36292 Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Notices 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). 

9 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to the Commission written 

notice of its intent to file the proposed rule change, 

along with a brief description and text of the 

proposed rule change, at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Commission deems this 

requirement to be met. 

10 Id. 

11For 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). 

12For purposes of calculating the 60-day period 

within which the Commission may summarily 

abrogate the proposed rule change under Section 

19(b)(3)(C) of the Act, the Commission considers 

the period to commence on July 13, 2009, the date 

on which ISE submitted Amendment No. 1. See 15 

U.S.C. 78s(b)(3)(C). 13 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. 60028 

(June 2, 2009), 74 FR 27364 (June 9, 2009) 

(‘‘Notice’’). 

4See Securities Exchange Act Release No. 47925 

(May 23, 2003), 68 FR 33548 (June 4, 2003) (Order 

Approving File No. SR–NASD–98–80). 

5The extensions were filed for immediate 

effectiveness and were therefore not approved by 

the Commission. See Securities Exchange Act 

Release No. 51860 (June 16, 2005), 70 FR 36427 

(June 23, 2005) (SR–NASD–2005–061); Securities 

Exchange Act Release No. 55819 (May 25, 2007), 72 

FR 30895 (June 4, 2007) (SR–NASD–2007–033); and 

Securities Exchange Act Release No. 60035 (June 3, 

2009), 74 FR 27360 (June 9, 2009) (SR–FINRA– 

2009–034). 

6A TCDO is a preliminary order issued in 

connection with an underlying disciplinary 

proceeding that has been initiated or will be 

initiated immediately. 

7The rule filing does not make any substantive 

changes to the existing pilot program. 

(iii) does not become operative for 30 

days after the date of the filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest, the proposed rule change has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.9 However, Rule 19b– 

4(f)(6)(iii) 10 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. ISE 

has requested that the Commission 

waive the 30-day operative delay. ISE 

states that under the proposal, all-ornone orders will be exposed to all 

members so that there is a greater 

opportunity for market participants to 

interact with such orders. The 

Commission also notes that the proposal 

is on a three-month pilot basis. For 

these reasons, the Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest, and 

designates the proposed rule change to 

be operative upon filing with the 

Commission.11

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.12

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–ISE–2009–51 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–ISE–2009–51. 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 ISE. 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–ISE–2009–51 and should be 

submitted on or before August 12, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–17351 Filed 7–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60306; File No. SR–FINRA– 

2009–035] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving a 

Proposed Rule Change To Adopt Its 

Temporary and Permanent Cease and 

Desist Authority on a Permanent Basis 

July 14, 2009. 

On May 18, 2009, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) (f/k/a the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’)) filed with the Securities and 

Exchange Commission (‘‘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 its rules 

regarding the issuance of issue 

temporary and permanent cease and 

desist orders on a permanent basis. The 

proposal was published for comment in 

the Federal Register on June 9, 2009.3

The Commission received no comments 

on the proposal. This order approves the 

proposed rule change. 

Since May 2003, pursuant to a pilot 

program approved by the Commission 4

and subsequent extensions,5 FINRA has 

had the authority to issue temporary 

cease and desist orders (‘‘TCDOs’’); 6

impose permanent cease and desist 

orders as a remedy in disciplinary cases; 

and enforce cease and desist orders. 

FINRA proposed to make the existing 

pilot program permanent.7

After careful review of the proposal, 

the Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 139 / Wednesday, July 22, 2009 / Notices 36293 

8 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). 

9 15 U.S.C. 78o–3(b)(6). 

10 15 U.S.C. 78o–3(b)(7). 

11See Notice for a more detailed description of 

the matter. 

12 15 U.S.C. 78s(b)(2). 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘System’’ is defined in BATS Rule 

1.5(aa). 

6The term ‘‘Trading Center’’ is defined in BATS 

Rule 2.11. 

a national securities association.8 In 

particular, the Commission finds that 

the proposal is consistent with Section 

15A(b)(6) of the Act,9 which requires, 

among other things that FINRA’s rules 

be designed 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 also believes that the 

proposed rule change is consistent with 

the provisions of Section 15A(b)(7) of 

the Act,10 which provides that FINRA 

members, or persons associated with its 

members, must be appropriately 

disciplined for violations of any 

provisions of the Act or FINRA’s rules. 

The Commission believes that making 

the pilot program permanent will 

provide FINRA with a mechanism to 

take action in certain situations against 

a member or an associated person that 

is alleged to have engaged, or is 

engaging, in conduct that violates 

Commission, FINRA, or NASD rules, 

when such intervention is necessary in 

order to prevent likely significant 

dissipation or conversion of assets or 

other significant harm to investors 

before the underlying disciplinary 

proceeding can be completed. At the 

same time, the Commission believes 

that FINRA’s cease and desist 

provisions contain sufficient procedural 

protections to ensure that respondents 

have the opportunity for a fair hearing 

and, if applicable, review thereof. When 

it first sought cease and desist authority 

in 2003, FINRA said that it would use 

the authority sparingly and has, in fact, 

only used its authority once for a TCDO 

and once for a permanent cease and 

desist order.11 FINRA stated in its 

Notice that if the proposal were adopted 

on a permanent basis, it would continue 

to use its cease and desist authority 

judiciously. The Commission expects 

that FINRA will continue to use this 

authority in an appropriate manner. The 

Commission believes it is reasonable 

and consistent with the Act for FINRA 

to adopt the cease and desist rules 

permanently to enable it to stop persons 

from engaging in securities transactions 

or conduct affecting the marketplace, in 

alleged violation of established rules, 

which is likely to cause harm to 

investors or would adversely affect the 

public interest if not addressed 

expeditiously. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,12 that the 

proposed rule change (SR–FINRA– 

2009–035), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–17349 Filed 7–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60313; File No. SR–BATS– 

2009–023] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

July 15, 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 July 9, 

2009, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the Exchange. BATS has designated 

the proposed rule change as one 

establishing or changing a member due, 

fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. 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 proposes to modify 

BATS Rule 15.1, entitled ‘‘Authority to 

Prescribe Dues, Fees, Assessments and 

Other Charges,’’ effective immediately. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.com, at the 

principal office of the Exchange, 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, 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 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to modify 

BATS Rule 15.1 to adopt new paragraph 

(d), which will allow the Exchange to 

pass on certain, specific fees that it is 

charged by the company that operates 

the data center where the Exchange’s 

System 5 is located, as described in 

further detail below. 

Exchange Members wishing to colocate their trading hardware to the 

Exchange’s System can do so by leasing 

space directly from the company that 

owns the data center. The Exchange has 

no involvement in determining the 

terms of any fees paid by the Member 

to lease co-location space and does not 

receive any proceeds from such fee. 

Certain Members of the Exchange 

maintain a co-location relationship with 

another Trading Center’s 6 system that is 

located in the same data center as the 

Exchange. To co-locate to the Exchange, 

rather than leasing additional space near 

the Exchange’s System, some Members 

choose instead to simply cross-connect 

their existing trading hardware from the 

space near another Trading Center’s 

system to the Exchange’s System. In 

such cases, the company that owns the 

data center charges the Exchange a 

monthly cross-connection fee. Pursuant 

to the proposed rule the Exchange will 

pass this cross connection fee on, in 

full, to the applicable Member. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 


jlentini on DSKJ8SOYB1PROD with NOTICES