on the 

BOX Options Participant that entered 

such order. 

Use of the Exchange’s Routing 

Services will be optional,19 and the 

Exchange will be responsible for routing 

decisions and will retain control of the 

routing logic.20 Neither the Exchange, 

nor any affiliate of the Exchange, may be 

the designated examining authority for 

a Routing Broker.21 The Commission 

also notes that the rule contemplates 

procedures and internal controls 

designed to protect confidential and 

proprietary information, which should 

help ensure that a Routing Broker does 

not misuse routing information obtained 

from the Exchange. In addition, the 

Exchange will provide its Routing 

Services in compliance with its own 

rules and with the provisions of the Act 

and the rules thereunder, including, but 

not limited to, the requirements in 

Sections 6(b)(4) and (5) of the Act 22 that 

the rules of a national securities 

exchange provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

issuers and other persons using its 

facilities, and not be designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers.23

In light of these protections, the 

Commission believes that BOX’s rules 

and procedures regarding the Routing 

Services are consistent with the Act. 

The Exchange has asked the 

Commission to accelerate approval of 

the proposed rule change. The Exchange 

notes that its proposal is consistent with 

prior Commission action,24 and that 

accelerated approval will allow BOX to 

establish and implement mechanisms to 

remain fully compliant with the 


dcolon on DSK2BSOYB1PROD with NOTICES
54610 Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 

25See letter from Elizabeth K. King, Associate 

Director, Division of Trading and Markets, 

Commission, to Maura A. Looney, Associate Vice 

President. NASDAQ OMX BX, Inc., dated August 

28, 2009 (granting the Exchange’s request under 

Rule 608(e) of Regulation NMS for a Temporary 

Exemption from Certain Provisions of the Options 

Order Protection and Locked/Crossed Market Plan) 

(‘‘Exemption Letter’’). 

26See SR–BX–2009–066, Item 7. 

27See Exemption Letter, supra note 25. 

28See, e.g., supra note 24. 

29 15 U.S.C. 78s(b)(2). 

30 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The 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 Information 

Notice, March 12, 2008 (Rulebook Consolidation 

Process). 

4SEA Rule 14b–1(b)(2) requires that brokerdealers must forward proxy and other specified 

materials no later than five business days after 

receipt. 

5Under paragraph (e) of the rule, a member’s duty 

under Rule 2260(a) applies provided the member: 

is furnished with sufficient copies of the material 

(e.g., annual reports, information statements or 

other material sent to security holders) by the 

issuer, stockholder or trustee; is requested by the 

issuer, stockholder or trustee to forward the 

Decentralized Plan and BOX Rules. The 

Exchange also states that accelerated 

approval will allow BOX to be fully 

compliant with the Decentralized Plan 

and no longer rely on a Commissiongranted exemption 25 from Rule 608(c) 

of Regulation NMS, which requires BOX 

to comply with, and enforce compliance 

by its members with, certain provisions 

of the Decentralized Plan.26 The 

exemption is currently set to expire on 

October 31, 2009.27 The Commission 

finds good cause for approving the 

proposed rule change before the 

thirtieth day after the date of 

publication of notice of filing thereof in 

the Federal Register. The Commission 

notes that the Exchange’s proposal is 

consistent with rules approved for other 

national securities exchanges.28 Also, 

approval on an accelerated basis will 

allow BOX an opportunity to comply 

with the terms of the Decentralized Plan 

prior to the expiration of its exemption, 

while the proposed pilot period will 

allow interested parties an opportunity 

to comment on the proposal before 

permanent approval. Accordingly, the 

Commission finds good cause, 

consistent with Section 19(b)(2) of the 

Act,29 to approve the proposed rule 

change on an accelerated basis for a 

pilot period expiring January 15, 2010. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act, that the 

proposed rule change (SR–BX–2009– 

066) is hereby approved on an 

accelerated basis for a pilot period to 

expire on January 15, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–25338 Filed 10–21–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60824; File No. SR–FINRA– 

2009–066] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Adopt 

FINRA Rule 2251 (Forwarding of Proxy 

and Other Issuer-Related Materials) in 

the Consolidated FINRA Rulebook 

October 14, 2009. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘SEA’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on October 2, 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 without 

material change NASD Rule 2260 

(Forwarding of Proxy and Other 

Materials) and NASD IM–2260 

(Approved Rates of Reimbursement) in 

the consolidated FINRA rulebook. The 

proposed rule change would combine 

NASD Rule 2260 and NASD IM–2260 

into a single rule that would be 

renumbered as FINRA Rule 2251 in the 

consolidated FINRA rulebook. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

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

office of FINRA and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

As part of the process of developing 

a new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt without 

material change NASD Rule 2260 

(Forwarding of Proxy and Other 

Materials) and NASD Interpretive 

Material (‘‘IM’’) 2260 (Approved Rates 

of Reimbursement) in the Consolidated 

FINRA Rulebook. The proposed rule 

change would combine NASD Rule 

2260 and NASD IM–2260 into a single 

rule that would be renumbered as 

FINRA Rule 2251 in the Consolidated 

FINRA Rulebook. 

(A) Background 

NASD Rule 2260 sets forth certain 

requirements with respect to the 

transmission of proxy materials and 

other communications to beneficial 

owners of securities and the limited 

circumstances in which members are 

permitted to vote proxies without 

instructions from those beneficial 

owners. NASD IM–2260 regulates the 

reimbursement that members are 

entitled to receive in connection with 

forwarding proxy materials and other 

communications. 

(1) NASD Rule 2260 

NASD Rule 2260(a) sets forth the 

general obligation of members to 

transmit proxy and related materials. 

The rule provides that members must, 

in connection with an equity security, 

forward promptly 4 or, in connection 

with a debt security, make reasonable 

efforts to forward promptly certain 

information to the beneficial owner,5 or 


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