Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Changes in the Functionality of the NASD/NYSE Trade Reporting Facility, 54957-54959 [E7-19091]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 187 / Thursday, September 27, 2007 / Notices
execution remained, zero; and (ii) at
least one strike price below (for calls) or
above (for puts) in the same options
class was quoted no bid at the time of
execution.
The proposed rule change would
require that for purposes of the ‘‘no bid
series’’ provision, bids and offers of the
parties to the subject trade that are in
any of the series in the same options
class would not be considered. In
addition, the proposed rule change
would provide that each group of series
in an options class with a non-standard
deliverable would be treated as a
separate options class. Finally, the
proposed rule change would clarify that
the ‘‘no bid series’’ provision is
intended to apply to series quoted no
bid on the Exchange (as opposed to
series for which the national best bid is
quoted no bid).5
III. Discussion
rwilkins on PROD1PC63 with NOTICES
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 6 and, in particular, the
requirements of Section 6(b) of the Act 7
and the rules and regulations
thereunder. Specifically, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act,8 in that the proposal promotes just
and equitable principles of trade,
prevents fraudulent and manipulative
acts, removes impediments to and
perfects the mechanism of a free and
open market and a national market
system, and, in general, protects
investors and the public interest.
The Commission considers that in
most circumstances trades that are
executed between parties should be
honored. On rare occasions, the price of
the executed trade indicates an
‘‘obvious error’’ may exist, suggesting
that it is unrealistic to expect that the
parties to the trade had come to a
meeting of the minds regarding the
terms of the transaction. In the
Commission’s view, the determination
of whether an ‘‘obvious error’’ has
occurred should be based on specific
5 Consistent with the existing provisions, for a
nullification to be granted, any member or person
associated with a member that believes it
participated in a transaction that falls within the
‘‘no bid series’’ parameters must also satisfy the
notification procedures set forth in paragraph (b) of
Rule 6.25.
6 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
VerDate Aug<31>2005
16:40 Sep 26, 2007
Jkt 211001
and objective criteria and subject to
specific and objective procedures.
The Exchange represented that the
proposed changes to the ‘‘no bid series’’
provision are intended to address the
Exchange’s experience in applying this
provision to particular trading scenarios
that have occurred. The Commission
believes that the proposed rule change
is designed to clarify the application of
Rule 6.25 to ‘‘no bid series’’ options and
thus is an appropriate modification of
the Exchange’s obvious error rule.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,9 that the
proposed rule change(SR–CBOE–2007–
04), as amended, is hereby approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–19080 Filed 9–26–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56491; File No. SR–FINRA–
2007–015]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to Changes in
the Functionality of the NASD/NYSE
Trade Reporting Facility
September 21, 2007.
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
September 19, 2007, 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’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared substantially
FINRA. FINRA has submitted the
proposed rule change under Section
19(b)(3)(A) of the Act 3 and Rule 19b–
4(f)(6) thereunder,4 which renders the
proposal effective upon filing with the
9 15
U.S.C. 78s(b)(2).
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).
4 17 CFR 240.19b–4(f)(6).
10 17
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
54957
Commission.5 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
FINRA proposes to amend its rules to
reflect a change in the functionality of
the NASD/NYSE Trade Reporting
Facility (the ‘‘NASD/NYSE TRF’’) 6 to
permit Participants to submit trades to
the NASD/NYSE TRF for submission to
the National Securities Clearing
Corporation (‘‘NSCC’’) for clearance and
settlement.
The text of the proposed rule change
is available at https://www.finra.org, at
the principal offices of FINRA, 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,
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 such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The NASD/NYSE TRF provides
FINRA members with a mechanism for
reporting locked-in trades in NMS
stocks, as defined in Rule 600(b)(47) of
Regulation NMS under the Act,7
effected otherwise than on an exchange.
NASD Rules 6130E(a) and 6140E
currently provide that the NASD/NYSE
TRF will not submit trades to clearing
and, where appropriate, Participants
must have a valid Qualified Service
Representative (‘‘QSR’’) agreement with
the NSCC or similar arrangement to
5 FINRA has asked the Commission to waive the
30-day operative delay provided in Rule 19b–
4(f)(6)(iii). 17 CFR 240.19b–4(f)(6)(iii).
6 Effective July 30, 2007, FINRA was formed
through the consolidation of NASD and the member
regulatory functions of NYSE Regulation, Inc.
Accordingly, the NASD/NYSE TRF is now doing
business as the FINRA/NYSE TRF. The formal
name change of each of FINRA’s Trade Reporting
Facilities (‘‘TRFs’’) is pending and, once completed,
FINRA will file a separate proposed rule change to
reflect those changes in the Manual.
7 17 CFR 242.600(b)(47).
E:\FR\FM\27SEN1.SGM
27SEN1
54958
Federal Register / Vol. 72, No. 187 / Thursday, September 27, 2007 / Notices
clear trades submitted to the NASD/
NYSE TRF.8
FINRA proposes to amend Rules
6130E(a) and 6140E to reflect a change
in the functionality of the NASD/NYSE
TRF to permit Participants to submit
trades to the NASD/NYSE TRF for
submission to the NSCC for clearance
and settlement. Thus, locked-in trades
(including locked-in trades reported as
other than regular way settlement) will
be accepted by the NASD/NYSE TRF, as
they are today, and at the option of the
Participant, clearing information for
such trades will be submitted to the
NSCC. In addition, FINRA proposes to
amend Rules 4632E(e)(3)(B) and
6130E(f) to include references to
‘‘clearing’’ and ‘‘clearing-only’’ reports
(in addition to non-clearing reports),
where appropriate, and Rule 6160E to
refer to trades that have been treated as
locked-in ‘‘and sent to DTCC.’’ The
amendments proposed herein are
identical to the rules relating to the
NASD/NSX TRF,9 and are substantially
similar to the rules relating to the
NASD/Nasdaq TRF.10
The proposed rule change will
provide members with another
mechanism for clearing trades that they
report to FINRA and will ensure
consistency in the trade reporting rules
relating to the TRFs, to the extent
practicable.
FINRA has filed the proposed rule
change for immediate effectiveness and
requested a waiver of the 30-day
operative delay. FINRA proposes that
the proposed rule change will be
operative on September 19, 2007, by
which date the NASD/NYSE TRF will
have made the necessary systems
changes to implement this proposed
rule change.
rwilkins on PROD1PC63 with NOTICES
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with Section
15A(b)(6) of the Act,11 which requires,
among other things, that FINRA rules be
designed to prevent fraudulent and
manipulative acts and practices, to
8 See also Securities Exchange Act Release No.
55325 (February 21, 2007), 72 FR 8820 (February
27, 2007) (notice of filing and immediate
effectiveness of SR–NASD–2007–011).
9 See NASD Rules 4632C(d), 6130C(a), 6140C and
6160C. Rule 6130C(a) was recently amended by
proposed rule change SR–FINRA–2007–003, which
was filed for immediate effectiveness, but is not yet
operative. See Securities Exchange Act Release No.
56321 (August 24, 2007), 72 FR 50425 (August 31,
2007).
10 See Rules 4632(d), 6130(a), 6140 and 6160. The
NASD/Nasdaq TRF offers trade comparison
functionality, while the NASD/NYSE TRF and
NASD/NSX TRF accept locked-in trades only. The
pertinent rules reflect this difference in
functionality.
11 15 U.S.C. 78o–3(b)(6).
VerDate Aug<31>2005
16:40 Sep 26, 2007
Jkt 211001
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,
and, in general, to protect investors and
the public interest. FINRA believes that
the proposed rule change will assist
members in complying with their
reporting obligations by providing
another mechanism for members to
clear trades reported to FINRA.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
FINRA 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.
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
FINRA has filed the proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 12 and subparagraph (f)(6) of
Rule 19b–4 thereunder.13 Because
FINRA has designated the foregoing
proposed rule change as one that: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date of 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 and Rule 19b–
4(f)(6) thereunder. As required under
Rule 19b–4(f)(6)(iii), FINRA provided
the Commission with written notice of
its intention to file the proposed rule
change at least five business days prior
to filing the proposal with the
Commission or such shorter period as
designated by the Commission.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. FINRA
12 15
13 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
Frm 00070
Fmt 4703
Sfmt 4703
has asked the Commission to waive the
30-day operative delay because of the
imminent closing of the NASD/BSE
TRF, which is expected to occur on or
before September 21, 2007. According to
FINRA, a FINRA member that currently
participates only in the NASD/BSE TRF
seeks to report trades to the NASD/
NYSE TRF after the NASD/BSE TRF
closes. FINRA states that the member
currently is performing systems testing
with the NASD/NYSE TRF so that it can
fully comply with its reporting
obligations following the closing of the
NASD/BSE TRF. The proposal would
accommodate this (and any other)
FINRA member that, for systems or
business reasons, chooses to use the
NASD/NYSE TRF as an alternative
facility through which to report trades
to FINRA, but that may also need a
facility through which to clear those
trades.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because, as noted above, the proposed
rules are identical, or substantially
similar, to the rules governing the
NASD/NSX TRF and the NASD/Nasdaq
TRF.14 In addition, the proposal will
provide an additional mechanism for
members to submit trades to NSCC for
clearance and settlement in light of the
imminent closing of the NASD/BSE
TRF.15 For these reasons, the
Commission designates the proposal to
be operative on filing with the
Commission.
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.
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 (https://www.sec.gov/
rules/sro.shtml ); or
14 See
notes 9 and 10, supra, and accompanying
text.
15 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
E:\FR\FM\27SEN1.SGM
27SEN1
Federal Register / Vol. 72, No. 187 / Thursday, September 27, 2007 / Notices
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–FINRA–2007–015 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–FINRA–2007–015. 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 (https://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 the FINRA. 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 publicly available. All
submissions should refer to File
Number SR–FINRA–2007–015 and
should be submitted on or before
October 18, 2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–19091 Filed 9–26–07; 8:45 am]
rwilkins on PROD1PC63 with NOTICES
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
sections A, B, and C below, of the most
significant aspects of such statements.
[Release No. 34–56479; File No. SR–MSRB–
2007–02]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing and Immediate
Effectiveness of Amendment to Rule
A–3, on Membership on the Board
September 20, 2007.
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 9,
2007, the Municipal Securities
Rulemaking Board (‘‘MSRB’’ or
‘‘Board’’), 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 MSRB. The
MSRB filed an amendment to the
proposed rule change on September 17,
2007. The MSRB has filed the proposal
pursuant to section 19(b)(3)(A) of the
Act,3 and Rule 19b-4(f)(3) 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, as amended, from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The MSRB is filing with the
Commission a proposed rule change
consisting of an amendment to Rule A–
3, on membership on the Board, to
permit a Board member to succeed him
or herself in office for a second
consecutive term. The text of the
proposed rule change is available on the
MSRB’s Web site (https://www.msrb.org),
at the MSRB, 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
MSRB 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 MSRB has
prepared summaries, set forth in
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(3).
2 17
16 17
CFR 200.30–3(a)(12).
VerDate Aug<31>2005
16:40 Sep 26, 2007
Jkt 211001
54959
PO 00000
Frm 00071
Fmt 4703
1. Purpose
The Board has been reviewing its
Administrative Rules and by-laws to
ensure that they are consistent with
current good corporate governance
practices. Rule A–3, on membership on
the Board, currently provides, among
other things, that no member of the
Board may succeed himself or herself in
office and no broker-dealer
representative or bank representative
may be succeeded by any person
associated with the broker, dealer or
municipal securities dealer with which
the member was associated at the
expiration of his or her term. The Board
has determined to modify this provision
in the rule (as well as in By-Law Article
3) to permit a sitting Board member to
serve a second consecutive term,
through the standard nomination and
election process. The rule amendment
does not establish a lifetime limit on the
number of terms a person could serve
but does limit a person to serving two
terms in succession. Sitting and former
Board members would be required to
undertake the same nomination and
election process applicable to new
applicants for Board membership. The
rule amendment also maintains the
existing prohibition on having a
representative of a dealer or bank
immediately succeed the expiring term
of another representative of the same
dealer or bank, other than in the case of
a sitting Board member succeeding him
or herself.
2. Statutory Basis
The MSRB believes that the proposed
rule change is consistent with section
15B(b)(2)(I) of the Act,5 which
authorizes the MSRB to adopt rules that
provide for the operation and
administration of the MSRB. The MSRB
believes that the proposed rule change
is consistent with this provision because
it is concerned solely with the operation
and administration of the MSRB.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The MSRB does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act since it only
applies to the operation and
administration of the MSRB.
5 15
Sfmt 4703
E:\FR\FM\27SEN1.SGM
U.S.C. 78o–4(b)(2)(I).
27SEN1
]]>Agencies
[Federal Register Volume 72, Number 187 (Thursday, September 27, 2007)]
[Notices]
[Pages 54957-54959]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-19091]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56491; File No. SR-FINRA-2007-015]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to Changes in the Functionality of the
NASD/NYSE Trade Reporting Facility
September 21, 2007.
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 September 19, 2007, 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'') the proposed rule change as described in Items I and
II below, which Items have been prepared substantially FINRA. FINRA has
submitted the proposed rule change under Section 19(b)(3)(A) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal
effective upon filing with the Commission.\5\ 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).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ FINRA has asked the Commission to waive the 30-day operative
delay provided in Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-
4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA proposes to amend its rules to reflect a change in the
functionality of the NASD/NYSE Trade Reporting Facility (the ``NASD/
NYSE TRF'') \6\ to permit Participants to submit trades to the NASD/
NYSE TRF for submission to the National Securities Clearing Corporation
(``NSCC'') for clearance and settlement.
---------------------------------------------------------------------------
\6\ Effective July 30, 2007, FINRA was formed through the
consolidation of NASD and the member regulatory functions of NYSE
Regulation, Inc. Accordingly, the NASD/NYSE TRF is now doing
business as the FINRA/NYSE TRF. The formal name change of each of
FINRA's Trade Reporting Facilities (``TRFs'') is pending and, once
completed, FINRA will file a separate proposed rule change to
reflect those changes in the Manual.
---------------------------------------------------------------------------
The text of the proposed rule change is available at https://
www.finra.org, at the principal offices of FINRA, 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, 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 such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The NASD/NYSE TRF provides FINRA members with a mechanism for
reporting locked-in trades in NMS stocks, as defined in Rule 600(b)(47)
of Regulation NMS under the Act,\7\ effected otherwise than on an
exchange. NASD Rules 6130E(a) and 6140E currently provide that the
NASD/NYSE TRF will not submit trades to clearing and, where
appropriate, Participants must have a valid Qualified Service
Representative (``QSR'') agreement with the NSCC or similar arrangement
to
[[Page 54958]]
clear trades submitted to the NASD/NYSE TRF.\8\
---------------------------------------------------------------------------
\7\ 17 CFR 242.600(b)(47).
\8\ See also Securities Exchange Act Release No. 55325 (February
21, 2007), 72 FR 8820 (February 27, 2007) (notice of filing and
immediate effectiveness of SR-NASD-2007-011).
---------------------------------------------------------------------------
FINRA proposes to amend Rules 6130E(a) and 6140E to reflect a
change in the functionality of the NASD/NYSE TRF to permit Participants
to submit trades to the NASD/NYSE TRF for submission to the NSCC for
clearance and settlement. Thus, locked-in trades (including locked-in
trades reported as other than regular way settlement) will be accepted
by the NASD/NYSE TRF, as they are today, and at the option of the
Participant, clearing information for such trades will be submitted to
the NSCC. In addition, FINRA proposes to amend Rules 4632E(e)(3)(B) and
6130E(f) to include references to ``clearing'' and ``clearing-only''
reports (in addition to non-clearing reports), where appropriate, and
Rule 6160E to refer to trades that have been treated as locked-in ``and
sent to DTCC.'' The amendments proposed herein are identical to the
rules relating to the NASD/NSX TRF,\9\ and are substantially similar to
the rules relating to the NASD/Nasdaq TRF.\10\
---------------------------------------------------------------------------
\9\ See NASD Rules 4632C(d), 6130C(a), 6140C and 6160C. Rule
6130C(a) was recently amended by proposed rule change SR-FINRA-2007-
003, which was filed for immediate effectiveness, but is not yet
operative. See Securities Exchange Act Release No. 56321 (August 24,
2007), 72 FR 50425 (August 31, 2007).
\10\ See Rules 4632(d), 6130(a), 6140 and 6160. The NASD/Nasdaq
TRF offers trade comparison functionality, while the NASD/NYSE TRF
and NASD/NSX TRF accept locked-in trades only. The pertinent rules
reflect this difference in functionality.
---------------------------------------------------------------------------
The proposed rule change will provide members with another
mechanism for clearing trades that they report to FINRA and will ensure
consistency in the trade reporting rules relating to the TRFs, to the
extent practicable.
FINRA has filed the proposed rule change for immediate
effectiveness and requested a waiver of the 30-day operative delay.
FINRA proposes that the proposed rule change will be operative on
September 19, 2007, by which date the NASD/NYSE TRF will have made the
necessary systems changes to implement this proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with
Section 15A(b)(6) of the Act,\11\ which requires, among other things,
that FINRA rules 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, and, in general, to
protect investors and the public interest. FINRA believes that the
proposed rule change will assist members in complying with their
reporting obligations by providing another mechanism for members to
clear trades reported to FINRA.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA 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.
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
FINRA has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\13\ Because FINRA has designated the foregoing proposed
rule change as one that: (1) Does not significantly affect the
protection of investors or the public interest; (2) does not impose any
significant burden on competition; and (3) does not become operative
for 30 days from the date of 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 and Rule 19b-4(f)(6)
thereunder. As required under Rule 19b-4(f)(6)(iii), FINRA provided the
Commission with written notice of its intention to file the proposed
rule change at least five business days prior to filing the proposal
with the Commission or such shorter period as designated by the
Commission.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. FINRA has asked the Commission to
waive the 30-day operative delay because of the imminent closing of the
NASD/BSE TRF, which is expected to occur on or before September 21,
2007. According to FINRA, a FINRA member that currently participates
only in the NASD/BSE TRF seeks to report trades to the NASD/NYSE TRF
after the NASD/BSE TRF closes. FINRA states that the member currently
is performing systems testing with the NASD/NYSE TRF so that it can
fully comply with its reporting obligations following the closing of
the NASD/BSE TRF. The proposal would accommodate this (and any other)
FINRA member that, for systems or business reasons, chooses to use the
NASD/NYSE TRF as an alternative facility through which to report trades
to FINRA, but that may also need a facility through which to clear
those trades.
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because, as noted above, the proposed rules are identical, or
substantially similar, to the rules governing the NASD/NSX TRF and the
NASD/Nasdaq TRF.\14\ In addition, the proposal will provide an
additional mechanism for members to submit trades to NSCC for clearance
and settlement in light of the imminent closing of the NASD/BSE
TRF.\15\ For these reasons, the Commission designates the proposal to
be operative on filing with the Commission.
---------------------------------------------------------------------------
\14\ See notes 9 and 10, supra, and accompanying text.
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
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.
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 (https://
www.sec.gov/rules/sro.shtml ); or
[[Page 54959]]
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-FINRA-2007-015 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2007-015. 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 (https://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 the FINRA. 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 publicly available. All
submissions should refer to File Number SR-FINRA-2007-015 and should be
submitted on or before October 18, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-19091 Filed 9-26-07; 8:45 am]
BILLING CODE 8010-01-P
