Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 2330 and IM-2330 To Reflect Changes to Corresponding FINRA Rule, 66191-66193 [E9-29648]
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66191
Federal Register / Vol. 74, No. 238 / Monday, December 14, 2009 / Notices
full calendar months. The waiver,
which would be granted by an Exchange
official designated by the Exchange’s
Board of Directors, would only apply if
the member purchasing the Trading
Rights is not currently an ISE market
maker and needs additional time to
commence its operations on the
Exchange as a market maker. The
Exchange believes granting the waiver
will provide new market makers
sufficient time to become operationally
ready.
This proposed fee change will be
operative on December 1, 2009.
2. Statutory Basis
The basis under the Securities
Exchange Act of 1934 (the ‘‘Exchange
Act’’) for this proposed rule change is
the requirement under Section 6(b)(4)
that an exchange have an equitable
allocation of reasonable dues, fees and
other charges among its members and
other persons using its facilities. In
particular, the proposed fee change will
allow the Exchange to recoup lost
revenue and encourage the timely
operation of its CMM Trading Rights.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
mstockstill on DSKH9S0YB1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3) of
the Act 4 and Rule 19b–4(f)(2) 5
thereunder. 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 proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
SECURITIES AND EXCHANGE
COMMISSION
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
No. SR–ISE–2009–101 on the subject
line.
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
2330 and IM–2330 To Reflect Changes
to Corresponding FINRA Rule
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securitiesand Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File No.
SR–ISE–2009–101. 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 changes 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 ISE. 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 No.
SR–ISE–2009–101 and should be
submitted on or before January 4, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–29647 Filed 12–11–09; 8:45 am]
BILLING CODE 8011–01–P
4 15
U.S.C. 78s(b)(3)(A).
5 17 CFR 19b–4(f)(2).
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17:54 Dec 11, 2009
6 17
Jkt 220001
PO 00000
CFR 200.30–3(a)(12).
Frm 00108
Fmt 4703
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[Release No. 34–61128; File No. SR–
NASDAQ–2009–106]
December 8, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
4, 2009, The NASDAQ Stock Market
LLC (the ‘‘Exchange’’ or ‘‘NASDAQ’’)
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 Exchange has designated the
proposed rule change as constituting a
non-controversial rule change under
Rule 19b–4(f)(6) under the Act,3 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Pursuant to the provisions of Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’),4 and Rule 19b–4
thereunder,5 the NASDAQ Stock Market
LLC (the ‘‘Exchange’’ or ‘‘NASDAQ’’) is
filing with the Securities and Exchange
Commission (‘‘Commission’’) a
proposed rule change to amend
NASDAQ Rule 2330 and IM–2330 to
reflect recent changes to a
corresponding rule of the Financial
Industry Regulatory Authority
(‘‘FINRA’’). The text of the proposed
rule change is below. Proposed new
language is italicized; proposed
deletions are in brackets:
NASDAQ Stock Market Rules
*
*
*
*
*
2150. Customers’ Securities or Funds
(a) Nasdaq Members and persons
associated with a member shall comply with
FINRA Rule 2150 as if such Rule were part
of Nasdaq’s Rules.
(b) Nothing in FINRA Rule 2150, as
applied to Nasdaq members and their
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
4 15 U.S.C. 78s(b)(1).
5 17 CFR 240.19b–4.
2 17
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14DEN1
66192
Federal Register / Vol. 74, No. 238 / Monday, December 14, 2009 / Notices
associated persons, shall be construed to
authorize any Nasdaq member or associated
person to act in a manner inconsistent with
Section 11(a) of the Act.
IM–2150. Segregation of Customers’
Securities
(a) Nasdaq Members and persons
associated with a member shall comply with
FINRA Interpretive Material 2150 as if such
Rule were part of Nasdaq’s Rules.
(b) For purposes of this Rule, references to
Rule 2150 shall be construed as references to
Nasdaq Rule 2150.
*
*
*
*
*
[2330. Customers’ Securities or Funds
(a) Nasdaq Members and persons
associated with a member shall comply with
NASD Rule 2330 as if such Rule were part
of Nasdaq’s Rules.
(b) Nothing in NASD Rule 2330, as applied
to Nasdaq members and their associated
persons, shall be construed to authorize any
Nasdaq member or associated person to act
in a manner inconsistent with Section 11(a)
of the Act.]
[IM–2330. Segregation of Customers’
Securities
(a) Nasdaq Members and persons
associated with a member shall comply with
NASD Interpretive Material 2330 as if such
Rule were part of Nasdaq’s Rules.
(b) For purposes of this Rule, references to
Rule 2330 shall be construed as references to
Nasdaq Rule 2330.]
*
*
*
*
*
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
Exchange 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
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
mstockstill on DSKH9S0YB1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Many of NASDAQ’s rules are based
on rules of FINRA (formerly the
National Association of Securities
Dealers (‘‘NASD’’)). During 2008, FINRA
embarked on an extended process of
moving rules formerly designated as
‘‘NASD Rules’’ into a consolidated
FINRA rulebook. In most cases, FINRA
has renumbered these rules, and in
some cases has substantively amended
them. Accordingly, NASDAQ also
proposes to initiate a process of
VerDate Nov<24>2008
17:54 Dec 11, 2009
Jkt 220001
modifying its rulebook to ensure that
NASDAQ rules corresponding to
FINRA/NASD rules continue to mirror
them as closely as practicable. In some
cases, it will not be possible for the rule
numbers of NASDAQ rules to mirror
corresponding FINRA rules, because
existing or planned NASDAQ rules
make use of those numbers. However,
wherever possible, NASDAQ plans to
update its rules to reflect changes to
corresponding FINRA rules.
This filing addresses NASDAQ Rule
2330 entitled ‘‘Customers’ Securities or
Funds’’ and IM–2330 entitled
‘‘Segregation of Customers’ Securities.’’
NASDAQ Rule 2330 and IM–2330 both
make reference to NASD Rule 2330
entitled ‘‘Improper Use of Customer’s
Securities or Funds; Prohibitions
Against Guarantees and Sharing in
Accounts.’’ FINRA filed a proposed rule
change, which will be effective
December 14, 2009, to adopt NASD Rule
2330 as FINRA Rule 2150.6 FINRA
made minor changes to Rule 2150,
specifically amending 2150(c). FINRA
Rule 2150 prohibits members and
associated person from: (a) Making
improper use of a customer’s securities
or funds; (b) guaranteeing a customer
against loss in connection with any
securities transaction or in any
securities account of the customer; and
(c) sharing in the profits or losses in the
customer’s account except under certain
limited conditions specified in the Rule.
In addition, FINRA added
Supplementary Information to Rule
2150 that codifies existing staff
guidance clarifying that: (i) A
‘‘guarantee’’ extended to all holders of a
particular security by an issuer as part
of that security generally would not be
subject to the prohibition against
guarantees and that a permissible
sharing arrangement remains subject to
other applicable FINRA rules; (ii) the
rule does not preclude a member from
determining on an after-the-fact basis, to
reimburse a customer for transaction
losses, provided however that the
member shall comply with all reporting
requirements that may be applicable to
such payment; (iii) the rule does not
preclude a member from correcting a
bona fide error; and (iv) the required
written authorization(s) shall be
preserved for a period of at least six
years after the date the account is
closed, which is consistent with the
retention period under the Act for
similar records.
NASDAQ is proposing to amend
NASDAQ Rule 2330 and IM–2330 by
renaming Rule 2330 to new Rule 2150
and renaming IM–2330 to new IM–2150,
in order to incorporate by reference the
FINRA rule. NASDAQ would delete
current Rule 2330 and IM–2330.
NASDAQ also proposes to amend the
references to NASD Rule 2330 to instead
state FINRA Rule 2150 in the new Rule
2150 and IM–2150 to reflect the change
to the FINRA rules.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,7
in general, and with Sections 6(b)(5) of
the Act,8 in particular, in that the
proposal is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest. The
proposed changes will conform
NASDAQ Rule 2330 and IM–2330 to
recent changes made to a corresponding
FINRA rule, to promote application of
consistent regulatory standards.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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, as amended.
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 foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 9 and Rule 19b–
4(f)(6) thereunder.10
7 15
6 Securities
Exchange Act Release No. 60701
(September 21, 2009), 74 FR 49425 (September 28,
2009) (SR–FINRA–2009–014).
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
U.S.C. 78f.
U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6).
8 15
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Federal Register / Vol. 74, No. 238 / Monday, December 14, 2009 / Notices
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:
mstockstill on DSKH9S0YB1PROD with NOTICES
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–NASDAQ–2009–106 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2009–106. This
file number should be included on the
subject line if e-mail is used.
To help the Commission process and
review your comments more efficiently,
please use only one method. The
Commission will post all comments on
the Commission’s Internet Web site
(https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
the principal office of the Exchange. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
VerDate Nov<24>2008
17:54 Dec 11, 2009
Jkt 220001
66193
submissions should refer to File
Number SR–NASDAQ–2009–106 and
should be submitted on or before
January 4, 2010.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc.E9–29648 Filed 12–11–09; 8:45 am]
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.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61130; File No. SR–NYSE–
2009–118]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Exclude
Early Closing Days From Certain ADV
Calculations
December 8, 2009.
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
December 1, 2009, New York Stock
Exchange LLC (the ‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘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 amend its
price list to provide that data from days
on which the Exchange closes early will
not be included in calculations of
average daily trading volume for the
applicable month in determining
member organizations’ qualification for
pricing tiers and qualification of
Supplemental Liquidity Providers
(‘‘SLPs’’) for liquidity credits. 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The NYSE charges member
organizations a lower transaction fee per
share when they provide liquidity with
respect to specified levels of average
daily trading volume (‘‘ADV’’) in the
applicable month. In addition, the
Exchange pays credits to SLPs for
providing liquidity to the Exchange and,
in doing so, pays higher credits to SLPs
that provide liquidity in excess of
specified levels of ADV for the
applicable month. The Exchange
proposes to exclude trading volume data
from those days on which it closes early
from calculations of ADV used in
determining member organizations’ and
SLPs’ qualification for more favorable
transaction pricing and liquidity credit
tiers. The Exchange closes early on a
small number of trading days in the
course of the year, which are generally
the trading days before or after a public
holiday (e.g., Christmas Eve and the day
after Thanksgiving). As the trading on
those days occurs over a shorter time
period and is typically very light, the
Exchange believes that including it in
ADV calculations distorts ADV for the
applicable month. Consequently, the
Exchange believes it is appropriate to
exclude days on which it closes early
from ADV calculations. The Exchange
notes that it will continue to include
early closing days in ADV calculations
when determining whether securities
are ‘‘More Active Securities’’ or ‘‘Less
Active Securities’’ for purposes of
determining which rebate tier
Designated Market Makers qualify for
when adding liquidity to the Exchange.
2. Statutory Basis
11 17
CFR 200.30–3(a)(12).
1 15 U.S.C.78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
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Sfmt 4703
The Exchange believes that the
proposed rule change is consistent with
E:\FR\FM\14DEN1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 238 (Monday, December 14, 2009)]
[Notices]
[Pages 66191-66193]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-29648]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61128; File No. SR-NASDAQ-2009-106]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 2330 and IM-2330 To Reflect Changes to Corresponding FINRA
Rule
December 8, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 4, 2009, The NASDAQ Stock Market LLC (the ``Exchange'' or
``NASDAQ'') 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
Exchange has designated the proposed rule change as constituting a non-
controversial rule change under Rule 19b-4(f)(6) under the Act,\3\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ the
NASDAQ Stock Market LLC (the ``Exchange'' or ``NASDAQ'') is filing with
the Securities and Exchange Commission (``Commission'') a proposed rule
change to amend NASDAQ Rule 2330 and IM-2330 to reflect recent changes
to a corresponding rule of the Financial Industry Regulatory Authority
(``FINRA''). The text of the proposed rule change is below. Proposed
new language is italicized; proposed deletions are in brackets:
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
NASDAQ Stock Market Rules
* * * * *
2150. Customers' Securities or Funds
(a) Nasdaq Members and persons associated with a member shall
comply with FINRA Rule 2150 as if such Rule were part of Nasdaq's
Rules.
(b) Nothing in FINRA Rule 2150, as applied to Nasdaq members and
their
[[Page 66192]]
associated persons, shall be construed to authorize any Nasdaq
member or associated person to act in a manner inconsistent with
Section 11(a) of the Act.
IM-2150. Segregation of Customers' Securities
(a) Nasdaq Members and persons associated with a member shall
comply with FINRA Interpretive Material 2150 as if such Rule were
part of Nasdaq's Rules.
(b) For purposes of this Rule, references to Rule 2150 shall be
construed as references to Nasdaq Rule 2150.
* * * * *
[2330. Customers' Securities or Funds
(a) Nasdaq Members and persons associated with a member shall
comply with NASD Rule 2330 as if such Rule were part of Nasdaq's
Rules.
(b) Nothing in NASD Rule 2330, as applied to Nasdaq members and
their associated persons, shall be construed to authorize any Nasdaq
member or associated person to act in a manner inconsistent with
Section 11(a) of the Act.]
[IM-2330. Segregation of Customers' Securities
(a) Nasdaq Members and persons associated with a member shall
comply with NASD Interpretive Material 2330 as if such Rule were
part of Nasdaq's Rules.
(b) For purposes of this Rule, references to Rule 2330 shall be
construed as references to Nasdaq Rule 2330.]
* * * * *
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 Exchange 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 Exchange 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
Many of NASDAQ's rules are based on rules of FINRA (formerly the
National Association of Securities Dealers (``NASD'')). During 2008,
FINRA embarked on an extended process of moving rules formerly
designated as ``NASD Rules'' into a consolidated FINRA rulebook. In
most cases, FINRA has renumbered these rules, and in some cases has
substantively amended them. Accordingly, NASDAQ also proposes to
initiate a process of modifying its rulebook to ensure that NASDAQ
rules corresponding to FINRA/NASD rules continue to mirror them as
closely as practicable. In some cases, it will not be possible for the
rule numbers of NASDAQ rules to mirror corresponding FINRA rules,
because existing or planned NASDAQ rules make use of those numbers.
However, wherever possible, NASDAQ plans to update its rules to reflect
changes to corresponding FINRA rules.
This filing addresses NASDAQ Rule 2330 entitled ``Customers'
Securities or Funds'' and IM-2330 entitled ``Segregation of Customers'
Securities.'' NASDAQ Rule 2330 and IM-2330 both make reference to NASD
Rule 2330 entitled ``Improper Use of Customer's Securities or Funds;
Prohibitions Against Guarantees and Sharing in Accounts.'' FINRA filed
a proposed rule change, which will be effective December 14, 2009, to
adopt NASD Rule 2330 as FINRA Rule 2150.\6\ FINRA made minor changes to
Rule 2150, specifically amending 2150(c). FINRA Rule 2150 prohibits
members and associated person from: (a) Making improper use of a
customer's securities or funds; (b) guaranteeing a customer against
loss in connection with any securities transaction or in any securities
account of the customer; and (c) sharing in the profits or losses in
the customer's account except under certain limited conditions
specified in the Rule. In addition, FINRA added Supplementary
Information to Rule 2150 that codifies existing staff guidance
clarifying that: (i) A ``guarantee'' extended to all holders of a
particular security by an issuer as part of that security generally
would not be subject to the prohibition against guarantees and that a
permissible sharing arrangement remains subject to other applicable
FINRA rules; (ii) the rule does not preclude a member from determining
on an after-the-fact basis, to reimburse a customer for transaction
losses, provided however that the member shall comply with all
reporting requirements that may be applicable to such payment; (iii)
the rule does not preclude a member from correcting a bona fide error;
and (iv) the required written authorization(s) shall be preserved for a
period of at least six years after the date the account is closed,
which is consistent with the retention period under the Act for similar
records.
---------------------------------------------------------------------------
\6\ Securities Exchange Act Release No. 60701 (September 21,
2009), 74 FR 49425 (September 28, 2009) (SR-FINRA-2009-014).
---------------------------------------------------------------------------
NASDAQ is proposing to amend NASDAQ Rule 2330 and IM-2330 by
renaming Rule 2330 to new Rule 2150 and renaming IM-2330 to new IM-
2150, in order to incorporate by reference the FINRA rule. NASDAQ would
delete current Rule 2330 and IM-2330. NASDAQ also proposes to amend the
references to NASD Rule 2330 to instead state FINRA Rule 2150 in the
new Rule 2150 and IM-2150 to reflect the change to the FINRA rules.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\7\ in general, and with
Sections 6(b)(5) of the Act,\8\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The proposed
changes will conform NASDAQ Rule 2330 and IM-2330 to recent changes
made to a corresponding FINRA rule, to promote application of
consistent regulatory standards.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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, as amended.
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 foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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[[Page 66193]]
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 Number SR-NASDAQ-2009-106 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2009-106.
This file number should be included on the subject line if e-mail is
used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2009-106 and should
be submitted on or before January 4, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc.E9-29648 Filed 12-11-09; 8:45 am]
BILLING CODE 8011-01-P
