28318 Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices 

24See proposed NYSE Arca Equities Rule 

8.700(e)(1)(A). 

25 15 U.S.C. 78f(b)(5). 

26 15 U.S.C. 78s(b)(2). 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 59836 (April 28, 

2009); 74 FR 20519 (May 4, 2009). 

4 If the panel consists of one arbitrator, the 

arbitrator will be a non-public arbitrator selected 

from the non-public chairperson roster described in 

Rule 13400(c). See Rule 13402(a). 

5 If the panel consists of one arbitrator, the 

arbitrator will be a public arbitrator selected from 

the chairperson roster described in Rule 12400(c) of 

the Code of Arbitration Procedure for Customer 

Disputes (‘‘Customer Code’’). See Rule 13402(b). 

6The proposed changes discussed in this order 

will not apply to claims filed under the Customer 

Code. 

7The proposal would not apply to disputes 

involving a claim of statutory employment 

discrimination. See Rule 13802. 

8See Rule 13802(c) (panel composition rule for 

statutory employment discrimination claims). 

9The proposed change would be consistent with 

the rules and procedures of the former New York 

Stock Exchange (‘‘NYSE’’) arbitration forum. In the 

NYSE arbitration forum, cases involving associated 

persons received a majority public panel because 

the rules classified associated persons as nonmembers, and non-members received a majority 

public panel. See NYSE Rule 607(a)(1). 

(5) A minimum of 100,000 Shares will 

be required to be outstanding at the start 

of trading.24

This approval order is based on the 

Exchange’s representations. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 25 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,26 that the 

proposed rule change (SR–NYSEArca– 

2009–30), as modified by Amendment 

No. 1 thereto, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13969 Filed 6–12–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60061; File No. SR–FINRA– 

2009–011] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change as Modified by 

Amendment No. 1 Thereto To Amend 

the Panel Composition Rules of the 

Code of Arbitration Procedure for 

Industry Disputes 

June 5, 2009. 

On March 4, 2009, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) (f/k/a National Association 

of Securities Dealers, Inc. (‘‘NASD’’)) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

19b–4 thereunder,2 a proposed rule 

change to amend the panel composition 

rules of the Code of Arbitration 

Procedure for Industry Disputes 

(‘‘Industry Code’’). On April 7, 2009, 

FINRA filed Amendment No. 1 to the 

proposed rule change. The proposed 

rule change, as modified by Amendment 

No. 1, was published for comment in 

the Federal Register on May 4, 2009.3

The Commission received no comments 

on the proposed rule change. This order 

approves the proposed rule change, as 

modified by Amendment No. 1. 

I. Description of the Proposal 

FINRA proposed to amend the 

Industry Code to change the criteria for 

determining the panel composition 

when the claim involves an associated 

person in industry disputes. 

Currently, Rule 13402(a) of the 

Industry Code requires an all non-public 

panel for disputes between members, 

and for employment disputes between 

or among members and associated 

persons that relate exclusively to 

employment contracts, promissory 

notes, or receipt of commissions.4 In all 

other disputes between or among 

members and associated persons, Rule 

13402(b) requires a majority public 

panel, where one arbitrator would be a 

non-public arbitrator and two would be 

public arbitrators.5

FINRA proposed to amend the 

Industry Code to change the criteria for 

determining panel composition when 

the claim involves an associated person 

in industry disputes.6 Specifically, 

FINRA proposed to amend Rule 13402 

and related rules of the Industry Code 

to: 

• Require that the parties receive a 

majority public panel for all industry 

disputes involving associated persons 

(excluding disputes involving statutory 

employment discrimination claims 

which require a specialized all public 

panel); 7

• Clarify that in disputes involving 

only members, parties will receive an all 

non-public panel; and 

• Provide that if a party amends its 

pleadings to add an associated person to 

a previously all member case, parties 

will receive a majority public panel. 

Thus, cases involving only members 

would have an all non-public panel; 

cases involving a member and an 

associated person (excluding cases 

involving a claim for statutory 

discrimination) would have a majority 

public panel; and cases involving an 

associated person with a statutory 

discrimination claim would have a 

specialized all public panel.8 Moreover, 

if a member amends its pleadings to add 

an associated person, the case would 

receive a majority public panel, and the 

rules that apply to cases between 

associated persons and members would 

govern list selection and the 

administration of the arbitration 

proceeding. 

Employment Disputes Involving 

Associated Persons 

Currently, in employment disputes 

between or among members and 

associated persons, FINRA requires that 

the panel consist of all non-public 

arbitrators in cases that arise out of the 

employment or termination of 

employment of an associated person, 

and that relate exclusively to (1) 

employment contracts, (2) promissory 

notes, or (3) receipt of commissions. 

However, if a party adds a claim that 

does not meet these criteria, the parties 

receive a majority public panel. 

FINRA proposed to amend Rule 

13402 of the Industry Code to clarify 

that for all employment disputes 

between or among members and 

associated persons (except for statutory 

employment discrimination cases), the 

parties must select a majority public 

panel.9 Rule 13402(a) would be 

amended to delete the title of the rule, 

which contains the exceptions to the 

majority public panel requirement, and 

replace it with a concise description, 

which clarifies that Rule 13402(a) 

would apply to disputes involving only 

members. Rule 13402(b) would be 

amended to modify the title of the rule 

to clarify that for all industry disputes 

involving associated persons (excluding 

disputes involving statutory 

employment discrimination claims), the 

parties would receive a majority public 

panel. FINRA also proposed to make 

similar title changes to Rules 13403(a) 

and 13403(b), which govern generating 

and sending lists to parties, and to Rules 

13406(a) and 13406(b), which govern 

appointment of arbitrators and 

discretion to appoint arbitrators not on 

the list. 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 113 / Monday, June 15, 2009 / Notices 28319 

10 In a dispute between members, if the panel 

consists of one arbitrator, the arbitrator will be 

selected from FINRA’s non-public chairperson 

arbitrator roster. See Rule 13402(a). 

11See Rule 13403(b)(1). FINRA has raised the 

amount in controversy that will be heard by a single 

chair-qualified arbitrator to $100,000. The rule 

became effective on March 30, 2009. See Exchange 

Act Release No. 59340 (February 2, 2009), 74 FR 

6335 (February 6, 2009) (File No. SR–FINRA–2008– 

047); see also Regulatory Notice 09–13. 

12Pursuant to Rule 13407(a), FINRA will send the 

list of non-public arbitrators to the new party, with 

employment history for the past 10 years and other 

background information for each arbitrator listed. 

The newly added party may rank and strike 

arbitrators in accordance with Rule 13404. 

13See note 8 supra. 

14See Rule 13309(c) of the Industry Code. 15Pursuant to Rule 13407(b), the newly added 

party may not strike the non-public arbitrator but 

may challenge the arbitrator for cause in accordance 

with Rule 13410. 16See note 8 supra. 17 In approving the proposed rule change, the 

Commission has considered the rule change’s 

impact on efficiency, competition, and capital 

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

18 15 U.S.C. 78o–3(b)(6). 

19 15 U.S.C. 78s(b)(2). 

20 17 CFR 200.30–3(a)(12). 

Employment Disputes Involving Only 

Members 

FINRA proposed to amend Rule 

13402(a) to clarify that, in disputes 

involving only members, the parties will 

receive an all non-public panel. FINRA 

noted that the proposed amendment to 

Rule 13402(a) is consistent with the 

current rule and its intent, which is that 

disputes involving only members 

should receive an all non-public panel. 

Amendments to Pleadings That Add an 

Associated Person 

FINRA proposed to add a provision to 

Rule 13402(a) to address amended 

pleadings that add an associated person 

as a party. Under the proposed rule 

change, if a member in a dispute 

involving only members amends a 

pleading to add a party who is an 

associated person, the parties will 

receive a majority public panel. If lists 

of potential arbitrators have not been 

sent to parties, the Neutral List 

Selection System (NLSS) would 

generate three lists as outlined in Rule 

13403(b)(2) of the Industry Code. 

Specifically, FINRA would send a 

public chairperson list, a public 

arbitrator list, and a non-public 

arbitrator list. If the panel consists of 

one arbitrator,10 NLSS would generate a 

public chairperson list, and FINRA 

would send this list only to the 

parties.11

If the lists have been sent to parties 

but are not yet due, FINRA would send 

two new lists to the parties: A public 

chairperson list and a public arbitrator 

list as outlined in Rule 13403(b)(2).12

The parties would keep the non-public 

chairperson list provided to them as 

described in Rule 13403(a), and would 

select the non-public arbitrator from this 

list. The arbitrator selected from the 

public chairperson list would be the 

chairperson of the panel. If the panel 

consists of one arbitrator, FINRA would 

send only a new public chairperson list 

to the parties.13

If the ranked lists are due, then the 

parties may not amend a pleading to 

add a new party until a panel has been 

selected and the panel grants a motion 

to add the party.14 If the panel grants the 

motion to add an associated person, 

FINRA will retain the non-public 

chairperson from the panel, and remove 

the remaining non-public arbitrators.15

The parties would select two public 

arbitrators from new lists that FINRA 

would send to them in the same manner 

as if the ranked lists are not yet due. The 

arbitrator selected from the public 

chairperson list would be the 

chairperson of the panel. If the panel 

consists of one arbitrator and the 

arbitrator grants a motion to add an 

associated person, the arbitrator would 

be replaced with a public chairqualified arbitrator that the parties 

select from a new public chairperson 

list that NLSS would generate.16

II. Discussion 

After careful review, 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 association.17 In particular, 

the Commission finds that the proposed 

rule change is consistent with Section 

15A(b)(6) of the Act,18 in that it is 

designed, among other things, to 

prevent fraudulent and manipulative 

acts and practices; 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 Commission believes that the 

proposed rule change will protect the 

public interest by simplifying the 

criteria for panel composition in 

industry disputes, establishing an 

objective standard for determining panel 

composition, and ensuring that panel 

composition is determined by the types 

of parties involved, and not by the types 

of claims filed. 

III. Conclusion 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to a national 

securities association. 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–FINRA– 

2009–011), as modified by Amendment 

No. 1, be and hereby is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–13967 Filed 6–12–09; 8:45 am] 

BILLING CODE 8010–01–P 

DEPARTMENT OF STATE 

[Public Notice 6662] 

Notice of Proposed Information 

Collection 

30–Day Notice of Proposed 

Information Collection: Form DS–7002, 

Training/Internship Placement Plan, 

OMB Control Number 1405–0170. 

ACTION: Notice of request for public 

comment and submission to OMB of 

proposed collection of information. 

SUMMARY: The Department of State has 

submitted the following information 

collection request to the Office of 

Management and Budget (OMB) for 

approval in accordance with the 

Paperwork Reduction Act of 1995. 

* Title of Information Collection: 

Training/Internship Placement Plan. 

* OMB Control Number: 1405–0170. 

* Type of Request: Revision of a 

Currently Approved Collection. 

* Originating Office: Bureau of 

Educational and Cultural Affairs, 

ECA/EC. 

* Form Number: Form DS–7002. 

* Respondents: Entities designated by 

the Department of State as sponsors of 

exchange visitor programs in the trainee 

or intern categories and U.S. businesses 

that provide the training or internship 

opportunity. 

* Estimated Number of Respondents: 

160. 

* Estimated Number of Responses: 

30,000. 

* Average Hours per Response: 2 

hours. 

* Total Estimated Burden: 60,000. 

* Frequency: On occasion. 

* Obligation To Respond: Required to 

obtain a benefit. 

DATES: Submit comments to the Office 

of Management and Budget (OMB) for 

up to 30 days from June 15, 2009. 

ADDRESSES: Direct comments and 

questions to Katherine Astrich, the 

Department of State Desk Officer in the 


pwalker on PROD1PC71 with NOTICES