Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change Relating to Violations Appropriate for Disposition Under FINRA's Minor Rule Violation Plan, 34061-34063 [E8-13426]
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Federal Register / Vol. 73, No. 116 / Monday, June 16, 2008 / Notices
SECURITIES AND EXCHANGE
COMMISSION
approve the proposal on an accelerated
basis.
[File No. 500–1]
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
In the Matter of Harbour Intermodal,
Ltd.; Order of Suspension of Trading
June 12, 2008.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Harbour
Intermodal, Ltd. because it has not filed
any periodic reports since the period
ended September 30, 2002.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the abovelisted company is suspended for the
period from 9:30 a.m. EDT on June 12,
2008, through 11:59 p.m. EDT on June
25, 2008.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 08–1361 Filed 6–12–08; 12:18pm]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57935; File No. SR–FINRA–
2008–023]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Order Granting Accelerated Approval
of a Proposed Rule Change Relating to
Violations Appropriate for Disposition
Under FINRA’s Minor Rule Violation
Plan
rwilkins on PROD1PC63 with NOTICES
June 6, 2008.
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 May 27,
2008, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
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
substantially prepared by FINRA. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons and to
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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FINRA proposes to amend NASD
Interpretive Material (‘‘IM’’) 9216 3 to
expand FINRA’s Minor Rule Violation
Plan (‘‘MRVP’’) to include violations of
options position and exercise limits and
contrary exercise advice procedures.
The text of the proposed rule change is
available at FINRA, the Commission’s
Public Reference Room, and https://
www.finra.org.
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 those
statements may be examined at the
places specified in Item III below.
FINRA has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The proposed rule change would
amend NASD IM–9216 to include in
FINRA’s MRVP violations of (1) options
position and exercise limits under
NASD Rule 2860(b)(3) and (b)(4), and
(2) contrary exercise advice procedures
under NASD Rule 2860(b)(23). NASD
Rule 9216 sets forth FINRA’s MRVP,
which allows FINRA to impose a fine of
up to $2,500 on any member or person
associated with a member for a minor
violation of the rules identified in IM–
9216 (known as ‘‘Minor Rule
Violations’’). The purpose of the MRVP
is to provide meaningful sanctions for
minor or technical violations of rules
when the initiation of a formal
disciplinary proceeding would be more
significant than warranted. Minor Rule
Violation letters also represent a useful
3 FINRA has filed with the Commission a
proposed rule change (SR–FINRA–2008–021) in
which FINRA proposes, among other things, to
adopt NASD IM–9216 as FINRA Rule 9217, without
material change. Assuming Commission approval of
this proposed rule change prior to the approval of
SR–FINRA–2008–021, FINRA will amend SR–
FINRA–2008–021, as necessary, to reflect such
approval.
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34061
tool for implementing the concept of
progressive discipline.
Inclusion of a rule in the MRVP does
not mean that all violations of that rule
should be treated as Minor Rule
Violations, and, in fact, significant
violations would not be handled under
the MRVP. Accordingly, under the
MRVP, FINRA retains the discretion to
bring full disciplinary proceedings for
any violation of a rule included in the
MRVP.
The NASD options rules contain
provisions imposing limits on the size
of an options position, and limits on the
number of options contracts that can be
exercised into shares of the underlying
security during a fixed period. To
address inadvertent violations of these
rules, due to among other things,
miscounting, technical problems, or a
misinterpretation of the position limit
calculation methodologies, that in the
judgment of FINRA do not materially
affect the market, FINRA proposes
adding violations of options position
and exercise limits as eligible for
disposition under the MRVP. Violations
of these rules deemed to have a
manipulative effect or intent would not
be treated as Minor Rule Violations.
Options issued by The Options
Clearing Corporation (i.e., exchangetraded options) have specific terms
regarding whether options that can be
settled only by delivery of the asset
underlying the option (typically an
equity security) will be automatically
exercised at settlement. The NASD
options rule has detailed ‘‘contrary
exercise advice’’ (‘‘CEA’’) procedures
describing the manner in which an
option holder can elect not to exercise
an option that normally would be
exercised, or exercise an option contract
that normally would expire worthless.
To prevent option holders from unfairly
exploiting after-hours news or market
information that affects the price of the
underlying security, the CEA notices
must be submitted to the broker-dealer
and by the broker-dealer to the OCC by
certain specified cut-off times.
Occasionally, due to technical problems
or other inadvertent errors, firms fail to
submit CEA notices within the
applicable time limits. For those
instances, FINRA proposes to have the
flexibility to treat the violation as a
Minor Rule Violation. Violations of the
CEA rules that exploit or are intended
to exploit after-hours news would not be
treated as Minor Rule Violations.
FINRA notes that position and
exercise limits and CEA violations are
part of the MRVP of the options
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34062
Federal Register / Vol. 73, No. 116 / Monday, June 16, 2008 / Notices
exchanges,4 therefore including them in
FINRA’s plan would promote greater
consistency in sanctions among
substantively similar rules enforced by
FINRA and the options exchanges.
FINRA will announce the effective
date of the proposed rule change in a
Regulatory Notice to be published no
later than 60 days following
Commission approval. The effective
date will be the date of Commission
approval.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,5 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. FINRA believes that the
proposed rule change is consistent with
Section 15A(b)(7) of the Act 6 in that it
provides for the appropriate discipline
for violation of FINRA rules. The
proposed rule change also is consistent
with Section 15A(b)(8) of the Act 7 in
that it furthers the statutory goals of
providing a fair procedure for
disciplining members and associated
persons. FINRA believes that the
addition of these violations to the MRVP
will provide FINRA staff with the ability
to provide meaningful sanctions for
minor or technical violations of these
rules when the initiation of a formal
disciplinary proceeding would be more
significant than warranted.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
rwilkins on PROD1PC63 with NOTICES
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.
4 See NASDAQ Options Rules, Chapter X, Section
7 (Penalty for Minor Rule Violations); Boston
Options Exchange Rules, Chapter X, Section 2
(Penalty for Rule Violations); Chicago Board
Options Exchange Rule 17.50 (Imposition of Fines
for Minor Rule Violations); American Stock
Exchange Rule 590. Part 1 (General Rule
Violations); Philadelphia Stock Exchange Rules F–
15 (Minor Infractions of Position/Exercise Limits
and Hedge Exemptions) and F–35 (Violations of
Exercise and Exercise Advice Rules for NoncashSettled Equity Option Contracts); International
Securities Exchange Rule 1614 (Imposition of Fines
for Minor Rule Violations).
5 15 U.S.C. 78o–3(b)(6).
6 15 U.S.C. 78o–3(b)(7).
7 15 U.S.C. 78o–3(b)(8).
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IV. Commission’s Findings and Order
Granting Accelerated Approval of
Proposed Rule Change
After careful consideration, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Section 15 of the
III. Solicitation of Comments
Act and the rules and regulations
Interested persons are invited to
thereunder applicable to a national
submit written data, views, and
securities association.8 In particular, the
arguments concerning the foregoing,
Commission finds that the proposed
including whether the proposed rule
rule change is consistent with Section
change is consistent with the Act.
15A(b)(6) of the Act because it is
Comments may be submitted by any of
designed to promote just and equitable
the following methods:
principles of trade, to foster cooperation
and coordination with persons engaged
Electronic Comments
in regulating, clearing, settling,
• Use the Commission’s Internet
processing information with respect to,
comment form (https://www.sec.gov/
and facilitating transactions in
rules/sro.shtml); or
securities, to remove impediments to
• Send an e-mail to ruleand perfect the mechanism of a free and
comments@sec.gov. Please include File
open market and a national market
Number SR–FINRA–2008–023 on the
system, and, in general, to protect
subject line.
investors and the public interest; and is
Paper Comments
not designed to permit unfair
discrimination between customers,
• Send paper comments in triplicate
issuers, brokers, or dealers, to fix
to Secretary, Securities and Exchange
minimum profits, to impose any
Commission, 100 F Street, NE.,
schedule or fix rates of commissions,
Washington, DC 20549–1090.
allowances, discounts, or other fees to
All submissions should refer to File
9
Number SR–FINRA–2008–023. This file be charged by its members.
The Commission further believes that
number should be included on the
subject line if e-mail is used. To help the FINRA’s proposal to sanction members
and associated persons who fail to
Commission process and review your
submit CEAs in a timely manner or limit
comments more efficiently, please use
only one method. The Commission will the size of an option position or the
post all comments on the Commission’s number of option contracts is consistent
with Sections 15A(b)(7) and 15A(b)(8) of
Internet Web site (https://www.sec.gov/
the Act,10 which require that the rules
rules/sro.shtml). Copies of the
of an association enforce compliance
submission, all subsequent
with, and provide appropriate
amendments, all written statements
discipline for, violations of Commission
with respect to the proposed rule
and FINRA rules. In addition, the
change that are filed with the
Commission finds that the proposal is
Commission, and all written
consistent with the public interest, the
communications relating to the
protection of investors, or otherwise in
proposed rule change between the
Commission and any person, other than furtherance of the purposes of the Act,
as required by Rule 19d–1(c)(2) under
those that may be withheld from the
the Act,11 which governs minor rule
public in accordance with the
violation plans. The Commission
provisions of 5 U.S.C. 552, will be
believes that the proposed rule change
available for inspection and copying in
should strengthen FINRA’s ability to
the Commission’s Public Reference
carry out its oversight and enforcement
Room, 100 F Street, NE., Washington,
responsibilities in cases where full
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. disciplinary proceedings are unsuitable
in view of the minor nature of the
Copies of such filing also will be
particular violation.
available for inspection and copying at
In approving this proposed rule
the principal office of FINRA. All
change, the Commission in no way
comments received will be posted
minimizes the importance of
without change; the Commission does
compliance with FINRA’s rules and all
not edit personal identifying
information from submissions. You
8 In approving this proposed rule change, the
should submit only information that
you wish to make available publicly. All Commission has considered its impact on
efficiency, competition, and capital formation. See
submissions should refer to File
15 U.S.C. 78c(f).
9 15 U.S.C. 78o–3(b)(6).
Number SR–FINRA–2008–023 and
10 15 U.S.C. 78o–3(b)(7) and(b)(8).
should be submitted on or before July 7,
11 17 CFR 240.19d–1(c)(2).
2008.
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.
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E:\FR\FM\16JNN1.SGM
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Federal Register / Vol. 73, No. 116 / Monday, June 16, 2008 / Notices
other rules subject to the imposition of
fines under the MRVP. The Commission
believes that the violation of any selfregulatory organization rules, as well as
Commission rules, is a serious matter.
However, the MRVP provides a
reasonable means of addressing rule
violations that do not rise to the level of
requiring formal disciplinary
proceedings, while providing greater
flexibility in handling certain violations.
The Commission expects that FINRA
will continue to conduct surveillance
with due diligence and make a
determination based on its findings, on
a case-by-case basis, whether a fine of
more or less than the recommended
amount is appropriate for a violation
under the MRVP or whether a violation
requires formal disciplinary action.
FINRA has requested that the
Commission find good cause for
approving the proposed rule change
prior to the thirtieth day after
publication of the notice thereof in the
Federal Register. The Commission
hereby grants that request. FINRA’s
proposal is substantially similar to those
of other options exchanges, which
previously have been approved by the
Commission.12 The Commission does
not believe that FINRA’s proposal raises
any novel regulatory issues, and no
comments were received on any of these
earlier proposals. Accordingly, the
Commission finds good cause, pursuant
to Section 19(b)(2) of the Act,13 for
approving the proposed rule change
prior to the thirtieth day after
publication of the notice thereof in the
Federal Register.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 14 and Rule
19d–1(c)(2) under the Act,15 that the
proposed rule change (SR–FINRA–
2008–023), be, and hereby is, approved
and declared effective on an accelerated
basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–13426 Filed 6–13–08; 8:45 am]
rwilkins on PROD1PC63 with NOTICES
BILLING CODE 8010–01–P
12 See, e.g., Securities Exchange Act Release No.
57528 (March 19, 2008), 73 FR 15826 (March 25,
2008) (SR–Phlx–2008–18).
13 15 U.S.C. 78s(b)(2).
14 15 U.S.C. 78s(b)(2).
15 17 CFR 240.19d–1(c)(2).
16 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(44).
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DEPARTMENT OF STATE
DEPARTMENT OF STATE
[Public Notice 6260]
[Public Notice 6259]
Determination Pursuant to Section 1(b)
of Executive Order 13224 Relating to
the Designation of the Rajah (Raja)
Solaiman (Sulayman, Sulaiman,
Soleiman) Movement (RSM), aka Rajah
Solaiman Revolutionary Movement
(RSRM) aka Rajah Solaiman Group,
aka Rajah Solaiman Islamic Movement
(RSIM) and RSM leader Ahmad
(Ahmed) Santos, aka Hilarion del
Rosario Santos III, aka Abu Lakay, aka
Ahmad Islam del Rosario Santos
Santos aka Hilarion del Rosario Santos
Acting under the authority of section
1(b) of Executive Order 13224 of
September 23, 2001, as amended by
Executive Order 13286 of July 2, 2002,
and Executive Order 13284 of January
23, 2003, and in consultation with the
Secretary of the Treasury, the Attorney
General, and the Secretary of Homeland
Security, I hereby determine that the
organization known as the Rajah
Solaiman Movement (RSM) and aliases
and transliterations listed above has
committed, or poses a significant risk of
committing, acts of terrorism that
threaten the security of U.S. nationals or
the national security, foreign policy, or
economy of the United States. In
addition, I find that RSM leader Ahmed
Santos and aliases has committed or
poses a significant risk of committing
acts of terrorism that threaten the
security of U.S. nationals or the national
security, foreign policy, or economy of
the United States.
Consistent with the determination in
section 10 of Executive Order 13224 that
‘‘prior notice to persons determined to
be subject to the Order who might have
a constitutional presence in the United
States would render ineffectual the
blocking and other measures authorized
in the Order because of the ability to
transfer funds instantaneously,’’ I
determine that no prior notice need be
provided to any person subject to this
determination who might have a
constitutional presence in the United
States, because to do so would render
ineffectual the measures authorized in
the Order.
This notice shall be published in the
Federal Register.
Dated: June 9, 2008.
John D. Negroponte,
Deputy Secretary of State. Department of
State.
[FR Doc. E8–13496 Filed 6–13–08; 8:45 am]
BILLING CODE 4710–10–P
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34063
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Correction of Advisory Committee
Meeting Information, Advisory
Committee on International Postal and
Delivery Services
Department of State.
Notice; correction.
AGENCY:
ACTION:
SUMMARY: The Department of State
published a document in the Federal
Register of June 6, 2008, concerning the
meeting location and date for the
meeting of the Advisory Committee on
International Postal and Delivery
Services. The meeting date and location
were incorrect in the announcement.
FOR FURTHER INFORMATION CONTACT:
Christopher Wood, Office of Technical
Specialized Agencies (IO/T), Bureau of
International Organization Affairs, U.S.
Department of State, at (202) 647–1044,
woodcs@state.gov.
Correction
In the Federal Register of June 6,
2008, in 93 FR on page 32382, in the
first column, correct the ‘‘Date’’ and
‘‘Location’’ captions to read:
DATES: July 10, 2008 from 2:00 p.m. to
about 5:30 p.m. (open to the public).
Location: Melrose Hotel, 2430
Pennsylvania Avenue, NW.,
Washington, DC 20037.
Dated: June 11, 2008.
Dennis M. Delehanty,
Designated Federal Officer, Advisory
Committee on International Postal and
Delivery Services.
[FR Doc. E8–13513 Filed 6–13–08; 8:45 am]
BILLING CODE 4710–19–P
DEPARTMENT OF TRANSPORTATION
Office of the Secretary
Notice of Applications for Certificates
of Public Convenience and Necessity
and Foreign Air Carrier Permits Filed
Under Subpart B (Formerly Subpart Q)
During the Week Ending March 21,
2008
The following Applications for
Certificates of Public Convenience and
Necessity and Foreign Air Carrier
Permits were filed under Subpart B
(formerly Subpart Q) of the Department
of Transportation’s Procedural
Regulations (See 14 CFR 301.201 et
seq.). The due date for Answers,
Conforming Applications, or Motions to
Modify Scope are set forth below for
each application. Following the Answer
period DOT may process the application
E:\FR\FM\16JNN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 116 (Monday, June 16, 2008)]
[Notices]
[Pages 34061-34063]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-13426]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57935; File No. SR-FINRA-2008-023]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Order Granting Accelerated
Approval of a Proposed Rule Change Relating to Violations Appropriate
for Disposition Under FINRA's Minor Rule Violation Plan
June 6, 2008.
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 May 27, 2008, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a 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 substantially prepared by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons and to approve the
proposal on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA proposes to amend NASD Interpretive Material (``IM'') 9216
\3\ to expand FINRA's Minor Rule Violation Plan (``MRVP'') to include
violations of options position and exercise limits and contrary
exercise advice procedures. The text of the proposed rule change is
available at FINRA, the Commission's Public Reference Room, and https://
www.finra.org.
---------------------------------------------------------------------------
\3\ FINRA has filed with the Commission a proposed rule change
(SR-FINRA-2008-021) in which FINRA proposes, among other things, to
adopt NASD IM-9216 as FINRA Rule 9217, without material change.
Assuming Commission approval of this proposed rule change prior to
the approval of SR-FINRA-2008-021, FINRA will amend SR-FINRA-2008-
021, as necessary, to reflect such approval.
---------------------------------------------------------------------------
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 those statements may be examined at the places specified in
Item III below. FINRA has prepared summaries, set forth in Sections A,
B, and C below, of the most significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The proposed rule change would amend NASD IM-9216 to include in
FINRA's MRVP violations of (1) options position and exercise limits
under NASD Rule 2860(b)(3) and (b)(4), and (2) contrary exercise advice
procedures under NASD Rule 2860(b)(23). NASD Rule 9216 sets forth
FINRA's MRVP, which allows FINRA to impose a fine of up to $2,500 on
any member or person associated with a member for a minor violation of
the rules identified in IM-9216 (known as ``Minor Rule Violations'').
The purpose of the MRVP is to provide meaningful sanctions for minor or
technical violations of rules when the initiation of a formal
disciplinary proceeding would be more significant than warranted. Minor
Rule Violation letters also represent a useful tool for implementing
the concept of progressive discipline.
Inclusion of a rule in the MRVP does not mean that all violations
of that rule should be treated as Minor Rule Violations, and, in fact,
significant violations would not be handled under the MRVP.
Accordingly, under the MRVP, FINRA retains the discretion to bring full
disciplinary proceedings for any violation of a rule included in the
MRVP.
The NASD options rules contain provisions imposing limits on the
size of an options position, and limits on the number of options
contracts that can be exercised into shares of the underlying security
during a fixed period. To address inadvertent violations of these
rules, due to among other things, miscounting, technical problems, or a
misinterpretation of the position limit calculation methodologies, that
in the judgment of FINRA do not materially affect the market, FINRA
proposes adding violations of options position and exercise limits as
eligible for disposition under the MRVP. Violations of these rules
deemed to have a manipulative effect or intent would not be treated as
Minor Rule Violations.
Options issued by The Options Clearing Corporation (i.e., exchange-
traded options) have specific terms regarding whether options that can
be settled only by delivery of the asset underlying the option
(typically an equity security) will be automatically exercised at
settlement. The NASD options rule has detailed ``contrary exercise
advice'' (``CEA'') procedures describing the manner in which an option
holder can elect not to exercise an option that normally would be
exercised, or exercise an option contract that normally would expire
worthless. To prevent option holders from unfairly exploiting after-
hours news or market information that affects the price of the
underlying security, the CEA notices must be submitted to the broker-
dealer and by the broker-dealer to the OCC by certain specified cut-off
times. Occasionally, due to technical problems or other inadvertent
errors, firms fail to submit CEA notices within the applicable time
limits. For those instances, FINRA proposes to have the flexibility to
treat the violation as a Minor Rule Violation. Violations of the CEA
rules that exploit or are intended to exploit after-hours news would
not be treated as Minor Rule Violations.
FINRA notes that position and exercise limits and CEA violations
are part of the MRVP of the options
[[Page 34062]]
exchanges,\4\ therefore including them in FINRA's plan would promote
greater consistency in sanctions among substantively similar rules
enforced by FINRA and the options exchanges.
---------------------------------------------------------------------------
\4\ See NASDAQ Options Rules, Chapter X, Section 7 (Penalty for
Minor Rule Violations); Boston Options Exchange Rules, Chapter X,
Section 2 (Penalty for Rule Violations); Chicago Board Options
Exchange Rule 17.50 (Imposition of Fines for Minor Rule Violations);
American Stock Exchange Rule 590. Part 1 (General Rule Violations);
Philadelphia Stock Exchange Rules F-15 (Minor Infractions of
Position/Exercise Limits and Hedge Exemptions) and F-35 (Violations
of Exercise and Exercise Advice Rules for Noncash-Settled Equity
Option Contracts); International Securities Exchange Rule 1614
(Imposition of Fines for Minor Rule Violations).
---------------------------------------------------------------------------
FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be the date of Commission
approval.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\5\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change is
consistent with Section 15A(b)(7) of the Act \6\ in that it provides
for the appropriate discipline for violation of FINRA rules. The
proposed rule change also is consistent with Section 15A(b)(8) of the
Act \7\ in that it furthers the statutory goals of providing a fair
procedure for disciplining members and associated persons. FINRA
believes that the addition of these violations to the MRVP will provide
FINRA staff with the ability to provide meaningful sanctions for minor
or technical violations of these rules when the initiation of a formal
disciplinary proceeding would be more significant than warranted.
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\5\ 15 U.S.C. 78o-3(b)(6).
\6\ 15 U.S.C. 78o-3(b)(7).
\7\ 15 U.S.C. 78o-3(b)(8).
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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. 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
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-FINRA-2008-023 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2008-023. 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 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 available publicly. All
submissions should refer to File Number SR-FINRA-2008-023 and should be
submitted on or before July 7, 2008.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Section 15 of
the Act and the rules and regulations thereunder applicable to a
national securities association.\8\ In particular, the Commission finds
that the proposed rule change is consistent with Section 15A(b)(6) of
the Act because it is designed 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; and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers, to fix minimum profits, to
impose any schedule or fix rates of commissions, allowances, discounts,
or other fees to be charged by its members.\9\
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\8\ In approving this proposed rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78o-3(b)(6).
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The Commission further believes that FINRA's proposal to sanction
members and associated persons who fail to submit CEAs in a timely
manner or limit the size of an option position or the number of option
contracts is consistent with Sections 15A(b)(7) and 15A(b)(8) of the
Act,\10\ which require that the rules of an association enforce
compliance with, and provide appropriate discipline for, violations of
Commission and FINRA rules. In addition, the Commission finds that the
proposal is consistent with the public interest, the protection of
investors, or otherwise in furtherance of the purposes of the Act, as
required by Rule 19d-1(c)(2) under the Act,\11\ which governs minor
rule violation plans. The Commission believes that the proposed rule
change should strengthen FINRA's ability to carry out its oversight and
enforcement responsibilities in cases where full disciplinary
proceedings are unsuitable in view of the minor nature of the
particular violation.
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\10\ 15 U.S.C. 78o-3(b)(7) and(b)(8).
\11\ 17 CFR 240.19d-1(c)(2).
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In approving this proposed rule change, the Commission in no way
minimizes the importance of compliance with FINRA's rules and all
[[Page 34063]]
other rules subject to the imposition of fines under the MRVP. The
Commission believes that the violation of any self-regulatory
organization rules, as well as Commission rules, is a serious matter.
However, the MRVP provides a reasonable means of addressing rule
violations that do not rise to the level of requiring formal
disciplinary proceedings, while providing greater flexibility in
handling certain violations. The Commission expects that FINRA will
continue to conduct surveillance with due diligence and make a
determination based on its findings, on a case-by-case basis, whether a
fine of more or less than the recommended amount is appropriate for a
violation under the MRVP or whether a violation requires formal
disciplinary action.
FINRA has requested that the Commission find good cause for
approving the proposed rule change prior to the thirtieth day after
publication of the notice thereof in the Federal Register. The
Commission hereby grants that request. FINRA's proposal is
substantially similar to those of other options exchanges, which
previously have been approved by the Commission.\12\ The Commission
does not believe that FINRA's proposal raises any novel regulatory
issues, and no comments were received on any of these earlier
proposals. Accordingly, the Commission finds good cause, pursuant to
Section 19(b)(2) of the Act,\13\ for approving the proposed rule change
prior to the thirtieth day after publication of the notice thereof in
the Federal Register.
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\12\ See, e.g., Securities Exchange Act Release No. 57528 (March
19, 2008), 73 FR 15826 (March 25, 2008) (SR-Phlx-2008-18).
\13\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act
\14\ and Rule 19d-1(c)(2) under the Act,\15\ that the proposed rule
change (SR-FINRA-2008-023), be, and hereby is, approved and declared
effective on an accelerated basis.
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\14\ 15 U.S.C. 78s(b)(2).
\15\ 17 CFR 240.19d-1(c)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(44).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-13426 Filed 6-13-08; 8:45 am]
BILLING CODE 8010-01-P
