28308 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices 

10 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 FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

4See Securities Exchange Act Release No. 58738 

(October 6, 2008), 73 FR 60371 (October 10, 2008) 

(Order Approving File No. SR–FINRA–2008–013). 

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–NYSEArca–2009–48 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–NYSEArca–2009–48. 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 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–NYSEArca–2009–48 and 

should be submitted on or before July 6, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13972 Filed 6–12–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60066; File No. SR–FINRA– 

2009–036] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Adopt 

FINRA Rules 2124 (Net Transactions 

With Customers), 2220 (Options 

Communications), 4370 (Business 

Continuity Plans and Emergency 

Contact Information) and 5250 

(Payments for Market Making) in the 

Consolidated FINRA Rulebook 

June 8, 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 May 21, 

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 

Rules 2220 (Options Communications), 

2441 (Net Transactions with 

Customers), 2460 (Payments for Market 

Making), 3510 (Business Continuity 

Plans) and 3520 (Emergency Contact 

Information) as FINRA rules in the 

consolidated FINRA rulebook without 

substantive change. The proposed rule 

change would renumber NASD Rule 

2220 as FINRA Rule 2220, NASD Rule 

2441 as FINRA Rule 2124, NASD Rule 

2460 as FINRA Rule 5250, and NASD 

Rules 3510 and 3520 would be 

combined into FINRA Rule 4370 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 NASD 

Rules 2220 (Options Communications), 

2441 (Net Transactions with 

Customers), 2460 (Payments for Market 

Making), 3510 (Business Continuity 

Plans) and 3520 (Emergency Contact 

Information) as FINRA rules in the 

consolidated FINRA rulebook without 

substantive change. 

Proposed FINRA Rule 2220 

FINRA is proposing to adopt NASD 

Rule 2220 (Options Communications) 

without substantive change into the 

Consolidated FINRA Rulebook as 

FINRA Rule 2220. NASD Rule 2220 sets 

forth a member’s obligations with 

respect to its options communications 

with the public. In 2008, FINRA revised 

NASD Rule 2220 to make it more 

consistent with FINRA’s general rules 

on communications with the public and 

the options communications rules of 

other self-regulatory organizations 

(SROs).4 As amended, NASD Rule 2220, 


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Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices 28309 

5See Regulatory Notice 08–73 (December 2008) 

(SEC Approves Amendments to NASD Rule 2220 to 

Update the Standards for Options 

Communications). There is no longer a comparable 

Incorporated NYSE Rule. FINRA previously deleted 

substantially similar Incorporated NYSE Rule 791 

(Communications to Customers) as part of a rule 

change that, among other things, reduced regulatory 

duplication for Dual Members during the interim 

period before the completion of the Consolidated 

FINRA Rulebook. See Securities Exchange Act 

Release No. 58533 (September 12, 2008), 73 FR 

54652 (September 22, 2008) (Order Approving File 

No. SR–FINRA–2008–036). 

6A ‘‘net’’ transaction is a principal transaction in 

which a market maker, after having received an 

order to buy (sell) an equity security, purchases 

(sells) the equity security at one price (from (to) 

another broker-dealer or another customer) and 

then sells to (buys from) the customer at a different 

price. 

7See Securities Exchange Act Release No. 54088 

(June 30, 2006), 71 FR 38950 (July 10, 2006) (Order 

Approving File No. SR–NASD–2004–135). 

8See Securities Exchange Act Release No. 38812 

(July 3, 1997), 62 FR 37105 (July 10, 1997) (Order 

Approving File No. SR–NASD–97–29). 

9There is no longer a comparable Incorporated 

NYSE Rule to NASD Rules 3510 and 3520. FINRA 

previously deleted from the Transitional Rulebook 

NYSE Rule 446 (Business Continuity and 

Contingency Plans), which contained substantially 

similar requirements as the two NASD rules, as part 

of the rule change to reduce regulatory duplication 

for Dual Members during the period before 

completion of the Consolidated FINRA Rulebook. 

See Securities Exchange Act Release No. 58533 

(September 12, 2008), 73 FR 54652 (September 22, 

2008) (Order Approving File No. SR–FINRA–2008– 

036). 

10 15 U.S.C. 78o–3(b)(6). 

among other things: (1) Uses, to the 

extent appropriate, the same 

terminology and definitions as in 

FINRA’s general rules on 

communications with the public; (2) 

makes the requirements for principal 

review of correspondence concerning 

options the same as for correspondence 

generally; and (3) updates the standards 

on the content of communications that 

precede the delivery of the options 

disclosure document (ODD). The 

amended rule became effective on 

March 4, 2009.5

FINRA recommends that NASD Rule 

2220 be transferred as FINRA Rule 2220 

into the Consolidated FINRA Rulebook 

without substantive change in light of 

the recent amendments. 

Proposed FINRA Rule 2124 

FINRA is proposing to adopt NASD 

Rule 2441 (Net Transactions with 

Customers) without substantive change 

into the Consolidated FINRA Rulebook 

as FINRA Rule 2124. NASD Rule 2441 

requires members to provide disclosure 

and obtain consent when trading on a 

‘‘net’’ basis with customers.6 With 

respect to non-institutional customers, 

the member must obtain the customer’s 

written consent on an order-by-order 

basis prior to executing the transaction 

and such consent must evidence the 

customer’s understanding of the terms 

and conditions of the order. With 

respect to institutional customers, a 

member must obtain the customer’s 

consent prior to executing the 

transaction and such consent may be 

obtained by either: (1) Use of a negative 

consent letter; (2) oral disclosure and 

consent on an order-by-order basis; or 

(3) written consent on an order-by-order 

basis. 

Rule 2441 was approved by the SEC 

in 2006, and was the product of notice 

and comment rulemaking.7 There have 

not been subsequent amendments to the 

rule, and FINRA does not believe any 

substantive changes to this rule are 

necessary. Therefore, FINRA 

recommends that NASD Rule 2441 be 

transferred without substantive change 

into the Consolidated FINRA Rulebook 

as FINRA Rule 2124. 

Proposed FINRA Rule 5250 

FINRA is proposing to adopt NASD 

Rule 2460 (Payment for Market Making) 

without substantive change into the 

Consolidated FINRA Rulebook as 

FINRA Rule 5250. NASD Rule 2460 

prohibits any payments by an issuer or 

an issuer’s affiliates and promoters, 

directly or indirectly, to a member or 

person associated with a member for 

publishing a quotation, acting as a 

market maker, or submitting an 

application in connection therewith. 

The rule contains two exceptions that 

permit a member to accept (1) payment 

for bona fide services, including, but not 

limited to, investment banking services 

and (2) reimbursement for registration 

or listing fees. The SEC approved NASD 

Rule 2460 after notice and comment in 

July 1997 with no subsequent 

amendments.8

FINRA believes no changes to this 

rule are appropriate or necessary. 

FINRA continues to believe, as stated in 

FINRA’s 1997 rule filing, that a market 

maker should have considerable latitude 

and freedom to make or terminate 

market making activities in an issuer’s 

securities. The decision by a firm to 

make a market in a given security and 

the question of price generally are 

dependent on a number of factors, 

including, among others, supply and 

demand, the firm’s expectations toward 

the market, its current inventory, and 

exposure to risk and competition. This 

decision should not be influenced by 

payments to the member from issuers or 

promoters. Therefore, FINRA proposes 

to transfer NASD Rule 2460 without 

substantive change into the 

Consolidated FINRA Rulebook as 

FINRA Rule 5250. 

Proposed FINRA Rule 4370 

FINRA is proposing to adopt NASD 

Rule 3510 (Business Continuity Plans) 

and NASD Rule 3520 (Emergency 

Contact Information) without 

substantive change into the 

Consolidated FINRA Rulebook and 

combine the rules as FINRA Rule 4370 

(Business Continuity Plans and 

Emergency Contact Information). NASD 

Rule 3510 requires members to create 

and maintain a written business 

continuity plan identifying procedures 

relating to an emergency or significant 

business disruption and enumerates the 

minimum elements that a member’s 

business continuity plan must address, 

to the extent those elements are 

applicable and necessary to the 

member’s business. NASD Rule 3510 

further requires members to update their 

business continuity plans upon any 

material change and, at a minimum, 

conduct an annual review of their plans. 

Each member also must disclose to its 

customers how its business continuity 

plan addresses the possibility of a future 

significant business disruption and how 

the member plans to respond to events 

of varying scope. Each member must 

make this disclosure, at a minimum, in 

writing to customers at account 

opening, by posting it on the member’s 

Web site (if the member maintains a 

Web site), and by mailing it to 

customers upon request. 

NASD Rules 3510 is one part of the 

NASD Rule 3500 Series (Emergency 

Preparedness), which requires members 

to establish emergency preparedness 

plans and procedures. NASD Rule 3520, 

which comprises the remainder of the 

NASD Rule 3500 Series, requires 

members to designate two emergency 

contact persons and provide this 

information to FINRA via electronic 

process.9

FINRA recommends that NASD Rules 

3510 and 3520 be adopted as one rule, 

FINRA Rule 4370, in the Consolidated 

FINRA Rulebook without any 

substantive changes to the respective 

rules’ provisions. 

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. 

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 


pwalker on PROD1PC71 with NOTICES
28310 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See infra notes 7 and 36 and accompanying text. 

4E-mail from Michael Cavalier, Chief Counsel, 

NYSE Euronext, to Edward Cho, Special Counsel, 

Division of Trading and Markets, Commission, 

dated June 4, 2009 (‘‘Exchange Confirmation’’). 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes that 

transferring NASD Rule 2220 into the 

Consolidated Rulebook protects 

investors and the public interest by 

providing the investing public with 

options communications rules that are 

designed to provide appropriate 

safeguards and greater clarity by 

promoting harmonization between 

FINRA’s and other SROs’ options 

communications rules. FINRA believes 

that transferring NASD Rule 2441 into 

the Consolidated FINRA Rulebook 

promotes investor protection by 

requiring members to provide disclosure 

and obtain customer consent when 

trading on a net basis. In addition, 

FINRA believes that the benefits to 

investors of requiring certain 

disclosures and obtaining customer 

consent when trading on a net basis 

outweighs the additional 

responsibilities placed on brokerdealers. FINRA believes that transferring 

NASD Rule 2460 into the Consolidated 

FINRA Rulebook will protect investors 

and the public interest and avert a 

potential conflict of interest by 

prohibiting members from receiving 

compensation or other payments from 

an issuer or others for listing, quoting or 

making a market in an issuer’s 

securities. Finally, FINRA believes that 

transferring and combining NASD Rules 

3510 and 3520 in the Consolidated 

FINRA Rulebook will help ensure that 

members are prepared in the event of a 

significant business disruption. The 

proposed rule change makes nonsubstantive changes to rules that have 

proven effective in meeting the statutory 

mandates. 

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 

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 

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–FINRA–2009–036 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–2009–036. 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 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–2009–036 and 

should be submitted on or before July 6, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13971 Filed 6–12–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60065; File No. SR– 

NYSEArca–2009–47] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and Order 

Granting Accelerated Approval of 

Proposed Rule Change Relating to 

Generic Listing Rules for Currency 

Trust Shares 

June 8, 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 May 28, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

‘‘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 proposed rule change on 

an accelerated basis.3

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange, through its wholly 

owned subsidiary NYSE Arca Equities, 

Inc. (‘‘NYSE Arca Equities’’ or the 

‘‘Corporation’’), proposes to amend its 

rules governing NYSE Arca, LLC, which 

is the equities trading facility of NYSE 

Arca. NYSE Arca is proposing to amend 

NYSE Arca Equities Rule 8.202 

(Currency Trust Shares) to provide 

generic listing and trading rules for such 

securities. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com.4


pwalker on PROD1PC71 with NOTICES