4790 Federal Register / Vol. 74, No. 16 / Tuesday, January 27, 2009 / Notices 

14For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

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. 58990 

(November 20, 2008), 73 FR 72534 (‘‘Notice’’). In 

order for a company to voluntarily delist from the 

Exchange, it would have to follow the procedures 

set forth in Rule 12d2–2 under the Act, which 

includes the filing of a Form 25 with the 

Commission. See Rule 12d2–2 under the Act, 17 

CFR 240.12d2–2. 

4As of the date of the Notice, twenty-nine issuers 

currently have listings with the Exchange. 

5See infra note 6. 

protection of investors and the public 

interest because such waiver will allow 

BATS Users to immediately benefit from 

the protections provided by BATS 

market orders. The Commission hereby 

grants the Exchange’s request and 

designates the proposal operative upon 

filing.14

At any time within 60 days of the 

filing of such 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. 

ii. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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 

No. SR–BATS–2009–001 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 No. 

SR–BATS–2009–001. 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 changes 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 BATS. 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 No. 

SR–BATS–2009–001 and should be 

submitted on or before February 17, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–1670 Filed 1–26–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59265; File No. SR–BSE– 

2008–36] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Inc.; Order Approving 

Proposed Rule Change Relating to 

Delisting Standards 

January 16, 2009. 

I. Introduction 

On November 3, 2008, the Boston 

Stock Exchange, Inc. (‘‘BSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’),1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

adopt new criteria permitting the 

delisting of a security when the 

Exchange has terminated its program for 

listing and trading cash equities 

(‘‘Listing Program’’) in connection with 

the discontinuation of trading in all 

securities listed on its market. The 

proposed rule change was published for 

comment in the Federal Register on 

November 28, 2008.3 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change. 

II. Description of the Proposed Rule 

Change 

On September 5, 2007, the Exchange 

announced the discontinuation of the 

operations of the Boston Equities 

Exchange. In addition to that 

announcement, in October 2007, all 

issuers were given additional notice that 

the BSE had terminated its Listing 

Program. While trading in all securities 

on the BSE ceased on September 5, 

2007, not all companies have delisted 

their securities from the Exchange by 

filing a Form 25 with the Commission.4

As a result, the Exchange proposes to 

adopt new rules that would give it the 

authority to delist, under certain 

conditions, the remaining BSE-listed 

companies, because there is no basis to 

involuntarily delist these companies 

under BSE’s existing rules. 

Under the proposal, the Exchange 

may determine to delist a security when 

the Exchange has terminated its Listing 

Program in connection with the 

discontinuation of trading in all 

securities listed on its market. The 

proposed new rule will provide that at 

least 15 days before issuing such 

delisting determination, the Board of 

Directors or its designee must give 

notice of the delisting to the company. 

As soon as practicable after the issuance 

of the delisting determination, notice 

will be provided to the company and 

the Commission of such delisting 

determination. Notice to the company of 

the delisting determination shall inform 

the company of the opportunity to 

appeal, applying the same appeal rights 

that exist under BSE rules for any 

company involuntarily delisted by the 

Exchange when the BSE was 

operational.5

The Exchange represents that it would 

use this authority to delist on the 

grounds that BSE is not currently 

operating a listing program and, 

therefore, it is in the public interest that 

the Exchange not maintain any 

appearance of having any listings on the 

Exchange as long as programs for listing 

and trading cash equities and related 

activity have ceased. In addition, prior 

to implementing any involuntary 

delistings, the Exchange represented 

that it will contact each company and 

suggest that it file a Form 25 to effect a 

voluntary delisting before the Exchange 

issues any delisting determination. 

Thereafter, the Exchange will move to 

delist those companies that do not act 

mstockstill on PROD1PC66 with NOTICES6

Federal Register / Vol. 74, No. 16 / Tuesday, January 27, 2009 / Notices 4791 

6The Commission notes that the appeals 

procedures proposed in new Section 2(c)(3) of 

Chapter XXVII are identical to the appeals 

procedures set forth in the current BSE Rules. See 

Chapter XXVII, Section 2(b)(2) of the BSE Rules. 

7Any future proposal to resume trading on a BSE 

market and amend listing standards would be 

required to be submitted as a proposed rule change 

to the Commission under Section 19(b) of the Act 

and Rule 19b–4 thereunder. See 15 U.S.C. 78s(b), 

17 CFR 240.19b–4. 

8Any company that seeks listing on the Exchange 

would be required to apply and meet the 

Exchange’s initial listing standards. Delisted 

companies may also apply to list on another 

national securities exchange if they meet that 

exchange’s initial listing standards. 

9 In approving this proposed rule change the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

10 15 U.S.C. 78f. 

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78f(b)(7). 

13 17 CFR 240.12d2–2. 

14 15 U.S.C. 78f(b)(5). 

15 17 CFR 240.12d2–2. 

16 17 CFR 240.12d2–2. 

17 15 U.S.C. 78f(b)(7). 

18The Commission has made similar findings in 

approving the original delisting appeal procedures 

of the BSE. See Securities Exchange Act Release No. 

Continued 

in accordance with that suggestion. 

Companies that are involuntarily 

delisted under the rule being adopted in 

this filing will have the appeal right 

provided for by new Section 2(c)(3) of 

Chapter XXVII of the Rules of the 

Exchange.6

In its filing, BSE noted that the 

NASDAQ OMX Group, Inc. (‘‘NASDAQ 

OMX’’) has acquired the Exchange. 

According to BSE, NASDAQ OMX 

expects that the Exchange will resume 

a program for listing and trading cash 

equities. Accordingly, the Exchange 

believes it is appropriate to leave all of 

its listing rules, as amended, in place 

pending rule changes to its listing 

rules.7 Upon the resumption of a listing 

business by the Exchange, delisted 

companies may be eligible for relisting 

if their securities meet the applicable 

standards of the Exchange.8

III. Discussion and Commission 

Findings 

After careful consideration, 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 9 and, in 

particular, the requirements of Section 6 

of the Act.10 Specifically, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,11 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. 

The Commission also finds that the 

proposed rule change is consistent with 

Section 6(b)(7) of the Act,12 which 

requires, among other things, that the 

rules of the exchange provide a fair 

procedure for the prohibition or 

limitation by the exchange of any 

person with respect to access to services 

offered by the exchange. 

The BSE proposes to adopt new 

criteria permitting the delisting of 

securities that are no longer being 

traded in connection with the 

discontinuation of trading in all 

securities listed on its market. The 

Commission notes that the new 

delisting standard can only be utilized 

in rare and unusual circumstances and 

emphasizes that it can only be used to 

involuntarily delist companies when the 

Exchange has discontinued trading in 

all listed securities in its marketplace, as 

BSE has done. Specifically, the 

Exchange announced in September 2007 

that it was terminating its Listings 

Program, and in October 2007, all 

issuers were given additional notice that 

the Listings Program had ceased. 

However, not all issuers have 

voluntarily delisted their securities in 

accordance with the requirements in 

Rule 12d2–2 under the Act 13 and BSE 

rules. The proposed rule change should 

also make the delisting process more 

efficient for both the Exchange and 

listed companies in light of the 

cessation of trading on the BSE market. 

The new delisting standard should 

provide the Exchange with an 

additional means of ensuring the quality 

of and public confidence in BSE as a 

national securities exchange during its 

reorganization. 

The proposed rule change further 

serves to protect the public from being 

mislead into believing that these 

securities retain the imprimatur of an 

exchange listing on an active trading 

market. In this regard, the Commission 

notes that companies listed on a 

national securities exchange retain 

certain benefits and privileges. If an 

exchange has ceased all trading in all 

securities due to discontinuation of its 

marketplace, companies generally 

should not be able to retain their 

exchange listing and corresponding 

privileges, as they are no longer 

providing liquidity via the market. 

Moreover, these companies would no 

longer be monitored for compliance 

with maintenance listing criteria, and 

thus investors and the public would not 

have necessary information regarding 

these companies’ viability. The 

Commission thus believes that the 

proposed new delisting standard is 

consistent with the protection of 

investors under Section 6(b)(5) of the 

Act.14

The Commission also believes the 

proposal provides sufficient notice to 

companies facing delisting pursuant to 

the new criteria consistent with the Act. 

First, notice will be given to the 

company at least 15 days before the 

Exchange issues its delisting 

determination. The Commission 

believes that the proposed rule affords 

sufficient time for interested parties to 

submit to the Exchange and/or 

Commission any comments they have 

on the anticipated delisting, or to take 

any other action as permitted under 

state and federal law including 

commencing a voluntary delisting in 

accordance with Rule 12d2–2 under the 

Act.15

Second, notice will be given to the 

company (and the Commission) after the 

issuance of the delisting determination, 

and the notice shall inform the company 

of the opportunity to appeal. The 

appeals procedures proposed in new 

Section 2(c)(3) of Chapter XXVII, which 

are identical to the appeals procedures 

currently set forth in Section 2(b)(2) of 

Chapter XXVII, provide for notice to the 

issuer of the Exchange’s decision to 

delist its securities; an opportunity for 

appeal to the Exchange’s board of 

directors, or to a designee of the board, 

with a $3000 fee; and public notice, no 

fewer than 10 days before the delisting 

becomes effective, of the Exchange’s 

final determination to delist the 

security. The Commission believes that 

the proposed rule requiring notice to the 

issuer of the Exchange’s delisting 

decision and establishing appeal 

procedures provides issuers with 

adequate notice and opportunity to 

appeal the delisting as required by Rule 

12d2–2 under the Act.16 The 

Commission notes that the appeal 

procedures being adopted by the 

Exchange set forth an adequate structure 

to meet the requirements of Section 

6(b)(7) of the Act 17 and for BSE to 

review on appeal any involuntary 

delistings commenced under the new 

rule being adopted herein.18

mstockstill on PROD1PC66 with NOTICES6

4792 Federal Register / Vol. 74, No. 16 / Tuesday, January 27, 2009 / Notices 

53700 (April 21, 2006), 71 FR 25257 (April 28, 

2006) (SR–BSE–2005–46). 

19 17 CFR 240.12d2–2. 

20 15 U.S.C. 78f(b)(5). 

21 17 CFR 200.30–3(a)(12). 

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

2The current FINRA rulebook includes, in 

addition to FINRA Rules, (1) NASD Rules and (2) 

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’’). 

For more information about the rulebook 

consolidation process, see FINRA Information 

Notice, March 12, 2008 (Rulebook Consolidation 

Process). 

3The term ‘‘person associated with a member’’ 

includes, among others, registered representatives. 

See FINRA By-Laws, Article I, Paragraph (rr). 

4 IM–2110–7 further states that nothing in the 

Interpretation shall affect the operation of NASD 

Rule 11870 (Customer Account Transfer Contracts). 

Generally, Rule 11870 addresses the transfer of 

securities account assets from one member to 

another member in connection with a customer 

request. (FINRA intends to review NASD Rule 

11870 and related interpretive materials as part of 

a later phase in the rulebook consolidation process. 

Note that the Commission has approved FINRA’s 

proposed rule change to rescind, as duplicative of 

Rule 11870, Incorporated NYSE Rule 412 and its 

Interpretation. See Securities Exchange Act Release 

No. 58533 (September 12, 2008), 73 FR 54652 

(September 22, 2008) [File No. SR–FINRA–2008– 

036]. 

5See NASD Notice to Members 02–07 (January 

2002) (Interfering With Customer Account 

Transfers); see also Securities Exchange Act Release 

No. 45239 (January 4, 2002), 67 FR 1790 (January 

14, 2002) [File No. SR–NASD–2001–95]. 

6NASD Notice to Members 79–7 (February 1979) 

(Fair Treatment of Customer Accounts); see also 

Securities Exchange Act Release No. 15194 

(September 28, 1978) (Notice to Broker-Dealers 

Concerning Fair Treatment of Customer Accounts). 

Finally, the proposed rule change 

requires that public notice of the final 

delisting determination by the Exchange 

be provided no fewer than 10 days 

before the delisting becomes effective, 

in accordance with Rule 12d2–2 under 

the Act.19 The Commission believes that 

public notice of the Exchange’s final 

determination should ensure that 

investors have adequate notice of an 

exchange delisting and is consistent 

with the protection of investors under 

Section 6(b)(5) of the Act.20

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and in 

particular Section 6 of the Act and the 

rules and regulations thereunder. 

It is therefore ordered, pursuant to 

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

proposed rule change (File No. SR– 

BSE–2008–36) is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–1673 Filed 1–26–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59253; File No. SR–FINRA– 

2008–052] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change Relating to the 

Adoption of FINRA Rule 2140 

(Interfering With the Transfer of 

Customer Accounts in the Context of 

Employment Disputes) in the 

Consolidated FINRA Rulebook 

January 15, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

October 29, 2008, Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

(f/k/a National Association of Securities 

Dealers, Inc. [‘‘NASD’’]) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change described in Items I, II, and III 

below, which items have been prepared 

by FINRA. The Commission is 

publishing this notice to solicit 

comments 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 Interpretive 

Material 2110–7 (IM–2110–7) 

(‘‘Interfering With the Transfer of 

Customer Accounts in the Context of 

Employment Disputes’’) as a FINRA rule 

in the consolidated FINRA rulebook. 

The proposed rule change would 

renumber NASD IM–2110–7 as FINRA 

Rule 2140 in the consolidated FINRA 

rulebook. 

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 these 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 

the new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),2

FINRA is proposing to adopt without 

material change NASD Interpretive 

Material 2110–7 (IM–2110–7) 

(‘‘Interfering With the Transfer of 

Customer Accounts in the Context of 

Employment Disputes’’) as a FINRA rule 

in the Consolidated FINRA Rulebook. 

The proposed rule change would 

renumber NASD IM–2110–7 as FINRA 

Rule 2140 in the Consolidated FINRA 

Rulebook. 

(A) Background 

NASD IM–2110–7 provides that it 

shall be inconsistent with just and 

equitable principles of trade for a 

member or person associated with a 

member 3 to interfere with a customer’s 

request to transfer his or her account in 

connection with the change in 

employment of the customer’s registered 

representative provided that the account 

is not subject to any lien for monies 

owed by the customer or other bona fide 

claim. Prohibited interference includes, 

but is not limited to, seeking a judicial 

order or decree that would bar or restrict 

the submission, delivery, or acceptance 

of a written request from a customer to 

transfer his or her account.4

FINRA adopted IM–2110–7 to address 

the practice of delaying customer 

account transfers.5 In adopting IM– 

2110–7, FINRA noted that, when a 

registered representative leaves his or 

her firm for a position at a different 

firm, clients serviced by the registered 

representative may decide to continue 

their relationship with the registered 

representative by transferring their 

accounts to the registered 

representative’s new firm. FINRA 

expressed concern that the registered 

representative’s former firm, concerned 

that its former employee may have 

breached his or her employment 

contract by sharing client information 

with the new firm or by soliciting 

clients to transfer their accounts to the 

new firm, sometimes would seek a court 

order to prevent the transfer of accounts. 

FINRA noted that in a prior Notice to 

Members it had already alerted members 

that unnecessary delays in transferring 

customer accounts, including delays 

accompanied by attempts to persuade 

customers not to transfer their accounts, 

are inconsistent with just and equitable 

principles of trade.6 FINRA stated that 

mstockstill on PROD1PC66 with NOTICES6