[Federal Register: July 12, 2010 (Volume 75, Number 132)]
[Notices]
[Page 39715-39720]
[DOCID:fr12jy10-78]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62454; File No. SR-FINRA-2010-030]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change To Adopt
FINRA Rule 11000 Series (Uniform Practice Code) in the Consolidated
FINRA Rulebook

July 6, 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 June 14, 2010, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc.
[``NASD'']) filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared primarily by FINRA. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    FINRA is proposing to adopt the NASD Rule 11000 Series (Uniform
Practice Code [``UPC'']) as FINRA rules in the consolidated FINRA
rulebook, subject to certain amendments, and to delete NASD Rule 3370
(Purchases) and the following corresponding provisions in the
Incorporated NYSE Rules and Interpretations: 176 (Delivery Time), 180
(Failure to Deliver), 282 (Buy-in Procedures) and its Supplementary
Material paragraphs .10-.80, 291 (Failure to Fulfill Closing Contract),
292 (Restrictions on Members' Participation in Transaction to Close
Defaulted Contracts), 293 (Closing Contracts in Suspended Securities),
294 (Default in Loan of Money), 387 (COD Orders) and its Supplementary
Material paragraphs .10-.60, Rule 387 Interpretations/01-/18, 430
(Partial Delivery of Securities to Customers on C.O.D. Purchases), and
Rule 430 Interpretation/01.\3\
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    \3\ The text of the proposed rule change is available on FINRA's
Web site at http://www.finra.org.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA included statements
concerning

the purpose of and basis for the proposed rule change and discussed any
comments it received on the proposed rule change. The text of these
statements may be examined at the places specified in Item IV below.
FINRA has prepared summaries, set forth in sections (A), (B), and (C)
below, of the most significant aspects of these statements.\4\
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    \4\ Some of the text of the summaries prepared by FINRA may have
been modified by the Commission.
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(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 adopt the
NASD Rule 11000 Series (Uniform Practice Code [``UPC'']) into the
Consolidated FINRA Rulebook, subject to certain amendments described
below. The UPC was originally adopted on January 20, 1941, and became
effective on August 1, 1941. The UPC prescribes the manner in which
over-the-counter securities transactions other than those cleared
through a registered clearing agency are compared, cleared, and settled
between member firms.
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    \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).
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    As a general matter, the UPC does not apply to:
    a. Transactions in securities between members that are compared,
cleared, or settled through the facilities of a registered clearing
agency;
    b. Transactions in securities exempted under Section 3(a)(12) of
the Act or municipal securities as defined in Section 3(a)(29) of the
Act;
    c. Transactions in redeemable securities issued by companies
registered under the Investment Company Act of 1940; or
    d. Transactions in Direct Participation Program securities.
    The UPC is designed to make uniform, where practicable, custom,
practice, usage, and trading technique in the investment banking and
securities business, particularly with respect to operational and
settlement issues. This can include such matters as trade terms,
deliveries, payments, dividends, rights, interest, stamp taxes, claims,
assignments, powers of substitution, due-bills, transfer fees, and
marking to the market. The UPC, among other things, was created so that
the transaction of day-to-day business by members may be simplified and
facilitated.
1. UPC Rules Generally
    FINRA is proposing to transfer a significant portion of the NASD
Rule 11000 Series into the Consolidated FINRA Rulebook with the minor
changes detailed below.\6\ Specifically, FINRA is proposing to update
certain terminology in the UPC. For example, NASD Rule 11120 defines
the term ``written notice'' as used in the UPC to include a notice
delivered by hand, letter, teletype, telegraph, TWX, facsimile
transmission, or other comparable media. FINRA is proposing to delete
the references to teletype, telegraph, and TWX and to include notice
delivered by electronic mail. In addition, FINRA is proposing to update
cross-references throughout the rules and to make other minor changes
primarily to reflect the new conventions of the Consolidated FINRA
Rulebook.
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    \6\ NASD Rules 11890 (Clearly Erroneous Transactions), IM-11890-
1 (Refusal To Abide by Rulings), and IM-11890-2 (Review by Panels of
the UPC Committee) were adopted, with significant changes, into the
Consolidated FINRA Rulebook as the FINRA Rule 11890 Series (Clearly
Erroneous Transactions) pursuant to a separate rule filing and are
not being addressed as part of this rule filing. Securities Exchange
Act Release No. 61080 (Dec. 1, 2009), 74 FR 64117 (Dec. 7, 2009)
(SR-FINRA-2009-068).
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2. Proposed FINRA Rules 11111 (Refusal To Abide by Rulings of the
Committee) and 11112 (Review by Panels of the UPC Committee)
    FINRA is proposing to adopt two new provisions that are largely
based on former NASD IM-11890-1 (Refusal To Abide by Rulings) and NASD
IM-11890-2 (Review by Panels of the UPC Committee).\7\ FINRA is
proposing that the provisions of former NASD IM-11890-1 be incorporated
into and merged with current NASD IM-11110 (Refusal To Abide by Rulings
of the Committee) into proposed new FINRA Rule 11111, as the two
provisions are largely identical. Former NASD IM-11890-1 provided that
a refusal by a member to take action necessary to effectuate a final
decision of a FINRA officer or the UPC Committee under NASD Rule 11890
(Clearly Erroneous Transactions) would be considered conduct
inconsistent with just and equitable principles of trade. Current NASD
IM-11110 provides that a refusal by a member to abide by an official
ruling of the UPC Committee, acting within its appropriate sphere,
shall be considered conduct inconsistent with just and equitable
principles of trade. Proposed FINRA Rule 11111 would merge the two
provisions by providing that a refusal by a member to take action
necessary to effectuate a final decision of a FINRA officer or the UPC
Committee under the UPC Code (FINRA Rule 11000 Series) or other FINRA
rules that permit review of FINRA decisions by the UPC Committee would
be considered conduct inconsistent with just and equitable principles
of trade.
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    \7\ Id.
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    FINRA is also proposing that the provisions of former NASD IM-
11890-2, which applied only to rulings under NASD Rule 11890, be
adopted as proposed new FINRA Rule 11112 (Review by Panels of the UPC
Committee) and be generally applicable to all rulings by the UPC
Committee. Proposed FINRA Rule 11112 would provide that a decision of
the UPC Committee may be rendered by a panel of the Committee, which
shall consist of three or more members of the UPC Committee, provided
no more than 50 percent of the members of any panel are directly
engaged in market making activity or employed by a firm whose revenues
from market making activity exceed ten percent of its total revenues.
3. Proposed FINRA Rules 11810 (Buying-In) and 11810.03 (Sample Buy-In
Forms)
    FINRA is proposing that NASD Rule 11810 (Buying-In) be adopted as
FINRA Rule 11810 (Buy-In Procedures and Requirements) in the
Consolidated FINRA Rulebook with certain clarifications and changes and
that Incorporated NYSE Rules 282 (Buy-in Procedures) and related
Supplementary Material paragraphs .10-.80 be deleted. The proposed
changes are intended to harmonize the differences between the NYSE rule
and the NASD rule and to update certain procedures and time frames.
FINRA is also proposing to adopt NASD IM-11810, which contains the
sample buy-in forms, into the Consolidated FINRA Rulebook as
accompanying Supplementary Material .03 to FINRA Rule 11810 with minor
changes to replace references to NASD with FINRA.
    Proposed FINRA Rule 11810 would continue to set forth the required
steps that members must follow to effect the ``buy-in'' of securities
including the procedures to be followed in issuing a ``buy-in'' notice,
the contents of such notice, the expectations of the receiving

party to respond to such notice, and the time frames in which a ``buy-
in'' may be issued, retransmitted, and effected.
    FINRA is proposing to make certain minor clarifications and to add
the following more substantive provisions to proposed FINRA Rule 11810,
which are contained in NYSE Rule 282 either with or without
modifications, as specified:
    a. Include as proposed paragraph (a) a statement clarifying that
the rule does not apply to, among other things, securities contracts
that are subject to the requirements of a national securities exchange
or a registered clearing agency.
    b. Amend certain time frames for action specified in the proposed
rule:
    i. Clarify the time frames within which members must take action to
effect the ``buy-in'' of securities as required therein. Specifically,
the NASD rule requires that a member act within the specified local
time at the member's location, whereas the NYSE rule requires action to
be taken based on Eastern Time (ET). To promote operational consistency
among members, the proposal would amend the required time frame for
action to be ET.
    ii. Amend the current time frame specified by the NASD and NYSE
rules for the acknowledgement of a ``buy-in'' notice and the
notification of an execution of the buy-in from 5 p.m. to 6 p.m. ET.
FINRA understands that the 5 p.m. time may be operationally difficult
for members to achieve in some cases and the 6 p.m. ET time frame would
be more operationally feasible.
    iii. Add Supplementary Material .01 (Early Closure of Markets) to
clarify that in the event of an announced early closure of the market
upon which the security subject to the ``buy-in'' notice is traded,
members may take the action required by the proposed rule not earlier
than one hour prior to the announced early closure of such market.
    c. Add new paragraph (b)(4) (Notice of ``Buy-In'' and Confirmation
of Receipt) to specify that (1) the buyer must maintain as part of its
records, confirmation of receipt of the notice by the seller and (2) if
the seller does not accept the notice of ``buy-in,'' it must reject it
by response to the buyer no later than 6 p.m. ET on the same date that
it receives such notice, and in the absence of doing so, the seller
will have been deemed by the buyer to have accepted such notice. The
proposed provision would clarify that the seller, in such case, would
have the right to request proof of the fail obligation from the buyer,
which the buyer must deliver to the seller prior to the effective date
of the ``buy-in.'' However, in no event would a buyer be entitled to a
``buy-in'' that exceeds the liability of a seller under an unsettled
securities contract because of the failure of the seller to reject a
``buy-in'' notice as provided in the rule, and a buyer may not execute
a ``buy-in'' notice to such extent the buyer fails to deliver the proof
of fail obligation in accordance with the requirements of the rule.
Requirements (1) and (2) described above are contained in the NYSE
rule, in a similar form, except FINRA is proposing to change the time
to 6 p.m. ET. FINRA is also proposing to add new provisions regarding
``passive acceptance'' of the ``buy-in'' by the seller as described
above, subject to certain safeguards for the benefit of the seller such
as requiring the buyer to provide the proof of fail obligation and
``buying-in'' the seller only for the securities contract amount in
accordance with the proposed rule.
    d. Add new paragraph (b)(5) (Notice of ``Buy-In'' and Confirmation
of Receipt) to specify that the receiving party shall immediately
retransmit a notice of ``buy-in'' to other parties from which the
securities may be due in the form of a retransmitted ``buy-in'' notice.
Consistent with proposed paragraph (b)(4) described above, the
provision would clarify that each party receiving a retransmitted
``buy-in'' notice will be required to maintain confirmation of receipt
of the notice as part of its books and records and either reject a
retransmitted ``buy-in'' notice that it has received by 6 p.m. ET on
the date such notice is received or be deemed to have accepted the
notice (``passive acceptance''). The safeguards described above in
proposed paragraph (b)(4) would also apply to sellers receiving a
retransmitted notice.
    e. Add new paragraph (b)(6) (Notice of ``Buy-In'' and Confirmation
of Receipt), which is contained in the NYSE rule, to clarify that when
a notice of ``buy-in'' or a retransmitted notice thereof is given for
less than the full amount of securities due, it shall not be for less
than one trading unit.
    f. Amend proposed paragraph (d) (Procedures for Closing of
Contracts) as follows:
    i. Retitle proposed paragraph (d) from the current rule title
``Seller's Failure to Deliver After Receipt of Notice'' to ``Procedures
for Closing of Contracts'' to better align with the content of that
paragraph.
    ii. Amend the time frames, as discussed generally above, to
generally require the party receiving the ``buy-in'' notice to deliver
the securities to the party issuing the notice by 3 p.m. ET on the
effective date of the ``buy-in'' notice.
    iii. Add language to clarify that if the buyer/issuing party prior
to executing the ``buy-in'' is notified by the seller/delivering party
that some or all of the securities are in the seller's physical
possession and will be delivered to the issuing party then the order to
``buy-in'' shall not be executed with respect to such securities and
the member that initiated the original order to ``buy-in'' shall accept
and pay for such securities. However, if such securities are not
promptly delivered the seller that represented that it would make such
delivery shall be liable for any resulting damages.
    iv. Add language contained in the NYSE rule to clarify the
operation of the rule when a retransmitted notice is sent to the
defaulting party but not received by such party prior to the delivery
of shares or the execution of the ``buy-in.'' In such case, the sender
of the notice may unless otherwise agreed promptly reestablish by a new
sale the contract subject to the notice of ``buy-in.''
    g. Amend proposed paragraph (h) (Notice of Executed ``Buy-In'') as
follows:
    i. Amend the time frame, as discussed above, for notice to be made
to the party for whose account the securities were bought to 6 p.m. ET
on the date of execution of the ``buy-in.''
    ii. Add new language, not contained in either legacy rule, to
clarify that the confirmation of the executed ``buy-in'' provided for
by the rule shall be forwarded to the party entitled to such by no
later than 9:30 a.m. ET on the following business day after the
execution of the ``buy-in.''
    iii. Add a provision contained in the NYSE rule that requires that
a statement of any resulting money differences from the execution of
the ``buy-in'' be provided immediately and that such money differences
shall be paid by no later than 3 p.m. ET on the business day after the
settlement date of the executed ``buy-in.''
    h. Amend proposed paragraph (i) (``Close-Out'' Under the Uniform
Practice Code Committee Rulings) to clarify, as provided in the NYSE
rule, that notification of all close-outs as provided by the paragraph
shall be sent immediately to the member in question pursuant to the
confirmation provisions of the Rule 11200 Series at least thirty
minutes before such ``close-out.''
    i. Add proposed Supplementary Material .02 (Securities Delivered by
Seller After Execution of ``Buy-In'') to clarify, as provided in the
NYSE rule, that where securities have been delivered by the seller
after the ``buy-in''

order has been placed but not executed, such securities may be returned
to the seller if the ``buy-in'' was executed in accordance with the
rule before it could reasonably be cancelled by the initiating party.
4. Proposed FINRA Rule 11820 (Selling-Out)
    FINRA is proposing that NASD Rule 11820 (Selling-Out) be adopted as
FINRA Rule 11820 (Selling-Out) into the Consolidated FINRA Rulebook,
subject to minor changes. There is no comparable NYSE Incorporated
Rule. NASD Rule 11820 generally requires the party executing the
``sell-out'' to notify the buyer on the day of execution, but no later
than the close of business local time, where the buyer maintains his
office, of the quantity sold and the price received. FINRA is proposing
to conform the time frames in the proposed rule to the time frames in
proposed FINRA Rule 11810 (Buy-In Procedures and Requirements).
Specifically, the proposal would replace the requirement to provide
notice ``no later than the close of business local time, where the
buyer maintains his office,'' with the requirement that such notice
must be provided no later than ``6:00 p.m. ET.'' FINRA believes this
change provides clarity and uniformity to the industry. In addition,
the proposal would amend certain references in the proposed rule from
``should'' to ``shall.'' Specifically, in proposed paragraph (b)
(Notice of ``Sell-Out''), notification by the party executing a ``sell-
out'' shall be in written or electronic form and a formal confirmation
of such sale shall be forwarded as promptly as possible after execution
of the ``sell-out.''
5. Proposed FINRA Rule 11860 (COD Orders)
    FINRA is proposing to adopt NASD Rule 11860 (Acceptance and
Settlement of COD Orders) as FINRA Rule 11860 (COD Orders) into the
Consolidated FINRA Rulebook, subject to minor changes and to delete
NASD Rule 3370 (Purchases) and Incorporated NYSE Rule 387 (COD Orders)
and its Supplementary Material paragraphs .10-.60, NYSE Rule 387
Interpretations/01-/18, Rule 430 (Partial Delivery of Securities to
Customers on C.O.D. Purchases), and NYSE Rule 430 Interpretation/01.
    NASD Rule 11860 and NYSE Rule 387 provide generally that no member
can accept an order from a customer pursuant to an arrangement whereby
payment for the securities purchased or delivery of the securities sold
is to be made to or by an agent of the customer unless certain
specified procedures are followed. NASD Rule 3370 and NYSE Rule 430
both generally provide that no member or associated person may accept a
customer's purchase order for securities unless it has first
ascertained that the customer placing the order or its agent has agreed
to receive the securities against payment in an amount equal to the
execution price even though such purchase may represent only a part of
a larger order. NYSE Rule 430 has an exception for obligations of the
U.S. government.
    Proposed FINRA Rule 11860 would continue the requirement in NYSE
Rule 430 and NASD Rule 3370 that members prior to accepting a purchase
order for a security (without the exception of U.S. government
obligations contained in Rule 430) ascertain that the customer or its
agent will receive against payment securities in an amount equal to any
execution confirmed to the customer even if such execution may
represent a partial fill of the order. In that members have been
subject to NASD Rule 3370, which includes transactions in U.S.
government obligations, FINRA is proposing to eliminate the exemption
for such securities as provided by Rule 430. Further, the proposed rule
would continue to require the use of either a Clearing Agency or a
Qualified Vendor for the electronic confirmation and affirmation of all
depository eligible transactions. FINRA is proposing to clarify that
the proposed rule would, similar to NYSE Rule 387, apply to (1)
transactions of foreign customers and broker-dealers that settle in the
U.S. and (2) eligible sinking funds and/or dividend reinvestment
transactions. The proposed rule would add a new requirement that is
contained in NYSE Rule 387 that requires a ``Qualified Vendor'' to
provide FINRA with copies of its required submissions to the SEC staff.
6. Proposed FINRA Rules 11870 (Customer Account Transfer Contracts) and
11870.03 (Sample Transfer Instruction Forms)
    FINRA is proposing to adopt NASD Rule 11870 as FINRA Rule 11870
(Customer Account Transfer Contracts) into the Consolidated FINRA
Rulebook with the following changes. There is no comparable NYSE
Incorporated Rule.\8\ FINRA is also proposing that NASD IM-11870, which
contains the Sample Transfer Instruction Forms, be adopted into the
Consolidated FINRA Rulebook with minor changes to replace references to
NASD with FINRA.
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    \8\ Previously, NYSE Rule 412 (Customer Account Transfer
Contracts) and its related interpretations similarly regulated the
transfer of customer accounts. FINRA eliminated NYSE Rule 412 and
its interpretations from the Transitional Rulebook as part of a rule
change to reduce regulatory duplication for Dual Members during the
period before completion of the Consolidated FINRA Rulebook. The
NYSE subsequently amended its version of NYSE Rule 412 to state that
NYSE members and member organizations shall comply with NASD Rule
11870, concerning the transfer of customer accounts between members,
and any amendments thereto, as if such rule is part of the NYSE's
rules. See Securities Exchange Act Release No. 58640 (Sept. 12,
2008), 73 FR 54652 (Sept. 22, 2008) (Approval Oder; SR-FINRA-2008-
036).
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    Generally, NASD Rule 11870 provides that when a brokerage customer
wishes to transfer his or her account to another member and gives
written notice of that fact to the receiving member, both members must
expedite and coordinate the transfer. Proposed FINRA Rule 11870 would
continue to set forth the required steps that members must follow to
effect the transfer of customers' accounts, including the initial
request to transfer an account, the time frame in which a transfer
request must be acted upon, the validation of such transfer request,
and the documentation required to effect the transfer. However, FINRA
is proposing to add minor clarifications as well as the following more
substantive provisions to proposed FINRA Rule 11870, which were
interpretations to the prior version of NYSE Rule 412 \9\:
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    \9\ Id.
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    a. Add a new provision regarding the procedures for the transfer of
book-entry mutual fund shares that clarifies the obligations of the
parties when transferring a customer's positions in such securities.
FINRA proposes to add this provision to paragraph (f)(9) of proposed
FINRA Rule 11870.
    b. Add a definition of the term ``participant in a registered
clearing agency'' for purposes of the rule to mean a member that is
eligible to use the agency's automated customer securities account
transfer capabilities.
    c. Add Supplementary Material .01 to clarify that members must
establish written procedures to effect and supervise the transfer of
customer account assets pursuant to the requirements of the proposed
rule.
    d. Add Supplementary Material .02 to require members to inform
customers with respect to retirement plan securities that the choice of
the method of disposition of such assets may result in liability for
the payment of taxes and penalties.
    e. Amend the time frames in the proposed rule for notice and
completion of close-outs of fail contracts resulting from the not
completing a transfer of a customer's account to conform to the

time frames for all close-outs as specified in proposed FINRA Rule
11810 (Buy-In Procedures and Requirements). Specifically, the proposed
rule would require the receiving member to provide notice to the
carrying member not later than 12 noon ET two business days preceding
the execution of the proposed close-out (as opposed to 12 noon ``his''
time). In addition, the proposed rule would require that every notice
of close-out state that the securities may be closed out ``unless
delivery is effected at or before a certain specified time, which may
not be prior to 3 p.m. ET,'' as opposed to ``the local time in the
community where the carrying member maintains his office.'' The
proposed rule also would replace the requirement that the party
executing the ``close-out'' notify the seller as to the quantity
purchased and the price paid not later than ``the close of business,
local time, where the seller maintains his office,'' with the
requirement to provide such notice not later than ``6 p.m. ET on the
date of the execution of such ``close-out''.''
    f. Amend certain references in the proposed rule from ``should'' to
``shall.'' Specifically, (1) In proposed paragraph (f) (Fail Contracts
Established) the obligation that fail contracts established pursuant to
the rule shall be clearly marked or captioned as such and that a
receiving member shall reject delivery of a security that cannot be
deemed a safekeeping position against a fail contract; (2) in proposed
paragraph (h) (Close-Out Procedures) that notification shall be in
written or electronic form and that confirmation of purchase along with
a billing or payment shall be forwarded as promptly as possible; (3) in
proposed paragraph (i) (Sell-Out Procedures) that notification shall be
in written or electronic form; and (4) in proposed paragraph (m)
(Participant in a Registered Clearing Agency) that when both members
are participants in a registered clearing agency, the securities
account asset transfer procedures shall be accomplished in accordance
with the rule and the rules of the registered clearing agency.
    g. Eliminate paragraph (n)(3) which requires that a copy of each
customer account transfer instruction issued on an ``ex-clearing
house'' basis be sent to the local District Office of NASD having
jurisdiction over the carrying member. FINRA believes that a majority
of customer account transfers now occur between members of a clearing
agency and the volume of transactions that occur ``ex-clearing'' has
significantly decreased.
    FINRA will announce the implementation date of the proposed rule
change in a Regulatory Notice to be published no later than ninety days
following Commission approval. The implementation date will be no later
than 365 days following Commission approval.
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 the proposed rule change will
adopt a majority of the UPC Rules into the new Consolidated FINRA
Rulebook without significant changes. FINRA is primarily proposing the
changes to update cross-references and reflect the new conventions of
the Consolidated FINRA Rulebook. Certain other UPC Rules are being
updated to reflect current industry practices.
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    \10\ 15 U.S.C. 78o-3(b)(6).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change would impose
any burden on competition.

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

    Written comments relating to the proposed rule change have not been
solicited or received. FINRA will notify the Commission of any written
comments received by FINRA.

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 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-FINRA-2010-030 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-2010-030. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Section, 100
F Street, NE., Washington, DC 20549-1090, on official business days
between the hours of 10 a.m. and 3 p.m. Copies of such filings will
also be available for inspection and copying at the principal office of
FINRA and on FINRA's Web site at http://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. All
submissions should refer to File Number SR-FINRA-2010-030 and should be
submitted on or before August 2, 2010.

    For the Commission by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-16866 Filed 7-9-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 85, Number 101 (Tuesday, May 26, 2020)]
[Notices]
[Pages 31489-31490]
[FR Doc No: 2020-11207]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CD20-5-000]

Kyle Kembel Farm Irrigation Hydropower Project; Notice of
Preliminary Determination of a Qualifying Conduit Hydropower Facility
and Soliciting Comments and Motions To Intervene

    On May 18, 2020, Kyle Kembel filed a notice of intent to construct
a qualifying conduit hydropower facility, pursuant to section 30 of the
Federal Power Act (FPA). The proposed Kyle Kembel Farm Irrigation
Hydropower Project would have an installed capacity of 5.2 kilowatts
(kW), and would be located along an existing irrigation pipeline on the
applicant's property near Fort Morgan, Morgan County, Colorado.
    Applicant Contact: Matt Harris, 21482 County Road T.5, Fort Morgan,
CO 80701, Phone No.<PHONE_NUMBER>, Email<EMAIL_ADDRESS>    FERC Contact: Christopher Chaney, Phone No.<PHONE_NUMBER>, Email:
<EMAIL_ADDRESS>    Qualifying Conduit Hydropower Facility Description: The proposed
project would consist of: (1) A 5.2-kW turbine-generator; (2) an
approximately 8-foot by 10-foot powerhouse; (3) 6-inch-diameter intake
and discharge pipes connecting to the existing irrigation pipeline; and
(4) appurtenant facilities. The proposed project would have an
estimated annual generation of up to 17.5 megawatt-hours.
    A qualifying conduit hydropower facility is one that is determined
or deemed to meet all the criteria shown in the table below.

                          Table 1--Criteria for Qualifying Conduit Hydropower Facility
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                                                                                Satisfies (Y/
              Statutory provision                                   Description                          N)
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FPA 30(a)(3)(A)................................  The conduit the facility uses is a tunnel, canal,            Y
                                                  pipeline, aqueduct, flume, ditch, or similar
                                                  manmade water conveyance that is operated for
                                                  the distribution of water for agricultural,
                                                  municipal, or industrial consumption and not
                                                  primarily for the generation of electricity.
FPA 30(a)(3)(C)(i).............................  The facility is constructed, operated, or                    Y
                                                  maintained for the generation of electric power
                                                  and uses for such generation only the
                                                  hydroelectric potential of a non-federally owned
                                                  conduit.
FPA 30(a)(3)(C)(ii)............................  The facility has an installed capacity that does             Y
                                                  not exceed 40 megawatts.
FPA 30(a)(3)(C)(iii)...........................  On or before August 9, 2013, the facility is not             Y
                                                  licensed, or exempted from the licensing
                                                  requirements of Part I of the FPA.
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    Preliminary Determination: The proposed Kyle Kembel Farm Irrigation
Hydropower Project will not alter the primary purpose of the conduit,
which is to transport water for irrigation. Therefore, based upon the
above

criteria, Commission staff preliminarily determines that the proposal
satisfies the requirements for a qualifying conduit hydropower
facility, which is not required to be licensed or exempted from
licensing.
    Comments and Motions to Intervene: Deadline for filing comments
contesting whether the facility meets the qualifying criteria is 30
days from the issuance date of this notice.
    Deadline for filing motions to intervene is 30 days from the
issuance date of this notice.
    Anyone may submit comments or a motion to intervene in accordance
with the requirements of Rules of Practice and Procedure, 18 CFR
385.210 and 385.214. Any motions to intervene must be received on or
before the specified deadline date for the particular proceeding.
    Filing and Service of Responsive Documents: All filings must (1)
bear in all capital letters the COMMENTS CONTESTING QUALIFICATION FOR A
CONDUIT HYDROPOWER FACILITY or MOTION TO INTERVENE, as applicable; (2)
state in the heading the name of the applicant and the project number
of the application to which the filing responds; (3) state the name,
address, and telephone number of the person filing; and (4) otherwise
comply with the requirements of sections 385.2001 through 385.2005 of
the Commission's regulations.\1\ All comments contesting Commission
staff's preliminary determination that the facility meets the
qualifying criteria must set forth their evidentiary basis.
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    \1\ 18 CFR 385.2001-2005 (2019).
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    The Commission strongly encourages electronic filing. Please file
motions to intervene and comments using the Commission's eFiling system
at http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit
brief comments up to 6,000 characters, without prior registration,
using the eComment system at http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact information at the
end of your comments. For assistance, please contact FERC Online
Support at<EMAIL_ADDRESS>(866) 208-3676 (toll free), or
(202) 502-8659 (TTY). In lieu of electronic filing, please send a paper
copy to: Secretary, Federal Energy Regulatory Commission, 888 First
Street, NE, Washington, DC 20426. A copy of all other filings in
reference to this application must be accompanied by proof of service
on all persons listed in the service list prepared by the Commission in
this proceeding, in accordance with 18 CFR 4.34(b) and 385.2010.
    Locations of Notice of Intent: The Commission provides all
interested persons an opportunity to view and/or print the contents of
this document via the internet through the Commission's website at
http://www.ferc.gov/docs-filing/elibrary.asp. Enter the docket number
(i.e., CD20-5) in the docket number field to access the document. You
may also register online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of new filings and issuances
related to this or other pending projects. Copies of the notice of
intent can be obtained directly from the applicant. At this time, the
Commission has suspended access to the Commission's Public Reference
Room due to the proclamation declaring a National Emergency concerning
the Novel Coronavirus Disease (COVID-19), issued by the President on
March 13, 2020. For assistance, call toll-free 1-866-208-3676 or email
<EMAIL_ADDRESS>For TTY, call<PHONE_NUMBER>.

    Dated: May 19, 2020.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2020-11207 Filed 5-22-20; 8:45 am]
BILLING CODE 6717-01-P