Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To Making the Portfolio Margin Pilot Permanent, 45506-45508 [E8-17890]

Download as PDF 45506 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the forgoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b–4(f)(6) thereunder.12 A proposed rule change filed under Rule 19b–4(f)(6) normally may 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. The Exchange requests that the Commission waive the 30-day operative delay, which would make the change operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the customer portfolio margining program to continue uninterrupted as it would otherwise expire on July 31, 2008.13 Accordingly, the Commission designates the proposed rule change 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has fulfilled this requirement. 13 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). dwashington3 on PRODPC61 with NOTICES 12 17 VerDate Aug<31>2005 14:19 Aug 04, 2008 Jkt 214001 effective upon filing with the Commission. At any time within 60 days of the filing of the 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. you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2008–73 and should be submitted on or before August 26, 2008. 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: BILLING CODE 8010–01–P Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2008–73 on the subject line. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Acting Secretary. [FR Doc. E8–17841 Filed 8–4–08; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–58251; File No. SR–FINRA– 2008–041] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating To Making the Portfolio Margin Pilot Permanent July 30, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 Paper Comments (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 25, • Send paper comments in triplicate 2008, Financial Industry Regulatory to Secretary, Securities and Exchange Authority, Inc. (‘‘FINRA’’) (f/k/a Commission, 100 F Street, NE., National Association of Securities Washington, DC 20549–1090. Dealers, Inc. (‘‘NASD’’)) filed with the All submissions should refer to File Securities and Exchange Commission Number SR–CBOE–2008–73. This file (‘‘SEC’’ or ‘‘Commission’’) the proposed number should be included on the subject line if e-mail is used. To help the rule change as described in Items I, II, and III below, which Items have been Commission process and review your substantially prepared by FINRA. comments more efficiently, please use only one method. The Commission will FINRA has designated the proposed rule post all comments on the Commission’s change as constituting a ‘‘noncontroversial’’ rule change under Internet Web site (https://www.sec.gov/ paragraph (f)(6) of Rule 19b–4 under the rules/sro.shtml). Copies of the Act,3 which renders the proposal submission, all subsequent effective upon receipt of this filing by amendments, all written statements the Commission. The Commission is with respect to the proposed rule publishing this notice to solicit change that are filed with the comments on the proposed rule change Commission, and all written from interested persons. communications relating to the proposed rule change between the I. Self-Regulatory Organization’s Commission and any person, other than Statement of the Terms of Substance of those that may be withheld from the the Proposed Rule Change public in accordance with the FINRA proposes to make permanent provisions of 5 U.S.C. 552, will be the portfolio margin pilot program set available for inspection and copying in forth in NASD Rule 2520(g) and the Commission’s Public Reference Incorporated NYSE Rule 431(g).4 The Room, 100 F Street, NE., Washington, DC 20549 on official business days 14 17 CFR 200.30–3(a)(12). between the hours of 10 a.m. and 3 p.m. 1 15 U.S.C. 78s(b)(1). Copies of such filing also will be 2 17 CFR 240.19b–4. available for inspection and copying at 3 17 CFR 240.19b–4(f)(6). the principal office of CBOE. All 4 The current FINRA rulebook consists of two sets of rules: (1) NASD Rules and (2) rules incorporated comments received will be posted from NYSE (‘‘Incorporated NYSE Rules’’). While the without change; the Commission does NASD Rules generally apply to all FINRA members, not edit personal identifying the Incorporated NYSE Rules apply only to information from submissions. You members of both FINRA and the NYSE, referred to as Dual Members. should submit only information that PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\05AUN1.SGM 05AUN1 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices portfolio margin pilot program permits members to margin certain products according to a prescribed portfolio margin methodology and is set to expire on July 31, 2008. There is no change to the rule text with this proposed rule change. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, 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 dwashington3 on PRODPC61 with NOTICES On February 12, 2007, FINRA (then known as NASD) filed SR–NASD–2007– 013 for immediate effectiveness to establish a portfolio margin pilot program that permits member firms to elect to margin certain products according to a prescribed portfolio margin methodology.5 The portfolio margin pilot program is substantially similar to margin rule amendments by the NYSE and the Chicago Board Options Exchange (‘‘CBOE’’), which were approved by the Commission.6 Consistent with the amended NYSE and CBOE portfolio margin programs, the pilot, as proposed in SR–NASD–2007– 013, started on April 2, 2007 and ended on July 31, 2007. The pilot program was extended for a one-year period to July 5 See Exchange Act Release No. 55471 (March 14, 2007), 72 FR 13149 (March 20, 2007) (Notice of Filing and Immediate Effectiveness of SR–NASD– 2007–013). 6 See Exchange Act Release No. 54918 (December 12, 2006), 71 FR 75790 (December 18, 2006) (SR– NYSE–2006–13, relating to further amendments to the NYSE’s portfolio margin pilot program); Exchange Act Release No. 54125 (July 11, 2006), 71 FR 40766 (July 18, 2006) (SR–NYSE–2005–93, relating to amendments to the NYSE’s portfolio margin pilot program); Exchange Act Release No. 52031 (July 14, 2005) 70 FR 42130 (July 21, 2005) (SR–NYSE–2002–19, relating to the NYSE’s original portfolio margin pilot). See also Exchange Act Release No. 54919 (December 12, 2006), 71 FR 75781 (December 18, 2006) (SR–CBOE–2006–14, relating to amendments to the CBOE’s portfolio margin pilot); Exchange Act Release No. 52032 (July 14, 2005) 70 FR 42118 (July 21, 2005) (SR–CBOE– 2002–03, relating to the CBOE’s original portfolio margin pilot). VerDate Aug<31>2005 14:19 Aug 04, 2008 Jkt 214001 31, 2008, also consistent with the NYSE and CBOE portfolio margin programs.7 FINRA is proposing to make permanent the pilot program contained in NASD Rule 2520(g) and Incorporated NYSE Rule 431(g). FINRA has not encountered any problems or difficulties relating to the pilot program since its inception and believes that the program better aligns margin requirements with the actual risk of hedged products. For these reasons, FINRA proposes to adopt the portfolio margin program on a permanent basis. FINRA has filed the proposed rule change for immediate effectiveness. The implementation date of the proposed rule change is August 1, 2008. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,8 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 making the portfolio margin program permanent is appropriate as the program better aligns the margin requirements with actual risk. 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 Because the forgoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b–4(f)(6) thereunder.10 A proposed rule change filed under Rule 19b–4(f)(6) normally may 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 requests that the Commission waive the 30-day operative delay, which would make the change operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the customer portfolio margining program to continue uninterrupted as it would otherwise expire on July 31, 2008.11 Accordingly, the Commission designates the proposed rule change effective upon filing with the Commission. At any time within 60 days of the filing of the 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 • Send an e-mail to rulecomments@sec.gov. Please include File 9 15 7 See Exchange Act Release No. 56108 (July 19, 2007) 72 FR 41375 (July 27, 2007) (Notice of Filing and Immediate Effectiveness of SR–NASD–2007– 045). See also Exchange Act Release No. 56107 (July 19, 2007) 72 FR 41377 (July 27, 2007) (Notice of Filing and Immediate Effectiveness of SR–NYSE– 2007–56, relating to extension of the NYSE portfolio margin pilot program to July 31, 2008) and Exchange Act Release No. 56109 (July 19, 2007) 72 FR 41365 (July 27, 2007) (Notice of Filing and Immediate Effectiveness of SR–CBOE–2007–75, relating to extension of the CBOE portfolio margin pilot program to July 31, 2008). 8 15 U.S.C. 78o–3(b)(6). PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 45507 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. FINRA has fulfilled this requirement. 11 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). 10 17 E:\FR\FM\05AUN1.SGM 05AUN1 45508 Federal Register / Vol. 73, No. 151 / Tuesday, August 5, 2008 / Notices Number SR–FINRA–2008–041 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–2008–041. 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–2008–041 and should be submitted on or before August 26, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Acting Secretary. [FR Doc. E8–17890 Filed 8–4–08; 8:45 am] dwashington3 on PRODPC61 with NOTICES BILLING CODE 8010–01–P [Release No. 34–58246; File No. SR–NYSE– 2008–64] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Eliminate the Exceptional Messaging Fee July 29, 2008. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on July 28, 2008, the New York Stock Exchange LLC (the ‘‘Exchange’’ or the ‘‘NYSE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which items have been prepared by the Exchange. The 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 The Exchange proposes to eliminate the exceptional system message fee of $0.01 per exceptional system message. While the change to the Exchange’s 2008 Price List pursuant to this proposal will be effective upon filing, the change will become operative as of August 1, 2008. The text of the proposed rule change is available on the Exchange’s Web site (https://www.nyse.com), at the Exchange’s Office of the Secretary, 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 self-regulatory organization 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 NYSE has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 12 17 CFR 200.30–3(a)(12). VerDate Aug<31>2005 14:19 Aug 04, 2008 2 17 Jkt 214001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00118 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to eliminate the exceptional system message fee of $0.01 per exceptional system message.3 This fee was originally introduced to compensate the Exchange for the cost of the incremental system capacity that needed to be readily available to accommodate trading strategies that resulted in significant volumes of system messages and cancellations. Since that time, the Exchange has increased its system capacity to a degree that it no longer incurs significant costs in maintaining system capacity to accommodate these sorts of trading strategies. As such, the Exchange no longer needs the fee revenue to cover the related costs. While the change to the Exchange’s 2008 Price List pursuant to this proposal will be effective upon filing, the change will become operative as of August 1, 2008. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of section 6 4 of the Act, in general, and furthers the objectives of section 6(b)(4),5 in particular, in that it is designed provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Exchange believes that the proposed elimination of the exceptional message fee is equitable as the costs it was designed to defray are not now material to the Exchange and, therefore, the Exchange will not have to recoup the lost revenues through the imposition of any other fees or charges. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not 3 An exceptional system message is defined as any system (i.e., SuperDOT, the Exchange’s Designated Order Turnaround System) message, as measured by mnemonic (mnemonics, which are alphabetical identifiers issued by the NYSE to its member firms and their customers, are required for order entry and identification purposes) on a daily basis, that exceeds the following criteria: (i) The ratio of a mnemonic’s share of the total system messages to the mnemonic’s share of total executed system volume exceeds 10:1; and (ii) the mnemonic’s cancelled system orders as a percentage of its total system orders exceeds 90.0%. See Securities Exchange Act Release No. 53071 (January 6, 2006), 71 FR 2281 (January 13, 2006) (SR–NYSE–2005–91). 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(4). E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 73, Number 151 (Tuesday, August 5, 2008)]
[Notices]
[Pages 45506-45508]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-17890]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58251; File No. SR-FINRA-2008-041]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change Relating To Making the Portfolio Margin Pilot 
Permanent

July 30, 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 July 25, 2008, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been substantially prepared by 
FINRA. FINRA has designated the proposed rule change as constituting a 
``non-controversial'' rule change under paragraph (f)(6) of Rule 19b-4 
under the Act,\3\ which renders the proposal effective upon receipt of 
this filing by the Commission. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

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

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

    FINRA proposes to make permanent the portfolio margin pilot program 
set forth in NASD Rule 2520(g) and Incorporated NYSE Rule 431(g).\4\ 
The

[[Page 45507]]

portfolio margin pilot program permits members to margin certain 
products according to a prescribed portfolio margin methodology and is 
set to expire on July 31, 2008. There is no change to the rule text 
with this proposed rule change.
---------------------------------------------------------------------------

    \4\ The current FINRA rulebook consists of two sets of rules: 
(1) NASD Rules and (2) rules incorporated from NYSE (``Incorporated 
NYSE Rules''). While the NASD Rules generally apply to all FINRA 
members, the Incorporated NYSE Rules apply only to members of both 
FINRA and the NYSE, referred to as Dual Members.
---------------------------------------------------------------------------

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
    On February 12, 2007, FINRA (then known as NASD) filed SR-NASD-
2007-013 for immediate effectiveness to establish a portfolio margin 
pilot program that permits member firms to elect to margin certain 
products according to a prescribed portfolio margin methodology.\5\ The 
portfolio margin pilot program is substantially similar to margin rule 
amendments by the NYSE and the Chicago Board Options Exchange 
(``CBOE''), which were approved by the Commission.\6\ Consistent with 
the amended NYSE and CBOE portfolio margin programs, the pilot, as 
proposed in SR-NASD-2007-013, started on April 2, 2007 and ended on 
July 31, 2007. The pilot program was extended for a one-year period to 
July 31, 2008, also consistent with the NYSE and CBOE portfolio margin 
programs.\7\
---------------------------------------------------------------------------

    \5\ See Exchange Act Release No. 55471 (March 14, 2007), 72 FR 
13149 (March 20, 2007) (Notice of Filing and Immediate Effectiveness 
of SR-NASD-2007-013).
    \6\ See Exchange Act Release No. 54918 (December 12, 2006), 71 
FR 75790 (December 18, 2006) (SR-NYSE-2006-13, relating to further 
amendments to the NYSE's portfolio margin pilot program); Exchange 
Act Release No. 54125 (July 11, 2006), 71 FR 40766 (July 18, 2006) 
(SR-NYSE-2005-93, relating to amendments to the NYSE's portfolio 
margin pilot program); Exchange Act Release No. 52031 (July 14, 
2005) 70 FR 42130 (July 21, 2005) (SR-NYSE-2002-19, relating to the 
NYSE's original portfolio margin pilot). See also Exchange Act 
Release No. 54919 (December 12, 2006), 71 FR 75781 (December 18, 
2006) (SR-CBOE-2006-14, relating to amendments to the CBOE's 
portfolio margin pilot); Exchange Act Release No. 52032 (July 14, 
2005) 70 FR 42118 (July 21, 2005) (SR-CBOE-2002-03, relating to the 
CBOE's original portfolio margin pilot).
    \7\ See Exchange Act Release No. 56108 (July 19, 2007) 72 FR 
41375 (July 27, 2007) (Notice of Filing and Immediate Effectiveness 
of SR-NASD-2007-045). See also Exchange Act Release No. 56107 (July 
19, 2007) 72 FR 41377 (July 27, 2007) (Notice of Filing and 
Immediate Effectiveness of SR-NYSE-2007-56, relating to extension of 
the NYSE portfolio margin pilot program to July 31, 2008) and 
Exchange Act Release No. 56109 (July 19, 2007) 72 FR 41365 (July 27, 
2007) (Notice of Filing and Immediate Effectiveness of SR-CBOE-2007-
75, relating to extension of the CBOE portfolio margin pilot program 
to July 31, 2008).
---------------------------------------------------------------------------

    FINRA is proposing to make permanent the pilot program contained in 
NASD Rule 2520(g) and Incorporated NYSE Rule 431(g). FINRA has not 
encountered any problems or difficulties relating to the pilot program 
since its inception and believes that the program better aligns margin 
requirements with the actual risk of hedged products. For these 
reasons, FINRA proposes to adopt the portfolio margin program on a 
permanent basis.
    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date of the proposed rule change is 
August 1, 2008.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ 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 making the portfolio margin program 
permanent is appropriate as the program better aligns the margin 
requirements with actual risk.
---------------------------------------------------------------------------

    \8\ 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

    Because the forgoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. FINRA has fulfilled this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
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 requests that the Commission 
waive the 30-day operative delay, which would make the change operative 
upon filing. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because such waiver will allow the customer portfolio 
margining program to continue uninterrupted as it would otherwise 
expire on July 31, 2008.\11\ Accordingly, the Commission designates the 
proposed rule change effective upon filing with the Commission.
---------------------------------------------------------------------------

    \11\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the 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
     Send an e-mail to rule-comments@sec.gov. Please include 
File

[[Page 45508]]

Number SR-FINRA-2008-041 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-2008-041. 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-2008-041 and should be 
submitted on or before August 26, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-17890 Filed 8-4-08; 8:45 am]
BILLING CODE 8010-01-P
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