Document ID: SEC-2010-0478-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-03-31T04:00Z

[Federal Register: March 31, 2010 (Volume 75, Number 61)]
[Notices]               
[Page 16213-16214]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr10-144]                         

[[Page 16213]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61769; File No. SR-BX-2010-020]

 
Self-Regulatory Organizations; The NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 3121 To Reflect Changes to Corresponding FINRA Rule

March 24, 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 March 19, 2010, The 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, II, and III 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 is filing this proposed rule change to amend BX Rule 
3121 to reflect recent changes to a corresponding rule of the Financial 
Industry Regulatory Authority (``FINRA''). The Exchange will implement 
the proposed rule change thirty days after the date of the filing. 
Proposed new language is in italics and proposed deletions are in 
brackets.
* * * * *
[ 3121]4570. Custodian of [the]Books and Records

A member who files a [Securities and Exchange Commission] Form BDW 
shall designate on the Form BDW, as the custodian of the member's books 
and records, a person associated with the member at the time that the 
Form BDW is filed.
* * * * *

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 BX'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 
most cases, FINRA has renumbered these rules, and in some cases has 
substantively amended them. Accordingly, BX also proposes to initiate a 
process of modifying its rulebook to ensure that BX rules corresponding 
to FINRA rules continue to mirror them as closely as practicable. In 
some cases, it will not be possible for the rule numbers of BX rules to 
mirror corresponding FINRA rule numbers, because existing or planned BX 
rules make use of those numbers. However, wherever possible, BX plans 
to update its rules to reflect changes to corresponding FINRA rules.
    This filing addresses BX Rule 3121, which formerly corresponded to 
NASD 3121. In SR-FINRA-2009-080,\4\ FINRA redesignated NASD Rule 3121 
as FINRA Rule 4570 with minor technical changes. FINRA Rule 4570 
requires a member to designate, as the custodian of its required books 
and records on Form BDW, a person who is associated with the firm at 
the time Form BDW is filed. The rule is intended to enhance the SRO's 
ability to obtain required books and records from firms that are no 
longer conducting business and to ensure that the custodian of the 
books and records has been subject to certain background checks. The 
FINRA Rule 4570 text makes minor technical changes by adopting 
terminology consistent with that used in Form BDW.
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    \4\ Securities Exchange Act Release No. 61332 (January 12, 
2010), 75 F.R. 3270 (January 20, 2010) (SR-FINRA-2009-080).
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    BX is adopting the new FINRA rule in full, and redesignating BX 
Rule 3121 to be BX Rule 4570, so as to correspond to the new FINRA rule 
number.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\5\ in general, and with 
Sections 6(b)(5) of the Act,\6\ 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 BX Rule 3121 to recent changes made to a 
corresponding FINRA rule, to promote application of consistent 
regulatory standards.
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    \5\ 15 U.S.C. 78f.
    \6\ 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 is effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6) \8\ 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

[[Page 16214]]

with the protection of investors and the public interest.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). 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 notes that the Exchange has satisfied the 
five-day pre-filing notice requirement.
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    In its guidance on the proposed rules of Self-Regulatory 
Organizations (``SROs''),\9\ the Commission concluded that filings 
based on the rules of another SRO already approved by the Commission 
are eligible for immediate effectiveness under Rule 19b-4(f)(6).\10\ 
The Commission noted that ``a proposed rule change appropriately may be 
filed as an immediately effective rule so long as it is based on and 
similar to another SRO's rule and each policy issue raised by the 
proposed rule (i) has been considered previously by the Commission when 
the Commission approved another exchange's rule (that was subject to 
notice and comment), and (ii) the rule change resolves such policy 
issue in a manner consistent with such prior approval.''\11\ The 
Exchange notes that the change is identical to a change by FINRA 
approved by the Commission.
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    \9\ Securities Exchange Act Release No. 58092 (July 3, 2008), 73 
FR 40144 (July 11, 2008).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ See supra note 9 at 40149.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-2010-020 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-BX-2010-020. 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 such 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-2010-020 
and should be submitted on or before April 21, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7104 Filed 3-30-10; 8:45 am]
BILLING CODE 8011-01-P