[Federal Register: February 23, 2009 (Volume 74, Number 34)]
[Rules and Regulations]
[Page 8000-8002]
[DOCID:fr23fe09-4]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 97

[Docket No. 30647 Amdt. No 3304]

Standard Instrument Approach Procedures, and Takeoff Minimums and
Obstacle Departure Procedures; Miscellaneous Amendments

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This establishes, amends, suspends, or revokes Standard
Instrument Approach Procedures (SIAPs) and associated Takeoff Minimums
and Obstacle Departure Procedures for operations at certain airports.
These regulatory actions are needed because of the adoption of new or
revised criteria, or because of changes occurring in the National
Airspace System, such as the commissioning of new navigational
facilities, adding new obstacles, or changing air traffic requirements.
These changes are designed to provide safe and efficient use of the
navigable airspace and to promote safe flight operations under
instrument flight rules at the affected airports.

DATES: This rule is effective February 23, 2009. The compliance date
for each SIAP, associated Takeoff Minimums, and ODP is specified in the
amendatory provisions.
    The incorporation by reference of certain publications listed in
the regulations is approved by the Director of the Federal Register as
of February 23, 2009.

ADDRESSES: Availability of matters incorporated by reference in the
amendment is as follows:
    For Examination--
    1. FAA Rules Docket, FAA Headquarters Building, 800 Independence
Avenue, SW., Washington, DC 20591;

    2. The FAA Regional Office of the region in which the affected
airport is located;
    3. The National Flight Procedures Office, 6500 South MacArthur
Blvd., Oklahoma City, OK 73169 or
    4. The National Archives and Records Administration (NARA). For
information on the availability of this material at NARA, call 202-741-
6030, or go to: http://www.archives.gov/federal_register/code_of_
federal_regulations/ibr_locations.html.
    Availability--All SIAPs and Takeoff Minimums and ODPs are available
online free of charge. Visit http://www.nfdc.faa.gov to register.
Additionally, individual SIAP and Takeoff Minimums and ODP copies may
be obtained from:
    1. FAA Public Inquiry Center (APA-200), FAA Headquarters Building,
800 Independence Avenue, SW., Washington, DC 20591; or
    2. The FAA Regional Office of the region in which the affected
airport is located.

FOR FURTHER INFORMATION CONTACT: Harry J. Hodges, Flight Procedure
Standards Branch (AFS-420), Flight Technologies and Programs Divisions,
Flight Standards Service, Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500 South MacArthur Blvd., Oklahoma
City, OK 73169 (Mail Address: P.O. Box 25082, Oklahoma City, OK 73125),
Telephone:<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: This rule amends Title 14 of the Code of
Federal Regulations, Part 97 (14 CFR part 97), by establishing,
amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS.
The complete regulators description of each SIAP and its associated
Takeoff Minimums or ODP for an identified airport is listed on FAA form
documents which are incorporated by reference in this amendment under 5
U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA
Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when
required by an entry on 8260-15A.
    The large number of SIAPs, Takeoff Minimums and ODPs, in addition
to their complex nature and the need for a special format make
publication in the Federal Register expensive and impractical.
Furthermore, airmen do not use the regulatory text of the SIAPs,
Takeoff Minimums or ODPs, but instead refer to their depiction on
charts printed by publishers of aeronautical materials. The advantages
of incorporation by reference are realized and publication of the
complete description of each SIAP, Takeoff Minimums and ODP listed on
FAA forms is unnecessary. This amendment provides the affected CFR
sections and specifies the types of SIAPs and the effective dates of
the associated Takeoff Minimums and ODPs. This amendment also
identifies the airport and its location, the procedure, and the
amendment number.

The Rule

    This amendment to 14 CFR part 97 is effective upon publication of
each separate SIAP, Takeoff Minimums and ODP as contained in the
transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments
may have been issued previously by the FAA in a Flight Data Center
(FDC) Notice to Airmen (NOTAM) as an emergency action of immediate
flight safety relating directly to published aeronautical charts. The
circumstances which created the need for some SIAP and Takeoff Minimums
and ODP amendments may require making them effective in less than 30
days. For the remaining SIAPS and Takeoff Minimums and ODPS, an
effective date at least 30 days after publication is provided.
    Further, the SIAPs and Takeoff Minimums and ODPS contained in this
amendment are based on the criteria contained in the U.S. Standard for
Terminal Instrument Procedures (TERPS). In developing these SIAPS and
Takeoff Minimums and ODPs, the TERPS criteria were applied to the
conditions existing or anticipated at the affected airports. Because of
the close and immediate relationship between these SIAPs, Takeoff
Minimums and ODPs, and safety in air commerce, I find that notice and
public procedures before adopting these SIAPS, Takeoff Minimums and
ODPs are impracticable and contrary to the public interest and, where
applicable, that good cause exists for making some SIAPs effective in
less than 30 days.

Conclusion

    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current.
It, therefore--(1) is not a ``significant regulatory action'' under
Executive Order 12866; (2) is not a ``significant rule'' under DOT
Regulatory Policies and Procedures (44 FR 11034; February 26, 1979) ;
and (3) does not warrant preparation of a regulatory evaluation as the
anticipated impact is so minimal. For the same reason, the FAA
certifies that this amendment will not have a significant economic
impact on a substantial number of small entities under the criteria of
the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 97

    Air Traffic Control, Airports, Incorporation by reference, and
Navigation (Air).

    Issued in Washington, DC, on January 9, 2009.
John M. Allen,
Director, Flight Standards Service.

Adoption of the Amendment

0
Accordingly, pursuant to the authority delegated to me, Title 14, Code
of Federal Regulations, Part 97 (14 CFR part 97) is amended by
establishing, amending, suspending, or revoking Standard Instrument
Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure
Procedures effective at 0902 UTC on the dates specified, as follows:

PART 97--STANDARD INSTRUMENT APPROACH PROCEDURES

0
1. The authority citation for part 97 continues to read as follows:

    Authority: 49 U.S.C. 106(g), 40103, 40106, 40113, 40114, 40120,
44502, 44514, 44701, 44719, 44721-44722.

0
2. Part 97 is amended to read as follows:

* * * Effective 12 FEB 2009

Jacksonville, FL, Craig Muni, RNAV (GPS) RWY 32, Orig-A

* * * Effective 12 MAR 2009

Little Rock, AR, Adams Field, RNAV (GPS) RWY 4L, Amdt 1
Little Rock, AR, Adams Field, RNAV (GPS) RWY 4R, Amdt 1
Little Rock, AR, Adams Field, RNAV (GPS) RWY 22L, Amdt 1
Little Rock, AR, Adams Field, RNAV (GPS) RWY 22R, Amdt 1
Osceola, AR, Osceola Muni, RNAV (GPS) RWY 19, Orig
Warren, AR, Warren Muni, GPS RWY 21, Orig-B, CANCELLED
Warren, AR, Warren Muni, NDB OR GPS RWY 3, Amdt 1B, CANCELLED
Warren, AR, Warren Muni, RNAV (GPS) RWY 3, Orig
Warren, AR, Warren Muni, RNAV (GPS) RWY 21, Orig
Warren, AR, Warren Muni, VOR/DME-A, Amdt 5
Sebring, FL, Sebring Regional, GPS RWY 36, Orig-A, CANCELLED
Sebring, FL, Sebring Regional, RNAV (GPS) Y RWY 36, Orig
Sebring, FL, Sebring Regional, RNAV (GPS) Z RWY 36, Orig
Vero Beach, FL, Vero Beach Muni, RNAV (GPS) RWY 4, Orig
Vero Beach, FL, Vero Beach Muni, RNAV (GPS) RWY 11R, Amdt 1
Vero Beach, FL, Vero Beach Muni, RNAV (GPS) RWY 22, Orig

Vero Beach, FL, Vero Beach Muni, RNAV (GPS) RWY 29L, Amdt 1
Atlanta, GA, Fulton County Arpt-Brown Field, NDB RWY 8, Amdt 3
Augusta, GA, Augusta Rgnl at Bush Field, Takeoff Minimums and
Obstacle DP, Amdt 13
Indianapolis, IN, Indianapolis Intl, RNAV (RNP) Z RWY 5L, Orig-A
Indianapolis, IN, Indianapolis Intl, RNAV (RNP) Z RWY 23R, Orig-A
Natchitoches, LA, Natchitoches Rgnl, RNAV (GPS) RWY 17, Orig
Natchitoches, LA, Natchitoches Rgnl, RNAV (GPS) RWY 35, Orig
Natchitoches, LA, Natchitoches Rgnl, Takeoff Minimums and Obstacle
DP, Amdt 6
Rayville, LA, John H Hooks Jr Memorial, RNAV (GPS) RWY 18, Orig
Rayville, LA, John H Hooks Jr Memorial, RNAV (GPS) RWY 36, Amdt 1
Rayville, LA, John H Hooks Jr Memorial, Takeoff Minimums and
Obstacle DP, Orig
Norwood, MA, Norwood Memorial, Takeoff Minimums and Obstacle DP,
Amdt 5
Fryeburg, ME, Eastern Slopes Regional, NDB-B, Amdt 2
Greenville, ME, Greenville Muni, NDB RWY 14, Amdt 5
Greenville, ME, Greenville SPB, NDB-A, Amdt 5
Greenville, ME, Greenville SPB, RNAV (GPS)-B, Orig
Romeo, MI, Romeo State, GPS RWY 36, Orig-A, CANCELLED
Romeo, MI, Romeo State, RNAV (GPS) RWY 18, Orig
Romeo, MI, Romeo State, RNAV (GPS) RWY 36, Orig
Romeo, MI, Romeo State, VOR/DME-A, Amdt 8
Glencoe, MN, Glencoe Muni, RNAV (GPS) RWY 31, Orig
Glencoe, MN, Glencoe Muni, Takeoff Minimums and Obstacle DP, Orig
South St Paul, MN, South St Paul Muni-Richard E Fleming Fld, GPS RWY
34, Orig, CANCELLED
South St Paul, MN, South St Paul Muni-Richard E Fleming Fld, RNAV
(GPS) RWY 34, Orig
Greenville, MS, Mid Delta Rgnl, GPS RWY 18L, Orig, CANCELLED
Greenville, MS, Mid Delta Rgnl, GPS RWY 18R, Orig, CANCELLED
Greenville, MS, Mid Delta Rgnl, GPS RWY 36R, Orig, CANCELLED
Greenville, MS, Mid Delta Rgnl, RNAV (GPS) RWY 18L, Orig
Greenville, MS, Mid Delta Rgnl, RNAV (GPS) RWY 18R, Orig
Greenville, MS, Mid Delta Rgnl, RNAV (GPS) RWY 36R, Orig
Fostoria, OH, Fostoria Metropolitan, NDB RWY 27, Amdt 5
Fostoria, OH, Fostoria Metropolitan, RNAV (GPS) RWY 27, Orig
Fostoria, OH, Fostoria Metropolitan, Takeoff Minimums and Obstacle
DP, Orig
Fostoria, OH, Fostoria Metropolitan, VOR-A, Amdt 4
Waverly, OH, Pike County, GPS RWY 7, Orig-B, CANCELLED
Waverly, OH, Pike County, GPS RWY 25, Orig-A, CANCELLED
Waverly, OH, Pike County, RNAV (GPS) RWY 7, Orig
Waverly, OH, Pike County, RNAV (GPS) RWY 25, Orig
Honesdale, PA, Cherry Ridge, RNAV (GPS) RWY 36, Orig, CANCELLED
Honesdale, PA, Cherry Ridge, RNAV (GPS)-B, Orig
Atlanta, TX, Hall Miller Muni, RNAV (GPS) RWY 5, Amdt 1

[FR Doc. E9-3047 Filed 2-20-09; 8:45 am]

BILLING CODE 4910-13-P


[Federal Register Volume 79, Number 125 (Monday, June 30, 2014)]
[Notices]
[Pages 36856-36857]
[FR Doc No: 2014-15203]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72457; File No. SR-FICC-2014-02]

Self-Regulatory Organizations; Fixed Income Clearing Corporation;
Order Approving Proposal To Extend the Pilot Program for Certain
Government Securities Division Rules Relating to the GCF Repo[supreg]
Service

June 24, 2014.
    On May 5, 2014, the Fixed Income Clearing Corporation (``FICC'')
filed with the Securities and Exchange Commission (``Commission'')
proposed rule change SR-FICC-2014-02 pursuant to Section 19(b)(1) of
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder.\2\ The proposed rule change was published for comment in
the Federal Register on May 23, 2014.\3\ The Commission received no
comments on the proposed rule change. For the reasons discussed below,
the Commission is approving the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 72184 (May 19, 2014), 79
FR 29828 (May 23, 2014) (SR-FICC-2014-02).
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I. Description of the Proposed Rule Change

    FICC seeks the Commission's approval to extend the pilot program
that is currently in effect for the GCF Repo[supreg] service (``2013
Pilot Program'').\4\ FICC requests that the 2013 Pilot Program be
extended for one year following the Commission's approval of this
filing. FICC represents that, during this extension period, the final
phase of tri-party reform will be implemented.\5\
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    \4\ See Securities Exchange Act Release No. 70068 (July 30,
2013), 78 FR 47453 (August 5, 2013) (SR-FICC-2013-06) (order
approving the 2013 Pilot Program).
    \5\ The final phase of tri-party reform includes the development
of an interactive messaging system to facilitate the substitution of
collateral between settlement banks. FICC has represented that, if
it determines to change the parameters of the GCF Repo[supreg]
service during the one-year extension period, it will file a
proposed rule change with the Commission. FICC has further warranted
that, if it seeks to extend the 2013 Pilot Program beyond the one-
year extension period or proposes to make the program permanent, it
will also file a proposed rule change with the Commission.
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A. The GCF Repo[supreg] Service

    The GCF Repo[supreg] service allows dealer members of FICC's
Government Services Division to trade general collateral finance repos
(``GCF Repos'') \6\ throughout the day without requiring intraday,
trade-for-trade settlement on a delivery-versus-payment (``DVP'') \7\
basis. The service allows dealers to trade GCF Repos, based on rate and
term, with inter-dealer broker netting members on a blind basis.
Standardized, generic CUSIP numbers have been established exclusively
for GCF Repo processing, and are used to specify the type of underlying
security that is eligible to serve as collateral for GCF Repos. Only
Fedwire eligible, book-entry securities may serve as collateral for GCF
Repos. Acceptable collateral for GCF Repos include most U.S. Treasury
securities, non-mortgage-backed federal agency securities, fixed and
adjustable rate mortgage-backed securities, Treasury Inflation-
Protected Securities (``TIPS'') and separate trading of registered
interest and principal securities (``STRIPS'').\8\
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    \6\ A GCF Repo is one in which the lender of funds is willing to
accept any of a class of U.S. Treasuries, U.S. government agency
securities, and certain mortgage-backed securities as collateral for
the repurchase obligation. This is in contrast to a specific
collateral repo.
    \7\ Delivery-versus-payment is a settlement procedure in which
the buyer's cash payment for the securities it has purchased is due
at the time the securities are delivered.
    \8\ See Securities Exchange Act Release No. 58696 (September 30,
2008), 73 FR 58698, 58699 (October 7, 2008) (SR-FICC-2008-04).
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B. Background of the Pilot Program

    Because FICC's GCF Repo[supreg] service operates as a tri-party
mechanism, FICC was asked to alter the service to align it with the
recommendations of the Tri-Party Repo Infrastructure Reform Task Force
(``TPR'').\9\ FICC consequently developed a pilot program (``2011 Pilot
Program'') to address the TPR's recommendations,\10\ and sought
Commission approval to institute that program.\11\ The Commission
approved the 2011 Pilot Program on August 29, 2011 for a period of one
year.\12\ When the expiration date for the 2011 Pilot Program
approached, FICC sought Commission approval to implement the 2012 Pilot
Program, which continued the 2011 Pilot Program in some aspects, and
modified it in others.\13\ On August 8, 2012, the Commission approved
the 2012 Pilot Program for a period of one year.\14\
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    \9\ The TPR was an industry group formed and sponsored in 2009
by the Federal Reserve Bank of New York to address weaknesses that
emerged in the tri-party repo market during the financial crisis.
The TPR's chief goal was to develop recommendations to address the
risks presented by the reversal of tri-party repo transactions, and
to develop procedures to ensure that tri-party repos would be
collateralized throughout the day, rather than at the end of the
day.
    \10\ The TPR issued preliminary and final reports setting forth
its recommendations for the reform of the tri-party repo market. See
Tri-Party Repo Infrastructure Reform Task Force Report of May 17,
2000, available at http://www.newyorkfed.org/prc/files/report_100517.pdf; see also Tri-Party Repo Infrastructure Reform Task Force
Final Report (February 15, 2012), available at http://www.newyorkfed.org/tripartyrepo/pdf/report_120215.pdf.
    \11\ Securities Exchange Act Release No. 64955 (July 25, 2011),
76 FR 45638 (July 29, 2011) (SR-FICC-2011-05).
    \12\ Securities Exchange Act Release No. 65213 (August 29,
2011), 76 FR 54824 (September 2, 2011) (SR-FICC-2011-05).
    \13\ The 2012 Pilot Program implemented several changes which,
although described in the rule filing that accompanied the 2011
Pilot Program, were not implemented during the 2011 Pilot Program's
period of effectiveness. They include: (i) Moving the time for
unwinding repos from 7:30 a.m. to 3:30 p.m.; (ii) moving the net-
free-equity process from morning to the evening; and (iii)
establishing rules for intraday GCF Repo collateral substitutions.
See Securities Exchange Act Release No. 67227 (June 20, 2012), 77 FR
38108, 38111-12 (June 26, 2012) (SR-FICC-2012-05).
    \14\ Securities Exchange Release No. 67621 (August 8, 2012), 77
FR 48572 (August 14, 2012) (SR-FICC-2012-05).
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C. The 2013 Pilot Program

    The 2013 Pilot Program and its predecessor, the 2012 Pilot Program,
have been the subject of a number of notices and approval orders
published by the Commission.\15\ These notices and orders provide
extensive detail on both the GCF Repo[supreg] service and the pilot
program itself. Under this proposed rule change, FICC is not proposing
to alter the current pilot program in any way; rather, it proposes only
to extend that program, as approved in 2012 and in 2013, for one
additional year.\16\
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    \15\ See Securities Exchange Act Release Nos. 67227 (June 20,
2012), 77 FR 38108, 38109-12 (June 26, 2012) (SR-FICC-2012-05);
67621 (August 8, 2012), 77 FR 48572, 48572-76 (August 14, 2012) (SR-
FICC-2012-05); 69774 (June 17, 2013), 78 FR 37631, 37632-35 (June
21, 2013) (SR-FICC-2013-06); and 70068 (July 30, 2013), 78 FR 47453,
47453-54 (August 5, 2013) (SR-FICC-2013-06).
    \16\ FICC would be required to file a proposed rule change with
the Commission pursuant to Section 19(b) of the Act if were to do
any of the following: (i) Change the parameters of the GCF
Repo[supreg] service during the one-year extension period, (ii)
extend the Pilot Program beyond the one-year period extension
period, or (iii) establish the 2013 Pilot Program as a permanent
program.
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II. Discussion

    Section 19(b)(2)(C) of the Act \17\ directs the Commission to
approve a proposed rule change of a self-

regulatory organization if it finds that such proposed rule change is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to such organization. Section
17A(b)(3)(F) of the Act \18\ requires, among other things, that the
rules of a clearing agency be designed to achieve several goals,
including (i) promoting the prompt and accurate clearance and
settlement of securities transactions and, to the extent applicable,
derivative agreements, contracts, and transactions, (ii) assuring the
safeguarding of securities and funds that are in the custody or control
of the clearing agency or for which it is responsible, and (iii)
protecting investors and the public interest.
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    \17\ 15 U.S.C. 78s(b)(2)(C).
    \18\ 15 U.S.C. 78q-1(b)(3)(F).
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    The Commission concludes that extending the 2013 Pilot Program for
one additional year is consistent with the requirements of the Act and
the rules and regulations thereunder. The 2013 Pilot Program furthers
the Act's goals because it helps attenuate the substantial risks
confronting the tri-party repo market, particularly those risks
associated with the provision of intraday credit to market
participants.\19\ The Commission believes that extending the 2013 Pilot
Program will ensure that these risks remain subject to more stringent
controls and that this, in turn, will help promote the prompt and
accurate clearance and settlement of securities transactions. The
Commission further believes that, by requiring tri-party repos to
remain collateralized for a longer period each day, the 2013 Pilot
Program helps to assure the safety of the securities and funds within
FICC's control, or for which it is responsible.\20\
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    \19\ The TPR characterized the ``practical elimination'' of this
intraday credit as its ``first and most significant . . .
recommendation.'' Tri-Party Repo Infrastructure Reform Task Force
Final Report, 4 (February 15, 2012), available at http://www.newyorkfed.org/tripartyrepo/pdf/report_120215.pdf.
    \20\ See 15 U.S.C. 78q-1(b)(3)(F).
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III. Conclusion

    On the basis of the foregoing, the Commission finds that the
proposed rule change is consistent with the requirements of the Act,
particularly those set forth in Section 17A,\21\ and the rules and
regulations thereunder.
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    \21\ 15 U.S.C. 78q-1.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\22\ that the proposed rule change (SR-FICC-2014-02) be, and hereby
is, approved.\23\
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    \22\ 15 U.S.C. 78s(b)(2).
    \23\ In approving the proposed rule change, the Commission
considered the proposal's impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-15203 Filed 6-27-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 40 (Tuesday, March 2, 2010)]
[Notices]
[Pages 9459-9464]
[FR Doc No: 2010-4235]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61575; File No. SR-FINRA-2010-007]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change To Amend the
By-Laws of NASD Dispute Resolution

February 23, 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
Financial Industry Regulatory Authority, Inc. (``FINRA'') (f/k/a
National Association of Securities Dealers, Inc. (``NASD'')) filed with
the Securities and Exchange Commission (``SEC'' or ``Commission'') on
January 22, 2010, the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by FINRA.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend the By-Laws of NASD Dispute
Resolution.\3\
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    \3\ If this proposed rule change is approved by the Commission,
the By-Laws of NASD Dispute Resolution will be redesignated as the
``By-Laws of FINRA Dispute Resolution.''
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    The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA 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, 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
Background on FINRA and Its Subsidiaries
    On July 30, 2007, NASD and the New York Stock Exchange (``NYSE'')
consolidated their member firm regulation and dispute resolution
operations into a combined organization, FINRA.\4\ As part of the
consolidation, the SEC approved amendments to the NASD By-Laws to
implement governance and related changes. The resulting FINRA By-Laws
included a FINRA Board governance structure that balanced public and
industry representation and designated seven governor seats to
represent member firms of various sizes based on the criteria of firm
size.
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    \4\ See Securities Exchange Act Release No. 56145 (July 26,
2007), 72 FR 42169 (August 1, 2007), as amended by Securities
Exchange Act Release No. 56145A (May 30, 2008), 73 FR 32377 (June 6,
2008) (File No. SR-NASD-2007-023).
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    On September 8, 2008, FINRA filed a proposal with the SEC to amend
the By-Laws of FINRA's regulatory subsidiary (``FINRA Regulation'') to
realign the representation of industry members on the National
Adjudicatory Council (``NAC'') to follow more closely the industry
representation on the FINRA Board of Governors (``FINRA Board''), to
eliminate the Regional Nominating Committees, to transfer such
committees' responsibilities for NAC industry appointments to the FINRA
Nominating Committee (``Nominating Committee''), and to change the name
of ``NASD Regulation'' and ``NASD'' to ``FINRA Regulation '' and
``FINRA'' respectively.\5\ The SEC approved the amendments to FINRA
Regulation's By-Laws on November 6, 2008.\6\
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    \5\ See Securities Exchange Act Rel. No. 58626 (Sept. 23, 2008),
73 FR 56872 (Sept. 30, 2008) (File No. SR-FINRA-2008-046, Notice of
Filing and Amendment No. 1).
    \6\ See Securities Exchange Act Rel. No. 58909 (Nov. 6, 2008),
73 FR 68467 (Nov. 18, 2008).
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    On March 27, 2009, FINRA filed a proposal with the SEC to amend
further the By-Laws of FINRA Regulation to modify the FINRA Regulation
Board (``FINRA Regulation Board'') composition, to adopt changes to
conform the FINRA Regulation By-Laws to the FINRA By-Laws, and to
reflect the corporate name change and similar matters.\7\ The SEC
approved the amendments to FINRA Regulation's By-Laws on May 21,
2009.\8\
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    \7\ See Securities Exchange Act Rel. No. 59696 (Apr. 2, 2009),
74 FR 16020 (Apr. 8, 2009) (File No. SR-FINRA-2009-020).
    \8\ See Securities Exchange Act Rel. No. 59962 (May 21, 2009),
74 FR 25792 (May 29, 2009) (Order Approving SR-FINRA-2009-020).
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    FINRA Dispute Resolution (formerly known as NASD Dispute
Resolution) is a subsidiary of FINRA that operates according to the
Plan of Allocation and Delegation of Functions by NASD to Subsidiaries
(``Delegation Plan''), as amended,\9\ which NASD adopted first in 1996.
Pursuant to the Delegation Plan, FINRA's dispute resolution subsidiary
conducts arbitration, mediation and other dispute resolution programs
and interprets rules and regulations pertaining to its dispute
resolution programs.\10\ NASD Dispute Resolution's By-Laws were not
amended at the time of the consolidation. Now that the consolidation
has been completed and amendments to FINRA Regulation's By-Laws have
been approved, FINRA believes NASD Dispute Resolution's By-Laws should
be updated.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Rel. No. 41971 (Sept. 30, 1999),
64 FR 55793 (Oct. 14, 1999) (Order Approving a Proposed Rule Change
by the National Association of Securities Dealers, Inc. to Create a
Dispute Resolution Subsidiary).
    \10\ See FINRA Manual, Corporate Organization, Plan of
Allocation & Delegation of Functions by NASD to Subsidiaries, NASD
Dispute Resolution, Section III (A)(1)(a) and (c).
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    In July 2007, when NASD and the NYSE consolidated their member firm
regulation and dispute resolution operations, FINRA created a
Regulation Policy Committee of the Board of Governors, the members of
which are 14 Governors from FINRA's Board of Governors.\11\ The members
of the Regulation Policy Committee also serve as the Directors of the
FINRA Regulation and FINRA Dispute Resolution Boards of Directors.\12\
The Commission approved the composition of FINRA's committees when it
approved amendments to FINRA's By-Laws on July 26, 2007.\13\ The
Commission also approved the composition of FINRA Regulation's Board of
Directors when it approved amendments to FINRA's By-Laws on May 21,
2009.\14\ When the FINRA Regulation and FINRA Dispute Resolution Boards
of Directors meet, they act in their respective capacities as directors
of those subsidiaries. The FINRA Dispute Resolution Board of Directors
continues to oversee the management of FINRA Dispute Resolution,
establish policies and procedures, and monitor the use of financial
resources, among other things.
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    \11\ FINRA's Board of Governors consists of 21 members, 11 of
whom are public members. See FINRA By-Laws, Article I(ss) and I(tt),
definitions of Public Director and Public Governor, respectively.
The Regulation Policy Committee is comprised of seven public, five
industry, and two neutral members of FINRA's Board of Governors. The
two neutral members are the Chief Executive Officers of FINRA and
NYSE Regulation, Inc. FINRA's By-Laws require that FINRA's
committees consist of a majority public members. See FINRA By-Laws,
Article IX (Committees--Appointment), section 1(b).
    \12\ FINRA's Chair and Chief Executive Officer is an ex-officio,
non-voting member of the FINRA Regulation and FINRA Dispute
Resolution Boards of Directors.
    \13\ Supra note 3.
    \14\ Supra note 7.
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Proposal To Amend NASD Dispute Resolution's By-Laws
    FINRA is proposing to amend the NASD Dispute Resolution By-Laws to:
(1) Modify the composition of the FINRA Dispute Resolution Board; (2)
adopt changes to conform the NASD Dispute Resolution By-Laws to the
FINRA By-Laws; and (3) implement other conforming changes to reflect
the corporate name change and other similar matters. The proposed
amendments to NASD Dispute Resolution By-Laws are modeled on those of
the FINRA and FINRA Regulation By-Laws (which, as discussed above, were
both previously approved by the Commission), with modifications,
described below, as appropriate to the particular functions of FINRA
Dispute Resolution.
    The following discussion addresses the proposed amendments to NASD
Dispute Resolution's By-Laws under the article of the By-Laws of NASD
Dispute Resolution in which the amendments would first appear.
Amendments to Article I--Definitions
    Article I of the NASD Dispute Resolution By-Laws contains
definitions of terms used in the By-Laws. FINRA is proposing to add to
or amend some of these definitions.
Broker and Dealer
    FINRA is proposing to amend the definitions of ``broker'' and
``dealer'' in Article I of the By-Laws of NASD Dispute Resolution to
conform them to the definitions of ``broker'' and ``dealer'' in the
Act, as amended by the Gramm-Leach-Bliley Act of 1999.\15\ As proposed,
FINRA would incorporate by reference the definitions of the terms
``broker'' and ``dealer'' as set forth in Sections 3(a)(4) and 3(a)(5),

respectively, of the Act.\16\ The SEC approved the same change to
definitions of the terms ``broker'' and ``dealer'' in the then-NASD
Regulation's By-Laws in March 2001.\17\ FINRA believes that the
proposed changes to the terms ``broker'' and ``dealer'' are necessary
to ensure that the definitions in the NASD Dispute Resolution By-Laws
remain consistent with the definitions of the Act.
---------------------------------------------------------------------------

    \15\ Public Law 106-102, 113 Stat. 1338 (1999).
    \16\ 15 U.S.C. 78c(a)(4) and (a)(5).
    \17\ See Securities Exchange Act Rel. No. 44052 (March 8, 2001),
66 FR 15157 (March 15, 2001) (File No. SR-NASD-01-13).
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Corporation
    FINRA is proposing to add the term ``Corporation'' to Article I of
the By-Laws of NASD Dispute Resolution to reflect the change of the
Corporation's name from ``NASD'' to ``FINRA.'' \18\ Proposed Article
I(e) would define Corporation to mean the National Association of
Securities Dealers, Inc., the Financial Industry Regulatory Authority,
Inc., or any future name of the entity.
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    \18\ Supra note 3.
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Electronic Transmission
    FINRA is proposing to add the term ``electronic transmission'' to
Article I of the By-Laws of NASD Dispute Resolution to reflect the
common usage of electronic transmission as a means of
communication.\19\ The term ``electronic transmission'' would be
defined to mean communicating or disseminating information or documents
to individuals or entities by telegraph, telefax, cable, radio,
wireless or other device or method. FINRA intends ``other device or
method'' to include e-mail, text messages, and related technologies,
for example. FINRA believes that the new definition clarifies the
current methods FINRA uses to communicate with and disseminate
information to individuals and entities, and gives FINRA flexibility to
use other devices or methods as advances in technology are made.
---------------------------------------------------------------------------

    \19\ The new term ``electronic transmission'' would be added as
proposed Article I(k) of the By-Laws of NASD Dispute Resolution.
---------------------------------------------------------------------------

FINRA Member
    FINRA is proposing to add the term ``FINRA member'' to Article I of
the By-Laws of NASD Dispute Resolution.\20\ As proposed, the term
``FINRA member'' would mean ``any broker or dealer admitted to
membership in FINRA, whether or not the membership has been terminated
or cancelled; and any broker or dealer admitted to membership in a
self-regulatory organization that, with FINRA consent, has required its
members to arbitrate pursuant to the Code of Arbitration Procedure for
Customer Disputes (``Customer Code'') or the Code of Arbitration
Procedure for Industry Disputes (``Industry Code'', and together with
the Customer Code, ``Codes'') and/or to be treated as members of FINRA
for purposes of the Codes, whether or not the membership has been
terminated or cancelled.''
---------------------------------------------------------------------------

    \20\ The new term ``FINRA member'' would be added as proposed
Article I(o) of the By-Laws of NASD Dispute Resolution.
---------------------------------------------------------------------------

    FINRA believes the proposed change would clarify the forum's
jurisdiction concerning a FINRA member, and would conform the
definition in the By-Laws to that in the Customer Code and the Industry
Code.\21\ FINRA believes that the proposed change to add the term
``FINRA member'' is necessary to ensure that the definitions in the
NASD Dispute Resolution By-Laws are consistent with the definitions in
the Codes.
---------------------------------------------------------------------------

    \21\ Rule 12100(o) of the Customer Code (definition of member)
and Rule 13100(o) of the Industry Code (definition of member). In
July 2007, the SEC approved an amendment to the Codes to clarify the
term ``member.'' See Securities Exchange Act Rel. No. 56029 (July 9,
2007), 72 FR 38641 (July 13, 2007) (File No. SR-NASD-2007-038).
---------------------------------------------------------------------------

Industry Director or Industry Member and Public Director or Public
Member
    FINRA is proposing to modify the terms ``Industry Director'' or
``Industry member'' and ``Public Director'' or ``Public member'' in
Articles I(k) and I(t), respectively. With regard to the term
``Industry Director'' or ``Industry member'', the proposed rule change
would amend the NASD Dispute Resolution's By-Laws by separating these
definitions into two definitions for ease of reference.\22\
---------------------------------------------------------------------------

    \22\ The term ``Industry Director'' will be defined in proposed
Article I(r); ``Industry Member'' in proposed Article I(s).
---------------------------------------------------------------------------

    FINRA is also proposing to amend the revised terms ``Industry
Director'' and ``Industry Member'' to limit the look-back test that
characterizes committee members as industry if they have served as an
officer, director, or employee of a broker or dealer, among other
reasons, to the past twelve months. The current provision uses a three-
year look-back test. The proposed change would make the definitions of
``Industry Director'' and ``Industry Member'' under the NASD Dispute
Resolution By-Laws consistent with the definitions of ``Industry
Director'', ``Industry Governor'', and ``Industry committee member'' in
the FINRA By-Laws.\23\
---------------------------------------------------------------------------

    \23\ See FINRA By-Laws, Article I(s) and I(t).
---------------------------------------------------------------------------

    The proposal would also add the term ``independent director'' to
the portion of the definitions of ``Industry Director'' and ``Industry
Member'' that excludes outside directors of a broker or dealer. The
term ``independent director'' is synonymous with outside director, but
FINRA is proposing to add it to the exclusionary clause to harmonize
the NASD Dispute Resolution By-Laws with the definition of ``Industry
Governor'' in the FINRA By-Laws.\24\
---------------------------------------------------------------------------

    \24\ See FINRA By-Laws, Article I(t).
---------------------------------------------------------------------------

    Similarly, FINRA is proposing to modify the term ``Public
Director'' or ``Public member'' by separating it into two definitions
for ease of reference.\25\ FINRA would also amend the proposed terms
``Public Director'' or ``Public Member'' to clarify that an
individual's service as a public director of a self regulatory
organization does not disqualify that person from serving as a Pubic
Director or Public Member under NASD Dispute Resolution's By-Laws.
---------------------------------------------------------------------------

    \25\ The term ``Public Director'' will be defined in proposed
Article I(w); ``Public Member'' in proposed Article I(x).
---------------------------------------------------------------------------

    FINRA notes that the proposed changes to the definitions of
``Industry Director'' and ``Industry Member'' as well as ``Public
Director'' and ``Public Member'' under the NASD Dispute Resolution By-
Laws are generally consistent with similar amendments to the By-Laws of
FINRA Regulation,\26\ which the SEC approved in November 2008.\27\
FINRA believes that the changes to the definitions would eliminate any
ambiguity concerning the interpretation of the rules within the
Corporation, and would ensure uniform application of the rules.
---------------------------------------------------------------------------

    \26\ Under the FINRA Regulation's By-Laws, the definitions of
Industry Member and Public Member contain a reference to a NAC or
committee member. See FINRA Regulation By-Laws, Articles I(y) and
I(ii). The NAC is appointed and governed pursuant to FINRA
Regulation By-Laws; FINRA Dispute Resolution does not use this
committee, and thus, references thereto do not appear in NASD
Dispute Resolution By-Laws.
    \27\ Supra note 5.
---------------------------------------------------------------------------

Person Associated With a Member or Associated Person of a Member
    On June 5, 2009, FINRA filed a proposed rule change to amend Rules
12100(r), 12506(a), and 12902(a) of the Customer Code and Rule 13100(r)
of the Industry Code to amend the definition of ``associated person,''
streamline a case administration procedure, and clarify that customers
could be assessed hearing session fees based on their own claims for
relief in connection with an industry claim.\28\ The Commission
approved the proposal on October 26, 2009.\29\
---------------------------------------------------------------------------

    \28\ See Securities Exchange Act Rel. No. 60159 (June 22, 2009),
74 FR 31779 (July 2, 2009) (File No. SR-FINRA-2009-041).
    \29\ See Securities Exchange Act Rel. No. 60878, 74 FR 56679
(Nov. 2, 2009) (Notice of Filing of Amendment No. 1 and Order
Granting Accelerated Approval of SR-2009-041, as Modified by
Amendment No. 1).

---------------------------------------------------------------------------

    Under that proposal, FINRA amended the definition of associated
person under the Codes \30\ to match the definition in FINRA's By-
Laws.\31\ The proposal amended the definition of ``person associated
with a member'' in the Codes in two ways: (1) By inserting the word
``other'' before the second reference to ``natural person'' to clarify
that the definition does not include corporate entities; and (2) by
inserting the criterion that a natural person includes someone who has
applied for registration.
---------------------------------------------------------------------------

    \30\ Rule 12100(r) of the Customer Code and Rule 13100(r) of the
Industry Code define ``person associated with a member'' to mean:
(1) A natural person registered under the Rules of FINRA; or (2) A
sole proprietor, partner, officer, director, or branch manager of a
member, or a natural person occupying a similar status or performing
similar functions, or a natural person engaged in the investment
banking or securities business who is directly or indirectly
controlling or controlled by a member, whether or not any such
person is registered or exempt from registration with FINRA under
the By-Laws or the Rules of FINRA.
    For purposes of the Code, a person formerly associated with a
member is a person associated with a member.
    \31\ FINRA's By-Laws define ``person associated with a member or
associated person of a member'' as (1) a natural person who is
registered or has applied for registration under the Rules of the
Corporation; (2) a sole proprietor, partner, officer, director, or
branch manager of a member, or other natural person occupying a
similar status or performing similar functions, or a natural person
engaged in the investment banking or securities business who is
directly or indirectly controlling or controlled by a member,
whether or not any such person is registered or exempt from
registration with the Corporation under these By-Laws or the Rules
of the Corporation; and (3) for purposes of Rule 8210, any other
person listed in Schedule A of Form BD of a member. See By-Laws of
the Corporation, Article I, Definitions (rr).
---------------------------------------------------------------------------

    FINRA is proposing to implement the same changes to the definition
of associated person of a member in the NASD Dispute Resolution By-
Laws, as have been approved recently by the Commission to same
definitions under the Codes, to ensure uniform application of the
definition.
Amendments to Article IV--Board of Directors
    FINRA is proposing to make limited conforming changes to Article IV
of the NASD Dispute Resolution By-Laws to parallel more closely the
governance structure of the FINRA Board.
Section 4.3--Qualifications
    The proposed rule change would amend Article IV, section 4.3(a) to
reflect FINRA's current governance structure by establishing that NASD
Dispute Resolution Board members would be drawn exclusively from the
FINRA Board. The proposed rule change would also amend section 4.3(a)
to streamline the composition of NASD Dispute Resolution's Board and
implement a requirement that it contain more Public Directors than
Industry Directors. Thus, section 4.3(a) would be amended to state that
``the number of Public Directors shall exceed the number of Industry
Directors.'' FINRA's By-Laws contain a similar requirement.\32\
---------------------------------------------------------------------------

    \32\ See By-Laws of the Corporation, Article VII (Board of
Governors), section 4(a).
---------------------------------------------------------------------------

    The proposal would make other changes to Article IV, section 4.3 as
follows:
     Re-structure the Board to remove the President of NASD
Dispute Resolution. The President would not be deemed a Director, and
therefore, the proposed rule change would delete several references to
the President of NASD Dispute Resolution;\33\
---------------------------------------------------------------------------

    \33\ See NASD Dispute Resolution By-Laws, Article IV, Sections
4.3(a) (Qualifications), 4.5 (Resignation), 4.11(c) (Meetings),
4.13(f) (Executive Committee), and 4.13(g) (Finance Committee).
Section 141(c)(2) of the General Corporation Law of the State of
Delaware provides that ``[t]he board of directors may designate 1 or
more committees, each committee to consist of 1 or more directors of
the corporation.'' (Emphasis added). Committees of the board,
therefore, may be comprised exclusively of board members. In
addition, any committee of the board that is delegated any power and
authority of the board, such as the Executive Committee, must be
comprised exclusively of board members. See Delaware General
Corporation Law, section 141(c)(2).
---------------------------------------------------------------------------

     Clarify that the Chair of the FINRA Board and the Chief
Executive Officer of FINRA shall be ex-officio non-voting members of
the Board;
     Transfer the task of selecting the Chair of the NASD
Dispute Resolution Board from the Board members to NASD Dispute
Resolution's stockholder;\34\
---------------------------------------------------------------------------

    \34\ See Delaware General Corporation Law section 142, which
allows the sole stockholder to make this selection if expressly
provided for in the By-Laws.
---------------------------------------------------------------------------

     Eliminate the requirement that the Board select a Vice
Chair; and
     State that the stockholder will designate the Chair at the
same time that the Directors are elected.
Section 4.4--Election
    The proposed rule change would eliminate as unnecessary the
reference to the first meeting of NASD Regulation at which Directors
initially were elected.
Section 4.5--Resignation
    The proposal would remove the requirement that Directors submit
written notice of resignation to the President. Under the proposal,
such notice would be submitted to the Chair of the Board, instead of
the President.
Section 4.6--Removal
    The proposed rule change would transfer the authority to remove
Directors from a majority vote of the FINRA Board to the stockholder of
FINRA Regulation.\35\ The proposed amendment would reflect Delaware
law, which requires that a stock corporation vest the power to remove
directors with the stockholder.\36\
---------------------------------------------------------------------------

    \35\ The sole stockholder of the capital stock of FINRA Dispute
Resolution, Inc. is FINRA, Inc. See Article VIII, section 8.1 (Sole
Stockholder).
    \36\ See Delaware General Corporation Law, section 141(k). As a
practical matter, the FINRA Board generally would be asked to pass a
resolution authorizing an officer of FINRA to execute a sole
stockholder consent on behalf of FINRA (who is the sole stockholder
of FINRA Dispute Resolution) before such a consent is executed. As
such, the FINRA Board would have a voice in the matter, but as a
matter of Delaware law, the consent authorizing the removal must be
executed by a duly authorized officer of FINRA in FINRA's capacity
as sole stockholder.
---------------------------------------------------------------------------

Section 4.7--Disqualification
    In connection with the proposed change to section 4.3(a), which
would require the number of Public Directors to exceed the number of
Industry Directors, the proposal would also amend section 4.7 to
clarify that when a Director is disqualified from Board service and the
Director's remaining term is not more than six months, the Board may
continue to operate and will not violate any compositional requirements
if it does not replace the disqualified Director.
Section 4.8--Filling of Vacancies
    Currently, Directors of FINRA Dispute Resolution are elected
annually at the meeting of FINRA Dispute Resolution's stockholder
meeting or at a special meeting dedicated to Board elections.\37\ When
the annual election of Directors is not held on the designated date,
the NASD Dispute Resolution By-Laws charge the Directors to ``cause
such election'' to be held.\38\ The proposed rule change would confirm
that the same process should be used by the FINRA Dispute Resolution
Board when filling vacancies among its ranks. Thus, the proposal would
amend section 4.8 to provide that the FINRA Board shall ``cause the
election'' of a qualified Director to fill the vacant position.\39\
---------------------------------------------------------------------------

    \37\ See current NASD Dispute Resolution By-Laws, Article IV,
section 4.4 (Election).
    \38\ Id.
    \39\ Pursuant to Delaware law, FINRA, as the sole stockholder of
FINRA Dispute Resolution, has the authority to execute a stockholder
consent electing an individual to the fill the vacancy pursuant to
directions of the FINRA Board. Alternatively, the FINRA Board may
pass a resolution making it known who they would like appointed to
fill the vacancy. Under this scenario, it is likely that the
remaining members of the FINRA Dispute Resolution Board will follow
the advice of its controlling stockholder and elect the recommended
individual. See Delaware General Corporation Law, section 223.

---------------------------------------------------------------------------

Section 4.9--Quorum and Voting
    The proposed rule change would remove a cross-reference to section
4.14(b) in the quorum provision, and also amend the provision to
clarify that, when there is a quorum, a majority vote of the Directors
present at a meeting constitutes action of the Board.
Section 4.12--Notice of Meetings; Waiver of Notice
    The proposal would clarify the conditions under which the NASD
Dispute Resolution Board may meet. The current NASD Dispute Resolution
By-Laws instruct that a Director may waive notice of a Board meeting by
being present at the meeting, so long as the Director did not attend
the meeting solely to object to the meeting taking place.\40\ FINRA is
proposing to amend section 4.12(c) to clarify that a Board meeting is a
legal meeting if all Directors are present and no Director is present
solely for the purpose of objecting to the meeting taking place.
---------------------------------------------------------------------------

    \40\ See current NASD Dispute Resolution By-Laws, Article IV,
section 4.12(b) (Notice of Meeting; Waiver of Notice) and Article
IX, section 9.3(b) (Waiver of Notice).
---------------------------------------------------------------------------

    The proposed rule change also would amend section 4.12(a) and (b)
to replace the phrase ``telegraph, telefax, cable, radio, or wireless''
with the new term ``electronic transmission.'' \41\ For an explanation
of the term ``electronic transmission,'' see the discussion under
``Amendments to Article I--Definitions'' above.
---------------------------------------------------------------------------

    \41\ FINRA proposed similar changes to Article IV, Section 4.12
(Notice of Meeting; Waiver of Notice) and Article XII, Section 12.3
(Waiver of Notice) of the FINRA Regulation By-Laws. See Securities
Exchange Act Rel. No. 59696 (April 2, 2009), 74 FR 16020 (April 8,
2009) (File No. SR-FINRA-2009-020).
---------------------------------------------------------------------------

Section 4.13--Committees
    As explained under the discussion of section 4.3(a), the proposal
would implement a requirement that the FINRA Dispute Resolution Board
contain more Public Directors than Industry Directors.\42\ In
furtherance of this change, references throughout Article IV to
balancing ``Industry'' and ``Non-Industry'' Board members would be
replaced with references to balancing ``Industry'' and ``Public'' Board
members. Similarly, the proposal would remove the requirement that the
Executive Committee include at least one Non-Industry Member and
institute the requirement that Public Directors shall exceed Industry
Directors on FINRA Dispute Resolution's Executive Committee of the
Board.\43\
---------------------------------------------------------------------------

    \42\ See also proposed Article I(r) (Industry Director);
proposed Article I(s) (Industry Member); proposed Article I(w)
(Public Director); and proposed Article I(x) (Public Member).
    \43\ See Article IV, section 4.12(f) (Executive Committee).
---------------------------------------------------------------------------

Section 4.15--Action Without Meeting
    The proposal would make a related change to section 4.15 to
eliminate the requirement that unanimous consent for taking action
without a meeting specifically be in writing and filed with the minutes
of the meeting. Instead, the proposal would require the consent to be
``in accordance with applicable law,'' which in the instance of FINRA
Dispute Resolution, would be Delaware law.
    FINRA believes that the proposed amendments to Article IV would
align FINRA Dispute Resolution's Board structure with that of FINRA and
its other subsidiary, and conform FINRA Dispute Resolution's corporate
practices to Delaware law.
Amendment to Article V--Officers, Agents, and Employees
Section 5.1--Officers
    As explained under the discussion of Article IV, section 4.3, the
proposed rule change would re-structure the Board to remove the
President of FINRA Dispute Resolution as a Director of the Board.\44\
In connection with this change, the proposal would remove a reference
to the President from section 5.1, so that the amended language would
state, in relevant part, that none of the officers need to be Directors
of FINRA Dispute Resolution.
---------------------------------------------------------------------------

    \44\ Supra note 32.
---------------------------------------------------------------------------

Amendments to Article VIII--Capital Stock
Section 8.3--Signatures
    The proposed rule change would amend several provisions regarding
FINRA Dispute Resolution's capital stock. Currently, under section
8.3(a), FINRA's approach to the corporate law issue of signing
certificates representing shares of FINRA Dispute Resolution capital
stock is to have these shares signed by FINRA Dispute Resolution
officers. Under the proposed re-structuring of the Board, FINRA Dispute
Resolution would not have an officer as Chair of the Board. Thus, FINRA
is proposing to remove the provision that permits the Chair of the
Board to sign stock certificates, and limit the authority to sign such
certificates to the President, Vice President, Secretary or Treasurer
of FINRA Dispute Resolution.
    FINRA is proposing to amend section 8.3(b) to remove the
limitations on the type of signatures required on certificates of
capital stock. The current provision states, in relevant part, that
``if any such certificates are countersigned by a transfer agent other
than NASD Dispute Resolution or its employee, or by a registrar other
than NASD Dispute Resolution or its employee, any other signature on
the certificate may be a facsimile.'' The proposed amendment would
eliminate limitations on when signatures on certificates representing
shares of FINRA Dispute Resolution's capital stock may be facsimiles
and permit any signature to be a facsimile. Thus, under the proposal,
the provision would be amended to state that ``any signature on the
stock certificate may be a facsimile.'' FINRA believes this change
would be consistent with current practice that permits its certificates
representing capital stock to be sealed with a facsimile of FINRA
Dispute Resolution's corporate seal.
Section 8.4--Stock Ledger
    Currently, section 8.4(a) of the NASD Dispute Resolution By-Laws
requires that the FINRA Dispute Resolution Secretary, or another
officer, employee, or agent, keep a record of FINRA Dispute
Resolution's capital stock ownership and ``the number of shares
represented by each such certificate.'' FINRA is proposing to change
several references to ``capital stock'' to ``certificates representing
shares of capital stock'' or similar constructions, instead of
``certificates for shares of capital stock.'' \45\ This change would
make NASD Dispute Resolution's By-Laws more consistent with the
language of the applicable section of the General Corporation Law of
the State of Delaware.\46\
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    \45\ The proposal would delete as imprecise the words
``certificates for'' in the discussion of potential registration of
shares of capital stock. See proposed NASD Dispute Resolution By-
Laws, Article VIII, section 8.4(b) (Stock Ledger), 8.5 (Transfers of
Stock), 8.6 (Cancellation), and 8.7 (Lost, Stolen, Destroyed, and
Mutilated Certificates).
    \46\ See Delaware General Corporation Law section 158.
---------------------------------------------------------------------------

Amendments to Article IX--Miscellaneous Provisions
Section 9.3--Waiver of Notice
    FINRA is proposing to amend section 9.3(a) of the NASD Dispute
Resolution By-Laws to replace the phrase ``telegraph, telefax, cable,
radio, or wireless'' with the new term ``electronic transmission.''
\47\
---------------------------------------------------------------------------

    \47\ See supra note 40, and the explanation of the term
``electronic transmission'' under ``Amendments to Article I--
Definitions.''

---------------------------------------------------------------------------

Conforming Changes Relating to the New FINRA Name and Other Technical
Changes
    FINRA is proposing to implement certain other non-substantive
changes to all articles of the NASD Dispute Resolution By-Laws. The
proposed rule change would make certain non-substantive changes to the
NASD Dispute Resolution By-Laws as follows:
     ``The NASD'' or ``NASD'' would be replaced with ``FINRA''
or ``the Corporation;''
     ``NASD Dispute Resolution'' would be changed to ``FINRA
Dispute Resolution;''
     ``The Rules of the Association'' would be replaced with
``the Rules of the Corporation;''
     ``National Nominating Committee'' would be replaced with
``Nominating Committee;''
     A reference to ``FINRA Regulation'' would be added; and
     ``Association'' would be replaced with ``Corporation.''
    FINRA is also proposing to amend Article II, section 2.1 to change
the name and address of the registered agent from The Corporation Trust
Company, 1209 Orange Street, Wilmington, DE 19801 to Corporation
Creations Network Inc., 1308 Delaware Avenue, Wilmington, DE 19806.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A of the Act, including Section 15A(b)(2) of
the Act,\48\ in that it provides for the organization of FINRA and
FINRA Dispute Resolution in a manner that will permit FINRA to carry
out the purposes of the Act, to comply with the Act, and to enforce
compliance by FINRA members and persons associated with FINRA members
with the Act, the rules and regulations thereunder, FINRA and NASD
rules and the Federal securities laws. FINRA further believes that the
proposed rule change is consistent with Section 15A(b)(4) of the
Act,\49\ which requires, among other things, that FINRA's rules assure
a fair representation of its members in the selection of its directors
and administration of its affairs and provides that one or more
directors shall be representative of issuers and investors and not be
associated with a member of FINRA, broker or dealer. FINRA believes
that the proposed composition of its Dispute Resolution Board would
fairly and effectively represent users of the dispute resolution forum,
and would help resolve dispute resolution issues in a manner that will
redound to the benefit of investors.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78o-3(b)(2).
    \49\ 15 U.S.C. 78o-3(b)(4).
---------------------------------------------------------------------------

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, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received by FINRA.

III. Date of Effectiveness of the Proposed Rule 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 the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule
change should be disapproved.

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2010-007 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-2010-007. 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 (http://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. 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 the File Number SR-FINRA-
2010-007 and should be submitted on or before March 23, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\50\
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    \50\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4235 Filed 3-1-10; 8:45 am]
BILLING CODE 8011-01-P