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 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 http://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 (http://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 (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 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 (http://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]


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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 http://
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 (http://
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 (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 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\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-19091 Filed 9-26-07; 8:45 am]
BILLING CODE 8010-01-P