Document ID: SEC-2009-1818-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Rule 1160 to Reflect the Availability of the FINRA Contact System to NASDAQ OMX BX Members That Are Not Also Members of FINRA
Posted Date: 2009-12-28T05:00Z

[Federal Register: December 28, 2009 (Volume 74, Number 247)]
[Notices]               
[Page 68641-68643]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28de09-97]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61197; File No. SR-BX-2009-081]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Update 
Rule 1160 to Reflect the Availability of the FINRA Contact System to 
NASDAQ OMX BX Members That Are Not Also Members of FINRA

December 17, 2009.

    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 December 9, 2009, 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. BX has designated the proposed rule 
change as constituting a non-controversial rule change under Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    BX submits this proposed rule change to Rule 1160 to extend the 
availability of the FINRA Contact System to BX members that are not 
also members of FINRA.
    The text of the proposed rule change is below. Proposed new 
language is in italics and proposed deletions are in brackets.

1160. Contact Information Requirements

    (a) Each member shall report to the Exchange all contact 
information required by the Exchange via the FINRA [NASD] Contact 
System [(in the case of Exchange members that are FINRA members) or via 
electronic mail or paper mail (in the case of Exchange members that are 
not FINRA members)].
    (b)-(c) No change.
* * * * *

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

    In its filing with the Commission, BX 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. BX 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
    BX is proposing to update Rule 1160 to reflect the availability of 
the FINRA Contact System (``System'') to BX members that are not also 
members of FINRA, and to make a technical change to the name of the 
System. The System maintains contact information records required by 
both BX and NASD Rules 1120, 1150, 3011, and 3520. Both BX

[[Page 68642]]

and FINRA use this information for regulatory communications, and 
compliance purposes, among other things. The information is provided to 
FINRA as part of the membership application. If the applicant is 
approved for membership, the new member is provided access to the 
System and is responsible for entering the required information into 
the System as well as keeping it current thereafter. Historically, 
FINRA permitted access to the System only to members of FINRA. A BX 
member that was already a member of FINRA could access the System to 
fulfill its ongoing obligation to keep the required information 
current; however, BX members that were not also members of FINRA were 
not permitted access to the System. As a consequence, such firms could 
only fulfill their obligation to keep the required information current 
by submitting the information to BX via e-mail or paper mail.
    FINRA recently made changes to the System so that BX-only members 
may also access the System, thus eliminating the need for the existing 
methods of providing such information. BX believes that having a 
central electronic location for this information is superior to the 
paper and e-mail-based methods of warehousing the information. BX will 
have access to the information maintained in the System for BX-only 
members in the same way as it has historically had with respect to BX 
members that are also members of FINRA. As such, BX is proposing to 
eliminate the language from Rule 1160 that requires BX-only members to 
provide required information by means other than the System. BX is also 
proposing to update the rule to reflect the new name of the System 
adopted by FINRA.\5\
---------------------------------------------------------------------------

    \5\ http://www.finra.org/Industry/Compliance/RegulatoryFilings/
FCS/P005662.
---------------------------------------------------------------------------

2. Statutory Basis
    BX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\6\ in general and with Sections 
6(b)(5) of the Act,\7\ in particular in that it 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 rule change is 
consistent with these provisions in that it will make available to all 
BX members an efficient means by which they may provide information 
required by Exchange rules.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    BX does not believe that the proposed rule change will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 BX has satisfied the five-day 
pre-filing notice requirement.
---------------------------------------------------------------------------

    Normally, a proposed rule change filed under 19b-4(f)(6) may not 
become operative prior to 30 days after the date of filing. 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. BX has requested that the Commission 
waive the 30-day operative delay. In its filing, BX noted that the 
proposal would provide a means for firms to comply with regulatory 
requirements more easily and quickly, and that keeping such information 
in a centralized, electronic location would enhance BX's and FINRA's 
oversight of these members.
---------------------------------------------------------------------------

    \10\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission believes that waiver of the 30-day operative period 
is consistent with the protection of investors and the public interest. 
The proposed rule change would allow contact information, utilized for 
regulatory communications and compliance purposes, among other things, 
to be more efficiently collected in a centralized location. In 
addition, the modification of the rule to reflect the new name of the 
System will add clarity to BX's rules. Finally, the Commission notes 
that it recently published and waived the 30-day pre-operative delay 
for a substantially similar proposal submitted by Nasdaq which was 
filed for immediate effectiveness.\11\ Accordingly, the Commission 
designates the proposal to be effective upon filing with the 
Commission.\12\
---------------------------------------------------------------------------

    \11\ See Securities Exchange Act Release No. 61151 (December 10, 
2009) (SR-NASDAQ-2009-109).
    \12\ For 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).
---------------------------------------------------------------------------

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-2009-081 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-2009-081. 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

[[Page 68643]]

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 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-2009-081 and should be 
submitted on or before January 19, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30595 Filed 12-24-09; 8:45 am]

BILLING CODE 8011-01-P