[Federal Register Volume 85, Number 34 (Thursday, February 20, 2020)]
[Notices]
[Pages 9816-9820]
[FR Doc No: 2020-03320]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88210; File No. SR-NASDAQ-2019-049]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Amendment No. 3 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 3, To
Amend the Definition of Family Member in Listing Rule 5605(a)(2) for
Purposes of the Definition of Independent Director

February 13, 2020.

I. Introduction

    On May 29, 2019, The NASDAQ Stock Market LLC (``Nasdaq'' 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,\2\ a
proposed rule change to amend the definition of a family member for
purposes of determining the independence of directors under Nasdaq Rule
5605(a)(2). The proposed rule change was published for comment in the
Federal Register on June 18, 2019.\3\
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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. 86095 (June 12,
2019), 84 FR 28379 (``Notice'').
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    On August 1, 2019, the Commission extended the time period within
which

to either approve the proposed rule change, disapprove the proposed
rule change, or institute proceedings to determine whether to approve
or disapprove the proposed rule change, to September 16, 2019.\4\ On
September 13, 2019, the Commission instituted an order instituting
proceedings under Section 19(b)(2)(B) of the Act (``OIP'') to determine
whether to approve or disapprove the proposed rule change.\5\ The
Commission received one comment letter, from Nasdaq, in response to the
OIP.\6\ On December 12, 2019, the Commission designated a longer period
for Commission action on the proposed rule change.\7\ On January 30,
2020, Nasdaq filed Amendment No. 1 to the proposed rule change, which
the Exchange subsequently withdrew. On January 31, 2020, Nasdaq filed
Amendment No. 2 to the proposed rule change, which the Exchange
subsequently withdrew.\8\ On February 11, 2020, Nasdaq filed Amendment
No. 3 to the proposed rule change. The Commission is publishing notice
of the filing of Amendment No. 3 to solicit comment from interested
persons and is approving the proposed rule change, as modified by
Amendment No. 3, on an accelerated basis.
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    \4\ See Securities Exchange Act Release No. 86545 (August 1,
2019), 84 FR 38704 (August 7, 2019).
    \5\ See Securities Exchange Act Release No. 86969 (September 13,
2019), 84 FR 49353 (September 19, 2019).
    \6\ See letter from Jeffrey S. Davis, Senior Vice President and
Senior Deputy General Counsel, Nasdaq, to Vanessa A. Countryman,
Secretary, Commission, dated November 12, 2019.
    \7\ See Securities Exchange Act Release No. 87721 (December 12,
2019), 84 FR 69401 (December 18, 2019).
    \8\ In Amendment No. 3, Nasdaq provided additional clarification
and justification in support of the proposed rule change, including
a statement that it was proposing to interpret the term ``children''
to exclude stepchildren; deleted and revised certain language in the
original proposal; and clarified that the proposed rule change to
Nasdaq Rule 5605(a)(2) will not affect the additional independence
criteria for audit committee members set forth in Nasdaq Rule
5605(c)(2), which incorporate the independence requirements of Rule
10A-3 under the Act, 17 CFR 240.10A-3. Amendment No. 3 replaces and
supersedes the original proposal in its entirety and is available
at: http://nasdaq.cchwallstreet.com/NASDAQ/pdf/nasdaq-filings/2019/SR-NASDAQ-2019-049_Amendment_3.pdf.
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II. Description of the Proposal, as Modified by Amendment No. 3

    Nasdaq has proposed to amend its definition of ``Family Member''
for purposes of determining whether a director is independent under
Nasdaq Rule 5605(a)(2) to mean a person's spouse, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law,
brothers and sisters-in-law, and anyone (other than domestic employees)
who shares such person's home. As stated by Nasdaq, the purpose of the
proposed rule change is to exclude domestic employees who share the
director's home, and stepchildren who do not share the director's home,
from the types of relationships that always preclude a finding that a
director is independent.\9\
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    \9\ See Amendment No. 3, supra note 8, at 5.
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    Nasdaq rules require companies listing on the Exchange to meet
certain standards, including that a majority of the board of the
directors of the company (the ``Board'') be Independent Directors, and
that the company's audit, compensation and nominating committees \10\
be comprised solely of Independent Directors.\11\ ``Independent
Director'' is defined in Nasdaq Rule 5605(a)(2) to mean a person other
than an executive officer or employee of the company or any other
individual having a relationship which, in the opinion of the company's
Board, would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director.
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    \10\ If the company does not have a nominating committee, under
Nasdaq Rule 5605(e)(1) nominees for directors must be selected or
recommended by Independent Directors constituting a majority of the
Board's Independent Directors in a vote in which only Independent
Directors participate.
    \11\ See Nasdaq Rule 5605(b)-(e).
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    Rule 5605(a)(2) also precludes a Board finding of independence in
specified situations where a director or a director's Family Member, as
defined in the rule, has (or has had), certain relationships with the
listed company. This list of relationships, commonly referred to as
``bright-line tests'', includes the following:
     A director who accepted or who has a Family Member who
accepted any compensation from the company in excess of $120,000 during
any period of twelve consecutive months within the three years
preceding the determination of independence (with certain exceptions,
including a Family Member who is an employee other than an executive
officer); \12\
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    \12\ Nasdaq's rules state that this criterion is generally
intended to capture situations where a compensation is made directly
to (or for the benefit of) the director or a Family Member of the
director. See Nasdaq Rule IM-5605.
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     A director who is a Family Member of an individual who is,
or at any time during the past three years was, employed by the company
as an executive officer;
     A director who is, or has a Family Member who is, a
partner in, or a controlling shareholder or an executive officer of,
any organization to which the company made, or from which the company
received, payments for property or services in the current or any of
the past three fiscal years that exceed 5% of the recipient's
consolidated gross revenues for that year, or $200,000, whichever is
more (with certain exceptions);
     A director of the company who is, or has a Family Member
who is, employed as an executive officer of another entity where at any
time during the past three years any of the executive officers of the
company serve on the compensation committee of such other entity; and
     A director who is, or has a Family Member who is, a
current partner of the company's outside auditor, or was a partner or
employee of the company's outside auditor who worked on the company's
audit at any time during any of the past three years.\13\
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    \13\ Nasdaq Rule 5605(a)(2)(A) also prohibits a director who is,
or at any time during the past three years was, employed by the
company. Additional criteria of independence apply with respect to
Board members and members of the audit and compensation committees.
See Nasdaq Rule 5605.
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    Nasdaq Rule 5605(a)(2) currently defines Family Member as ``a
person's spouse, parents, children and siblings, whether by blood,
marriage or adoption, or anyone residing in such person's home.'' As
noted by Nasdaq in its proposal, this definition includes stepchildren,
as they are ``children by . . . marriage.'' It also includes domestic
employees who reside in a person's home.
    Nasdaq has proposed to re-define a Family Member to mean ``a
person's spouse, parents, children, siblings, mothers and fathers-in-
law, sons and daughters-in-law, brothers and sisters-in-law, and anyone
(other than domestic employees) who shares such person's home.''
According to Nasdaq, this definition would make its definition of
Family Member identical to the definition of ``immediate family
member'' in the corresponding corporate governance rules of the New
York Stock Exchange (``NYSE'').\14\ Nasdaq has proposed further to
interpret the term ``children'' to exclude stepchildren.\15\ As noted
by Nasdaq,

however, the relationship of a stepchild who shares the same home with
a director would continue to be considered a Family Member relationship
under the bright-line tests, because the definition of a Family Member
will include anyone (other than domestic employees) who shares the
director's home.\16\ Nasdaq has also proposed to exclude domestic
employees who reside in a director's home from the definition of Family
Member.
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    \14\ See Section 303A.02 of the NYSE Listed Company Manual,
which states in this regard: ``An `immediate family member' includes
a person's spouse, parents, children, siblings, mothers and fathers-
in-law, sons and daughters-in-law, brothers and sisters-in-law, and
anyone (other than domestic employees) who shares such person's
home.'' See also Amendment No. 3, at 8, in which Nasdaq stated,
among other things, that it had heard from its listed companies and
their legal counsel that the current situation, where each market
has a different definition, complicates the preparation by listed
companies of director and officer questionnaires that the companies
need in order to analyze director independence.
    \15\ See Amendment No. 3, supra note 8, at 7.
    \16\ See id.
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    Concerning the aspect of the proposed rule change relating to
stepchildren, Nasdaq noted in its proposal that, over time, it had
concluded that inclusion of stepchildren in the definition of Family
Member for the purposes of the bright-line tests makes the definition
over-inclusive. The Exchange further stated that it believes that a
director's relationship with his or her stepchildren may or may not
interfere with the director's exercise of independent judgment,
depending on the facts and circumstances of the situation.\17\
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    \17\ See id.
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    The Exchange acknowledged in its proposal that if a stepchild has
been a dependent of a director or was part of the director's household
since being a minor, the director's relationship with that stepchild is
likely to be similar to a relationship with a biological child.
However, the Exchange maintained, if the director married a person who
has an adult child, the director never acted in any capacity as a
parent of this stepchild, and the stepchild never shared the director's
household, then the director and stepchild are likely to have an
attenuated relationship that is unlike the relationship of a parent and
a child.\18\
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    \18\ See id.
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    Nasdaq has concluded, therefore, that a stepchild relationship
should not preclude a director from being considered independent in all
circumstances. The Exchange believes, rather, that a company's Board is
in the best position to determine whether a given relationship between
a director and stepchild is likely to interfere with the director's
exercise of independent judgment in carrying out his or her
responsibilities based on the facts and circumstances.\19\ The Exchange
noted in its proposal that, under Nasdaq Rule 5605(a)(2) and IM-5605,
the Board must affirmatively determine that no relationship exists that
would interfere with such independent judgment.\20\
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    \19\ See id., at 7-8.
    \20\ See id., at 10.
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    Nasdaq added that the proposed rule change to the definition of
Family Member for purposes of the bright-line tests of independence in
Nasdaq Rule 5605(a)(2) would not affect the additional independence
criteria for audit committee members set forth in Nasdaq Rule
5605(c)(2), which incorporate the independence requirements of the Rule
10A-3 under the Act.\21\
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    \21\ Nasdaq Rule 5605(c)(2) requires that each Company must
have, and certify that it has and will continue to have, an audit
committee of at least three members, each of whom must, among other
requirements, meet the criteria for independence set forth in Rule
10A-3(b)(1) under the Act, in addition to the requirements of Nasdaq
Rule 5605(a)(2). See also Nasdaq Rule IM-5605-4 (Audit Committee
Composition).
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    Concerning the aspect of the proposed rule change that relates to
domestic employees who share a director's home, Nasdaq stated that the
term Family Member was not intended to capture commercial
relationships. Here, too, the Exchange expressed the belief that it is
appropriate for the Board to review a relationship between a director
and a domestic employee under a facts and circumstances test.\22\
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    \22\ See Amendment No. 3, supra note 8, at 10.
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III. Summary of Comment Letter

    As previously noted, the Commission received one comment letter,
from Nasdaq, in response to the OIP. In its letter, Nasdaq stated,
among other things, that it and NYSE appear to agree that stepchildren
should be excluded from the definition of Family Member (in Nasdaq's
rules) and immediate family member (in NYSE's rules). Nasdaq believes
that ``NYSE interprets the term `children' to exclude stepchildren,
particularly in situation where the stepchild relationship is
attenuated, namely where a person has become a stepchild of a director
as an adult.'' Nasdaq stated that it based this understanding on
information that it said was provided by practitioners that represent
companies listed on both Nasdaq and NYSE and from companies previously
listed on NYSE. Nasdaq further noted that the Commission has previously
approved the proposed definition as consistent with Section 6(b)(5) of
the Act and added that it believes that Commission disapproval of its
proposed rule change would promote unfair competition.

IV. Discussion and Commission Findings

    After careful review, 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.\23\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\24\ which
requires, among other things, that the rules of a national securities
exchange 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.
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    \23\ 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).
    \24\ 15 U.S.C. 78f(b)(5).
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    As discussed above, Nasdaq has proposed to define a Family Member,
for purposes of the bright-line tests of whether a director qualifies
as an Independent Director, to mirror the definition of ``immediate
family member'' under NYSE's rules. The Commission notes that other
exchanges, too, use the same or similar language in their corporate
governance rules, all of which have been approved by the Commission as
consistent with the Act.\25\ The Commission notes, in addition, that it
has received no comments, other than the aforementioned letter from the
Exchange, in support of its proposal in response to the OIP.
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    \25\ See, e.g., Securities Exchange Act Release Nos. 48863 (Dec.
1, 2003), 68 FR 68432 (Dec. 8, 2003) (order approving File No. SR-
Amex-2003-65, now incorporated in NYSE American LLC Company Guide at
Section 803, Commentary .01); 49810 (June 4, 2004), 69 FR 32647
(June 10, 2004) (order approving SR-PCX-2003-35, now incorporated in
the rules of NYSE Arca, Inc., at Rule 5.3-E(k)(5)(H)); and 49911
(June 24, 2004), 69 FR 39989 (July 1, 2004) (order approving File
No. SR-CHX-2003-19, now incorporated in the rules of NYSE Chicago,
Inc., at Article 22, Rule 19(o)). In addition to approving Nasdaq's
proposed new rule text defining Family Member for purposes of the
bright-line tests, which mirrors the rule language of these other
exchanges, the Commission is also approving Nasdaq's interpretation
of ``children'' as excluding stepchildren, an interpretation that
the Commission has not approved previously for other exchanges.
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    As to Nasdaq's proposal to interpret the term ``children'' to
exclude stepchildren from the definition of Family Member, Nasdaq
explained in support of its proposal that in some cases a stepchild has
been a dependent or was part of the director's household since being a
minor and the director/stepchild relationship is likely then to be
similar to a relationship with a biological child, who is covered by
the bright-line tests, while in other cases the director and stepchild
relationship is attenuated, as in a situation where the director is
married to a person who has an adult child who never shared the

director's household, and the director never acted in any capacity as a
parent to the stepchild. As a result of these different fact patterns,
Nasdaq believes it is appropriate to leave to the Board the
determination as to whether such a relationship is likely to interfere
with the director's exercise of independent judgement in carrying out
the director's responsibilities, based on the Board's analysis of the
facts and circumstances of the director/stepchild relationship. Nasdaq
has further noted that a stepchild who shares a home with the director
would continue to be covered by the bright-line tests through the
definition of Family Member, which still includes anyone, other than a
domestic employee, who shares the director's home. Additionally, the
Commission notes that, as Nasdaq points out, the Exchange's rules place
a responsibility on the Board of a listed company to make an
affirmative determination, beyond applying the bright-line tests, that
any individual serving as an independent director has no relationship
that would impair his or her independence.\26\
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    \26\ See supra, text accompanying note 20.
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    In addition, the Commission notes that, in the proposal as modified
by Amendment No. 3, the Exchange stated that, to comply with the
Exchange's rules, it will expect the Boards of its listed companies to
continue to elicit through director questionnaires the information
necessary to make independence determinations, which, it states, will
need to include questions about stepchild relationships. The Commission
believes that this should help to ensure that listed companies inquire
about stepchild relationships so that such companies can discern the
essential facts and circumstances to be able to make the affirmative
findings necessary under Nasdaq rules to determine a director is
independent. This is important given that Nasdaq will no longer be
including stepchildren within the blanket exclusions of the Family
Member relationships identified in the bright-line tests that
automatically disqualify a director from being independent. The
Commission notes that the proposal, in the narrow context of excluding
stepchildren who do not share the director's home from the definition
of Family Member for purposes of the bright-line tests, should provide
additional flexibility to Boards by permitting them to consider the
independence of a director based on the particular facts and
circumstances of a director and stepchild relationship, while at the
same time continuing to require Boards to have the responsibility to
ensure that such a relationship would not interfere with or impair a
Board member's independence.\27\
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    \27\ See Nasdaq Rule 5605(a)(2) and IM-5605.
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    The Commission also notes that the Exchange's proposal would permit
a finding of independence if there is a company relationship with the
minor stepchild of a director who is not sharing the director's home,
while Rule 10A-3 and Exchange Rule 5605(c)(2), which incorporates the
independence requirements of Rule 10A-3, could preclude a finding of
independence in such case for a director serving as a member of an
audit committee. Exchange Rule 5605(c)(2) also incorporates the
independence requirements of Rule 5605(a)(2) for a director serving on
the audit committee. In the proposal as modified by Amendment No. 3, to
avoid any confusion, Nasdaq has made clear that the change it is
proposing to the interpretation of Family Member concerning
stepchildren in Nasdaq Rule 5605(a)(2), for purposes of the bright-line
tests in that provision, will not affect the additional independence
criteria for audit committee members in Nasdaq Rule 5605(c)(2),
incorporating the provisions of Rule 10A-3.\28\
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    \28\ The Commission would expect the Exchange to make clear to
its listed companies that the proposed broader exclusion from the
definition of Family Member, as it applies to minor stepchildren not
sharing the director's home, may not be applied for purposes of
determining the independence of audit committee members, where the
stricter standards of Rule 10A-3, as well as Exchange Rule
5605(c)(2), still apply.
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    Finally, the Commission believes that it is reasonable for Nasdaq
to exclude domestic employees who share a director's home from the
definition of Family Member, as do other exchanges. The Commission
notes that Nasdaq stated in its proposal that it believes that it is
appropriate for a company's Board to review a relationship between a
director and a domestic employee who shares the director's home under a
facts and circumstances test, as in the case of a stepchild
relationship.\29\ The Commission also notes that this proposed
provision is consistent with the rules of other exchanges.\30\ As noted
above with respect to other relationships, the Board would continue to
need to make an affirmative determination that such a domestic employee
relationship with the director does not interfere with the director's
independence, pursuant to the requirements in Exchange Rule 5605(a)(2)
and IM 5605.
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    \29\ See Amendment No. 3, supra note 8, at 10.
    \30\ See supra, note 25.
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V. Accelerated Approval of the Proposed Rule Change, as Modified by
Amendment No. 3

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 3, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
3 in the Federal Register. Amendment No. 3 provided clarifications and
additional information regarding the justification of the proposal and
also made clear that the proposed rule change would not impact the
applicability of the Exchange's additional independence criteria for
audit committee members set forth in Nasdaq Rule 5605(c)(2), which
incorporate the independence requirements of Rule 10A-3. In Amendment
No. 3, Nasdaq also stated that Boards of its listed companies will be
expected to elicit the information necessary for Boards to make
independence determinations and specifically ask about stepchild
relationships. The Commission also notes that the proposed rule
language being adopted herein was noticed for comment in the Federal
Register and no comments were received in response to that notice. The
clarifications and additional justification in Amendment No. 3 have
assisted the Commission in evaluating the proposal under the Act.
Accordingly, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\31\ to approve the proposed rule change, as
modified by Amendment No. 3, on an accelerated basis.
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    \31\ 15 U.S.C. 78s(b)(2).
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VI. Solicitation of Comments on Amendment No. 3 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 3 to 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-NASDAQ-2019-049 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-NASDAQ-2019-049. This

file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2019-049, and should be submitted
on or before March 12, 2020.

VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-NASDAQ-2019-049), as
modified by Amendment No. 3, be, and it hereby is, approved on an
accelerated basis.
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    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(57).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2020-03320 Filed 2-19-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 206 (Wednesday, October 24, 2012)]
[Rules and Regulations]
[Pages 64904-64906]
[FR Doc No: 2012-26155]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2012-0741]
RIN 1625-AA00

Safety Zone, Atlantic Intracoastal Waterway; Carolina Beach, NC

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a temporary safety zone on the
waters of the Atlantic Intracoastal Waterway at Carolina Beach, North
Carolina. The safety zone is necessary to provide for the safety of
mariners on navigable waters during maintenance on the U.S. 421 Fixed
Bridge crossing the Atlantic Intracoastal Waterway, mile 295.6, at
Carolina Beach, North Carolina. The safety zone will temporarily
restrict vessel movement within the designated area starting on
December 20, 2012, through October 31, 2013.

DATES: This rule is effective from December 20, 2012, until October 31,
2013.

ADDRESSES: Documents mentioned in this preamble are part of docket
[USCG-2012-0741]. To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type the
docket number in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rulemaking. You may also
visit the Docket Management Facility in Room W12-140 on the ground
floor of the Department of Transportation West Building, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email CWO4 Joseph M. Edge, U.S. Coast Guard Sector North
Carolina; telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>If you
have questions on viewing or submitting material to the docket, call
Renee V. Wright, Program Manager, Docket Operations, telephone (202)
366-9826.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

    DHS Department of Homeland Security
    FR Federal Register
    NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    On August 21, 2012, the Coast Guard published a Notice of Proposed
Rulemaking (NPRM) (33 FR 50444). We received no comments on the
proposed rule. No public meeting was requested, and none was held.

B. Basis and Purpose

    North Carolina Department of Transportation has awarded a contract
to American Bridge Company of Virginia Beach, Virginia to perform
bridge maintenance on the U.S. 421 Fixed Bridge crossing the Atlantic
Intracoastal Waterway, mile 295.6, at Carolina Beach, North Carolina.
The contract provides for cleaning, painting, and steel repair to
commence on December 20, 2012 with a completion date of October 31,
2013. The contractor will utilize a 40 foot by 60 foot sectional barge
as a work platform and for equipment staging. This safety zone will
provide a safety buffer to transiting vessels as bridge repairs present
potential hazards to mariners and property due to reduction horizontal
clearance. During this period the Coast Guard will require a one hour
notification to the work supervisor for passage through the U.S. 421
Fixed Bridge along the Atlantic Intracoastal Waterway, mile 295.6,
Carolina Beach, North Carolina. The bridge notification requirement
will apply during the maintenance period for vessels requiring a
horizontal clearance of greater than 60 feet.

C. Discussion of Comments, Changes and the Final Rule

    We received no comments on the proposed rule. No public meeting was
requested, and none was held.
    The temporary safety zone will encompass the waters directly under
the U.S. 421 Fixed Bridge crossing the Atlantic Intracoastal Waterway,
mile 295.6, at Carolina Beach, North Carolina (34[deg]03'21'' N,
077[deg]53'58'' W). All vessels transiting this section of the waterway
requiring a horizontal clearance of greater than 60 feet will be
required to make a one hour advanced notification to the work
supervisor while the safety zone is in effect. This zone will be in
effect from 8 a.m. December 20, 2012 through 8 p.m. October 31, 2013.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on these statutes and executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders. This rule does not
restrict traffic from transiting the designated portion of the Atlantic
Intracoastal Waterway, it imposes a one hour notification to ensure the
waterway is clear of impediment to allow passage to vessels requiring a
horizontal clearance of greater than 60 feet.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The term ``small
entities'' comprises small businesses, not-for-profit organizations
that are independently owned and operated and are not dominant in their
fields, and governmental jurisdictions with populations of less than
50,000. The Coast Guard received no comments from the Small Business
Administration on this rule. The Coast Guard certifies under 5 U.S.C.
605(b) that this rule will not have a significant economic impact on a
substantial number of small entities.
    This rule affects the following entities, some of which may be
small entities: the owners or operators of commercial tug and barge
companies, recreational and commercial fishing vessels intending to
transit the specified portion of Atlantic Intracoastal Waterway from 8
a.m. December 20, 2012 through 8 p.m. October 31, 2013.
    This safety zone would not have a significant economic impact on a
substantial number of small entities for the following reasons.
Although the safety zone will apply to this section of the Atlantic
Intracoastal Waterway, vessel traffic will be able to request passage
by providing a one hour advanced notification to the work supervisor.
Before the effective period, the Coast Guard will issue maritime
advisories widely available to the users of the waterway.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INTFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the

establishment of a temporary safety zone. This rule is categorically
excluded from further review under paragraph 34(g) of Figure 2-1 of the
Commandant Instruction. An environmental analysis checklist supporting
this determination and a Categorical Exclusion Determination are
available in the docket where indicated under ADDRESSES. We seek any
comments or information that may lead to the discovery of a significant
environmental impact from this rule.

List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and
recordkeeping requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS

0
1. The authority citation for part 165 continues to read as follows:

    Authority: 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50
U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L. 107-
295, 116 Stat. 2064; Department of Homeland Security Delegation No.
0170.1.

0
2. Add Sec.  165.T05-0741 to read as follows:

Sec.  165.T05-0741  Safety Zone, Atlantic Intracoastal Waterway;
Carolina Beach, NC.

    (a) Regulated area. The following area is a safety zone: This zone
includes the waters directly under and 100 yards either side of the US
421 Fixed Bridge crossing the Atlantic Intracoastal Waterway, mile
295.6, at Carolina Beach, North Carolina (34[deg]03'21'' N,
077[deg]53'58'' W).
    (b) Regulations. The general safety zone regulations found in 33
CFR 165.23 apply to the safety zone created by this temporary section,
Sec.  165.T05-0741. In addition the following regulations apply:
    (1) All vessels requiring greater than 60 feet horizontal clearance
to safely transit through the US 421 Fixed Bridge crossing the Atlantic
Intracoastal Waterway, mile 295.6, at Carolina Beach, North Carolina
must contact the work supervisor tender on VHF-FM marine band radio
channels 13 and 16 or at<PHONE_NUMBER> one hour in advance of intended
transit.
    (2) All Coast Guard assets enforcing this safety zone can be
contacted on VHF-FM marine band radio channels 13 and 16.
    (3) The operator of any vessel within or in the immediate vicinity
of this safety zone shall:
    (i) Stop the vessel immediately upon being directed to do so by any
commissioned, warrant or petty officer on board a vessel displaying a
Coast Guard Ensign, and
    (ii) Proceed as directed by any commissioned, warrant or petty
officer on board a vessel displaying a Coast Guard Ensign.
    (c) Definitions. (1) Captain of the Port North Carolina means the
Commander, Coast Guard Sector North Carolina or any Coast Guard
commissioned, warrant or petty officer who has been authorized by the
Captain of the Port to act on his behalf.
    (2) Designated representative means any Coast Guard commissioned,
warrant, or petty officer who has been authorized by the Captain of the
Port North Carolina to assist in enforcing the safety zone described in
paragraph (a) of this section.
    (3) Work Supervisor means the contractor's on site representative.
    (d) Enforcement. The U.S. Coast Guard may be assisted by Federal,
State and local agencies in the patrol and enforcement of the zone.
    (e) Enforcement period. This section will be enforced from 8 a.m.
December 20, 2012 through 8 p.m. October 31, 2013 unless cancelled
earlier by the Captain of the Port.

    Dated: October 4, 2012.
A. Popiel,
Captain, U.S. Coast Guard, Captain of the Port Sector North Carolina.
[FR Doc. 2012-26155 Filed 10-23-12; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register: October 12, 2007 (Volume 72, Number 197)]
[Notices]
[Page 58136-58137]
[DOCID:fr12oc07-105]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56615; File No. SR-FINRA-2007-014]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Limit the Use of FINRA's Name and Any Other
Name Owned by FINRA and To Require Members and Persons Associated With
a Member that Refer to their FINRA Membership on a Web site to Provide
a Hyperlink to http://www.finra.org

October 4, 2007.
    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 September 17, 2007, the 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 substantially by FINRA.
FINRA filed the proposal under section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal 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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to amend NASD Interpretative Material 2210-4
(``IM-2210-4'') to limit the use of FINRA's name and any other
corporate name owned by FINRA and to require members and persons
associated with a member that refer to their FINRA Membership on a Web
site to provide a hyperlink to http://www.finra.org The text of the proposed rule change is available at http://www.finra.org., the

principal offices of FINRA, and the Commission's Public Reference Room.

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

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

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

1. Purpose
    On November 9, 2006, the SEC approved an amendment to IM-2210-4
establishing a requirement for member firms and persons associated with
a member that refer to their membership in NASD on a Web site to
hyperlink to NASD's home page, http://www.nasd.com (``the hyperlink

requirement'').\5\ On January 8, 2007, NASD published Notice to Members
07-02, which announced the Commission's approval of the hyperlink
requirement and established July 7, 2007, as its implementation
date.\6\ Following SEC approval of the hyperlink requirement, NASD and
NYSE Group, Inc (``NYSE'') announced a plan to consolidate their member
regulation operations into a combined organization, the sole U.S.
private-sector provider of member firm regulation for securities firms
that do business with the public. To reflect this consolidation, NASD
changed its corporate name and internet domain and delayed the
implementation of the hyperlink requirement until its new corporate
name and internet domain could be established.\7\ NASD has changed its
name to FINRA and changed its internet domain from http://www.nasd.com to http://www.finra.org. FINRA is now submitting the instant proposed

rule change to amend IM-2210-4 to reflect the new corporate identity.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 54740 (November 9,
2006), 71 FR 67184 (November 20, 2006) (SR-NASD-2006-073).
    \6\ See NASD Notice to Members 07-02 (January 2007).
    \7\ FINRA previously announced that it would file a separate
rule change to amend IM-2210-4 to reflect its new corporate name.
See Securities Exchange Act Release No. 56124 (July 24, 2007), 72 FR
42165 (August 1, 2007) (SR-NASD-2007-042) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change to Delay the
Implementation of NASD Interpretative Material 2210-4, which
Requires Certain Member Firms to Provide a Hyperlink to http//
http://www.nasd.com).

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

    First, the proposed rule change amends the heading of IM-2210-4 to
refer to FINRA instead of NASD. Second, the reference to the NASD By-
Laws has been updated to refer to the FINRA By-Laws, which were adopted
on July 30, 2007.\8\
---------------------------------------------------------------------------

    \8\ Specifically, Article XV, Section 2, now states: ``No member
shall use the name of the Corporation except to the extent that may
be permitted by the Rules of the Corporation.'' The name of the
Corporation is Financial Industry Regulatory Authority, Inc. See
Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR
42190 (August 1, 2007) (SR-NASD-2007-053) (Notice of Filing and
Order Granting Accelerated Approval of Proposed Rule Change Relating
to the Restated Certificate of Incorporation of National Association
of Securities Dealers, Inc.).
---------------------------------------------------------------------------

    Third, paragraph (1) includes a reference to FINRA or any other
corporate name or facility owned by FINRA. By including ``any other
corporate name or facility owned by FINRA,'' IM-2210-4 will still
retain limitations on the use of NASD's name to avoid any potential
confusion or misuse of its legacy name, which is still widely accepted
by investors. In addition, IM-2210-4 will encompass names or facilities
of FINRA, including TRACE and ADF. Consequently, under the proposed
rule change, members could neither state nor imply in any
communications with the public that FINRA, or any other corporate name
or facility owned by FINRA, endorses, indemnifies, or guarantees the
member's business practices, selling methods, the class or type of
securities offered, or any specific security.
    Finally, in paragraph (3), FINRA replaces the references to
``NASD'' and the NASD Web site, ``http://www.nasd.com,'' with ``FINRA,'' and

``http://www.finra.org'' to reflect the new corporate identity. This amendment

would require members, or persons associated with a member, that refer
to their FINRA membership on a Web site to provide a hyperlink to
http://www.finra.org.\9\

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

    \9\ See Footnote 7.
---------------------------------------------------------------------------

    FINRA will announce the implementation date of the proposed rule
change in a Regulatory Notice to be published no later than 60 days
following Commission notice of the filing of the rule change in the
Federal Register for immediate effectiveness. The implementation date
will be 30 days after the date of the filing.
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's 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 is
amending IM-2210-4 to reflect its new corporate identity and to ensure
that its rule regarding the use of its corporate name is current and
accurate.
---------------------------------------------------------------------------

    \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 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

    Written comments were neither solicited nor received.

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

    The proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder,\12\
because the foregoing proposed rule does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if consistent with the protection of investors
and the public interest.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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.\13\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-2007-014 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-FINRA-2007-014. 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 offices 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-2007-014 and should be
submitted on or before November 2, 2007.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
 [FR Doc. E7-20118 Filed 10-11-07; 8:45 am]

BILLING CODE 8011-01-P