Securities Investor Protection Corporation; Notice of Filing of a Proposed Bylaw Change Relating to SIPC Fund Assessments on SIPC Members, 75711-75713 [2010-30434]
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Federal Register / Vol. 75, No. 233 / Monday, December 6, 2010 / Notices
have no adverse tax consequences to
Contract Owners and will in no way
alter the tax benefits to Contract
Owners.
jdjones on DSK8KYBLC1PROD with NOTICES
Applicants’ Legal Analysis:
1. Section 26(c) of the 1940 Act
provides that it shall be unlawful for
any depositor or trustee of a registered
unit investment trust holding the
security of a single issuer to substitute
another security for such security unless
the Commission shall have approved
such substitution; and the Commission
shall issue an order approving such
substitution if the evidence establishes
that it is consistent with the protection
of investors and the purposes fairly
intended by the policies and provisions
of the 1940 Act. Section 26(c) protects
the expectation of investors that the unit
investment trust will accumulate shares
of a particular issuer and is intended to
insure that unnecessary or burdensome
sales loads, additional reinvestment
costs or other charges will not be
incurred due to unapproved
substitutions of securities.
2. The proposed Substitution of
shares held by the AUL Account, as
described above, may be deemed to
involve a substitution of securities
within the meaning of Section 26(c) of
the 1940 Act. The Applicants therefore
request an order from the Commission
pursuant to Section 26(c) approving the
proposed Substitution.
3. The investment objective and
primary risks of the Substituted
Portfolio are the same as that of the
Removed Portfolio and the investment
strategies of the two are nearly identical;
thus, Contract Owners will have
reasonable continuity in investment
expectations. Accordingly, the
Substituted Portfolio is an appropriate
investment vehicle for those Contract
Owners who have Contract values
allocated to the Removed Portfolio.
Further, the Substituted Portfolio has
lower expenses and better historical
performance than that of the Removed
Portfolio.
4. In connection with assets held
under the Contracts affected by the
Substitution, Applicants will not
receive for three (3) years from the date
of substitution any direct or indirect
benefits from the Substituted Portfolio,
its advisors or underwriters (or their
affiliates) at a rate higher than that
which they had received from the
Removed Portfolio, its advisors or
underwriters (or their affiliates)
including but without limitation, 12b-1,
shareholder service, administration or
other service fees, revenue sharing or
other arrangements.
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5. Applicants represent and warrant
that the Substitution and the selection
of the Substituted Portfolio were not
motivated by any financial
consideration paid or to be paid to AUL
or its affiliates by the Substituted
Portfolio, its advisors or underwriters or
their respective affiliates.
6. The Substitution will not result in
the type of costly forced redemption
that Section 26(c) was intended to guard
against because the Contract Owner will
continue to have the same type of
investment choice, with better potential
returns and lower expenses and will not
otherwise have any incentive to redeem
their shares or terminate their Contracts.
7. The purposes, terms and conditions
of the proposed Substitution are
consistent with the protection of
investors, and the principles and
purposes of Section 26(c), and do not
entail any of the abuses that Section
26(c) is designed to prevent.
(a) The Substituted Portfolio has
better historical performance than the
Removed Portfolio.
(b) The current total annual operating
expenses and management fee of the
Substituted Portfolio are lower than
those of the Removed Portfolio.
(c) The Substituted Portfolio is an
appropriate portfolio to move Contract
Owners’ values currently allocated to
the Removed Portfolio because the
portfolios have the same objectives and
risks and very similar strategies.
(d) All costs of the Substitution,
including any allocated brokerage costs,
will be borne by Applicants and will not
be borne by Contract Owners. No
charges will be assessed to effect the
Substitution.
(e) The Substitution will be at the net
asset value of the respective portfolio
shares without the imposition of any
transfer or similar charge and with no
change in the amount of any Contract
Owners’ Contract values.
(f) The Substitution will not cause the
fees and charges under the Contracts
currently being paid by the Contract
Owners to be greater after the
Substitution than before the
Substitution and will result in Contract
Owners Contract values being moved to
a portfolio with lower current total
annual operating expenses.
(g) Notice of the proposed
Substitution will be mailed to all
Contract Owners at least 30 days prior
to the Substitution, All Contract Owners
will have an opportunity at any time
after receipt of the notice of the
Substitution and for 30 days after the
Substitution to transfer Contract account
value affected by the Substitution to
other available subaccounts without the
imposition of any transfer charge or
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limitation and without being counted as
one of the Contract Owner’s free
transfers in a contract year.
(h) Within five business days after the
Substitution, Applicants will send to
their affected Contract Owners a written
confirmation that the Substitution has
occurred.
(i) The Substitution will, in no way,
alter the terms of the Contracts or the
obligations of Applicants under them.
(j) The Substitution will have no
adverse tax consequences to Contract
Owners and will, in no way, alter the
tax benefits to Contract Owners.
Conclusion
Applicants assert that, for the reasons
summarized above, the Commission
should grant the requested order
approving the Proposed Substitution.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–30461 Filed 12–3–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. SIPA–169; File No. SIPC–2010–
01]
Securities Investor Protection
Corporation; Notice of Filing of a
Proposed Bylaw Change Relating to
SIPC Fund Assessments on SIPC
Members
November 30, 2010.
Pursuant to Section 3(e)(1) of the
Securities Investor Protection Act of
1970 (‘‘SIPA’’), 15 U.S.C. 78ccc(e)(1),
notice is hereby given that on October
8, 2010, the Securities Investor
Protection Corporation (‘‘SIPC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a proposed
bylaw change. The Commission is
publishing this notice to solicit
comments on the proposed bylaw
change from interested persons.
I. Description of Proposed Bylaw
Change
Section 4(c)(2) of SIPA requires SIPC
to impose assessments upon its member
broker-dealers deemed necessary and
appropriate to establish and maintain a
broker-dealer liquidation fund
administered by SIPC (the ‘‘SIPC Fund’’)
and to repay any borrowings by SIPC
used to liquidate a broker-dealer.
Pursuant to this authority, SIPC collects
an annual assessment from its members.
The amount of the annual assessment is
prescribed by SIPA and the SIPC
E:\FR\FM\06DEN1.SGM
06DEN1
jdjones on DSK8KYBLC1PROD with NOTICES
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Federal Register / Vol. 75, No. 233 / Monday, December 6, 2010 / Notices
bylaws. For example, if SIPC has an
outstanding loan from the Commission,
SIPA provides that SIPC assess its
member broker-dealers 1⁄2 of 1% of the
gross revenues from their securities
business.1 In addition, if the SIPC Fund
aggregates or is likely to aggregate less
than $2.5 billion for six months or more,
SIPC must raise each member’s
assessment to 1⁄2 of 1% of net operating
revenues.2 When the SIPC Fund is at its
targeted level, SIPC collects a minimum
assessment as provided for in SIPA. The
current target level for the SIPC Fund is
$2.5 billion.
The Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010
(‘‘Dodd-Frank Act’’) amended SIPA to
change the minimum assessment from
an amount not to exceed $150 to an
amount not to exceed 0.02 percent of
the gross revenues from the securities
business of the SIPC member.3 Under
Article 6 of the SIPC bylaws, SIPC must
assess its members a minimum amount
($150) unless certain conditions apply.
Because in some cases an assessment of
$150 would exceed 0.02 percent of the
gross revenues, the SIPC Assessment
bylaw must be amended to be consistent
with the Dodd-Frank Act. First, SIPC
has proposed to amend Article 6,
Section 1(a)(1)(B) of the SIPC bylaws by
replacing ‘‘$150’’ with the term ‘‘0.02
percent of the net operating revenues
from the securities business.’’ This
amendment clarifies that the minimum
assessment for members, once the SIPC
Fund reaches its target, is 0.02 percent
of a member’s net operating revenues,
not $150. Second, SIPC has proposed
deleting Section 1(a)(3) of Article 6,
which stated that $150 was the
minimum assessment a SIPC member
would be required to pay in any
calendar year. These amendments were
approved by SIPC’s Board of Directors
on September 16, 2010.
As indicated above, SIPC’s bylaw
changes refer to ‘‘net operating
revenues’’ instead of ‘‘gross revenues.’’
Since 1991, when assessing on a
percentage basis (i.e., not a flat $150
minimum assessment), SIPC has based
the assessment amount on a percentage
of net operating revenues, not gross
revenues, from the securities business.
In 1991, a SIPC Task Force study found
that securities firms no longer
structured their business on a gross
revenue basis but instead used a net
operating revenue basis, which excludes
interest expense and dividend expense
in accounting for revenue. SIPC bases its
assessment on the net revenues
1 15
U.S.C. 78ddd(d)(1)(A)(ii).
Bylaws, Article 6, Section (a)(1)(C)(i).
3 The Dodd-Frank Act, Section 929V.
2 SIPC
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associated with that business, which it
believes is consistent with SIPA. Basing
the assessment on net operating
revenues as opposed to gross revenues
will decrease the amount of the
assessment in most situations. However,
under SIPA, SIPC may adjust the basis
for collecting assessments and the
amount of assessments as long as the
assessments are within the parameters
prescribed in SIPA.4 Using a minimum
assessment of 0.02 percent of net
operating revenues would not cause the
amount of the assessment to exceed the
maximum amount permitted for the
minimum assessment under Section
4(d)(1)(C) of SIPA, as amended by the
Dodd-Frank Act.
In 1991, when SIPC changed its
assessment methodology from gross
revenues to net operating revenues, the
Commission published notice of the
proposed change and requested
comment.5 The comments received
were in support of the proposed change,
which made the assessments more
consistent with how industry revenues
are calculated.6
II. Need for Public Comment
Section 3(e)(1) of SIPA provides that
SIPC must file with the Commission a
copy of proposed bylaw changes. That
section further provides that bylaw
changes shall take effect 30 days after
filing, unless the Commission either; (i)
disapproves the change as contrary to
the public interest or the purposes of
SIPA, or (ii) finds that the change
involves a matter of such significant
public interest that public comment
should be obtained. Thus, under Section
3(e)(1) of SIPA, a proposed bylaw
change does not have to be noticed for
public comment. However, under
Section 3(e)(1)(B) of SIPA, the
Commission can find that ‘‘such
proposed change involves a matter of
such significant public interest that
public comment should be obtained,’’ in
which case, the Commission may, after
notifying SIPC in writing of such
finding, require that the proposed bylaw
change be considered by the same
procedures as a proposed rule change
including, among other things,
publication in the Federal Register and
opportunity for public comment.
The SIPC Fund, which is built from
assessments on its members and the
4 15
U.S.C. 78ddd(c)(2) and 78lll(9).
Investor Protection Corporation;
Notice of Proposed Bylaw Change Relating to SIPC
Fund Assessments on SIPC Members, Rel. No.
SIPA–156, 56 FR 51952 (Oct. 16, 1991).
6 Securities Investor Protection Corporation;
Order Approving Proposed Bylaw Change Relating
to SIPC Fund Assessments on SIPC Members, Rel.
No. SIPA–157, 56 FR 60145 (Nov. 27, 1991).
5 Securities
PO 00000
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interest earned on the fund, is used for
the protection of customers of members
liquidated under SIPA to maintain
investor confidence in the securities
markets. In light of this fact and that the
bylaw change provides for a new
minimum assessment methodology, the
Commission finds, pursuant to Section
3(e)(1)(B) of SIPA, that the proposed
bylaw change involves a matter of such
significant public interest that public
comment should be obtained and that
the procedures applicable to proposed
SIPC rule changes in Section 3(e)(2) of
SIPA should be followed. As required
by Section 3(e)(1)(B) of SIPA, the
Commission has notified SIPC of this
finding in writing.
III. Date of Effectiveness of the
Proposed Bylaw Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register, or within such longer period:
(i) As the Commission may designate up
to 90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which SIPC consents, the
Commission will: (A) By order approve
such proposed bylaw change, or (B)
Institute proceedings to determine
whether the proposed bylaw change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/other.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SIPC–2010–01 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SIPC–2010–01. 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/other.shtml). Copies of the
submission, all subsequent
E:\FR\FM\06DEN1.SGM
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Federal Register / Vol. 75, No. 233 / Monday, December 6, 2010 / Notices
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. 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
publicly available. All submissions
should refer to File Number SIPC–2010–
01 and should be submitted on or before
December 27, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–30434 Filed 12–3–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
jdjones on DSK8KYBLC1PROD with NOTICES
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, December 9, 2010 at 2
p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10)
and 17 CFR 200.402(a)(3), (5), (7), 9(ii)
and (10), permit consideration of the
scheduled matters at the Closed
Meeting.
Commissioner Aguilar, as duty
officer, voted to consider the items
listed for the Closed Meeting in a closed
session.
7 17
CFR 200.30–3(f)(2)(i).
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The subject matter of the Closed
Meeting scheduled for Thursday,
December 9, 2010 will be:
Dated: December 1, 2010.
Elizabeth M. Murphy,
Secretary.
institution and settlement of injunctive
actions; institution and settlement of
administrative proceedings; and other
matters relating to enforcement proceedings.
[FR Doc. 2010–30628 Filed 12–2–10; 4:15 pm]
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Dated: December 1, 2010.
Elizabeth M. Murphy,
Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Wednesday, December 8, 2010 at 10
a.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemption 5 U.S.C.
552b(c)(10) and 17 CFR 200.402(a)(10),
permit consideration of the scheduled
matter at the Closed Meeting.
Commissioner Aguilar, as duty
officer, voted to consider the item listed
for the Closed Meeting in a closed
session.
The subject matter of the Closed
Meeting scheduled for Wednesday,
December 8, 2010 will be:
An adjudicatory matter
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
Frm 00052
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63386; File No. SR–CBOE–
2010–102]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to the Penny
Pilot Program
November 29, 2010.
[FR Doc. 2010–30530 Filed 12–1–10; 4:15 pm]
PO 00000
BILLING CODE 8011–01–P
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 November
24, 2010, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) 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
Exchange has designated the proposal as
a ‘‘non-controversial’’ proposed rule
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b–4(f)(6) thereunder.4 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 is proposing to amend
its rules relating to the Penny Pilot
Program. The text of the proposed rule
change is available on the Exchange’s
Web site (https://www.cboe.org/Legal), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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 those
statements may be examined at the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
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]]>Agencies
[Federal Register Volume 75, Number 233 (Monday, December 6, 2010)]
[Notices]
[Pages 75711-75713]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-30434]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. SIPA-169; File No. SIPC-2010-01]
Securities Investor Protection Corporation; Notice of Filing of a
Proposed Bylaw Change Relating to SIPC Fund Assessments on SIPC Members
November 30, 2010.
Pursuant to Section 3(e)(1) of the Securities Investor Protection
Act of 1970 (``SIPA''), 15 U.S.C. 78ccc(e)(1), notice is hereby given
that on October 8, 2010, the Securities Investor Protection Corporation
(``SIPC'') filed with the Securities and Exchange Commission
(``Commission'') a proposed bylaw change. The Commission is publishing
this notice to solicit comments on the proposed bylaw change from
interested persons.
I. Description of Proposed Bylaw Change
Section 4(c)(2) of SIPA requires SIPC to impose assessments upon
its member broker-dealers deemed necessary and appropriate to establish
and maintain a broker-dealer liquidation fund administered by SIPC (the
``SIPC Fund'') and to repay any borrowings by SIPC used to liquidate a
broker-dealer. Pursuant to this authority, SIPC collects an annual
assessment from its members. The amount of the annual assessment is
prescribed by SIPA and the SIPC
[[Page 75712]]
bylaws. For example, if SIPC has an outstanding loan from the
Commission, SIPA provides that SIPC assess its member broker-dealers
\1/2\ of 1% of the gross revenues from their securities business.\1\ In
addition, if the SIPC Fund aggregates or is likely to aggregate less
than $2.5 billion for six months or more, SIPC must raise each member's
assessment to \1/2\ of 1% of net operating revenues.\2\ When the SIPC
Fund is at its targeted level, SIPC collects a minimum assessment as
provided for in SIPA. The current target level for the SIPC Fund is
$2.5 billion.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78ddd(d)(1)(A)(ii).
\2\ SIPC Bylaws, Article 6, Section (a)(1)(C)(i).
---------------------------------------------------------------------------
The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (``Dodd-Frank Act'') amended SIPA to change the minimum assessment
from an amount not to exceed $150 to an amount not to exceed 0.02
percent of the gross revenues from the securities business of the SIPC
member.\3\ Under Article 6 of the SIPC bylaws, SIPC must assess its
members a minimum amount ($150) unless certain conditions apply.
Because in some cases an assessment of $150 would exceed 0.02 percent
of the gross revenues, the SIPC Assessment bylaw must be amended to be
consistent with the Dodd-Frank Act. First, SIPC has proposed to amend
Article 6, Section 1(a)(1)(B) of the SIPC bylaws by replacing ``$150''
with the term ``0.02 percent of the net operating revenues from the
securities business.'' This amendment clarifies that the minimum
assessment for members, once the SIPC Fund reaches its target, is 0.02
percent of a member's net operating revenues, not $150. Second, SIPC
has proposed deleting Section 1(a)(3) of Article 6, which stated that
$150 was the minimum assessment a SIPC member would be required to pay
in any calendar year. These amendments were approved by SIPC's Board of
Directors on September 16, 2010.
---------------------------------------------------------------------------
\3\ The Dodd-Frank Act, Section 929V.
---------------------------------------------------------------------------
As indicated above, SIPC's bylaw changes refer to ``net operating
revenues'' instead of ``gross revenues.'' Since 1991, when assessing on
a percentage basis (i.e., not a flat $150 minimum assessment), SIPC has
based the assessment amount on a percentage of net operating revenues,
not gross revenues, from the securities business. In 1991, a SIPC Task
Force study found that securities firms no longer structured their
business on a gross revenue basis but instead used a net operating
revenue basis, which excludes interest expense and dividend expense in
accounting for revenue. SIPC bases its assessment on the net revenues
associated with that business, which it believes is consistent with
SIPA. Basing the assessment on net operating revenues as opposed to
gross revenues will decrease the amount of the assessment in most
situations. However, under SIPA, SIPC may adjust the basis for
collecting assessments and the amount of assessments as long as the
assessments are within the parameters prescribed in SIPA.\4\ Using a
minimum assessment of 0.02 percent of net operating revenues would not
cause the amount of the assessment to exceed the maximum amount
permitted for the minimum assessment under Section 4(d)(1)(C) of SIPA,
as amended by the Dodd-Frank Act.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78ddd(c)(2) and 78lll(9).
---------------------------------------------------------------------------
In 1991, when SIPC changed its assessment methodology from gross
revenues to net operating revenues, the Commission published notice of
the proposed change and requested comment.\5\ The comments received
were in support of the proposed change, which made the assessments more
consistent with how industry revenues are calculated.\6\
---------------------------------------------------------------------------
\5\ Securities Investor Protection Corporation; Notice of
Proposed Bylaw Change Relating to SIPC Fund Assessments on SIPC
Members, Rel. No. SIPA-156, 56 FR 51952 (Oct. 16, 1991).
\6\ Securities Investor Protection Corporation; Order Approving
Proposed Bylaw Change Relating to SIPC Fund Assessments on SIPC
Members, Rel. No. SIPA-157, 56 FR 60145 (Nov. 27, 1991).
---------------------------------------------------------------------------
II. Need for Public Comment
Section 3(e)(1) of SIPA provides that SIPC must file with the
Commission a copy of proposed bylaw changes. That section further
provides that bylaw changes shall take effect 30 days after filing,
unless the Commission either; (i) disapproves the change as contrary to
the public interest or the purposes of SIPA, or (ii) finds that the
change involves a matter of such significant public interest that
public comment should be obtained. Thus, under Section 3(e)(1) of SIPA,
a proposed bylaw change does not have to be noticed for public comment.
However, under Section 3(e)(1)(B) of SIPA, the Commission can find that
``such proposed change involves a matter of such significant public
interest that public comment should be obtained,'' in which case, the
Commission may, after notifying SIPC in writing of such finding,
require that the proposed bylaw change be considered by the same
procedures as a proposed rule change including, among other things,
publication in the Federal Register and opportunity for public comment.
The SIPC Fund, which is built from assessments on its members and
the interest earned on the fund, is used for the protection of
customers of members liquidated under SIPA to maintain investor
confidence in the securities markets. In light of this fact and that
the bylaw change provides for a new minimum assessment methodology, the
Commission finds, pursuant to Section 3(e)(1)(B) of SIPA, that the
proposed bylaw change involves a matter of such significant public
interest that public comment should be obtained and that the procedures
applicable to proposed SIPC rule changes in Section 3(e)(2) of SIPA
should be followed. As required by Section 3(e)(1)(B) of SIPA, the
Commission has notified SIPC of this finding in writing.
III. Date of Effectiveness of the Proposed Bylaw Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register, or within such longer period: (i) As the Commission
may designate up to 90 days of such date if it finds such longer period
to be appropriate and publishes its reasons for so finding or (ii) as
to which SIPC consents, the Commission will: (A) By order approve such
proposed bylaw change, or (B) Institute proceedings to determine
whether the proposed bylaw change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/other.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SIPC-2010-01 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SIPC-2010-01. 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/other.shtml). Copies of the submission, all subsequent
[[Page 75713]]
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. 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 publicly available. All
submissions should refer to File Number SIPC-2010-01 and should be
submitted on or before December 27, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(f)(2)(i).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-30434 Filed 12-3-10; 8:45 am]
BILLING CODE 8011-01-P
