Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend EDGX Rule 3.13, 51138-51140 [2010-20474]
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51138
Federal Register / Vol. 75, No. 159 / Wednesday, August 18, 2010 / Notices
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
No. SR–ISE–2010–81 on the subject
line.
Paper Comments
sroberts on DSKD5P82C1PROD with NOTICES
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
No. SR–ISE–2010–81. 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 Web site viewing and
printing 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–2010–81 and should be
submitted on or before September 8,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–20406 Filed 8–17–10; 8:45 am]
BILLING CODE 8010–01–P
20 17
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62688; File Nos. SR–BATS–
2010–018; SR–BX–2010–044; SR–CBOE–
2010–065; SR–CHX–2010–14; SR–EDGA–
2010–05; SR–EDGX–2010–05; SR–FINRA–
2010–033; SR–ISE–2010–66; SR–NYSE–
2010–49; SR–NYSEAmex-2010–63; SR–
NYSEArca-2010–61; SR–NASDAQ–2010–
079; SR–NSX–2010–08]
or institute proceedings to determine
whether the proposed rule change
should be disapproved. The 35th day for
these filings is August 11, 2010.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider these proposed rule changes,
which relate to the addition of
additional securities to the single-stock
circuit breaker pilot program, and the
comment letters that have been
submitted in connection with these
filings.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the Act,6
designates August 25, 2010, as the date
by which the Commission should either
approve or institute proceedings to
determine whether to disapprove the
proposed rule changes.
Self-Regulatory Organizations; BATS
Exchange, Inc.; Chicago Board
Options Exchange, Incorporated;
Chicago Stock Exchange, Inc.; EDGA
Exchange, Inc.; EDGX Exchange, Inc.;
Financial Industry Regulatory
Authority, Inc.; International Securities
Exchange LLC; NASDAQ OMX BX,
Inc.; The NASDAQ Stock Market LLC;
National Stock Exchange, Inc.; New
York Stock Exchange LLC; NYSE
Amex LLC; NYSE Arca, Inc.; Notice of
Designation of Longer Period for
Commission Action on Proposed Rule
Changes Relating to Trading Pauses
Due to Extraordinary Market Volatility
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
August 11, 2010.
[FR Doc. 2010–20366 Filed 8–17–10; 8:45 am]
On June 30, 2010, each of BATS
Exchange, Inc., Chicago Board Options
Exchange, Incorporated, Chicago Stock
Exchange, Inc., EDGA Exchange, Inc.,
EDGX Exchange, Inc., Financial
Industry Regulatory Authority, Inc.,
International Securities Exchange, LLC,
The NASDAQ Stock Market LLC,
NASDAQ OMX BX, Inc., National Stock
Exchange, Inc., New York Stock
Exchange LLC, NYSE Amex LLC, and
NYSE Arca, Inc. filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) 1 of the Securities Exchange Act
of 1934 (‘‘Act’’),2 and Rule 19b–4
thereunder,3 proposed rule changes to
amend certain of their respective rules
to add additional securities to the
single-stock circuit breaker pilot
program.4
Section 19(b)(2) of the Act 5 provides
that, within thirty-five days of the
publication of notice of the filing of a
proposed rule change, or within such
longer period as the Commission may
designate up to ninety days of such date
if it finds such longer period to be
appropriate and publishes its reasons
for so finding, the Commission shall
either approve the proposed rule change
BILLING CODE 8010–01–P
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 The single-stock circuit breaker pilot program
was initially approved on June 10, 2010. See
Securities Exchange Act Release Nos. 62251 (June
10, 2010), 75 FR 34183 (June 16, 2010); 62252 (June
10, 2010), 75 FR 34186 (June 16, 2010).
5 15 U.S.C. 78s(b)(2).
2 15
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62695; File No. SR–EDGX–
2010–11]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend EDGX Rule
3.13
August 11, 2010.
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 August
3, 2010, EDGX Exchange, Inc. (‘‘EDGX’’
or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. 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
EDGX Rule 3.13 to conform it with
FINRA Rule 5230 in order (i) for FINRA
6 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(31).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
7 17
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Federal Register / Vol. 75, No. 159 / Wednesday, August 18, 2010 / Notices
to effectively examine for the rule
pursuant to a Rule 17d–2 agreement that
the Exchange has entered into with
FINRA; and (ii) to modernize its terms
and clarify its scope. The text of the
proposed rule change is available on the
Exchange’s Web site at https://
www.directedge.com, on the
Commission’s Web site at https://
www.sec.gov, at the principal office of
the Exchange, 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 those 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 parts of such
statements.
sroberts on DSKD5P82C1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
EDGX Exchange, Inc. has entered into
a Rule 17d–2 3 agreement with FINRA
pursuant to which FINRA surveils
violations of rules in common between
FINRA and EDGX. This agreement
covers common members of EDGX and
FINRA and allocates to FINRA
regulatory responsibility, with respect to
common members, for the following: (i)
Examination of common members of
EDGX and FINRA for compliance with
Federal securities laws, rules and
regulations and rules of the Exchange
that the Exchange has certified as
identical or substantially similar to
FINRA rules; (ii) investigation of
common members of EDGX and FINRA
for violations of Federal securities laws,
rules or regulations, or Exchange rules
that the Exchange has certified as
identical or substantially identical to a
FINRA rule; and (iii) enforcement of
compliance by common members with
the Federal securities laws, rules and
regulations, and the rules of EDGX that
the Exchange has certified as identical
or substantially similar to FINRA rules.4
EDGX Rule 3.13 is identical to NASD
Rule 3330, which was subsequently re3 17
CFR 240.17d–2.
Securities and Exchange Release No. 61698
(March 12, 2010), 75 FR 13151 (March 18, 2010)
(approving File No. 10–196).
4 See
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18:40 Aug 17, 2010
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numbered and amended to be FINRA
Rule 5230.5 FINRA, however, recently
incorporated additional exceptions to
this rule in order to ‘‘modernize its
terms and clarify its scope.’’ 6 After a
consideration of the merits of such rule
change, including the benefits of
ensuring that Rule 3.13 would continue
to be a common rule covered under the
Exchange’s Rule
17d–2 agreement with FINRA, EDGX is
proposing to amend its Rule 3.13 to
comport it with FINRA Rule 5230.
EDGX Rule 3.13 currently provides
that no member may, ‘‘directly or
indirectly, give, permit to be given, or
offer to give, anything of value to any
person for the purpose of influencing or
rewarding the action of such person in
connection with the publication or
circulation in any newspaper,
investment service, or similar
publication, of any matter which has, or
is intended to have, an effect upon the
market price of any security. * * * ’’
The rule includes an exception for any
matter that is ‘‘clearly distinguishable as
paid advertising.’’
EDGX agrees with FINRA’s reasoning
for proposing changes to its Rule 5230.
Therefore, EDGX is proposing two
changes to EDGX Rule 3.13 to
modernize its terms and clarify its
scope.7 First, the proposed rule change
updates the list of media to which the
rule refers since Rule 3.13 refers only to
matters published or circulated in any
‘‘newspaper, investment service, or
similar publication.’’ The proposed rule
change updates this language to include
electronic and other types of media,
including magazines, Web sites, and
television programs. Second, the
proposed rule change expands the
exceptions in the rule beyond paid
advertising to also include
compensation paid in connection with
research reports and communications
published in reliance on Section 17(b)
of the Securities Act of 1933.8 EDGX is
proposing these changes to clarify that
the prohibitions in the rule are not
5 See Securities and Exchange Release No. 60648
(September 10, 2009), 74 FR 47837 (September 17,
2009) (SR–FINRA–2009–048).
6 See Securities and Exchange Release No. 60648
(September 10, 2009), 74 FR 47837 (September 17,
2009) (SR–FINRA–2009–048).
7 The proposed rule changes also changes the title
of the rule to ‘‘Payments Involving Publications that
Influence the Market Price of a Security.’’
8 Section 17(b) of the Securities Act of 1933
provides that no person may ‘‘publish, give
publicity to, or circulate any * * * communication
which, though not purporting to offer a security for
sale, describes such security for a consideration
received or to be received, directly or indirectly,
from an issuer, underwriter, or dealer, without fully
disclosing the receipt, whether past or prospective,
of such consideration and the amount thereof.’’ 15
U.S.C. 77q(b).
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51139
intended to cover compensation paid for
publications that are explicitly
permitted pursuant to other rules. For
example, Rule 3.13 could be read to
prohibit a member from paying for a
third-party research report if the report
affected the market price of a security.
However, EDGX does not believe that
the rule should be read to prohibit
compensation paid in connection with
the publication of information that is
specifically permitted pursuant to
Section 17(b) of the Securities Act of
1933, provided the required disclosures
are made.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,9
in general, and with Section 6(b)(5) of
the Act 10 in particular, which requires,
among other things, that Exchange 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. EDGX
believes that the proposed rule change
will clarify the scope of the rule as well
as allow FINRA to be able to examine
for it under a Rule 17d–2 agreement
since it will be identical to FINRA Rule
5230, as proposed to be amended.
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.
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 Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
foregoing proposed rule change: (i) Does
not significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
9 15
U.S.C. 78f.
U.S.C. 78f(b)(5).
11 15 U.S.C. 78s(b)(3)(A)(iii).
12 17 CFR 240.19b–4(f)(6).
10 15
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51140
Federal Register / Vol. 75, No. 159 / Wednesday, August 18, 2010 / Notices
competition; and (iii) by its terms, does
not become operative for 30 days from
the date on which it was filed, 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 13 and Rule 19b–4(f)(6)
thereunder.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend 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
Number SR–EDGX–2010–11 on the
subject line.
sroberts on DSKD5P82C1PROD with NOTICES
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–EDGX–2010–11. 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
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the self-regulatory organization
to submit to the Commission 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 satisfied this requirement.
14 17
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18:40 Aug 17, 2010
Jkt 220001
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 Web site viewing and
printing 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–EDGX–
2010–11 and should be submitted on or
before September 8, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–20474 Filed 8–17–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62709; File No. SR–
NASDAQ–2010–097]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by The
NASDAQ Stock Market LLC To Amend
Exchange Rules Related to the Cut-off
Time for Contrary Exercise Advice
Submissions
August 12, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on August 3,
2010, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II,
below, which Items have been prepared
by NASDAQ. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
NASDAQ is filing with the
Commission a proposal for the
NASDAQ Options Market (‘‘NOM’’ or
‘‘Exchange’’) to amend Chapter VIII,
Section 1 (Exercise of Options
Contracts) to make changes to extend
the cut-off time to submit contrary
exercise advices (‘‘Contrary Exercise
Advices’’ or ‘‘CEAs’’).3 The Exchange
also proposes to make certain nonsubstantive changes to reorganize the
text of Chapter VIII, Section 1 to more
clearly present the existing
requirements and to eliminate
duplicative language.
The text of the proposed rule change
is available on NASDAQ’s Web site at
https://nasdaq.cchwallstreet.com/
Filings/, at NASDAQ’s principal office,
on the Commission’s Web site at https://
www.sec.gov, 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,
NASDAQ 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.
NASDAQ has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposal is to
make changes to Chapter VIII, Section 1
to extend the cut-off time to submit
Contrary Exercise Advices to the
Exchange; to extend exercise cut-off
deadlines to Quarterly Options Series;
and to make certain non-substantive
changes to reorganize the text of Section
1 to more clearly present the existing
requirements and to eliminate
duplicative language.4
3 Contrary Exercise Advices are also referred to as
Expiring Exercise Declarations (‘‘EED’’) in the rules
of The Options Clearing Corporation.
4 The Exchange proposes to reorganize the current
rule text of Chapter VIII, Section 1 so that the
requirement that exercise decisions must be made
by 5:30 p.m. Eastern Time is specified in paragraph
(c), while the requirements pertaining to submitting
CEA instructions are contained in new paragraph
(d). The language in new paragraph (d) is comprised
E:\FR\FM\18AUN1.SGM
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]]>Agencies
[Federal Register Volume 75, Number 159 (Wednesday, August 18, 2010)]
[Notices]
[Pages 51138-51140]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-20474]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62695; File No. SR-EDGX-2010-11]
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
EDGX Rule 3.13
August 11, 2010.
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 August 3, 2010, EDGX Exchange, Inc. (``EDGX'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend EDGX Rule 3.13 to conform it with
FINRA Rule 5230 in order (i) for FINRA
[[Page 51139]]
to effectively examine for the rule pursuant to a Rule 17d-2 agreement
that the Exchange has entered into with FINRA; and (ii) to modernize
its terms and clarify its scope. The text of the proposed rule change
is available on the Exchange's Web site at https://www.directedge.com,
on the Commission's Web site at https://www.sec.gov, at the principal
office of the Exchange, 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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
EDGX Exchange, Inc. has entered into a Rule 17d-2 \3\ agreement
with FINRA pursuant to which FINRA surveils violations of rules in
common between FINRA and EDGX. This agreement covers common members of
EDGX and FINRA and allocates to FINRA regulatory responsibility, with
respect to common members, for the following: (i) Examination of common
members of EDGX and FINRA for compliance with Federal securities laws,
rules and regulations and rules of the Exchange that the Exchange has
certified as identical or substantially similar to FINRA rules; (ii)
investigation of common members of EDGX and FINRA for violations of
Federal securities laws, rules or regulations, or Exchange rules that
the Exchange has certified as identical or substantially identical to a
FINRA rule; and (iii) enforcement of compliance by common members with
the Federal securities laws, rules and regulations, and the rules of
EDGX that the Exchange has certified as identical or substantially
similar to FINRA rules.\4\
---------------------------------------------------------------------------
\3\ 17 CFR 240.17d-2.
\4\ See Securities and Exchange Release No. 61698 (March 12,
2010), 75 FR 13151 (March 18, 2010) (approving File No. 10-196).
---------------------------------------------------------------------------
EDGX Rule 3.13 is identical to NASD Rule 3330, which was
subsequently re-numbered and amended to be FINRA Rule 5230.\5\ FINRA,
however, recently incorporated additional exceptions to this rule in
order to ``modernize its terms and clarify its scope.'' \6\ After a
consideration of the merits of such rule change, including the benefits
of ensuring that Rule 3.13 would continue to be a common rule covered
under the Exchange's Rule 17d-2 agreement with FINRA, EDGX is proposing
to amend its Rule 3.13 to comport it with FINRA Rule 5230.
---------------------------------------------------------------------------
\5\ See Securities and Exchange Release No. 60648 (September 10,
2009), 74 FR 47837 (September 17, 2009) (SR-FINRA-2009-048).
\6\ See Securities and Exchange Release No. 60648 (September 10,
2009), 74 FR 47837 (September 17, 2009) (SR-FINRA-2009-048).
---------------------------------------------------------------------------
EDGX Rule 3.13 currently provides that no member may, ``directly or
indirectly, give, permit to be given, or offer to give, anything of
value to any person for the purpose of influencing or rewarding the
action of such person in connection with the publication or circulation
in any newspaper, investment service, or similar publication, of any
matter which has, or is intended to have, an effect upon the market
price of any security. * * * '' The rule includes an exception for any
matter that is ``clearly distinguishable as paid advertising.''
EDGX agrees with FINRA's reasoning for proposing changes to its
Rule 5230. Therefore, EDGX is proposing two changes to EDGX Rule 3.13
to modernize its terms and clarify its scope.\7\ First, the proposed
rule change updates the list of media to which the rule refers since
Rule 3.13 refers only to matters published or circulated in any
``newspaper, investment service, or similar publication.'' The proposed
rule change updates this language to include electronic and other types
of media, including magazines, Web sites, and television programs.
Second, the proposed rule change expands the exceptions in the rule
beyond paid advertising to also include compensation paid in connection
with research reports and communications published in reliance on
Section 17(b) of the Securities Act of 1933.\8\ EDGX is proposing these
changes to clarify that the prohibitions in the rule are not intended
to cover compensation paid for publications that are explicitly
permitted pursuant to other rules. For example, Rule 3.13 could be read
to prohibit a member from paying for a third-party research report if
the report affected the market price of a security. However, EDGX does
not believe that the rule should be read to prohibit compensation paid
in connection with the publication of information that is specifically
permitted pursuant to Section 17(b) of the Securities Act of 1933,
provided the required disclosures are made.
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\7\ The proposed rule changes also changes the title of the rule
to ``Payments Involving Publications that Influence the Market Price
of a Security.''
\8\ Section 17(b) of the Securities Act of 1933 provides that no
person may ``publish, give publicity to, or circulate any * * *
communication which, though not purporting to offer a security for
sale, describes such security for a consideration received or to be
received, directly or indirectly, from an issuer, underwriter, or
dealer, without fully disclosing the receipt, whether past or
prospective, of such consideration and the amount thereof.'' 15
U.S.C. 77q(b).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\9\ in general, and with
Section 6(b)(5) of the Act \10\ in particular, which requires, among
other things, that Exchange 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. EDGX believes that the proposed rule change
will clarify the scope of the rule as well as allow FINRA to be able to
examine for it under a Rule 17d-2 agreement since it will be identical
to FINRA Rule 5230, as proposed to be amended.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(5).
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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.
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the foregoing proposed rule change: (i) Does not significantly
affect the protection of investors or the public interest; (ii) does
not impose any significant burden on
[[Page 51140]]
competition; and (iii) by its terms, does not become operative for 30
days from the date on which it was filed, 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 \13\ and Rule 19b-4(f)(6)
thereunder.\14\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to submit to the
Commission 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 satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend 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-EDGX-2010-11 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-EDGX-2010-11. 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 Web site viewing and
printing 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-EDGX-2010-11 and should be
submitted on or before September 8, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-20474 Filed 8-17-10; 8:45 am]
BILLING CODE 8010-01-P
