[Federal Register: July 13, 2010 (Volume 75, Number 133)]
[Notices]
[Page 40023-40026]
[DOCID:fr13jy10-136]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[FMCSA Docket No. FMCSA-2010-0212]

Notice of Fiscal Year 2011 Safety Grants and Solicitation for
Applications

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice; request for comments.

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SUMMARY: This notice is to inform the public of the Federal Motor
Carrier Safety Administration's (FMCSA) anticipated Fiscal Year (FY)
2011 safety grant opportunities. At present, FMCSA is operating under
an extension of the Safe, Accountable, Flexible, Efficient
Transportation Equity Act: A Legacy of Users (Pub. L. 109-59) which
will expire December 31, 2010, unless extended further by Congress.
While the Agency expects new authorization to make changes to its grant
programs, the Agency is preparing for FY 2011 using the assumption that
the following grant programs will continue in the new authorization.
    The FMCSA invites comments on the proposed application deadlines
for its FY 2011 safety grants programs. The 11 safety programs include
the Motor Carrier Safety Assistance Program (MCSAP) Basic grants; MCSAP
Incentive grants; MCSAP New Entrant Safety Audit grants; MCSAP High
Priority grants; Commercial Motor Vehicle (CMV) Operator Safety
Training grants; Border Enforcement grants (BEG); Commercial Driver's
License Program Improvement (CDLPI) grants; Commercial Driver's License
Information System (CDLIS) Modernization grants; Performance and
Registration Information Systems Management (PRISM) grants; Safety Data
Improvement Program grants (SaDIP); and the Commercial Vehicle
Information Systems and Networks (CVISN) grants. The purpose of this
notice is to provide grantees with information well in advance of the
Agency's proposed FY 2011 safety grant application deadlines and to
request comments on the deadlines and other changes in the Agency's
safety grant programs.

DATES: Comments must be received on or before September 13, 2010.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2010-0212, using any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the
online instructions for submitting comments.
    Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Avenue, SE., West Building, Ground
Floor, Room W12-140, Washington, DC 20590-0001.
    Hand Delivery or Courier: West Building, Ground Floor, Room W12-
140, 1200 New Jersey Avenue, SE., between 9 a.m. and 5 p.m. E.T.,
Monday through Friday, except Federal holidays.
    Fax:<PHONE_NUMBER>.
    Instructions: All submissions must include the Agency name and
docket number. Note that all comments received will be posted without
change to http://www.regulations.gov, including any personal
information provided. Please see the Privacy Act heading for further
information.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and follow the
online instructions for accessing the docket or physically go to the
street address listed above.
    Privacy Act: Anyone is able to search the electronic form of all
comments received into any of our dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review DOT's
Privacy Act Statement for the Federal Docket Management System
published in the Federal Register on January 17, 2008 (73 FR 3316), or
you may visit http://edocket.access.gpo.gov/2008/pdf/E8-785.pdf.
    Public Participation: The Federal eRulemaking Portal is available
24 hours each day, 365 days each year. You can get electronic
submission and retrieval help and guidelines under the ``help'' section
of the Federal eRulemaking Portal Web site. If you want us to notify
you that we received your comments, please include a self-addressed,
stamped envelope or postcard, or print the acknowledgement page that
appears after submitting comments online.
    Comments received after the comment closing date will be included
in the docket, and we will consider late comments to the extent
practicable. FMCSA may, however, issue a final determination at any
time after the close of the comment period.

FOR FURTHER INFORMATION CONTACT: Please contact the following FMCSA
staff with questions or needed information on the Agency's grant
programs:

New Entrant Safety Audits Grants--Arthur Williams,

<EMAIL_ADDRESS>202-366-3695
Border Enforcement Grants--Carla Vagnini<EMAIL_ADDRESS>202-
366-3771
MCSAP Basic/Incentive Grants--Deborah Snider<EMAIL_ADDRESS>
202-366-2941
MCSAP High Priority Grants--Cim Weiss<EMAIL_ADDRESS>202-366-0275
CMV Operator Safety Training Grants--Julie Otto<EMAIL_ADDRESS>
202-366-0710
CDLPI Grants--Brandon Poarch<EMAIL_ADDRESS>202-366-3030
SaDIP Grants--Cim Weiss<EMAIL_ADDRESS>202-366-0275
PRISM Grants--Tom Lawler<EMAIL_ADDRESS>202-366-3866
CVISN Grants--Julie Otto<EMAIL_ADDRESS>202-366-0710.

All staff may be reached at FMCSA, 1200 New Jersey Avenue, SE.,
Washington, DC 20590. Office hours are from 9 a.m. to 5 p.m., EST,
Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: The FMCSA recognizes that State and local
governments and other grantees are dependent on its safety grants to
develop and maintain important commercial motor vehicle (CMV) safety
programs. The FMCSA further acknowledges that delays in awarding grant
funds may have an adverse impact on these important safety programs. As
a result, FMCSA completed a grants process review to identify ways to
streamline the application, award, and grants management processes, and
to award grant funds earlier each fiscal year. In addition, FMCSA made
changes in the grants application, award and oversight processes to
standardize application forms, increase the use of electronic
documents, standardize quarterly reports and reduce the number of
needed grant amendments.
    The FMCSA continues to enter into grant agreements beginning
October 1 or as soon thereafter as administratively practicable. FMCSA
intends to enter into grant agreements no later than 90 days from the
date the application is due.
    The FMCSA is using a standard grant application form and a new
quarterly reporting process. The FMCSA requires the Standard Form 424
(``Application for Federal Assistance'') and its attachments for all
grant program applications. While each grant program may request
different data in some of the data fields on the form, the use of the
Standard Form 424 is mandatory. FMCSA adopted the Standard Form--
Project Progress Report (SF-PPR) as its required form for quarterly
reporting. Again, each grant program may, in certain instances, request
different data be submitted in some of the fields or boxes on the form
but SF-PRR is mandatory for quarterly reporting.
    The number of original copies of grant agreements required to be
submitted to FMCSA was reduced from three copies to two. In addition,
FMCSA will provide most grant agreement documents electronically to its
financial processing office. Grantees will, however, be required to
submit the completed Automated Clearing House (ACH) Vendor Payment Form
(SF-3881) directly to FMCSA's financial processing office by U.S.
Postal Service, courier service or secure fax. We request information
on any impacts of these proposed changes.
    The FMCSA continues to request comments and suggestions from
grantees concerning improvement of the application, award and grants
management processes. Additional information is provided below for each
individual grant program.

MCSAP Basic and Incentive Grants

    Sections 4101 and 4107 of SAFETEA-LU authorize FMCSA's Motor
Carrier Safety Grants. MCSAP Basic and Incentive formula grants are
governed by 49 U.S.C. 31102-31104 and 49 CFR Part 350. Under the Basic
and Incentive grants programs, a State lead MCSAP agency, as designated
by its Governor, is eligible to apply for Basic and Incentive grant
funding by submitting a commercial vehicle safety plan (CVSP). See 49
CFR 350.201 and 350.205. The following jurisdictions are not eligible
for Incentive funds: The Virgin Islands, American Samoa, Guam, Puerto
Rico, and the Commonwealth of the Northern Mariana Islands. Pursuant to
49 U.S.C. 31103 and 49 CFR 350.303, FMCSA will reimburse each lead
State MCSAP agency 80 percent of eligible costs incurred in a fiscal
year. Each State will provide a 20 percent match to qualify for the
program. The FMCSA Administrator waives the requirement for matching
funds for the Virgin Islands, American Samoa, Guam, and the
Commonwealth of the Northern Mariana Islands. See 49 CFR 350.305. In
accordance with 49 CFR 350.323, the Basic grant funds will be
distributed proportionally to each State's lead MCSAP agency using the
following four, equally weighted (25 percent) factors:
    (1) 1997 road miles (all highways) as defined by the FMCSA;
    (2) All vehicle miles traveled (VMT) as defined by the FMCSA;
    (3) Population--annual census estimates as issued by the U.S.
Census Bureau; and
    (4) Special fuel consumption (net after reciprocity adjustment) as
defined by the FMCSA.

A State's lead MCSAP agency may qualify for Incentive Funds if it can
demonstrate that the State's CMV safety program has shown improvement
in any or all of the following five categories:
    (1) Reduction in the number of large truck-involved fatal
accidents;
    (2) Reduction in the rate of large-truck-involved fatal accidents
or maintenance of a large-truck-involved fatal accident rate that is
among the lowest 10 percent of such rates for MCSAP recipients and is
not higher than the rate most recently achieved;
    (3) Upload of CMV accident reports in accordance with current FMCSA
policy guidelines;
    (4) Verification of Commercial Driver's Licenses during all
roadside inspections; and
    (5) Upload of CMV inspection data in accordance with current FMCSA
policy guidelines.

Incentive funds will be distributed in accordance with 49 CFR
350.327(b).
    Prior to the start of each fiscal year, FMCSA calculates the amount
of Basic and Incentive funding each State is expected to receive. This
information is provided to the States and is made available on the
Agency's Web site. The FY 2011 information is available at
www.fmcsa.dot.gov.
    It should be noted that MCSAP Basic and Incentive formula grants
are awarded based on the State's submission of the CVSP. The evaluation
factors described in the section below titled ``Application Information
for FY 2011 Grants'' will not be considered. MCSAP Basic and Incentive
grant applications must be submitted electronically through grants.gov
(http://www.grants.gov).

New Entrant Safety Audit Grants

    Sections 4101 and 4107 of SAFETEA-LU also authorize the Motor
Carrier Safety Grants to enable grant recipients to conduct interstate
New Entrant safety audits consistent with 49 CFR Parts 350.321 and
385.301. Eligible recipients are State agencies, local governments, and
organizations representing government agencies that use and train
qualified officers and employees in coordination with State motor
vehicle safety agencies. The FMCSA's share of these grant funds will be
100 percent. New Entrant grant applications must be submitted
electronically through grants.gov (http://www.grants.gov).

MCSAP High Priority Grants

    Section 4107 of SAFETEA-LU also authorizes the Motor Carrier Safety
Grants to enable recipients to carry out activities and projects that
improve CMV safety and compliance with CMV regulations. Funding is
available for projects that are national in scope, increase public
awareness and education, demonstrate new technologies and reduce the
number and rate of CMV accidents. Eligible recipients are State
agencies, local governments, and organizations representing government
agencies that use and train qualified officers and employees in
coordination with State motor vehicle safety agencies.
    For grants awarded for public education activities, the Federal
share will be 100 percent. For all High Priority grants other than
those awarded in support of public education activities, FMCSA will
provide reimbursements for no more than 80 percent of all eligible
costs, and recipients will be required to provide a 20 percent match.
FMCSA may reserve High Priority funding exclusively for innovative
traffic enforcement projects, with particular emphasis on work zone
enforcement and rural road safety. Also, FMCSA may reserve funding for
an innovative traffic enforcement initiative known as ``Ticketing
Aggressive Cars and Trucks'' or TACT. TACT provides a research-based
safety model that can be replicated by States when conducting a high-
visibility traffic enforcement program to promote safe driving
behaviors among car and truck drivers. The objective of this program is
to reduce the number of commercial truck and bus related crashes,
fatalities and injuries resulting from improper operation of motor
vehicles and aggressive driving behavior. More information regarding
TACT can be found at http://www.fmcsa.dot.gov/safety-security/tact/
abouttact.htm.
    High Priority grant applications must be submitted electronically
through grants.gov.

CMV Operator Safety Training Grants

    Section 4134 of SAFETEA-LU established a grant program which
enables recipients to train current and future drivers in the safe
operation of CMVs, as defined in 49 U.S.C. 31301(4). Eligible awardees
include State governments, local governments and accredited post-
secondary educational institutions (public or private) such as
colleges, universities, vocational-technical schools and truck driver
training schools. Funding priority for this discretionary grant program
will be given to regional or multi-state educational or nonprofit
associations serving economically distressed regions of the United
States. The Federal share of these funds will be 80 percent, and
recipients will be required to provide a 20 percent match. CMV Operator
Safety Training grant applications must be submitted electronically
through grants.gov.

Border Enforcement Grants (BEG)

    Section 4110 of SAFETEA-LU established the BEG program. The purpose
of this discretionary program is to provide funding for border CMV
safety programs and related enforcement activities and projects. An
entity or a State that shares a land border with another country is
eligible to receive this grant funding. Eligible awardees include State
governments, local governments, and entities (i.e., accredited post-
secondary public or private educational institutions such as
universities). Requests from entities must be coordinated with the
State lead CMV inspection agency. Applications must include a Border
Enforcement Plan and meet the required maintenance of expenditure
requirement. BEG funding decisions take into consideration the State or
entity's performance on previous BEG awards; its ability to expend the
awarded funds with the BEG performance year; and activities meeting the
BEG national criteria established by FMCSA. As established by SAFETEA-
LU, the Federal share of these funds will be 100 percent. As a result,
there is no matching requirement. BEG grant applications must be
submitted electronically through grants.gov.

CDLPI Grants

    Section 4124 of SAFETEA-LU established a discretionary grant
program that provides funding for improving States' implementation of
the Commercial Driver's License (CDL) program, including expenses for
computer hardware and software, publications, testing, personnel, and
training. Funds may not be used to rent, lease, or buy land or
buildings. The agency designated by each State as the primary driver
licensing agency responsible for the development, implementation, and
maintenance of the CDL program is eligible to apply for grant funding.
State grant proposals must include the State's assessment of its CDL
program and a detailed budget explaining how the funds will be used.
The Federal share of funds for projects awarded under this grant is
established by SAFETEA-LU as 100 percent; therefore, there is no State
matching requirement. The funding opportunity announcement on
grants.gov will provide more detailed information on the application
process; national funding priorities for FY 2011; evaluation criteria;
required documents and certifications; State maintenance of expenditure
requirements; and additional information related to the availability of
funds. CLDPI grant applications must be submitted electronically
through grants.gov.

SaDIP Grants

    Section 4128 of SAFETEA-LU established a Safety Data Improvement
Program (SaDIP) grant program to improve the quality of crash and
inspection truck and bus data reported by the States to FMCSA, as
described 49 U.S.C. 31102. Eligible recipients are State agencies,
local governments, and organizations representing government agencies
that are involved with highway traffic safety activities and must
demonstrate a capacity to work with highway traffic safety
stakeholders. The State's SaDIP proposal must focus on a project that
enhances the accuracy, timeliness, and completeness of the collection
and reporting of Commercial Motor Vehicle crash information in all
components of the State's record system. An applicant's proposed SaDIP
project must address the seven (7) application requirements plus the
overriding indicator established for the State Safety Data Quality
(SSDQ) program. The FMCSA will provide reimbursements for no more that
80 percent of all eligible costs and recipients are required to provide
a 20 percent match.

PRISM Grants

    Section 4109 of SAFETEA-LU authorizes FMCSA to award financial
assistance funds to States to implement the Performance and
Registration Information Systems Management (PRISM) requirements that
link Federal motor carrier safety information systems with State CMV
registration and licensing systems. This program enables a State to
determine the safety fitness of a motor carrier or registrant when
licensing or registering or while the license or registration is in
effect. PRISM grant applications must be submitted electronically
through grants.gov. No matching funds are required.

CVISN Grants

    Section 4126 of SAFETEA-LU authorizes FMCSA to award financial
assistance to States to deploy, operate, and maintain elements of their
Commercial Vehicle Information Systems and Networks (CVISN)

Program, including commercial vehicle, commercial driver, and carrier-
specific information systems and networks. The agency in each State
designated as the primary agency responsible for the development,
implementation, and maintenance of a CVISN-related system is eligible
to apply for grant funding.
    Section 4126 of SAFETEA-LU distinguishes between two types of CVISN
projects: Core and Expanded. To be eligible for funding of Core CVISN
deployment project(s), a State must have its most current Core CVISN
Program Plan and Top-Level Design approved by FMCSA and the proposed
project(s) should be consistent with its approved Core CVISN Program
Plan and Top-Level Design. If a State does not have a Core CVISN
Program Plan and Top-Level Design, it may apply for up to $100,000 in
funds to either compile or update a Core CVISN Program Plan and Top-
Level Design.
    A State may also apply for funds to prepare an Expanded CVISN
Program Plan and Top-Level Design if FMCSA acknowledged the State as
having completed Core CVISN deployment. In order to be eligible for
funding of any Expanded CVISN deployment project(s), a State must have
its most current Expanded CVISN Program Plan and Top-Level Design
approved by FMCSA and any proposed Expanded CVISN project(s) should be
consistent with its Expanded CVISN Program Plan and Top-Level Design.
If a State does not have an existing or up-to-date Expanded CVISN
Program Plan and Top-Level Design, it may apply for up to $100,000 in
funds to either compile or update an Expanded CVISN Program Plan and
Top-Level Design.
    CVISN grant applications must be submitted electronically through
grants.gov. Awards for approved CVISN grant applications are made on a
first-come, first-served basis. States must provide a match of 50
percent.

Application Information for FY 2011 Grants

    General information about the FMCSA grant programs is available in
the Catalog of Federal Domestic Assistance (CFDA) which can be found on
the internet at http://www.cfda.gov. To apply for funding, applicants
must register with grants.gov at http://www.grants.gov/applicants/get_
registered.jsp and submit an application in accordance with
instructions provided.
    Evaluation Factors: The following evaluation factors will be used
in reviewing the applications for all FMCSA discretionary grants:
    (1) Prior performance--Completion of identified programs and goals
per the project plan.
    (2) Effective Use of Prior Grants--Demonstrated timely use and
expensing of available funds.
    (3) Cost Effectiveness--Applications will be evaluated and
prioritized on the basis of expected impact on safety relative to the
investment of grant funds. Where appropriate, costs per unit will be
calculated and compared with national averages to determine
effectiveness. In other areas, proposed costs will be compared with
historical information to confirm reasonableness.
    (4) Applicability to announced priorities--If national priorities
are included in the grants.gov notice, those grants that specifically
address these issues will be given priority consideration.
    (5) Ability of the applicant to support the strategies and
activities in the proposal for the entire project period of
performance.
    (6) Use of innovative approaches in executing a project plan to
address identified safety issues.
    (7) Feasibility of overall program coordination and implementation
based upon the project plan.
    (8) Any grant-specific evaluation factors, such as program balance
or geographic diversity, will be included in the grants.gov application
information.
    Proposed Application Due Dates: For the following grant programs,
FMCSA will consider funding complete applications or plans submitted by
the following dates:

MCSAP Basic and Incentive Grants--August 1, 2010
Border Enforcement Grants--September 15, 2010
MCSAP High Priority Grants--September 15, 2010
CMV Operator Safety Training Grants--October 1, 2010
New Entrant Safety Audit Grants--October 15, 2010
CVISN Grants--October 15, 2010
CDLPI Grants--November 1, 2010
PRISM Grants--November 1, 2010
SaDIP Grants--November 1, 2010
    Applications submitted after due dates may be considered on a case-
by-case basis and are subject to availability of funds.

    Issued on: July 6, 2010.
William A. Quade,
Associate Administrator for Enforcement and Program Delivery.
[FR Doc. 2010-17067 Filed 7-12-10; 8:45 am]
BILLING CODE 4910-EX-P


[Federal Register Volume 79, Number 93 (Wednesday, May 14, 2014)]
[Rules and Regulations]
[Page 27489]
[FR Doc No: 2014-10970]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket No. USCG-2014-0261]

Safety Zone; Fourth of July Fireworks, Glenbrook, NV

AGENCY: Coast Guard, DHS.

ACTION: Notice of enforcement of regulation.

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SUMMARY: The Coast Guard will enforce the safety zone for the Fourth of
July Fireworks display in the Captain of the Port, San Francisco area
of responsibility during the dates and times noted below. This action
is necessary to protect the life and property of the maritime public
from the hazards associated with the fireworks display. During the
enforcement period, unauthorized persons or vessels are prohibited from
entering into, transiting through, or anchoring in the safety zone,
unless authorized by the Patrol Commander (PATCOM).

DATES: The regulations in 33 CFR 165.1191, Table 1, Item number 16 will
be enforced from 5 a.m. through 9:30 p.m. on July 4, 2014.

FOR FURTHER INFORMATION CONTACT: If you have questions on this notice,
call or email Lieutenant Junior Grade William Hawn, U.S. Coast Guard
Sector San Francisco; telephone<PHONE_NUMBER> or email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    The Coast Guard will enforce a safety zone in navigable waters
around and under a fireworks barge within a radius of 100 feet during
the loading of the fireworks barge and until the start of the fireworks
display. From 5 a.m. until 8 p.m. on July 4, 2014, the fireworks barge
will be loading pyrotechnics at the launch site in Glenbrook Bay in
approximate position 39[deg]05'18'' N, 119[deg]56'34'' W (NAD 83). Upon
the commencement of the 20 minute fireworks display, scheduled to begin
between 8 p.m. and 9 p.m. on July 4, 2014, the safety zone will
increase in size and encompass the navigable waters around and under
the fireworks barge within a radius 1,000 feet in approximate position
39[deg]05'18'' N, 119[deg]56'34'' W (NAD 83). Upon the conclusion of
the fireworks display the safety zone shall terminate. This safety zone
will be in effect from 5 a.m. until 9:30 p.m. on July 4, 2014.
    Under the provisions of 33 CFR 165.1191, unauthorized persons or
vessels are prohibited from entering into, transiting through, or
anchoring in the safety zone during all applicable effective dates and
times, unless authorized to do so by the PATCOM. Additionally, each
person who receives notice of a lawful order or direction issued by an
official patrol vessel shall obey the order or direction. The PATCOM is
empowered to forbid entry into and control the regulated area. The
PATCOM shall be designated by the Commander, Coast Guard Sector San
Francisco. The PATCOM may, upon request, allow the transit of
commercial vessels through regulated areas when it is safe to do so.
    This notice is issued under authority of 33 CFR 165.1191 and 5
U.S.C. 552(a). In addition to this notice in the Federal Register, the
Coast Guard will provide the maritime community with extensive advance
notification of the safety zone and its enforcement period via the
Local Notice to Mariners. If the Captain of the Port determines that
the regulated area need not be enforced for the full duration stated in
this notice, a Broadcast Notice to Mariners may be used to grant
general permission to enter the regulated area.

    Dated: April 24, 2014.
Gregory G. Stump,
Captain, U.S. Coast Guard, Captain of the Port San Francisco.
[FR Doc. 2014-10970 Filed 5-13-14; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 79, Number 102 (Wednesday, May 28, 2014)]
[Notices]
[Pages 30675-30678]
[FR Doc No: 2014-12226]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72208; File No. SR-FINRA-2014-023]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Adopt FINRA Rule 2121 (Fair Prices and
Commissions), Supplementary Material .01 (Mark-Up Policy) and
Supplementary Material .02 (Additional Mark-Up Policy For Transactions
in Debt Securities, Except Municipal Securities) in the Consolidated
FINRA Rulebook

May 21, 2014.
    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 May 9, 2014, 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 below, which Items have been substantially 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to adopt current NASD Rule 2440 and Interpretive
Material (``IM'') 2440-1 and IM-2440-2 as FINRA Rule 2121 (Fair Prices
and Commissions), Supplementary Material .01 (Mark-Up Policy) and

Supplementary Material .02 (Additional Mark-Up Policy For Transactions
in Debt Securities, Except Municipal Securities) without any
substantive changes. FINRA also proposes to update references and
cross-references within Supplementary Material .01 and .02, and in
other FINRA rules accordingly.\4\
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    \4\ The text of FINRA Rule 3170, which contains a cross-
reference to NASD Rule 2440 that will be updated as part of this
proposal, was approved by the SEC on December 23, 2013. (See
Securities Exchange Act Release No. 71179 (December 23, 2013); 78 FR
79542 (December 30, 2013) (Order Approving SR-FINRA-2013-025)). The
effective date for this rule is December 1, 2014.
---------------------------------------------------------------------------

    Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in brackets.

* * * * *

Text of Proposed New FINRA Rules (Marked to Show Changes From NASD Rule
2440, IM-2440-1 and IM-2440-2; NASD Rule 2440, IM-2440-1 and IM-2440-2
to be Deleted in Their Entirety)

* * * * *

2000. Duties and Conflicts

* * * * *

2100. Transactions With Customers

* * * * *

2120. Commissions, Mark Ups and Charges

[2440.] 2121. Fair Prices and Commissions

    No Change.

Supplementary Material:

[IM-2440-1.] .01 Mark-Up Policy

    The question of fair mark-ups or spreads is one which has been
raised from the earliest days of the National Association of
Securities Dealers (``Association''). No definitive answer can be
given and no interpretation can be all-inclusive for the obvious
reason that what might be considered fair in one transaction could
be unfair in another transaction because of different circumstances.
In 1943, the Association's Board adopted what has become known as
the ``5% Policy'' to be applied to transactions executed for
customers. It was based upon studies demonstrating that the large
majority of customer transactions were effected at a mark-up of 5%
or less. The Policy has been reviewed by the Board of Governors on
numerous occasions and each time the Board has reaffirmed the
philosophy expressed in 1943. Pursuant thereto, and in accordance
with Article VII, Section 1(a)(ii) of the By-Laws, the Board [has]
adopted the following interpretation [under Rule 2440.]
    It shall be deemed a violation of Rule [2110] 2010 and Rule
[2440] 2121 for a member to enter into any transaction with a
customer in any security at any price not reasonably related to the
current market price of the security or to charge a commission which
is not reasonable.
    (a) through (d) No Change.
* * * * *

[IM-2440-2.] .02 Additional Mark-Up Policy For Transactions in Debt
Securities, Except Municipal Securities \1\

(a) Scope

    [(1) IM-2440-1] Supplementary Material .01 to Rule 2121 applies
to debt securities transactions, and this [IM-2440-2] Supplementary
Material .02 supplements the guidance provided in [IM-2440-1]
Supplementary Material .01.

(b) Prevailing Market Price

    (1) A dealer that is acting in a principal capacity in a
transaction with a customer and is charging a mark-up or mark-down
must mark-up or mark-down the transaction from the prevailing market
price. Presumptively for purposes of this [IM-2440-2] Supplementary
Material .02, the prevailing market price for a debt security is
established by referring to the dealer's contemporaneous cost as
incurred, or contemporaneous proceeds as obtained, consistent with
[NASD] FINRA pricing rules. (See, e.g., Rule [2320] 5310.)
    (2) through (6) No Change.
    (7) Finally, if information concerning the prevailing market
price of the subject security cannot be obtained by applying any of
the above factors, [NASD] FINRA or its members may consider as a
factor in assessing the prevailing market price of a debt security
the prices or yields derived from economic models (e.g., discounted
cash flow models) that take into account measures such as credit
quality, interest rates, industry sector, time to maturity, call
provisions and any other embedded options, coupon rate, and face
value; and consider all applicable pricing terms and conventions
(e.g., coupon frequency and accrual methods). Such models currently
may be in use by bond dealers or may be specifically developed by
regulators for surveillance purposes.
    (8) No Change.
    (9) ``Customer,'' for purposes of Rule [2440] 2121, [IM-2440-1]
Supplementary Material .01 to Rule 2121 and this [IM-2440-2]
Supplementary Material .02, shall not include a qualified
institutional buyer (``QIB'') as defined in Rule 144A under the
Securities Act of 1933 that is purchasing or selling a non-
investment grade debt security when the dealer has determined, after
considering the factors set forth in [IM-2310-3] Rule 2111(b), that
the QIB has the capacity to evaluate independently the investment
risk and in fact is exercising independent judgment in deciding to
enter into the transaction. For purposes of Rule [2440] 2121, [IM-
2440-1] Supplementary Material .01 to Rule 2121 and this [IM-2440-2]
Supplementary Material .02, ``non-investment grade debt security''
means a debt security that: (i) If rated by only one nationally
recognized statistical rating organization (``NRSRO''), is rated
lower than one of the four highest generic rating categories; (ii)
if rated by more than one NRSRO, is rated lower than one of the four
highest generic rating categories by any of the NRSROs; or (iii) if
unrated, either was analyzed as a non-investment grade debt security
by the dealer and the dealer retains credit evaluation documentation
and demonstrates to [NASD] FINRA (using credit evaluation or other
demonstrable criteria) that the credit quality of the security is,
in fact, equivalent to a non-investment grade debt security, or was
initially offered and sold and continues to be offered and sold
pursuant to an exemption from registration under the Securities Act
of 1933.

(c) ``Similar'' Securities

    (1) No Change.
    (2) The degree to which a security is ``similar,'' as that term
is used in this [IM-2440-2] Supplementary Material .02, to the
subject security may be determined by factors that include but are
not limited to the following:
    (A) through (D) No Change.
    (3) No Change.

-----------------------------------------------------------------------
\1\ No Change.

* * * * *

3000. Supervision and Responsibilities Relating to Associated Persons

3100. Supervisory Responsibilities

* * * * *

3170. Tape Recording of Registered Persons by Certain Firms

(a) Definitions

    (1) through (2) No Change.
    (3) For purposes of this Rule, the term ``disciplinary history''
means a finding of a violation by a registered person in the past
five years by the SEC, a self-regulatory organization, or a foreign
financial regulatory authority of one or more of the following
provisions (or comparable foreign provision) or rules or regulations
thereunder: Violations of the types enumerated in Exchange Act
Section 15(b)(4)(E); Exchange Act Section 15(c); Securities Act
Section 17(a); SEA Rules 10b-5 and 15g-1 through 15g-9; NASD Rule
2110 (Standards of Commercial Honor and Principles of Trade) or
FINRA Rule 2010 (Standards of Commercial Honor and Principles of
Trade) (only if the finding of a violation of NASD Rule 2110 or
FINRA Rule 2010 is for unauthorized trading, churning, conversion,
material misrepresentations or omissions to a customer,
frontrunning, trading ahead of research reports or excessive
markups), FINRA Rule 5280 (Trading Ahead of Research Reports), NASD
Rule 2120 (Use of Manipulative, Deceptive or Other Fraudulent
Devices) or FINRA Rule 2020 (Use of Manipulative, Deceptive or Other
Fraudulent Devices), NASD Rule 2310 (Recommendations to Customers
(Suitability)) or FINRA Rule 2111 (Suitability), NASD Rule 2330
(Customers' Securities or Funds) or FINRA Rule 2150 (Improper Use of
Customers' Securities or Funds; Prohibition Against Guarantees and
Sharing in Accounts), NASD Rule 2440 or FINRA Rule 2121 (Fair Prices
and Commissions), NASD Rule 3010 (Supervision) or FINRA Rule 3110
(Supervision) (failure to supervise only for both NASD Rule 3010 and
FINRA Rule 3110), NASD Rule 3310 (Publication of Transactions and
Quotations) or FINRA Rule 5210 (Publication of Transactions and
Quotations), and NASD Rule 3330 (Payment Designed to Influence
Market Prices, Other

than Paid Advertising) or FINRA Rule 5230 (Payments Involving
Publications that Influence the Market Price of a Security); and
MSRB Rules G-19, G-30, and G-37(b) & (c).
    (4) through (5) No Change.
    (b) through (d) No Change.
* * * * *

5000. Securities Offering and Trading Standards and Practices

* * * * *

5300. Handling of Customer Orders

5310. Best Execution and Interpositioning

    (a) through (d) No Change.
    (e) The obligations described in paragraphs (a) through (d)
above exist not only where the member acts as agent for the account
of its customer but also where transactions are executed as
principal. Such obligations are distinct from the reasonableness of
commission rates, markups or markdowns, which are governed by [NASD
Rule 2440 and IM-2440] Rule 2121 and its Supplementary Material.

Supplementary Material

    .01 through .09 No Change.
* * * * *

6000. Quotation and Transaction Reporting Facilities

* * * * *

6600. OTC Reporting Facility

* * * * *

6630. Applicability of FINRA Rules to Securities Previously Designated
as PORTAL Securities

    (a) The following are specifically applicable to transactions
and business activities relating to securities that, prior to
October 26, 2009, had been designated by The Nasdaq Stock Market LLC
for inclusion in the PORTAL Market (``PORTAL securities''):
    (1) [NASD Rule 2440, and] FINRA Rules 0130, 0140, 2010, 2020,
2111, 2121, 2232, 2251, 2261, 2262, 2269, 5310, 8210;
    (2) No Change.
    (3) FINRA Rules 5210, 5220, Supplementary Material to Rule 2121,
and NASD IM-2420-1[, IM-2440-1, and IM-2440-2].
    (b) through (d) No Change.
* * * * *

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
    As part of the process of developing a new consolidated rulebook
(``Consolidated FINRA Rulebook''),\5\ FINRA is proposing to transfer
NASD Rule 2440 (Fair Prices and Commissions) into the Consolidated
FINRA Rulebook as FINRA Rule 2121. NASD Rule 2440 provides that for
securities transactions in both listed and unlisted securities a member
that buys for his own account from his customer, or sells for his own
account to his customer, shall buy or sell at a price that is fair
taking into consideration all relevant circumstances, including market
conditions with respect to such security at the time of the
transaction, the expense involved, and the fact that it is entitled to
a profit.\6\ Further, if the member acts as agent for its customer in
any such transaction, that member shall not charge its customer more
than a fair commission or service charge, taking into consideration all
relevant circumstances, including market conditions with respect to
such security at the time of the transaction, the expense of executing
the order, and the value of any service he may have rendered by reason
of his experience in and knowledge of such security and the market
therefor.\7\ FINRA proposes to transfer this rule into the Consolidated
FINRA Rulebook without any substantive changes.\8\
---------------------------------------------------------------------------

    \5\ 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).
    \6\ NASD Rule 2440.
    \7\ NASD Rule 2440.
    \8\ FINRA previously has solicited comment on a proposal to move
NASD Rule 2440 to the FINRA rules with substantive changes. See
Regulatory Notice 11-08 (February 2011); see also Regulatory Notice
13-07 (January 2013). Given that these proposals raised complex
issues and FINRA would like to proceed with the rulebook
consolidation process expeditiously, FINRA is proposing in this rule
change to move Rule 2440 and its Interpretive Materials to the FINRA
rules without substantive changes, and will defer proposing any
substantive changes to the rule to a future rule proposal.
---------------------------------------------------------------------------

    With NASD Rule 2440, FINRA also is proposing to transfer IM-2440-1
(Mark-Up Policy) and IM-2440-2 (Additional Mark-Up Policy For
Transactions in Debt Securities, Except Municipal Securities) as
Supplementary Material .01 and .02, respectively. IM-2440-1 provides
additional guidance as to what may constitute a fair price or spread;
IM-2440-2 provides additional guidance for mark-ups related to
transactions in debt securities, except municipal securities. As with
NASD Rule 2440, FINRA proposes to transfer these Interpretive Materials
without any substantive changes.\9\
---------------------------------------------------------------------------

    \9\ In addition to transferring IM-2440-1 to Supplementary
Material .01, FINRA is changing the introductory language in IM-
2440-1, which describes the adoption of the interpretation set forth
in that provision, to reflect the historical nature of that
adoption.
---------------------------------------------------------------------------

    FINRA also is proposing to update references and cross-references
within Supplementary Material .01. Specifically, FINRA is clarifying
that the reference to ``Association'' in this Supplementary Material is
to the National Association of Securities Dealers. FINRA is updating
the reference in this Supplementary Material to NASD Rule 2110, which
is now FINRA Rule 2010. FINRA is also updating Supplementary Material
.02 to change references to NASD to FINRA, to update the reference to
NASD Rule 2320 to FINRA Rule 5310, and to update the reference to NASD
IM-2310-3 to FINRA Rule 2111(b).
    FINRA also proposes to update other FINRA rules as necessary to
reflect the transfer of NASD Rule 2440 and its Interpretive Material to
FINRA Rule 2121 and its Supplementary Material.
    FINRA has filed the proposed rule change for immediate
effectiveness.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that this proposed rule change, which
does not substantively change the rule, is consistent with the Act
because it is being undertaken pursuant to the rulebook consolidation
process, which is designed to provide additional clarity and regulatory
efficiency to FINRA members by consolidating the applicable NASD,
Incorporated NYSE, and FINRA rules into one rule set.
---------------------------------------------------------------------------

    \10\ 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. As noted above, this proposal
will not substantively change either the text or the application of the
rule and its supporting material.

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 with respect
to this proposal to transfer NASD Rule 2440 and its supporting
Interpretive Material into the Consolidated FINRA Rulebook without any
substantive changes.\11\
---------------------------------------------------------------------------

    \11\ But see note 8 supra.
---------------------------------------------------------------------------

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 \12\ and Rule 19b-
4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), FINRA provided the Commission with written notice of
its intention to file the proposed rule change at least five
business days prior to filing the proposal with the Commission or
such shorter period as designated by the Commission.
---------------------------------------------------------------------------

    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_ADDRESS>Please include
File Number SR-FINRA-2014-023 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-FINRA-2014-023. 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 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, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of FINRA. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2014-023 and should be
submitted on or before June 18, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-12226 Filed 5-27-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: March 4, 2008 (Volume 73, Number 43)]
[Notices]
[Page 11688]
[DOCID:fr04mr08-110]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57384; File No. SR-Amex-2007-95]

Self-Regulatory Organizations; American Stock Exchange, LLC;
Order Granting Approval of a Proposed Rule Change Relating to the
Execution of NDX and RUT Combination Orders

February 26, 2008.
    On August 20, 2007, the American Stock Exchange, LLC (``Amex'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder, a
proposed rule change regarding the definitions and the execution
procedure for NDX and RUT combination orders.\2\ The proposed rule
change was published for comment in the Federal Register on September
7, 2007, for a 15-day comment period.\3\ The Commission received no
comments regarding the proposal. This order approves the proposed rule
change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 56343 (August 30,
2007), 72 FR 51481.
---------------------------------------------------------------------------

    The Exchange proposes to adopt Commentary .01 to Amex Rule 950-
ANTE(e) to add the definitions pertaining to NDX and RUT combination
orders.\4\ Pursuant to proposed Commentary .01(a) to Amex Rule 950-
ANTE(e), a ``NDX Combination'' is a long (short) NDX call and a short
(long) NDX put having the same expiration date and strike price. An
``RUT Combination'' is a long (short) RUT call and a short (long) RUT
put having the same expiration date and strike price. As defined in
proposed Commentary .01(c) to Amex Rule 950-ANTE(e), a ``NDX
combination order'' is an order to purchase or sell NDX options and the
offsetting number of NDX Combinations defined by the delta. Further, an
``RUT combination order'' is an order to purchase or sell RUT options
and the offsetting number of RUT Combinations defined by the delta. The
``delta'' is defined in proposed Commentary .01(b) to Amex Rule 950-
ANTE(e) as the positive (negative) number of NDX or RUT combinations
that must be sold (bought) to establish a market neutral hedge with the
corresponding NDX or RUT option position.
---------------------------------------------------------------------------

    \4\ NDX is the NASDAQ-100 Index; RUT is the Russell 2000 Index.
---------------------------------------------------------------------------

    The Exchange further proposes to adopt execution procedures
regarding NDX and RUT combination orders. The proposed Amex Rule 953-
ANTE(c) would enable an member holding a NDX or RUT combination order,
and bidding or offering in a multiple of the minimum price variation on
the basis of a total debit or credit for the order, to execute the NDX
or RUT combination order even if the member has determined that the
combination order may not otherwise be executable (e.g., the bids and
offers displayed in the Amex limit order book or in the trading crowd
will not satisfy the net debit or credit price of the combination
order). Pursuant to proposed Amex Rule 953-ANTE(c)(i), a member may
execute an NDX or RUT combination order at the best net debit or credit
price, so long as no leg of the order would trade at a price outside
the currently displayed bids or offers in the trading crowd or bids or
offers in the limit order book, and at least one leg of the order would
trade at a price that is better than the corresponding bid or offer in
the Amex limit order book.
    Further, the Exchange proposes that if an NDX or RUT combination
order is not executed immediately, that same order may be executed and
printed at the price originally quoted for each component option series
within two (2) hours after the original quote, provided the prices
originally quoted satisfied the requirements of proposed Amex Rule 953-
ANTE(c)(i), and, at the time of execution, no individual leg of such
order trades ahead of the corresponding bid or offer in the NDX or RUT
limit order book. Amex will report to the trading floor, and the
Options Price Reporting Authority, component legs of an NDX or RUT
combination order executed in such manner using a sold sale indicator
to notify the public that the reported prices are part of an out-of-
range combination trade.
    The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\5\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\6\ which requires that the
rules of exchange be 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 securities system, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \5\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    According to Amex, it may be difficult in a volatile market to
complete trades on options tied to an NDX Combination or an RUT
Combination, because the originally quoted price for a component leg
may be out-of-range by the time market participants are prepared to
complete the transaction. By permitting execution and printing of NDX
and RUT combination orders two hours from the original quote, the
proposed rule change may help market participants complete such trades.
    The Commission notes that the proposed rule change takes into
account the protection of public customer orders by providing that no
individual leg of the NDX or RUT combination order may trade ahead of
the corresponding bid or offer in the NDX or RUT limit order book.
Further, the Commission notes that Amex will issue a regulatory
circular reminding its members that the adoption of Amex Rule 953-
ANTE(c) does not minimize the best execution obligations for customer
orders. The Commission also notes that Amex will report to the trading
floor, and the Options Price Reporting Authority, component legs of
out-of-range NDX or RUT combination orders with a sold sale indicator.
The Commission believes that the indicator should help to avoid
investor confusion regarding such trades and minimize any negative
impact on price discovery. In addition, the indicator should help the
Exchange monitor the trading of NDX and RUT combination orders.
    The Commission expects the Exchange to monitor compliance with the
proposal. In particular, the Commission expects the Exchange to monitor
compliance with the requirement in proposed Amex Rule 953-ANTE(c)(ii)
that at time of the execution no individual leg of NDX or RUT
combination order trades ahead of the corresponding bid or offer in the
NDX or RUT limit order book.
    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (SR-Amex-2007-95) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-4079 Filed 3-3-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: July 12, 2007 (Volume 72, Number 133)]
[Notices]
[Page 38104-38106]
[DOCID:fr12jy07-90]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56014; File No. SR-BSE-2007-31]

Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend the Effective Date of a Previous Rule Change Relating to
Information Contained in a Directed Order on the Boston Options
Exchange

July 5, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on July 2, 2007, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the BSE. The
BSE filed the proposed rule change as a ``noncontroversial'' proposed
rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change
effective upon filing with 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\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The BSE proposes to extend the effective date of the amended rule
governing the Exchange's Directed Order process on the Boston Options
Exchange (``BOX'') from July 31, 2007 to January 31, 2008. The text of
the proposed rule change is available on BSE's Web site at http://www.bostonoptions.com
, at BSE's

principal office, 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 BSE 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 BSE has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    On March 20, 2006, the BSE proposed an amendment to its rules
governing its Directed Order process on the BOX.\5\ The rules were
amended to clearly state that the BOX Trading Host identifies to an
Executing Participant (``EP'') the identity of the firm entering a
Directed Order. The amended rule was to be effective until June 30,
2006, while the Commission considered a corresponding Exchange proposal
to amend its rules to permit EPs to choose the firms from whom they
will accept Directed Orders, while providing complete anonymity of the
firm entering a Directed Order.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 53516 (March 20,
2006), 71 FR 15232 (March 27, 2006) (SR-BSE-2006-14).
    \6\ See Securities Exchange Act Release No. 53357 (February 23,
2006), 71 FR 10730 (March 2, 2006) (SR-BSE-2005-52).
---------------------------------------------------------------------------

    On June 30, 2006, the Exchange proposed extending the effective
date of the rule governing its Directed Order process on the BOX from
June 30, 2006 to September 30, 2006 while the Commission continued to
consider the corresponding Exchange proposal.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 54082 (June 30,
2006), 71 FR 38913 (July 10, 2006) (SR-BSE-2006-29).
---------------------------------------------------------------------------

    On September 11, 2006, the Exchange proposed extending the
effective date of the amended rule governing the Directed Order process
on the BOX from September 30, 2006 to January 31, 2007.\8\ On January
16, 2007, the Exchange proposed an additional amendment from January
31, 2007 until July 31, 2007, while the Commission considered the
corresponding Exchange proposal to amend its rules to permit EPs to
choose the firms from whom they will accept Directed Orders, while
providing complete anonymity of the firm entering a Directed Order.\9\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 54469 (September 19,
2006), 71 FR 56201 (September 26, 2006) (SR-BSE-2006-38).
    \9\ See Securities Exchange Act Release No. 55139 (January 19,
2007), 72 FR 3448 (January 25, 2007) (SR-BSE-2007-01).
---------------------------------------------------------------------------

    This filing from the Exchange now proposes another extension of the
effective date of the amended rule governing its Directed Order process
on BOX from July 31, 2007 to January 31, 2008.\10\ In the event the
Commission reaches a decision with respect to the corresponding
Exchange proposal to amend its rules before January 31, 2008, the
amended rule governing the Exchange's Directed Order process on the BOX
will cease to be effective at the time of that decision.
---------------------------------------------------------------------------

    \10\ In the event that the issue of anonymity in the Directed
Order process is not resolved by January 31, 2008, the Exchange will
consider whether to submit another filing under Rule 19b-4(f)(6)
extending this rule and system process.
---------------------------------------------------------------------------

2. Statutory Basis
    The amended rule is designed to clarify the information contained
in a Directed Order. This proposed rule filing seeks to extend the
amended rule's effectiveness from July 31, 2007 to January 31, 2008.
This extension will afford the Commission the necessary time to
consider the Exchange's corresponding proposal to amend its rule to
permit EPs to choose the firms from whom they will accept Directed
Orders while providing complete anonymity of the firm entering a
Directed Order. Accordingly, the Exchange believes that this proposal
is consistent with the requirements of Section 6(b) of the Act,\11\ in
general, and Section 6(b)(5) of the Act,\12\ in particular, in that it
is designed to foster cooperation and coordination with persons engaged
in regulating, clearing, settling, processing information with respect
to, and facilitating transaction in securities, to remove impediments
to and perfect the mechanism for a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

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

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

    The Exchange has neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, 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) \13\ of the Act and Rule 19b-4(f)(6)
thereunder.\14\ As required under Rule 19b-4(f)(6)(iii),\15\ the
Exchange provided the Commission with written notice of its intent to
file the proposed rule change, along with a brief description and text
of the proposed rule change, at least five business days prior to the
date of the filing of the proposed rule change.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
may not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The BSE requests that the Commission
waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\18\ which would make the rule change effective and
operative upon filing. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because such waiver would continue to conform the BOX
rules to BOX's current practice and clarify that Directed Orders on BOX
are not anonymous without interruption.\19\ Accordingly, the Commission
designates the proposed rule change

operative upon filing with the Commission.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ Id.
    \19\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of such 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-BSE-2007-31 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BSE-2007-31. 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 Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of BSE. 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-BSE-2007-31 and should be
submitted on or before August 2, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\20\
Florence E. Harmon,
Deputy Secretary.
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    \20\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E7-13491 Filed 7-11-07; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 82, Number 153 (Thursday, August 10, 2017)]
[Notices]
[Pages 37484-37485]
[FR Doc No: 2017-16831]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81318; File No. SR-FINRA-2017-021]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Approving Proposed Rule Change To Make Available
a New TRACE Security Activity Report

August 4, 2017.

I. Introduction

    On June 19, 2017, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend FINRA Rule 7730 (Trade Reporting and
Compliance Engine (``TRACE'')) to make available a new ``Security
Activity Report.'' The proposed rule change was published for comment
in the Federal Register on June 29, 2017.\3\ The Commission received
two comments on the proposal.\4\ On August 3, 2017, FINRA submitted a
letter responding to comments.\5\ As 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\ See Securities Exchange Act Release No. 81007 (June 23,
2017), 82 FR 29602 (June 29, 2017) (``Notice'').
    \4\ See letters to Brent J. Fields, Secretary, Commission, from
Bennett Golub, Chief Risk Officer, and Alexis Rosenblum, Director,
BlackRock, Inc., dated July 20, 2017 (``BlackRock Letter''); and
Sean Davy, Managing Director, Capital Markets Division, Securities
Industry and Financial Markets Association (``SIFMA''), dated July
20, 2017 (``SIFMA Letter'').
    \5\ See letter to Brent J. Fields, Secretary Commission, from
Racquel L. Russell, Associate General Counsel, FINRA, dated August
3, 2017 (``Response Letter'').
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II. Description of the Proposal

    FINRA Rule 7730, among other things, sets forth the TRACE data
products offered by FINRA. FINRA proposed to amend Rule 7730 to make
available a new Security Activity Report, which will provide aggregated
statistics by security for TRACE-Eligible Securities that are corporate
or agency bonds (collectively ``CA Bonds''). FINRA stated that the
Security Activity Report will include basic descriptive elements for
each CA Bond, such as the issuer's name and the security's coupon and
maturity date, as well as aggregate transaction statistics. These
statistics will include par value volume and number of customer buy
transactions, par value volume and number of customer sell
transactions, and par value volume and number of inter-dealer
transactions.\6\ FINRA noted that, currently, transactions whose volume
is over the dissemination cap \7\ becomes available only after 18
months as part of the Historic TRACE Data product.\8\ FINRA will
provide the Security Activity Report on a 90-day delay to address
potential confidentiality concerns.
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    \6\ The Security Activity Report will reflect differing levels
of par value volume detail depending on whether the transaction size
is larger than the dissemination cap and whether there are more than
six transactions occurring in a calendar month. Additionally, if a
CA Bond has more than six transactions in a month, the par value
volume traded would appear on the report within specified size
categories along with a range of the number of transactions that
occur within the specified volume size categories. These size
categories will be announced in the Regulatory Notice which
announces the effective date of the Security Activity Report.
    \7\ Currently, the actual par value traded is publicly
disseminated only if it is below the size cap in that asset class.
For transactions in investment grade CA bonds over a $5 million par
value, TRACE disseminates the size as ``5MM+.'' For transactions in
non-investment grade corporate bonds over a $1 million par value,
TRACE disseminates the size as ``1MM+.''
    \8\ The Commission notes that on June 23, 2017 it approved a
proposed rule change to reduce the minimum delay from 18 months to
six months for transactions included in the Historic TRACE Data Sets
relating to CA Bonds. This approval occurred after the current
proposed rule change was filed with the Commission. See Securities
Exchange Act Release No. 81011 (June 23, 2017), 82 FR 29597 (June
29, 2017). The effective date of this change is October 2, 2017. See
also, FINRA Regulatory Notice 17-23.
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    The Security Activity Report also will provide information
regarding the number of unique MPIDs that report transactions in a
particular security. The report will provide the aggregate activity of
the five most active MPIDs in each CA Bond and the number of unique
MPIDs for disseminated uncapped and capped transactions.\9\ In
addition, the report will include the percentage, in aggregate, of the
total number of transactions and the total par value volume traded by
the top five MPIDs for each particular security.
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    \9\ FINRA stated that the number of unique reporting MPIDs will
be provided by displaying either the actual number of unique MPIDs
where there are six or more unique MPIDs or as ``1 to 5'' where
there are five or fewer reporting MPIDs. Specific market
participants that engaged in the transactions will not be identified
in the Security Activity Report.
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    FINRA believes that the Security Activity Report might be useful
for both business and regulatory purposes. For example, FINRA noted
that members might use the information provided in the Security
Activity Report to better ascertain their relative trading activity in
particular CA Bonds. Interested parties also could use the information
in the Security Activity Report in connection with regulatory
obligations, such as assessing, classifying, and reviewing the
liquidity risk of individual securities pursuant to Rule 22e-4 under
the Investment Company Act.\10\
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    \10\ 17 CFR 270.22e-4.
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    FINRA has stated that it will announce in a Regulatory Notice the
effective date of the proposed rule change, which will be no later than
365 days following Commission approval.\11\ FINRA intends to establish
a fee for the TRACE Security Activity Report in the future. The fee
will be established pursuant to a separate rule filing.
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    \11\ In its Response Letter FINRA stated that it intends for the
effective date for the Security Activity Report to be no sooner than
February 1, 2018. See Response Letter at 2.
---------------------------------------------------------------------------

III. Summary of Comments and FINRA's Response

    As previously noted, the Commission received two comment letters
\12\ and a FINRA Response Letter \13\ on the proposed rule change. Both
commenters expressed general support for the proposal and noted that
the additional data provided by the Security Activity Report would
assist in regulatory compliance with Rule 22e-4.\14\ One commenter
raised concerns about the implementation, calculation, and the format
of the Security Activity Report.\15\ This commenter noted that the
delay period reduction for the Historic TRACE Data product from 18
months to six months had the potential to impact market participant
behavior, and recommended delaying the implementation of the Security
Activity

Report for at least six months from the effective date of the reduced
delay period.\16\ FINRA disagreed that an additional implementation
delay related to the Historic TRACE Data product was necessary for the
Security Activity Report. FINRA stated that proposed features of the
Security Activity Report, such as the 90-day publication delay and
other grouping of activity reduce information leakage risks and
mitigate any potential impacts.\17\ FINRA stated that it intends for
the effective date of the Security Activity Report to be no sooner than
February 1, 2018.\18\
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    \12\ See supra note 4.
    \13\ See supra note 5.
    \14\ See SIFMA Letter at 1; BlackRock Letter at 1.
    \15\ See SIFMA Letter at 2-3.
    \16\ See id. at 2.
    \17\ See Response Letter at 2.
    \18\ See id.
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    This commenter also believed there would be confidentiality
concerns if market concentration percentages were not aggregated across
the top five MPIDs for each particular security.\19\ In its Response
Letter, FINRA clarified and reiterated that the activity of the top
five MPIDs will be expressed in aggregate figures.\20\
---------------------------------------------------------------------------

    \19\ See SIFMA Letter at 2.
    \20\ See Response Letter at 2.
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    Finally, this commenter stated that it would be beneficial for
FINRA to publicly share a draft template of the Security Activity
Report so that market participants could educate themselves on the
format and contents of the report.\21\ FINRA responded that it intends
to post a file layout for the Security Activity Report on its Web site
at least 30 days before the Security Activity Report's effective
date.\22\
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    \21\ See SIFMA Letter at 2-3.
    \22\ See Response Letter at 2.
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IV. Discussion

    After careful consideration, the Commission finds that the proposed
rule change is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
association.\23\ In particular, the Commission finds that the proposed
rule change is consistent with Section 15A(b)(6) of the Act,\24\ which
requires, among other things, that FINRA rules be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The
Commission does not believe that commenters raised any issue that would
preclude approval of FINRA's proposal. The Commission notes that the
Security Activity Report does not require member firms to provide FINRA
with any additional data. The product is optional and responds to
consumer demand for a more useful market data product. Finally, the
Security Activity Report appears reasonably designed to promote
transparency while minimizing the potential for information leakage.
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    \23\ In approving this proposed rule change, the Commission has
considered the proposed rule change's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
    \24\ 15 U.S.C. 78o-3(b)(6).
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IV. Conclusion

    It is therefore ordered pursuant to Section 19(b)(2) of the Act
\25\ that the proposed rule change (SR-FINRA-2017-021) be, and hereby
is, approved.
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    \25\ 15 U.S.C. 78s(b)(2).
    \26\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16831 Filed 8-9-17; 8:45 am]
 BILLING CODE 8011-01-P