Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Operational Date of SR-FINRA-2009-065, 68654-68656 [2010-28066]
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68654
Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
buffer for MMFs would reduce their net
yields and possibly motivate
institutional investors to move assets
from MMFs to unregulated alternatives
(particularly if regulatory reform does
not include new constraints on such
vehicles). The effect of these competing
incentives on institutional investors’
cash management practices is uncertain,
but it is at least plausible that a
reorganization of MMFs as SPBs may
lead to a net shift of assets to
unregulated investment vehicles.
h. Enhanced Constraints on Unregulated
MMF Substitutes
New rules intended to reduce the
susceptibility of MMFs to runs generally
also will reduce the appeal of the funds
to many investors. For example, several
of the reforms recently adopted by the
SEC probably will reduce the net yields
that the funds pay to shareholders, and
a switch to floating NAVs would
eliminate a feature that some MMF
shareholders see as essential.
Reforms that reduce the appeal of
MMFs may motivate some institutional
investors to move assets to alternative
cash management vehicles with stable
NAVs, such as offshore MMFs,
enhanced cash funds, and other stable
value vehicles. These vehicles typically
invest in the same types of short-term
instruments that MMFs hold and share
many of the features that make MMFs
vulnerable to runs, so growth of
unregulated MMF substitutes would
likely increase systemic risks. However,
such funds need not comply with rule
2a–7 or other ICA protections and in
general are subject to little or no
regulatory oversight. In addition, the
risks posed by MMF substitutes are
difficult to monitor, since they provide
far less market transparency than
MMFs.
Thus, effective mitigation of systemic
risks may require policy reforms
targeted outside the MMF industry to
address risks posed by funds that
compete with MMFs and to combat
regulatory arbitrage that might offset
intended reductions in MMF risks. Such
reforms most likely would require
legislation and action by the SEC and
other agencies. For example,
consideration should be given to
prohibiting unregistered investment
vehicles from maintaining stable NAVs,
perhaps by amending sections 3(c)(1)
and 3(c)(7) of the ICA to specify that
exemptions from the requirement to
register as an investment company do
not apply to funds that seek a stable
NAV. Banking and state insurance
regulators might consider additional
restrictions to mitigate systemic risk for
bank common and collective funds and
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other investment pools that seek a stable
NAV but that are exempt from
registration under sections 3(c)(3) and
3(c)(11) of the ICA.
[FR Doc. 2010–28177 Filed 11–5–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63223; File No. SR–FINRA–
2010–054]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the
Operational Date of SR–FINRA–2009–
065
November 1, 2010.
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 October
27, 2010, the Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II, which Items have been
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to extend the
period during which FINRA may make
the rule changes set forth in SR–FINRA–
2009–065 and approved by the SEC on
February 22, 2010, effective to no later
than June 1, 2011.4
The proposed rule change would not
make any new changes to the text of
FINRA rules.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
4 See Securities Exchange Act Release No. 61566
(February 22, 2010), 75 FR 9262 (March 1, 2010)
(Order Approving File No. SR–FINRA–2009–065)
(hereinafter, ‘‘SEC Order Approving TRACE
Expansion—Asset-Backed Securities’’).
2 17
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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 October 1, 2009, FINRA filed SR–
FINRA–2009–065, a proposed rule
change to expand the Trade Reporting
and Compliance Engine (‘‘TRACE’’) to
designate asset-backed securities,
mortgage-backed securities and other
similar securities (collectively, ‘‘AssetBacked Securities’’) as eligible for
TRACE, and to establish reporting, fee
and other requirements for such
securities. In SR–FINRA–2009–065,
FINRA stated that it would announce
the effective date of the proposed rule
change in a Regulatory Notice to be
published ‘‘no later than 60 days
following Commission approval’’ and
the effective date would be ‘‘no later
than 270 days following publication’’ of
the Regulatory Notice announcing the
Commission’s approval.
The proposed rule change was
published for notice and comment.5
FINRA filed its response to comments
on December 22, 2009,6 and
Amendment No. 1 to SR–FINRA–2009–
065 on January 19, 2010 (hereinafter,
SR–FINRA–2009–065 and Amendment
No. 1 thereto are, together, the ‘‘TRACE
ABS filing’’).7 The Commission
5 See Securities Exchange Act Release No. 60860
(October 21, 2009), 74 FR 55600 (October 28, 2009)
(Notice of Filing of File No. SR–FINRA–2009–065).
6 See Letter from Sharon Zackula, Associate Vice
President and Associate General Counsel, FINRA, to
Elizabeth M. Murphy, Secretary, SEC, dated
December 22, 2009.
7 The TRACE ABS filing included amendments
to: (a) Rule 6710 to amend the defined terms,
‘‘Asset-Backed Security’’ and ‘‘TRACE-Eligible
Security’’ to include Asset-Backed Securities as
TRACE-Eligible Securities, to amend several other
defined terms, and to add several new defined
terms, most of which relate to Asset-Backed
Securities; (b) Rule 6730 to require the reporting of
Asset-Backed Securities transactions, to establish a
six-month pilot period for reporting such
transactions no later than T + 1 during TRACE
System hours, and to amend certain requirements
in connection with the reporting of commissions,
factors, transaction size and settlement terms in
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Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
approved the TRACE ABS filing on
February 22, 2010.8
On April 14, 2010, FINRA filed for
immediate effectiveness SR–FINRA–
2010–019, a proposed rule change to
extend by 45 days the proposed
implementation period for SR–FINRA–
2009–065.9 On April 23, 2010, FINRA
published Regulatory Notice 10–23
announcing Commission approval of the
TRACE ABS Filing. Regulatory Notice
10–23 briefly described the rule
changes, and, in reliance upon the 45day extension provided for in SR–
FINRA–2010–019, announced that the
effective date of such rule changes
would be February 14, 2011.
FINRA has determined that it would
be beneficial to delay the effective date
of the TRACE ABS filing to no later than
June 1, 2011. FINRA will publish a
Regulatory Notice no later than 30 days
following the operative date of this
proposed rule change to announce the
revised effective date of the TRACE ABS
filing, and to indicate that the
previously announced effective date,
February 14, 2011, is no longer valid.
The complexity and variety of
structures of Asset-Backed Securities
present significant operational and
technical challenges. For example, new
processes and systems are being
developed and must be implemented
across the industry to assure the
integrity of the Asset-Backed Securities
reference data that facilitates timely and
accurate reporting. In addition, FINRA
believes that it is very important to
provide extended time for coordinated
testing among firms and FINRA.
Accordingly, FINRA believes a delay of
the effective date until no later than
June 1, 2011 is warranted.
FINRA has filed the proposed rule
change for immediate effectiveness and
has requested that the SEC waive the
requirement that the proposed rule
change not become operative for 30 days
after the date of the filing, such that
FINRA can implement the proposed
rule change immediately.
Asset-Backed Securities transactions; (c) Rule 6750
to provide that information on a transaction in a
TRACE-Eligible Security that is an Asset-Backed
Security will not be disseminated; (d) Rule 6760 to
amend the notification requirements; (e) Rule 7730
to establish fees for reporting transactions in AssetBacked Securities; and (f) the Rule 6700 Series and
Rule 7730 to incorporate certain other technical,
administrative and clarifying changes.
8 See SEC Order Approving TRACE Expansion—
Asset-Backed Securities.
9 See Securities Exchange Act Release No. 61948
(April 20, 2010), 75 FR 22670 (April 29, 2010)
(Notice of Filing and Immediate Effectiveness of
File No. SR–FINRA–2010–019 to Extend the
Implementation Period for SR–FINRA–2009–65).
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2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,10 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. The flexibility to
establish an effective date no later than
June 1, 2011 to implement the TRACE
ABS filing will allow FINRA and
members sufficient time to make
additional necessary enhancements to
the TRACE system and member
systems, and to engage in coordinated
testing of the technology. These steps
will facilitate timely and accurate
reporting of transactions in AssetBacked Securities, and enhance
FINRA’s surveillance of the market in
Asset-Backed Securities for the
protection of investors and in
furtherance of the public interest.
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
The Exchange represented that the
proposed rule change qualifies for
immediate effectiveness pursuant to
Section 19(b)(3)(A) of the Exchange
Act 11 and Rule 19b–4(f)(6) thereunder 12
because it: (i) Does not significantly
affect the protection of investors or the
public interest; (ii) does not impose any
significant burden on 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.13
U.S.C. 78o–3(b)(6).
U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6).
13 In addition, Rule 19b–4(f)(6)(iii) requires a selfregulatory 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
68655
The Exchange has requested that the
Commission waive the 30-day operative
delay, so that the proposed rule change
may become operative upon filing. The
Commission hereby grants the
Exchange’s request.14 The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. The proposal appears
reasonably designed to allow firms
sufficient time to make necessary
systems and operational changes to
facilitate the timely and accurate
reporting of Asset-Backed Securities
transactions as required by the TRACE
ABS filing, and waiving the 30-day preoperative period will allow FINRA to
communicate the new operative date to
its members without undue delay.
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–FINRA–2010–054 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–FINRA–2010–054. 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
10 15
11 15
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proposed rule change, or such shorter time as
designated by the Commission. The Commission
has waived the five-day pre-filing period in this
case.
14 For the purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
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68656
Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices
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 the 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–2010–054 and
should be submitted on or before
November 29, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63229; File No. SR–NYSE–
2010–71]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by New York
Stock Exchange LLC To Increase the
Maximum Order Size Accepted by
Floor Broker Systems From 25,000,000
Shares to 99,000,000 Shares
jlentini on DSKJ8SOYB1PROD with NOTICES
November 2, 2010.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on November
1, 2010, New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Rule 1000 regarding the
maximum order size accepted by Floor
broker systems from 25,000,000 shares
to 99,000,000 shares. The text of the
proposed rule change is available at the
Exchange, on the Commission’s Web
site at https://www.sec.gov, at the
Commission’s Public Reference Room,
and https://www.nyse.com.
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
[FR Doc. 2010–28066 Filed 11–5–10; 8:45 am]
15 17
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. Purpose
The Exchange proposes to amend
Rule 1000 to provide that Floor broker
systems shall accept a maximum order
size of 99,000,000, an increase from the
current 25,000,000 share limit.
a. Background
Floor brokers receive orders from
customers via telephone and electronic
delivery to Floor broker systems. Details
of orders delivered to Floor broker
systems are automatically transmitted to
a designated Exchange database as
required by Rule 123(e). Orders
delivered telephonically must be
manually entered by the broker (or
clerk) into Exchange systems in order to
capture the order details in the
designated Exchange database pursuant
to Rule 123(e) before the broker can
represent these orders on the Exchange.
Exchange systems currently accept
orders up to 25,000,000 shares.
Exchange systems include Display
Book®, which is the Exchange’s
matching engine, and Floor broker
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
systems, which are the systems made
available to Floor brokers to accept
orders from customers and if warranted,
enter such orders into the Display Book.
There is no limit on the size of orders
that can be transmitted to a Floor broker
telephonically. Customers who wish to
send orders in excess of 25,000,000
shares must break these orders into
smaller sizes to send electronically or
submit these orders by telephone to the
broker. The broker (or clerk) must then
enter these telephonic orders in smaller
quantities into Exchange systems.
b. Proposed Amendment to NYSE Amex
Equities Rule 1000
The Exchange proposes to amend
Rule 1000 to state that Floor broker
systems shall accept a maximum order
size up to 99,000,000 shares. This
enhancement would allow more
efficient electronic processing of very
large orders sent to Floor brokers.
Orders sent to Display Book by Floor
brokers are subject to the same
maximum order size of 25,000,000
shares as all other market participants.
The Exchange notes that parallel
changes are proposed to be made to the
rules of the NYSE Amex LLC.4
The Exchange will implement the
systemic changes on or about December
10, 2010 and will notify Floor brokers
when the Floor broker systems have
been modified to accept a maximum
order size up to 99,000,000 shares.
2. Statutory Basis
The basis under the Securities
Exchange Act of 1934 (the ‘‘Act’’) 5 for
this proposed rule change is the
requirement under Section 6(b)(5) 6 that
an exchange have rules that are
designed to promote just and equitable
principles of trade, 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 Exchange believes
that the proposed rule change
accomplishes these goals by providing
efficient methods for customers to
transmit orders to Floor brokers.
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
necessary or appropriate in furtherance
of the purposes of the Act.
4 See
SR–NYSEAmex–2010–102.
U.S.C. 78a.
6 15 U.S.C. 78f(b)(5).
5 15
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]]>Agencies
[Federal Register Volume 75, Number 215 (Monday, November 8, 2010)]
[Notices]
[Pages 68654-68656]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28066]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63223; File No. SR-FINRA-2010-054]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the Operational Date of SR-FINRA-2009-
065
November 1, 2010.
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 October 27, 2010, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II, which Items have been 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 is proposing to extend the period during which FINRA may make
the rule changes set forth in SR-FINRA-2009-065 and approved by the SEC
on February 22, 2010, effective to no later than June 1, 2011.\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 61566 (February 22,
2010), 75 FR 9262 (March 1, 2010) (Order Approving File No. SR-
FINRA-2009-065) (hereinafter, ``SEC Order Approving TRACE
Expansion--Asset-Backed Securities'').
---------------------------------------------------------------------------
The proposed rule change would not make any new changes to the text
of FINRA rules.
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 October 1, 2009, FINRA filed SR-FINRA-2009-065, a proposed rule
change to expand the Trade Reporting and Compliance Engine (``TRACE'')
to designate asset-backed securities, mortgage-backed securities and
other similar securities (collectively, ``Asset-Backed Securities'') as
eligible for TRACE, and to establish reporting, fee and other
requirements for such securities. In SR-FINRA-2009-065, FINRA stated
that it would announce the effective date of the proposed rule change
in a Regulatory Notice to be published ``no later than 60 days
following Commission approval'' and the effective date would be ``no
later than 270 days following publication'' of the Regulatory Notice
announcing the Commission's approval.
The proposed rule change was published for notice and comment.\5\
FINRA filed its response to comments on December 22, 2009,\6\ and
Amendment No. 1 to SR-FINRA-2009-065 on January 19, 2010 (hereinafter,
SR-FINRA-2009-065 and Amendment No. 1 thereto are, together, the
``TRACE ABS filing'').\7\ The Commission
[[Page 68655]]
approved the TRACE ABS filing on February 22, 2010.\8\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 60860 (October 21,
2009), 74 FR 55600 (October 28, 2009) (Notice of Filing of File No.
SR-FINRA-2009-065).
\6\ See Letter from Sharon Zackula, Associate Vice President and
Associate General Counsel, FINRA, to Elizabeth M. Murphy, Secretary,
SEC, dated December 22, 2009.
\7\ The TRACE ABS filing included amendments to: (a) Rule 6710
to amend the defined terms, ``Asset-Backed Security'' and ``TRACE-
Eligible Security'' to include Asset-Backed Securities as TRACE-
Eligible Securities, to amend several other defined terms, and to
add several new defined terms, most of which relate to Asset-Backed
Securities; (b) Rule 6730 to require the reporting of Asset-Backed
Securities transactions, to establish a six-month pilot period for
reporting such transactions no later than T + 1 during TRACE System
hours, and to amend certain requirements in connection with the
reporting of commissions, factors, transaction size and settlement
terms in Asset-Backed Securities transactions; (c) Rule 6750 to
provide that information on a transaction in a TRACE-Eligible
Security that is an Asset-Backed Security will not be disseminated;
(d) Rule 6760 to amend the notification requirements; (e) Rule 7730
to establish fees for reporting transactions in Asset-Backed
Securities; and (f) the Rule 6700 Series and Rule 7730 to
incorporate certain other technical, administrative and clarifying
changes.
\8\ See SEC Order Approving TRACE Expansion--Asset-Backed
Securities.
---------------------------------------------------------------------------
On April 14, 2010, FINRA filed for immediate effectiveness SR-
FINRA-2010-019, a proposed rule change to extend by 45 days the
proposed implementation period for SR-FINRA-2009-065.\9\ On April 23,
2010, FINRA published Regulatory Notice 10-23 announcing Commission
approval of the TRACE ABS Filing. Regulatory Notice 10-23 briefly
described the rule changes, and, in reliance upon the 45-day extension
provided for in SR-FINRA-2010-019, announced that the effective date of
such rule changes would be February 14, 2011.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 61948 (April 20,
2010), 75 FR 22670 (April 29, 2010) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2010-019 to Extend the
Implementation Period for SR-FINRA-2009-65).
---------------------------------------------------------------------------
FINRA has determined that it would be beneficial to delay the
effective date of the TRACE ABS filing to no later than June 1, 2011.
FINRA will publish a Regulatory Notice no later than 30 days following
the operative date of this proposed rule change to announce the revised
effective date of the TRACE ABS filing, and to indicate that the
previously announced effective date, February 14, 2011, is no longer
valid.
The complexity and variety of structures of Asset-Backed Securities
present significant operational and technical challenges. For example,
new processes and systems are being developed and must be implemented
across the industry to assure the integrity of the Asset-Backed
Securities reference data that facilitates timely and accurate
reporting. In addition, FINRA believes that it is very important to
provide extended time for coordinated testing among firms and FINRA.
Accordingly, FINRA believes a delay of the effective date until no
later than June 1, 2011 is warranted.
FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the SEC waive the requirement that
the proposed rule change not become operative for 30 days after the
date of the filing, such that FINRA can implement the proposed rule
change immediately.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\10\ 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. The flexibility to establish an effective date no
later than June 1, 2011 to implement the TRACE ABS filing will allow
FINRA and members sufficient time to make additional necessary
enhancements to the TRACE system and member systems, and to engage in
coordinated testing of the technology. These steps will facilitate
timely and accurate reporting of transactions in Asset-Backed
Securities, and enhance FINRA's surveillance of the market in Asset-
Backed Securities for the protection of investors and in furtherance of
the public interest.
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\10\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange represented that the proposed rule change qualifies
for immediate effectiveness pursuant to Section 19(b)(3)(A) of the
Exchange Act \11\ and Rule 19b-4(f)(6) thereunder \12\ because it: (i)
Does not significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on 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.\13\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ In addition, Rule 19b-4(f)(6)(iii) requires a 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
Commission has waived the five-day pre-filing period in this case.
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The Exchange has requested that the Commission waive the 30-day
operative delay, so that the proposed rule change may become operative
upon filing. The Commission hereby grants the Exchange's request.\14\
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The proposal appears reasonably designed to allow firms sufficient time
to make necessary systems and operational changes to facilitate the
timely and accurate reporting of Asset-Backed Securities transactions
as required by the TRACE ABS filing, and waiving the 30-day pre-
operative period will allow FINRA to communicate the new operative date
to its members without undue delay.
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\14\ For the purposes only of waiving the 30-day operative
delay, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-FINRA-2010-054 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-FINRA-2010-054. 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
[[Page 68656]]
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 the
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-2010-054 and should be submitted on or before November 29,
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. 2010-28066 Filed 11-5-10; 8:45 am]
BILLING CODE 8011-01-P
