Document ID: SEC-2010-1331-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-09-02T04:00Z

[Federal Register: September 2, 2010 (Volume 75, Number 170)]
[Notices]               
[Page 53992-53994]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02se10-95]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62774; File No. SR-BX-2010-058]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 2260 To Reflect Changes to Corresponding FINRA Rule

August 26, 2010.
    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 August 17, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'' or ``BX'') 
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 Exchange has designated the 
proposed rule change as constituting a non-controversial rule change 
under Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BX Rule 2260 and IM-2260 to reflect 
recent changes to a corresponding rule of the Financial Industry 
Regulatory Authority (``FINRA''). The text of the proposed rule change 
is available at http://nasdaq.cchwallstreet.com, at the Exchange's 
principal office, at the Commission's Public Reference Room, and on the 
Commission's Web site at http://www.sec.gov.

[[Page 53993]]

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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Many of the Exchange's rules are based on rules of FINRA (formerly 
the National Association of Securities Dealers (``NASD'')). During 
2008, FINRA embarked on an extended process of moving rules formerly 
designated as ``NASD Rules'' into a consolidated FINRA rulebook. In 
many cases, FINRA has renumbered these rules, and in some cases has 
substantively amended them. Accordingly, BX has initiated a process of 
modifying its rulebook to ensure that BX rules corresponding to FINRA/
NASD rules continue to mirror them as closely as practicable.
    This filing addresses BX Rule 2260 and IM-2260, which incorporates 
the guidance previously contained in the corresponding NASD Rules 
relating to the forwarding of proxy and other materials by members and 
the rates of reimbursement for such actions. In SR-FINRA-2009-066,\4\ 
FINRA combined NASD Rule 2260 and IM-2260 into FINRA Rule 2251 without 
material amendment to the substance of the rule. FINRA also made minor 
clarifying changes and other changes primarily to reflect the new 
formatting and terminology conventions of the Consolidated FINRA 
Rulebook.\5\ The Exchange proposes to similarly combine BX Rule 2260 
and IM-2260 into new BX Rule 2251, which will continue to incorporate 
the requirements of the corresponding FINRA rule.\6\
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    \4\ Securities Exchange Act Release No. 61052 (November 23, 
2009), 74 FR 62857 (December 1, 2009) (SR-FINRA-2009-066).
    \5\ The Commission notes that, as part of those changes, FINRA 
deleted references to NASD Rule 2430. Since FINRA Rule 2251 no 
longer references NASD Rule 2430, and BX is conforming its rule to 
reflect the current FINRA rule, BX is also proposing to delete 
references to Nasdaq Rule 2430.
    \6\ BX intends to make a separate rule filing to incorporate 
changes required to this Rule by Section 957 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general, and with 
Section 6(b)(5) of the Act,\8\ in particular, in that the proposal is 
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. The proposed 
changes will conform the Exchange's rules to recent changes made to the 
corresponding FINRA rules, to promote application of consistent 
regulatory standards.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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, as amended.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ thereunder in that 
it effects a change that: (i) Does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, 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.\11\ The Exchange has 
requested that the Commission waive the 30-day operative delay.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change 
pursuant to Rule 19b-4(f)(6) under the Act, an Exchange is required 
to give 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 Exchange has met this requirement.
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    The Commission has considered the Exchange's request to waive the 
30-day operative delay. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. As noted above, BX rules cross-reference certain NASD 
rules that no longer exist, and have been updated in the consolidated 
FINRA rulebook. The proposed rule change will update certain of the 
references in the Exchange's rules that are outdated. The Commission 
also notes that these changes have previously been approved by the 
Commission for FINRA. The Commission believes that allowing this rule 
change to become immediately operative will facilitate the purpose of 
this rule change--namely, to eliminate any potential confusion arising 
from the existing rule's outdated cross-references. Based on the 
foregoing, the Commission finds that waiving the 30-day operative delay 
period is consistent with the protection of investors and the public 
interest, and the proposal is therefore deemed operative upon 
filing.\12\
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    \12\ For the purposes only of waiving the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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 rule-comments@sec.gov. Please include 
File Number SR-BX-2010-058 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary,

[[Page 53994]]

Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-1090.

All submissions should refer to File Number SR-BX-2010-058. 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 Web site viewing and 
printing 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-BX-2010-058 and should be 
submitted on or before September 23, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-21931 Filed 9-1-10; 8:45 am]
BILLING CODE 8010-01-P