[Federal Register Volume 83, Number 19 (Monday, January 29, 2018)]
[Notices]
[Pages 4108-4111]
[FR Doc No: 2018-01540]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82572; File No. SR-ISE-2018-06]

Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 502

January 23, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 16, 2018, Nasdaq ISE, LLC (``ISE'' or ``Exchange'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I, II, and III, below,
which Items have been prepared by the Exchange. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 502 (Criteria for Underlying
Securities) to modify the criteria for listing an option on an
underlying covered security.
    The text of the proposed rule change is available on the Exchange's
website at http://ise.cchwallstreet.com/, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend ISE Rule 502 to
modify the criteria for listing options on an underlying security as
defined in Section 18(b)(1)(A) of the Securities Act of 1933
(hereinafter ``covered security'' or ``covered securities''). In
particular, the Exchange proposes to modify Section (b)(5)(i) of Rule
502 to permit the listing of an option on an underlying covered
security that has a market price of at least $3.00 per share for the
previous three consecutive business days preceding the date on which
the Exchange submits a certificate to the Options Clearing Corporation
(``OCC'') for listing and trading. The Exchange does not intend to
amend any other criteria for listing options on an underlying security
in Rule 502.
    This proposed rule change is identical to a recently-approved rule
change by the Exchange's affiliate, Nasdaq PHLX LLC (``Phlx''), to its
initial listing standards,\3\ and serves to align the rules of Phlx and
the Exchange.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 82474 (January 9,
2018) (SR-Phlx-2017-75) (Order Granting Approval of a Proposed Rule
Change) (``Phlx Filing''). The Exchange, together with its
affiliates, The Nasdaq Stock Market LLC (``Nasdaq'') and Nasdaq BX,
Inc. (``BX''), have filed identical rule change proposals based on
the Phlx Filing. The Exchange notes that Chapter 5 of the ISE
Rulebook, including Rule 502, is incorporated by reference into the
rulebooks of Nasdaq GEMX, LLC (``GEMX'') and Nasdaq MRX, LLC
(``MRX''). As such, the amendments to ISE Rule 502 will also impact
GEMX and MRX Rules 502. ISE, GEMX, MRX, Nasdaq, Phlx and BX are all
wholly owned subsidiaries of Nasdaq, Inc. (``Nasdaq HoldCo'').
---------------------------------------------------------------------------

    Currently the underlying covered security must have a closing
market price of $3.00 per share for the previous five consecutive
business days preceding the date on which the Exchange submits a
listing certificate to OCC. In the proposed amendment, the market price
will still be measured by the closing price reported in the primary
market in which the underlying covered security is traded, but the
measurement will be the price over the prior three consecutive business
day period preceding the submission of the listing certificate to OCC,
instead of the prior five business day period.
    The Exchange acknowledges that the Options Listing Procedures Plan
\4\ requires that the listing certificate be provided to OCC no earlier
than 12:01 a.m. and no later than 11:00 a.m. (Chicago time) on the
trading day prior to the day on which trading is to begin.\5\ The
proposed amendment will still comport with that requirement. For
example, if an initial public offering (``IPO'') occurs at 11 a.m. on
Monday, the earliest date the Exchange could submit its listing
certificate to OCC would be on Thursday by 12:01 a.m. (Chicago time),
with the market price determined by the closing price over the three-
day period from Monday through Wednesday. The option on the IPO would
then be eligible for trading on the Exchange on Friday. The proposed
amendment would essentially enable options trading within four business
days of an IPO becoming available instead of six business days (five
consecutive days plus the day the listing certificate is submitted to
OCC).
---------------------------------------------------------------------------

    \4\ The Plan for the Purpose of Developing and Implementing
Procedures Designed to Facilitate the Listing and Trading of
Standardized Options Submitted Pursuant to Section 11a(2)(3)(B) of
the Securities Exchange Act of 1934 (a/k/a the Options Listing
Procedures Plan (``OLPP'')) is a national market system plan that,
among other things, sets forth procedures governing the listing of
new options series. See Securities Exchange Act Release No. 44521
(July 6, 2001), 66 FR 36809 (July 13, 2001) (Order approving OLPP).
The sponsors of OLPP include ISE; OCC; BATS Exchange, Inc.; BOX
Options Exchange LLC; C2 Options Exchange, Incorporated; Chicago
Board Options Exchange, Incorporated; EDGX Exchange, Inc.; Miami
International Securities Exchange, LLC; MIAX PEARL, LLC; Nasdaq BX,
Inc.; Nasdaq PHLX LLC; The Nasdaq Stock Market LLC; Nasdaq GEMX,
LLC; Nasdaq MRX, LLC; NYSE American, LLC; and NYSE Arca, Inc.
    \5\ See OLPP at page 3.

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

    At the time the Exchange adopted the ``look back'' period of five
consecutive business days, it determined that the five-day period was
sufficient to protect against attempts to manipulate the market price
of the underlying security and would provide a reliable test for
stability.\6\ Surveillance technologies and procedures concerning
manipulation have evolved since then to provide adequate prevention or
detection of rule or securities law violations within the proposed time
frame, and the Exchange represents that its existing trading
surveillances are adequate to monitor the trading in the underlying
security and subsequent trading of options on the Exchange.\7\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 47483 (March 11,
2003), 68 FR 13352 (March 19, 2003) (SR-ISE-2003-04).
    \7\ Such surveillance procedures generally focus on detecting
securities trading subject to opening price manipulation, closing
price manipulation, layering, spoofing or other unlawful activity
impacting an underlying security, the option, or both. As it relates
to IPOs, the Exchange has price movement alerts, unusual market
activity and order book alerts active for all trading symbols. These
real-time patterns are active for the new security as soon as the
IPO begins trading. The Nasdaq MarketWatch group, which provides
such real-time surveillance on the Exchange and its affiliated
markets, monitors trading activity in IPOs to see whether the new
issue moves substantially above or below the public offering price
in the first day or several days of trading.
---------------------------------------------------------------------------

    Furthermore, the Exchange notes that the scope of its surveillance
program also includes cross market surveillance for trading that is not
just limited to the Exchange. In particular, the Financial Industry
Regulatory Authority (``FINRA''), pursuant to a regulatory services
agreement, operates a range of cross-market equity surveillance
patterns on behalf of the Exchange to look for potential manipulative
behavior, including spoofing, algorithm gaming, marking the close and
open, and momentum ignition strategies, as well as more general,
abusive behavior related to front running, wash sales, quoting/routing,
and Reg SHO violations. These cross-market patterns incorporate
relevant data from various markets beyond the Exchange and its
affiliates, including data from the New York Stock Exchange (``NYSE'').
    Additionally for options, the Nasdaq Options Surveillance team
utilizes an array of patterns that monitor manipulation of options, or
manipulation of equity securities (regardless of venue) for the purpose
of impacting options prices on any of the six Nasdaq HoldCo-operated
options markets (i.e., mini-manipulation strategies). Surveillance
coverage is initiated once options begin trading on any of Nasdaq
HoldCo's six options markets, including the Exchange. Accordingly, the
Exchange believes that the cross market surveillance performed by FINRA
on behalf of the Exchange, coupled with Exchange staff's real-time
monitoring of similarly violative activity on ISE and its affiliated
markets as described herein, reflects a comprehensive surveillance
program that is adequate to monitor for manipulation of the underlying
security and overlying option within the proposed three-day look back
period.
    Furthermore, the Exchange notes that the proposed listing criteria
would still require that the underlying security be listed on NYSE, the
American Stock Exchange (now known as NYSE American), or the National
Market System of The Nasdaq Stock Market (now known as the Nasdaq
Global Market) (collectively, the ``Named Markets''), as provided for
in the definition of ``covered security'' from Section 18(b)(1)(A) of
the 1933 Act.\8\ Accordingly, the Exchange believes that the proposed
rule change would still ensure that the underlying security meets the
high listing standards of a Named Market, and would also ensure that
the underlying is covered by the regulatory protections (including
market surveillance, investigation and enforcement) offered by these
exchanges for trading in covered securities conducted on their
facilities.
---------------------------------------------------------------------------

    \8\ See 15 U.S.C. 77r(b)(1)(A).
---------------------------------------------------------------------------

    In addition, The Nasdaq Stock Market LLC, the Exchange's affiliated
listing market, had no cases within the past five years where an IPO-
related issue for which it had pricing information qualified for the
$3.00 price requirement during the first three days of trading and did
not qualify for the $3.00 price requirement during the first five
days.\9\ In other words, none of these qualifying issues fell below the
$3.00 threshold within the first three or five days of trading. As
such, the Exchange believes that its existing surveillance program,
coupled with its findings related to the IPO-related issues on Nasdaq
as described herein, adequately address potential concerns regarding
possible manipulation or price stability within the proposed timeframe.
---------------------------------------------------------------------------

    \9\ There were over 750 IPO-related issues on Nasdaq within the
past five years. Out of all of the issues with pricing information,
there was only one issue that had a price below $3 during the first
five consecutive business days. The Exchange notes, however, that
Nasdaq allows for companies to list on the Nasdaq Capital Market at
$2.00 or $3.00 per share in some instances, which was the case for
this particular issue. See Nasdaq Rule 5500 Series for initial
listing standards on the Nasdaq Capital Market.
---------------------------------------------------------------------------

    The Exchange also believes that the proposed look back period can
be implemented in connection with the other initial listing criteria
for underlying covered securities. In particular, the Exchange
recognizes that it may be difficult to verify the number of
shareholders in the days immediately following an IPO due to the fact
that stock trades generally clear within two business days (T+2) of
their trade date and therefore the shareholder count will generally not
be known until T+2.\10\ The Exchange notes that the current T+2
settlement cycle was recently reduced from T+3 on September 5, 2017 in
connection with the Commission's amendments to Exchange Rule 15c6-1(a)
to adopt the shortened settlement cycle,\11\ and the look back period
of three consecutive business days proposed herein reflects this
shortened T+2 settlement period. As proposed, stock trades would clear
within T+2 of their trade date (i.e., within three business days) and
therefore the number of shareholders could be verified within three
business days, thereby enabling options trading within four business
days of an IPO (three consecutive business days plus the day the
listing certificate is submitted to OCC).
---------------------------------------------------------------------------

    \10\ The number of shareholders of record can be verified from
large clearing agencies such as The Depository Trust and Clearing
Corporation (``DTCC'') upon the settlement date (i.e., T+2).
    \11\ See Securities Exchange Act Release No. 78962 (September
28, 2016), 81 FR 69240 (October 5, 2016) (Amendment to Securities
Transaction Settlement Cycle) (File No. S7-22-16).
---------------------------------------------------------------------------

    Furthermore, the Exchange notes that it can verify the shareholder
count with various brokerage firms that have a large retail customer
clientele. Such firms can confirm the number of individual customers
who have a position in the new issue. The earliest that these firms can
provide confirmation is usually the day after the first day of trading
(T+1) on an unsettled basis, while others can confirm on the third day
of trading (T+2). The Exchange has confirmed with some of these
brokerage firms who provide shareholder numbers to the Exchange that
they are able to provide these numbers within T+2 after an IPO. For the
foregoing reasons, the Exchange believes that basing the proposed three
business day look back period on the T+2 settlement cycle would allow
for sufficient verification of the number of shareholders.
    The proposed rule change will apply to all covered securities that
meet the relevant criteria in Rule 502. Pursuant to Rule 502(b), the
Exchange establishes guidelines to be considered in evaluating
potential underlying securities for Exchange options transactions.
However, the fact that a particular security may meet the

standards established by the Exchange does not necessarily mean that it
will be selected as an underlying security.\12\ As part of the
established criteria, the issuer must be in compliance with any
applicable requirements of the Act.\13\ Additionally, in considering
the underlying security, the Exchange relies on information made
publicly available by the issuer and/or the markets in which the
security is traded.\14\ The Exchange believes that these measures,
together with its existing surveillance procedures, provide adequate
safeguards in the review of any covered security that may meet the
proposed criteria for consideration of the option within the timeframe
contained in this proposal.
---------------------------------------------------------------------------

    \12\ See Rule 502(b).
    \13\ See Rule 502(b)(3).
    \14\ See Rule 502(d).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\15\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\16\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f(b).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes to its listing
standards for covered securities would allow the Exchange to more
quickly list options on a qualifying covered security that has met the
$3.00 eligibility price without sacrificing investor protection. As
discussed above, the Exchange believes that its existing trading
surveillances provide a sufficient measure of protection against
potential price manipulation within the proposed three consecutive
business day timeframe. The Exchange also believes that the proposed
three consecutive business day timeframe would continue to be a
reliable test for price stability in light of its findings that none of
the IPO-related issues on Nasdaq within the past five years that
qualified for the $3.00 per share price standard during the first three
trading days fell below the $3.00 threshold during the fourth or fifth
trading day. Furthermore, the established guidelines to be considered
by the Exchange in evaluating the potential underlying securities for
Exchange option transactions,\17\ together with existing trading
surveillances, provide adequate safeguards in the review of any covered
security that may meet the proposed criteria for consideration of the
option within the proposed timeframe.
---------------------------------------------------------------------------

    \17\ See notes 12-14 above.
---------------------------------------------------------------------------

    In addition, the Exchange believes that basing the proposed
timeframe on the T+2 settlement cycle adequately addresses the
potential difficulties in confirming the number of shareholders of the
underlying covered security. Having some of the largest brokerage firms
that provide these shareholder counts to the Exchange confirm that they
are able to provide these numbers within T+2 further demonstrates that
the 2,000 shareholder requirement can be sufficiently verified within
the proposed timeframe. For the foregoing reasons, the Exchange
believes that the proposed amendments will remove and perfect the
mechanism of a free and open market and a national market system by
providing an avenue for investors to swiftly hedge their investment in
the stock in a shorter amount of time than what is currently in
place.\18\
---------------------------------------------------------------------------

    \18\ This proposed rule change does not alter any obligations of
issuers or other investors of an IPO that may be subject to a lock-
up or other restrictions on trading related securities.
---------------------------------------------------------------------------

    Finally, it should be noted that a price/time standard for the
underlying security was first adopted when the listed options market
was in its infancy, and was intended to prevent the proliferation of
options being listed on low-priced securities that presented special
manipulation concerns and/or lacked liquidity needed to maintain fair
and orderly markets.\19\ When options trading commenced in 1973, the
Commission determined that it was necessary for securities underlying
options to meet certain minimum standards regarding both the quality of
the issuer and the quality of the market for a particular security.\20\
These standards, including a price/time standard, were imposed to
ensure that those issuers upon whose securities options were to be
traded were widely-held, financially sound companies whose shares had
trading volume and float substantial enough so as not to be readily
susceptible to manipulation.\21\ At that time, the Commission
determined that the imposition of these standards was reasonable in
view of the pilot nature of options trading and the limited experience
of investors with options trading.\22\
---------------------------------------------------------------------------

    \19\ See Securities Exchange Act Release No. 29628 (August 29,
1991), 56 FR 43949-01 (September 5, 1991) (SR-AMEX-86-19; SR-CBOE-
86-15; SR-NYSE-86-20; SR-PSE-86-15; and SR-PHLX-86-21) (``1991
Approval Order'') at 43949 (discussing the Commission's concerns
when options trading initially commenced in 1973).
    \20\ See 1991 Approval Order at 43949.
    \21\ Id.
    \22\ Id.
---------------------------------------------------------------------------

    Now more than 40 years later, the listed options market has evolved
into a mature market with sophisticated investors. In view of this
evolution, the Commission has approved various exchange proposals to
relax some of these initial listing standards throughout the years,\23\
including reducing the price/time standard in 2003 from $7.50 per share
for the majority of business days over a three month period to the
current $3.00 per share/five business day standard (``2003
Proposal'').\24\ It has been almost fifteen years since the Commission
approved the 2003 Proposal, and both the listed options market and
exchange technologies have continued to evolve since then. In this
instance, Nasdaq is only proposing a modest reduction of the current
five business day standard to three business days to correspond to the
securities industry's move to a T+2 standard settlement cycle.\25\ The
$3.00 per share standard and all other initial options listing criteria
in Rule 502 will remain unchanged by this proposal. For the reasons
discussed herein, the Exchange therefore believes that the proposed
three business day period will be beneficial to the marketplace without
sacrificing investor protections.
---------------------------------------------------------------------------

    \23\ See e.g., 1991 Approval Order (modifying a number of
initial listing criteria, including the reduction of the price/time
standard from $10 per share each day during the preceding three
calendar months to $7.50 per share for the majority of days during
the same period).
    \24\ See Securities Exchange Act Release Nos. 47190 (January 15,
2003), 68 FR 3072 (January 22, 2003) (SR-CBOE-2002-62); 47352
(February 11, 2003), 68 FR 8319 (February 20, 2003) (SR-PCX-2003-
06); 47483 (March 11, 2003), 68 FR 13352 (March 19,2003) (SR-ISE-
2003-04); 47613 (April 1, 2003), 68 FR 17120 (April 8, 2003) (SR-
Amex-2003-19); and 47794 (May 5, 2003), 68 FR 25076 (May 9, 2003)
(SR-Phlx-2003-27).
    \25\ See note 11 above.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change
reduces the number of days to list options on an underlying security,
and is intended to bring new options listings to the marketplace
quicker.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \26\ and Rule 19b-4(f)(6)
thereunder.\27\
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \28\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\29\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative upon filing. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest as it will allow the Exchange to
align its initial options listing standards with that of its
affiliates, and the Exchange's proposal does not raise new issues.
Accordingly, the Commission hereby waives the 30-day operative delay
requirement and designates the proposed rule change as operative upon
filing.\30\
---------------------------------------------------------------------------

    \28\ 17 CFR 240.19b-4(f)(6).
    \29\ 17 CFR 240.19b-4(f)(6)(iii).
    \30\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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 email to [email protected]. Please include
File Number SR-ISE-2018-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2018-06. This file
number should be included on the subject line if email 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 website (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 website 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 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-ISE-2018-06, and should be submitted on
or before February 20, 2018.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
---------------------------------------------------------------------------

    \31\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-01540 Filed 1-26-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: July 15, 2009 (Volume 74, Number 134)]
[Notices]
[Page 34337-34339]
[DOCID:fr15jy09-89]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2009-0123; FRL-8424-2]

Pentachloronitrobenzene (PCNB); Amendments to Terminate Uses

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: This notice announces EPA's order for the amendments to
terminate uses, voluntarily requested by the registrants and accepted
by the Agency, of certain products containing the pesticide PCNB,
pursuant to section 6(f)(1) of the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA), as amended. This order follows a March 30,
2009 Federal Register Notice of Receipt of Requests from the PCNB
registrants to amend voluntarily certain of their PCNB product
registrations. Specifically, the registrants requested to amend their
registrations to terminate the following uses of PCNB: Golf course
roughs; residential sites including lawns, yards, and ornamental plants
and gardens around homes and apartments; grounds around day care
facilities; school yards; parks (except industrial parks); playgrounds;
and athletic fields (except professional and college fields). In the
March 30, 2009 Notice, EPA indicated that it would issue an order
implementing the amendments to terminate uses, unless the Agency
received substantive comments within the 30-day comment period that
would merit its further review of these requests, or unless the
registrants withdrew their requests within this period. The Agency did
not receive any comments on the notice. Further, the registrants did
not withdraw their requests. Accordingly, EPA hereby issues in this
notice an order granting the requested amendments to terminate certain
uses. Any distribution, sale, or use of the PCNB products subject to
this order is permitted only in accordance with the terms of this
order, including any existing stocks provisions.

DATES: The cancellations are effective July 15, 2009.

FOR FURTHER INFORMATION CONTACT: Jill Bloom, Special Review and
Reregistration Division, Office of Pesticide Programs, Environmental
Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460-
0001; telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-
mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    This action is directed to the public in general, and may be of
interest to a wide range of stakeholders including environmental, human
health, and agricultural advocates; the chemical industry; pesticide
users; and members of the public interested in the sale, distribution,
or use of pesticides. Since others also may be interested, the Agency
has not attempted to describe all the specific entities that may be
affected by this action. If you have any questions regarding the
applicability of this action to a particular entity, consult the person
listed under FOR FURTHER INFORMATION CONTACT.

B. How Can I Get Copies of this Document and Other Related Information?

    1. Docket. EPA has established a docket for this action under
docket identification (ID) number EPA-HQ-OPP-2009-0123. Publicly
available docket materials are available either in the electronic
docket at http://www.regulations.gov, or, if only available in hard
copy, at the Office of Pesticide Programs (OPP) Regulatory Public
Docket in Rm. S-4400, One Potomac Yard (South Bldg.), 2777 S. Crystal
Dr., Arlington, VA. The hours of operation of this Docket Facility are
from 8:30 a.m. to 4 p.m., Monday through Friday, excluding legal
holidays. The Docket Facility telephone number is<PHONE_NUMBER>.
    2. Electronic access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr.

II. What Action is the Agency Taking?

    This notice announces the amendments to terminate uses, as
requested by registrants (Amvac Chemical Corporation and Chemtura
Corporation), of certain of their end-use and manufacturing-use PCNB
products registered under section 3 of FIFRA. These registrations are
listed in sequence by registration number in Table 1 of this unit.
Since the registrants submitted their initial 6(f)(1) requests to amend
their registrations to terminate uses, Chemtura requested the transfer
of most of its PCNB registrations to Amvac, including all of those PCNB
registrations for which Chemtura had requested amendment. The transfer
was approved on April 23, 2009. Therefore, Amvac will be responsible
for amending all of the following registrations in accordance with this
order. Former and current EPA registration numbers are shown for all
affected products.

                        Table 1.--PCNB Product Registration Amendments to Terminate Uses
----------------------------------------------------------------------------------------------------------------
                                                                                Product Name (names of
                                       EPA Registration Number        Product type         transferred products
   Current EPA Registration Number        prior to transfer      (manufacturing-use or      may be expected to
                                                                    end-use product)             change)
----------------------------------------------------------------------------------------------------------------
5481-8981                              400-399                  End-use                  Terraclor 75W Wettable
                                                                                Powder
----------------------------------------------------------------------------------------------------------------
5481-8983                              400-401                  Manufacturing-use        Terraclor Technical
----------------------------------------------------------------------------------------------------------------
5481-8984                              400-402                  End-use                  Terraclor 10% Granular,
                                                                                Revere 10% Granular
----------------------------------------------------------------------------------------------------------------
5481-8985                              400-403                  End-use                  Greenback Lawn
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-8986                              400-404                  End-use                  Turfcide Emulsifiable
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-8988                              400-407                  End-use                  Turfcide 10% Granular
----------------------------------------------------------------------------------------------------------------

5481-8990                              400-414                  Manufacturing-use        Terraclor 90% Dust
                                                                                Concentrate
----------------------------------------------------------------------------------------------------------------
5481-8991                              400-453                  End-use                  Terraclor Flowable
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-8992                              400-454                  End-use                  Turfcide 4F, Turfcide
                                                                                400, Terraclor 400,
                                                                                Revere 4000
----------------------------------------------------------------------------------------------------------------
5481-8994                              400-457                  End-use                  Turfcide 15G
----------------------------------------------------------------------------------------------------------------
5481-8995                              400-458                  End-use                  Terraclor 15G
----------------------------------------------------------------------------------------------------------------
5481-8996                              400-459                  Manufacturing-use        Terrazan PCNB Technical
                                                                                99%
----------------------------------------------------------------------------------------------------------------
5481-8997                              400-460                  End-use                  Terrazan 24%
                                                                                Emulsifiable
                                                                                Concentrate
----------------------------------------------------------------------------------------------------------------
5481-8998                              400-479                  End-use                  Turfcide WDG
----------------------------------------------------------------------------------------------------------------
5481-8999                              400-504                  Manufacturing-use        Terraclor Tech 96
----------------------------------------------------------------------------------------------------------------
5481-197                               N/A                      Manufacturing-use        Technical Grade PCNB
                                                                                95%
----------------------------------------------------------------------------------------------------------------
5481-211                               N/A                      End-use                  PCNB 10% Granules Soil
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-214                               N/A                      End-use                  PCNB Soil and Turf
                                                                                Liquid Drench
----------------------------------------------------------------------------------------------------------------
5481-279                               N/A                      End-use                  PCNB 75% Wettable
                                                                                Powder
----------------------------------------------------------------------------------------------------------------
5481-419                               N/A                      End-use                  PCNB 75W Turf and
                                                                                Ornamental Soil
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-438                               N/A                      Manufacturing-use        PCNB
----------------------------------------------------------------------------------------------------------------
5481-441                               N/A                      End-use                  PCNB 75 DG
----------------------------------------------------------------------------------------------------------------
5481-443                               N/A                      End-use                  PCNB 2 Flowable Turf
                                                                                and Ornamental Soil
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-444                               N/A                      End-use                  PCNB 10 G Turf and
                                                                                Ornamental Soil
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-450                               N/A                      End-use                  PCNB 20% WDG Soil
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-453                               N/A                      End-use                  PCNB 75 WSP
----------------------------------------------------------------------------------------------------------------
5481-457                               N/A                      End-use                  Turfpro WSP Turf and
                                                                                Ornamental Soil
                                                                                Fungicide
----------------------------------------------------------------------------------------------------------------
5481-464                               N/A                      End-use                  Par-Flo 6F
----------------------------------------------------------------------------------------------------------------
5481-465                               N/A                      End-use                  Par-Flo
----------------------------------------------------------------------------------------------------------------
5481-471                               N/A                      End-use                  Win-Flo 6F
----------------------------------------------------------------------------------------------------------------
5481-472                               N/A                      End-use                  Win-Flo
----------------------------------------------------------------------------------------------------------------

    Table 2 of this unit includes the name and address of record for
the registrant of the products in Table 1 of this unit.

              Table 2.--Registrant of Amended PNCB Products
------------------------------------------------------------------------
            EPA Company Number                Company Name and Address
------------------------------------------------------------------------
5481                                        Amvac Chemical Corporation,
                                             4695 MacArthur Court, Suite
                                             1250, Newport Beach, CA
                                             92660
------------------------------------------------------------------------

III. Summary of Public Comments Received and Agency Response to
Comments

    During the public comment period provided, EPA received no comments
in response to the March 30, 2009 Federal Register notice (FRL-8405-9)
announcing the Agency's receipt of the requests for voluntary
amendments to terminate certain uses of PCNB.

 IV. Order Terminating Certain PCNB Uses

    Pursuant to FIFRA section 6(f), EPA hereby approves the requested
amendments to terminate uses of the PCNB registrations identified in
Table 1 of Unit II. Accordingly, the Agency orders that the PCNB
product registrations identified in Table 1 of Unit II. are hereby
amended to terminate the following uses: Golf course roughs;
residential sites including lawns, yards, and ornamental plants and
gardens around homes and apartments; grounds around day care
facilities; school yards; parks (except industrial parks); playgrounds;
and athletic fields (except professional and college fields). Any
distribution, sale, or use of existing stocks of the products
identified in Table 1 of Unit II. in a manner inconsistent with any of
the Provisions for Disposition of Existing Stocks set forth in Unit VI.
will be considered a violation of FIFRA.

V. What is the Agency's Authority for Taking this Action?

    Section 6(f)(1) of FIFRA provides that a registrant of a pesticide
product may at any time request that any of its pesticide registrations
be canceled or amended to terminate one or more uses. FIFRA further
provides that, before acting on the request, EPA must publish a notice
of receipt of any such request in the Federal Register. Thereafter,
following the public comment period, the Administrator may approve such
a request.

VI. Provisions for Disposition of Existing Stocks

    Existing stocks are those stocks of registered pesticide products
which are currently in the United States and which were packaged,
labeled, and released for shipment prior to the effective date of the
cancellation action. The cancellation order issued in this notice
includes the following existing stocks provisions.
    Amvac Corporation will be permitted to sell or distribute existing
stocks of the manufacturing-use products referenced in Table 1 of Unit
II., with labels that are not revised per the requested amendments for
termination of uses (i.e., ``previously approved labeling''), until 6
months after the effective date of this order. Persons other than Amvac
Corporation may continue to use existing stocks of the manufacturing-
use products referenced in Table 1 of Unit II., with previously
approved labeling, for formulation into end-use products until 18
months after the effective date of this order, provided such use is
consistent with the previously approved labeling for that product.
    Amvac Corporation will be permitted to sell or distribute existing
stocks of the end-use products referenced in Table 1 of Unit II., with
previously approved labeling, until 18 months after the effective date
of this order. Persons other than Amvac Corporation may sell or
distribute existing stocks of the end-use products referenced in Table
1 of Unit II., with previously approved labeling, until 18 months after
the effective date of this order. Users will be allowed to use existing
stocks of the affected PCNB end-use products with previously approved
labeling until such stocks are exhausted, provided such use is in a
manner consistent with the previously approved labeling for that
product.

List of Subjects

    Environmental protection, Pesticides and pests.

    Dated: July 2, 2009.
Peter Caulkins,
Acting Director, Special Review and Registration Division, Office of
Pesticide Programs.
[FR Doc. E9-16812 Filed 7-14-09; 8:45 am]

BILLING CODE 6560-50-S


[Federal Register: March 29, 2010 (Volume 75, Number 59)]
[Notices]
[Page 15470-15471]
[DOCID:fr29mr10-101]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61747; File No. SR-FINRA-2010-010]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Update a Cross-Reference Within FINRA Rule 0150

March 19, 2010.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on March 9, 2010, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I, II
and III, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 0150 (Application of Rules
to Exempted Securities Except Municipal Securities) to update a cross-
reference to reflect a change adopted in the consolidated FINRA
rulebook.
    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
    FINRA is in the process of developing a new consolidated rulebook
(``Consolidated FINRA Rulebook'').\4\ This process involves FINRA
submitting to the Commission for approval a series of proposed rule
changes over time to adopt rules in the Consolidated FINRA Rulebook.
The phased adoption and implementation of those rules necessitates
periodic amendments to update rule cross-references in the Consolidated
FINRA Rulebook.
---------------------------------------------------------------------------

    \4\ The current FINRA rulebook consists of (1) FINRA Rules; (2)
NASD Rules; and (3) rules incorporated from NYSE (``Incorporated
NYSE Rules'') (together, the NASD Rules and Incorporated NYSE Rules
are referred to as the ``Transitional Rulebook''). While the NASD
Rules generally apply to all FINRA members, the Incorporated NYSE
Rules apply only to those members of FINRA that are also members of
the NYSE (``Dual Members''). The FINRA Rules apply to all FINRA
members, unless such rules have a more limited application by their
terms. For more information about the rulebook consolidation
process, see Information Notice, March 12, 2008 (Rulebook
Consolidation Process).
---------------------------------------------------------------------------

    The proposed rule change would update a rule cross-reference to
reflect changes adopted in the Consolidated FINRA Rulebook.
Specifically, the proposed rule change would update FINRA Rule 0150 to
reflect the incorporation into the Consolidated FINRA Rulebook of FINRA
Rule 5160 (Disclosure of Price and Concessions in Selling Agreements)
and the deletion of NASD Rule 2770 (Disclosure of Price in Selling
Agreements). FINRA Rule 5160 was approved by the Commission on January
25, 2010 \5\ and will become effective on April 19, 2010.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 61417 (January 25,
2010), 75 FR 5157 (February 1, 2010) (Order Approving File No. SR-
FINRA-2009-086).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate
effectiveness. The implementation date for the proposed rule change
will be April 19, 2010, the date on which the previously approved rule
change will also be implemented.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\6\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes the proposed rule change will provide
greater clarity to members and the public regarding FINRA's rules.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

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

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) requires that
a self-regulatory organization submit to the Commission written
notice of its intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the filing of the proposed rule change,
or such shorter time as designated by the Commission. The Commission
notes that at least five days prior to the instant filing, FINRA
provided the Commission written notice of its intent to file the
proposed rule change, along with a brief description and text of the
proposed rule change.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors,

or otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2010-010 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-2010-010. 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,\9\ 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, on official business days between the hours of 10 a.m.
and 3 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of FINRA and on its Web site at
www.finra.org. 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.
---------------------------------------------------------------------------

    \9\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov/.
---------------------------------------------------------------------------

    All submissions should refer to File Number SR-FINRA-2010-010 and
should be submitted on or before April 19, 2010.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-6773 Filed 3-26-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: January 2, 2009 (Volume 74, Number 1)]
[Notices]
[Page 149-150]
[DOCID:fr02ja09-59]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59152; File No. SR-CBOE-2008-127]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing of Proposal To Eliminate $3 Underlying
Price Requirement for Continued Listing and Listing of Additional
Series

December 23, 2008.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on December 18, 2008, 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 self-regulatory organization. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 5.4.01 to eliminate the $3
market price per share requirement from the Exchange's requirements for
continued approval for an underlying security. The Exchange also
proposes to amend Rule 5.4.02 by eliminating the prohibition against
listing additional series of options on an underlying security at any
time when the price per share of such underlying security is less than
$3. The text of the rule proposal is available on the Exchange's Web
site (http://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 self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this proposed rule change is to eliminate the $3
market price per share requirement from the Exchange's requirements for
continued approval for an underlying security from Rule 5.4.01(d). In
addition, the rule filing would amend Rule 5.4.02 by eliminating the
prohibition against listing additional series of options on an
underlying security at any time when the price per share of such
underlying security is less than $3. Also, the Exchange proposes to
make technical changes throughout the Interpretations and Policies to
Rule 5.4 to eliminate references to paragraph (d) of Interpretation and
Policy .01 to Rule 5.4.
    The Exchange believes that the $3 market price per share
requirement is no longer necessary or appropriate, and states that only
those underlying securities meeting the remaining maintenance listing
criteria set forth in Rule 5.4.01 will be eligible for continued
listing and the listing of additional option series. The Exchange
believes that the current $3 market price per share requirement could
have a negative effect on investors. For example, in the current
volatile market environment, the Exchange is currently unable to list
new series on underlying securities trading below $3. If there is
market demand for series below $3, the Exchange would be unable to
accommodate such requests and investors would be unable to hedge their
positions with options series with strikes below $3.
2. Statutory Basis
    Because the current rule proposal will permit the Exchange to make
options on underlying securities available even if the price of the
underlying security is less than $3, the Exchange believes the rule
proposal is consistent with the Act and the rules and regulations under
the Act applicable to a national securities exchange and, in
particular, the requirements of Section 6(b) of the Act.\4\
Specifically, the Exchange believes that the proposed rule change is
consistent with the Section 6(b)(5) Act \5\ requirements that the rules
of an exchange be designed to promote just and equitable principles of
trade, to prevent fraudulent and manipulative acts and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.

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

    The Exchange neither solicited nor received comments on this
proposal.

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 the 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-CBOE-2008-127 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

    All submissions should refer to File Number SR-CBOE-2008-127. 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 inspection
and copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549-1090. Copies of the filing will also be
available for inspection and copying at the Exchange's principal
office. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
CBOE-2008-127 and should be submitted on or before January 23, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-31148 Filed 12-31-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: December 29, 2008 (Volume 73, Number 249)]
[Notices]
[Page 79531-79533]
[DOCID:fr29de08-104]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59106; File No. SR-NYSE-2008-112]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change to Discontinue Policy of
Prohibiting Transfer Agents from Charging Fees for Issuing Stock
Certificates

December 16, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 30, 2008, New York
Stock Exchange, LLC (``NYSE'') filed with the Securities and Exchange
Commission (``Commission'') proposed rule change No. SR-NYSE-2008-112.
The

Commission is publishing this notice to solicit comments from
interested parties on the proposed rule change as described in Items I,
II, and III below, which items have been prepared primarily by the
NYSE.\2\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ The exact text of the NYSE's proposed rule change can be
found at http://www.nyse.com.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    NYSE proposes to discontinue its policy of prohibiting transfer
agents for listed companies from charging fees for the issuance of
stock certificates.

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 NYSE 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. NYSE has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\3\
---------------------------------------------------------------------------

    \3\ The Commission has modified portions of the text of the
summaries prepared by the NYSE.
---------------------------------------------------------------------------

(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE proposes to discontinue its long-standing, unwritten policy of
prohibiting transfer agents of NYSE listed companies from charging for
the issuance of stock certificates.
    The securities industry is moving towards eliminating the use of
physical certificates (i.e., dematerialization) by encouraging
investors to hold securities positions in book-entry form either in
street name at a broker-dealer or through the Direct Registration
System (``DRS''). DRS allows investors to have securities directly
registered in book-entry form on the records of the issuer or its
transfer agent without having a certificate issued. DRS also allows
those securities positions to be electronically transferred to a
broker-dealer in order to effect a transaction without the risk and
delay associated with the use of paper certificates. Since March 31,
2008, Section 501.00 of NYSE's Listed Company Manual has required that
all securities listed on the NYSE must be eligible for participation in
DRS.\4\ Approximately 2,428 NYSE listed securities currently
participate in DRS.
---------------------------------------------------------------------------

    \4\ Section 501.00 requires listed securities to be eligible for
a direct registration system operated by a clearing agency, as
defined in Section 3(a)(23) of the Act, that is registered with the
Commission pursuant to Section 17A(b)(2) of the Act. While currently
the DRS administered by The Depository Trust Company is the only
direct registration system offered by a registered clearing agency,
Section 501.00 provides issuers with the option of using another
qualified direct registration system if one should exist in the
future. Section 501.00 does not extend to securities which are
specifically permitted under that chapter to be and which are book-
entry only. NYSE will waive the application of Section 501.00 to any
listed company that is a foreign private issuer that submits to NYSE
a letter from an independent home country counsel certifying that a
home country law or regulation prohibits such compliance.
---------------------------------------------------------------------------

    To further the industry's efforts to dematerialize, the Securities
Industry and Financial Markets Association (``SIFMA''), which is one of
the leaders in the movement towards dematerialization, recently sent a
letter to the NYSE requesting that the NYSE discontinue its prohibition
of charging fees in connection with the issuance of securities
certificates (``SIFMA Letter'').\5\ SIFMA noted that almost 75% of
physical certificates deposited by broker-dealers and bank custodians
at The Depository Trust Company (``DTC''), a registered clearing agency
that is the primary custodian of securities traded in the United
States, were issued within the last six months. SIFMA believes that
these recent deposits indicate that DTC participants (i.e., broker-
dealers and banks) are providing physical certificates to their
customers only to have the securities moved back into street name in a
short period of time. In SIFMA's view, this activity results in
unnecessary expense and in inherent risk that the certificates may be
lost, destroyed, or stolen. A SIFMA survey concluded that more than 1.2
million certificates need to be replaced because of loss, destruction,
or theft each year at an approximate cost to the transfer agents of $65
million.\6\
---------------------------------------------------------------------------

    \5\ Letter to Stephen Walsh, Vice President, NYSE Euronext, from
Lawrence Morillo, SIFMA Operations Legal & Regulatory Sub-Committee
Chair (August 26, 2008).
    \6\ ``Securities Industry Immobilization & Dematerialization
Implementation Guide--The Phase-Out of the Stock Certificate''
(SIFMA, 2008).
---------------------------------------------------------------------------

    NYSE believes that securityholders derive no apparent benefit from
continuing to hold their securities in certificated form rather than in
uncertificated form in street name or through DRS and that the
inability of the transfer agents to charge for the issuance of
securities certificates imposes a considerable cost on issuers and
transfer agents. Therefore, NYSE proposes to discontinue its
prohibition of charging fees for the issuance of new certificates.
Allowing transfer agents to charge for the issuance of certificates
should not only shift the cost of the issuance of certificates from the
issuers and transfer agents to the requesting securityholders but
should also have the added effect of encouraging more securityholders
to hold their securities in street name or through DRS. This should
further the movement to dematerialization. NYSE listed companies that
want their investors to continue to have access to the free issuance of
new certificates will be able to ensure the continuation of this
practice by modifying their contractual arrangements with their
transfer agents.
    NYSE believes that the proposal will help make the securities
markets more safe and efficient by encouraging the dematerialization of
securities. NYSE also believes that the proposal is consistent with the
protection of investors and the public interest because holding a
securities position in street name or through DRS provides investors
with the ability to hold their securities in a safe and cost-effective
manner without incurring the fees associated with the issuance and
processing of securities certificates.
2. Statutory Basis
    NYSE believes that the proposed rule change is consistent with
Section 6(b) of the Act,\7\ in general, and particularly furthers the
objectives of Section 6(b)(5) of the Act \8\ in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. In
particular, NYSE believes that the proposal removes impediments to and
perfects the mechanism of a free and open market and a national market
system in that it encourages the dematerialization of securities, which
should improve the process of transferring securities in the public
markets. NYSE also believes that the proposal is consistent with the
protection of investors and the public interest in that holding
securities in or through street name and DRS provides a better
alternative to holding securities in certificated form by providing
investors with the ability to hold their securities in a safe and cost-
effective manner without incurring the fees

associated with the issuance of certificates.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NYSE does not believe that the proposed rule change will impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.

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

    NYSE has neither solicited nor received written comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Within thirty-five 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 ninety 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-NYSE-2008-112 in the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2008-112. 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 inspection and
copying in the Commission's Public Reference Section, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3:30 p.m. Copies of such filings also will be available
for inspection and copying at the principal office of NYSE and on the
NYSE's Web site, http://www.nyse.com. All comments received will be
posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSE-2008-112 and should be submitted on
or before January 20, 2009. For the Commission by the Division of
Trading and Markets, pursuant to delegated authority.\9\

Florence E. Harmon,
Acting Secretary.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

 [FR Doc. E8-30784 Filed 12-24-08; 8:45 am]

BILLING CODE 8011-01-P