[Federal Register: July 23, 2008 (Volume 73, Number 142)]
[Notices]
[Page 42844-42848]
[DOCID:fr23jy08-83]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58176; File No. SR-FINRA-2008-021]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change and
Amendment No. 1 Thereto, Relating to the Adoption of NASD Rules 4000
Through 10000 Series and the 12000 Through 14000 Series as FINRA Rules
in the New Consolidated FINRA Rulebook

July 16, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``SEA'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on May 23, 2008, Financial Industry Regulatory Authority,
Inc. (``FINRA'') (f/k/a National Association of Securities Dealers,
Inc. (``NASD'')), filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') the proposed rule change as described in
Items I, II, and III below, which Items have been substantially
prepared by FINRA. On July 11, 2008, FINRA filed Amendment No. 1 to the
proposed rule change. The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    FINRA is proposing to adopt the following NASD rules (which are
part of the existing FINRA rulebook) \3\ as FINRA rules in the new
consolidated FINRA rulebook: the 4000 through 10000 Series and the
12000 through 14000 Series. The text of the proposed rule change is
available at FINRA, the Commission's Public Reference Room, and http://
www.finra.org.
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    \3\ As further discussed herein, the FINRA rulebook currently
consists of the NASD rules and certain incorporated NYSE rules.
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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 such statements.

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

1. Purpose
Background
    On July 30, 2007, NASD and NYSE consolidated their member firm
regulation operations into a combined organization, FINRA.\4\ As part
of the transaction, FINRA incorporated into its existing rulebook NYSE
rules related to member firm conduct (``Incorporated NYSE Rules'').
Thus, the current FINRA rulebook consists of two sets of rules: (1)
NASD rules; and (2) the Incorporated NYSE Rules (together referred to
as the ``Transitional Rulebook'').\5\ The Incorporated NYSE Rules apply
only to Dual Members.\6\ The new consolidated rulebook (``Consolidated
FINRA Rulebook'') will consist only of FINRA rules and will apply to
all FINRA members, unless such rules have a more limited application by
their terms.
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    \4\ See Securities Exchange Act Release No. 56145 (July 26,
2007); 72 FR 42169 (August 1, 2007) (Order Approving SR-NASD-2007-
023 (``Release No. 34-56145'')).
    \5\ Pursuant to Rule 17d-2 under the Act, 17 CFR 240.17d-2,
NASD, NYSE and NYSE Regulation entered into an agreement to reduce
regulatory duplication for firms that are members of both FINRA and
the NYSE (``Dual Members'') by allocating regulatory
responsibilities for the Incorporated NYSE Rules to FINRA. FINRA has
assumed examination, enforcement and surveillance responsibilities
under the agreement relating to compliance by Dual Members to the
extent such responsibilities involve member firm regulation. See
Securities Exchange Act Release No. 56148 (July 26, 2007), 72 FR
42146 (August 1, 2007) (File No. 4-544).
    \6\ The Incorporated NYSE Rules continue to apply to persons
affiliated with Dual Members to the same extent and in the same
manner as they did before the consolidation. In applying the
Incorporated NYSE Rules to Dual Members and such affiliated persons,
FINRA has incorporated the related interpretative positions set
forth in the NYSE Rule Interpretations Handbook and NYSE Information
Memos.
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    The proposed rule change represents the first phase of the rulebook
consolidation process.\7\ During this process, FINRA members will be
subject to both the Consolidated FINRA Rulebook, as it becomes
populated with rules filed with and approved by the Commission, and the
Transitional Rulebook. (The NYSE Incorporated Rules in the Transitional
Rulebook will continue to apply only to Dual Members.) As the
Consolidated FINRA Rulebook expands with SEC-approved final FINRA
rules, the Transitional Rulebook will be reduced by the elimination of
those rules, or sections thereof, that address the same subject matter
of regulation. As a result, when the Consolidated FINRA Rulebook is
completed, the Transitional Rulebook will have been eliminated in its
entirety.
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    \7\ FINRA issued an Information Notice on March 12, 2008 that
describes the rulebook consolidation process in greater detail.
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    The proposed rule change would transfer from the Transitional
Rulebook to the Consolidated FINRA Rulebook the NASD Rule 4000 through
14000 Series, with the exception of the Rule 11000 Series (Uniform
Practice Code). As described in more detail below, the NASD Rule 4000
through 7000 Series generally involve regulatory requirements and fees
for quoting, trading, reporting, clearing and comparing over-the-
counter transactions. The NASD Rule 8000 Series involves investigations
and sanctions. The NASD Rule 9000 Series involves disciplinary
procedures. The NASD Rule 10000, 12000, 13000 and 14000 Series involve
Dispute Resolution (arbitration and mediation) procedures. The proposed
rule change would adopt these rule series in their entirety as FINRA
rules as part of the Consolidated FINRA Rulebook, with certain non-
material changes.

    The rules proposed to be transferred as part of the proposed rule
change would occupy the Rule 6000 through 10000 Series and the Rule
12000 through 14000 Series in the Consolidated FINRA Rulebook as set
forth in a Table of Contents attached as Exhibit 2 to the proposed rule
change. The proposed rule change would reserve Rule Series 0100 through
5000 for future transfers and amendments to member conduct rules
involving, among others, member application processes and associated
person registration, transactions with customers, supervision,
communications and disclosures, and financial responsibility.
    Additionally, and with the exception of the Arbitration Code, the
Consolidated FINRA Rulebook will no longer contain Interpretive
Materials (``IMs''); rather, the IMs either will become stand alone
rules or will be integrated into existing rule text or moved to a
``Supplementary Material'' section at the end of a rule. The
``Supplementary Material'' will set forth the same type of legally
binding guidance and additional information that IMs provide today and
will be filed with the Commission.
Rules To Be Transferred
    The proposed rule change would adopt in their entirety the
following NASD rules as FINRA rules in the Consolidated FINRA Rulebook,
save minor changes, including: Replacing references to NASD or the
Association with FINRA; certain renumbering to effectuate a new
organizational framework for the rulebook that groups and categorizes
rules into more logical and related subject matter areas; and certain
conforming changes to rule references, e.g., the Exchange Act, SEA
rules, the Securities Act of 1933 (``Securities Act'') and Securities
Act rules.
Marketplace Rules
    The NASD Rule 4000 through 7000 Series (Marketplace Rules)
generally set forth the regulatory requirements and fees for quoting,
trading, reporting, clearing and comparing, as applicable, over-the-
counter transactions in NMS stocks, as defined in SEC Rule 600(b)(47)
of Regulation NMS under the Act, OTC Equity Securities \8\ and certain
eligible debt securities. These rules would occupy the Rule 6000 Series
(Quotation and Transaction Reporting Facilities) and Rule 7000 Series
(Clearing, Transaction and Order Data Requirements, and Facility
Charges) in the Consolidated FINRA Rulebook.
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    \8\ ``OTC Equity Security'' is defined in NASD Rule 6610 and
generally encompasses those securities not traded on an exchange,
including OTC Bulletin Board and Pink Sheets securities.
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    The following rule series to be transferred cover reporting,
clearing and comparison, as applicable, of transactions in NMS stocks
effected otherwise than on an exchange through FINRA's Trade Reporting
Facilities (``TRFs''): \9\ the NASD Rule 4000 and 6100 Series (relating
to the FINRA/Nasdaq TRF), renumbered as the Rule 6300A and 7200A
Series, respectively; the NASD Rule 4000C and 6000C Series (relating to
the FINRA/NSX TRF), renumbered as the Rule 6300B and 7200B Series,
respectively; and the NASD Rule 4000E and 6000E Series (relating to the
FINRA/NYSE TRF), renumbered as the Rule 6300C and 7200C Series,
respectively. For the most part, these rule series are identical, with
relatively minor differences reflecting distinctions in TRF
functionality. Each TRF rule set currently contains two definition
sections: NASD Rules 4200 and 4631 (relating to the FINRA/Nasdaq TRF),
NASD Rules 4200C and 4631C (relating to the FINRA/NSX TRF) and NASD
Rules 4200E and 4631E (relating to the FINRA/NYSE TRF). These
definition sections would be combined for each TRF in Rules 6320A,
6320B, and 6320C, respectively, of the Consolidated FINRA Rulebook.
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    \9\ The three TRFs are: the FINRA/Nasdaq TRF, the FINRA/NSX TRF
and the FINRA/NYSE TRF. The relevant formation documents have been
amended to change the name of each TRF from ``NASD'' to ``FINRA,''
where necessary. The proposed rule change would reflect the name
changes in the Consolidated FINRA Rulebook.
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    The NASD Rule 4000A and 6100A Series, renumbered as the Rule 6200
and 7100 Series, respectively, cover quoting, reporting, clearing and
comparison of transactions in NMS stocks effected otherwise than on an
exchange through FINRA's Alternative Display Facility (``ADF''), which
is both a trade reporting and quotation display and collection
facility.
    The NASD Rule 5000 Series relates to trading in NMS stocks effected
otherwise than on an exchange and applies uniformly to transactions
reported to the TRFs and ADF. This series would be transferred to the
Consolidated FINRA Rulebook and renumbered as the Rule 6100 Series and
renamed ``Quoting and Trading in NMS Stocks,'' and certain rules
relating to the TRFs and ADF would be combined and relocated to the
Rule 6100 Series. Specifically, NASD Rules 4633, 4120A, 4633C, and
4633E relating to halts in over-the-counter trading in NMS stocks would
be combined to form Rule 6120 (Trading Halts). In addition, NASD IM-
4632, IM-4632C, and IM-4632E relating to timely transaction reporting
would be combined to form Rule 6181 (Timely Transaction Reporting).
Finally, NASD IM-6130, IM-6130C, and IM-6130E relating to the reporting
of short sales would be combined to form Rule 6182 (Trade Reporting of
Short Sales).
    NASD Rule 5000, renumbered as Rule 6110 (Trading Otherwise Than On
An Exchange), requires members to report transactions in NMS stocks
effected otherwise than on or through a national securities exchange to
FINRA. This series also includes rules relating to initial public
offering transactions (NASD Rule 5110, renumbered as Rule 6130),
members' obligations to provide information to FINRA upon request (NASD
Rule 5130, renumbered as Rule 6150), the use of multiple Market
Participant Symbols (MPIDs) for TRF participants (NASD Rule 5140 and
IM-5140, renumbered as Rule 6160 and Supplementary Material
thereunder), and FINRA's authority to provide exemptive relief from
certain Regulation NMS-related trade reporting requirements (NASD Rule
5150, renumbered as Rule 6183). In addition, NASD Rule 5120 relating to
prohibited trading practices would be renumbered as Rule 6140 and
paragraph (i) of that rule would be amended to define ``Stop Stock
Transaction'' and ``Stop Stock Price.'' (Currently, NASD Rule 5120
cross-references those definitions in NASD Rule 4200.) Finally, NASD
Rule 4613A(b) and IM-4613A-1 relating to the ADF would be relocated to
this series as Rule 6170 (Primary and Additional MPIDs for Alternative
Display Facility Participants) and Supplementary Material thereunder.
    The NASD Rule 6000 Series comprises a number of more specific rule
series, as described herein. As noted above, the NASD Rule 6100 Series
covers reporting, clearing and comparison of over-the-counter
transactions in NMS stocks through the FINRA/Nasdaq TRF. This rule
series also covers reporting, clearing and comparison of transactions
in OTC Equity Securities through FINRA's OTC Reporting Facility
(``ORF''). A single rule series would no longer apply to these two
facilities. Rather, the NASD Rule 6100 Series would be amended, as
necessary, to form the Rule 7200A Series, applicable only to the FINRA/
Nasdaq TRF (i.e., the references to the ORF, OTC Equity Securities and
Direct Participation Program (``DPP'') securities would be deleted).
The NASD Rule 6100 Series also would be amended, as necessary, to form
the Rule 7300 Series, applicable only to the ORF (i.e., the references
to the FINRA/Nasdaq TRF and ``designated

securities,'' as well as the provisions relating to the transaction fee
transfer mechanism, which is only supported by the FINRA/Nasdaq TRF,
would be deleted). Finally, the references to NASD Rule 6410 and the
ITS/CAES System would be deleted, as those references inadvertently
were not deleted from NASD Rule 6110 as part of a prior rule filing
approved by the Commission.\10\
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    \10\ See Securities Exchange Act Release No. 54537 (September
28, 2006), 71 FR 59173 (October 6, 2006) (Order Approving File No.
SR-NASD-2006-091).
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    The NASD Rule 6200 Series, renumbered as the Rule 6700 Series,
covers the reporting and dissemination, as applicable, of over-the-
counter secondary market transactions in eligible debt securities to
FINRA's Trade Reporting and Compliance Engine (``TRACE'').
    The NASD Rule 6500 Series covers the operation and use of FINRA's
OTC Bulletin Board (``OTCBB'') service, which is an electronic
quotation medium for members to display quotations in OTCBB-eligible
securities. This series will remain as the Rule 6500 Series in the
Consolidated FINRA Rulebook.
    The NASD Rule 6600 Series, renumbered as the Rule 6400 Series and
renamed ``Quoting and Trading in OTC Equity Securities,'' sets forth
the recording and reporting requirements applicable to certain
quotations and unpriced indications of interest displayed on inter-
dealer quotation systems and the requirements applicable to reporting
transactions in OTC Equity Securities to the ORF.
    NASD Rule 6620, which sets forth the reporting requirements
applicable to transactions in OTC Equity Securities, would be
renumbered as Rule 6622 and included in a separate series, the Rule
6600 Series (OTC Reporting Facility). The Rule 6600 Series would
comprise all rules applicable to trade reporting to the ORF, including
the NASD Rule 6700 and 6900 Series, discussed below. New Rule 6610
would explain that members that report transactions in OTC Equity
Securities and DPP securities to the ORF also must comply with the 7300
Series, as well as all other applicable rules and regulations.
Additionally, new Rule 6621 would cross-reference the definitions set
forth in Rule 6420, which are applicable to trading and quoting in OTC
Equity Securities. NASD IM-4632, which is cross-referenced in NASD Rule
6620, would form Rule 6623 (Timely Transaction Reporting), and NASD IM-
6130 would form Rule 6624 (Trade Reporting of Short Sales).
    The NASD Rule 6700 Series, renumbered as the Rule 6630 Series,
covers trade reporting to the ORF of debt and equity transactions in
PORTAL securities, which are foreign and domestic securities that are
eligible for resale under Securities Act Rule 144A. NASD Rule 6732,
renumbered as Rule 6633, would be amended to delete from paragraph
(a)(1) the reference to ``paragraph (d).'' That reference inadvertently
was not deleted as part of a prior rule filing approved by the
Commission.\11\
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    \11\ See Securities Exchange Act Release No. 54084 (June 30,
2006), 71 FR 38935 (July 10, 2006) (Order Approving File No. SR-
NASD-2005-087).
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    The NASD Rule 6900 Series, renumbered as the Rule 6640 Series,
covers trade reporting to the ORF of secondary market transactions in
DPP securities other than transactions executed on a national
securities exchange. The definition of ``OTC Reporting Facility'' in
Rule 6642 would be amended to clarify that the comparison function is
not available for DPPs that are not eligible for clearance and
settlement through the National Securities Clearing Corporation (which
mirrors this term's definition in NASD Rule 6610(k)).
    The NASD Rule 6950 Series, renumbered as the Rule 7400 Series, sets
forth member obligations to record and report to FINRA's Order Audit
Trail System certain information with respect to orders in equity
securities listed on the Nasdaq Stock Market and OTC equity securities.
NASD Rule 6957 (Effective Date) would be deleted, as all requirements
of the Order Audit Trail System are now effective.
    The NASD Rule 7000 Series, renumbered as the Rule 7700 Series,
covers applicable fees for use of the ORF, OTCBB and TRACE services.
The Rule 7000A Series, renumbered as the Rule 7500 Series, covers
charges for ADF services and equipment. The following rule series cover
fees and market data revenue rebates for trade reporting, clearing and
comparison, as applicable, through the TRFs: The NASD Rule 7000B
Series, renumbered as the Rule 7600A Series (relating to the FINRA/
Nasdaq TRF); the NASD Rule 7000C Series, renumbered as the Rule 7600B
Series (relating to the FINRA/NSX TRF); and the NASD Rule 7000E Series,
renumbered as the Rule 7600C Series (relating to the FINRA/NYSE TRF).
Investigations and Sanctions Rules
    The NASD Rule 8000 Series generally covers investigations and
sanctions and would be transferred substantively unchanged to the
Consolidated FINRA Rulebook. It comprises several more specific rule
series, as described herein. The NASD Rule 8100 Series has a
definitional section and requirements regarding the availability of the
manual.\12\ The NASD Rule 8200 Series permits FINRA to inspect members'
books and records and requires members to provide information in
connection with FINRA investigations, examinations or proceedings. The
NASD Rule 8200 Series also provides for automated submission of certain
trading data. The NASD Rule 8300 Series provides FINRA with authority
to sanction members and their associated persons for violations of
FINRA's rules, federal securities laws, and Municipal Securities
Rulemaking Board's rules. NASD IM-8310-1 addresses the effect of a bar
or suspension, revocation or cancellation of a person's registration.
In addition, NASD IM-8310-2 and IM-8310-3 govern FINRA's release of
certain information regarding members and their associated persons
through FINRA BrokerCheck, as well as FINRA's release of certain
disciplinary complaints, decisions and other information. These IMs
would be renumbered in the Consolidated FINRA Rulebook as Rules 8311,
8312 and 8313.
Code of Procedure
    The NASD Rule 9000 Series generally provides procedures for
initiating and adjudicating various types of actions, including
disciplinary, eligibility, expedited, and cease and desist proceedings.
The NASD Rule 9100 Series, for instance, sets forth rules of general
applicability to disciplinary and other proceedings that FINRA
initiates against members and their associated persons. This rule
series includes a definitional section, provisions for service, filing
and notice of papers, rules relating to the conduct of parties, counsel
and adjudicators, and the allowance of motions practice.\13\ The

NASD Rule 9200 Series delineates specific procedures for disciplinary
proceedings. It includes provisions for filing complaints and answers,
requesting and holding hearings, settlement procedures and issuing
decisions. NASD IM-9216 sets forth violations eligible for disposition
under the Minor Rule Violation Plan (``MRVP'') and would be renumbered
as Rule 9217 in the Consolidated FINRA Rulebook--the only rule to be
renumbered in the Rule 9000 Series.\14\ The NASD Rule 9300 Series sets
forth the procedures for disciplinary matters that are appealed to or
called for review by the National Adjudicatory Council or called for
review by the Board of Governors. The NASD Rule 9520 Series covers
eligibility proceedings.\15\ The proposed rule change would delete the
NASD Rule 9530 Series--a change that should have been effectuated in a
previous rule filing.\16\ The NASD Rule 9550 Series sets forth
standards and procedures for expedited proceedings, which cover various
situations, ranging from members' failing to pay arbitration awards to
members' experiencing financial or operations difficulties.\17\ The
NASD Rule 9600 Series provides procedures for exemptions, while the
NASD Rule 9700 Series sets forth procedures for grievances concerning
automated systems. The Rule NASD 9800 Series governs temporary cease
and desist orders.
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    \12\ NASD Rule 8110 currently requires that members keep and
maintain a copy of the manual in a readily accessible place and make
it available to customers upon request. The proposed rule change
would further clarify that members may comply with Rule 8110 by
maintaining electronic access to the manual and providing customers
with such access upon request. See also Securities Exchange Act
Release No. 39470 (December 19, 1997), 62 FR 67927 (December 30,
1997) (Order Approving File No. SR-NASD-97-81) (seeking to, among
other things, simplify NASD Rule 8110 to allow members to maintain
an electronic version of the NASD manual as their required copy of
the manual).
    \13\ NASD Rule 9144(b) (Separation of Adjudicators) would be
amended to conform to changes made to the FINRA By-Laws as a result
of the consolidation transaction to reflect that the Chair of the
National Adjudicatory Council will no longer automatically occupy a
seat on the Board of Governors. See Release No. 34-56145, supra note
4.
    \14\ NASD IM-9216 also would be amended to reflect that FINRA
members may now be subject to a minor rule violation for a violation
of a FINRA rule, in addition to addressing violations of the FINRA
By-Laws, Schedules to the By-Laws, NASD rules, Incorporated NYSE
Rules, SEA Rules and Municipal Securities Rulemaking Board
(``MSRB'') rules. In this regard, FINRA notes that it is filing a
separate rule change addressing the application of the FINRA rules
to those members subject to NASD IM-1013 (Membership Waive-In
Process for Certain NYSE Member Organizations) (commonly referred to
as the ``waive-in firms''). The proposed rule change also would
reorganize IM-9216 to group by type the provisions and rules
specified therein (i.e., By-Law provisions, FINRA rules, NASD rules,
SEA rules, MSRB rules and Incorporated NYSE Rules), and to present
them in numerical order within each group. The proposed rule change
would not add new substantive rules to the MRVP.
    \15\ NASD Rule 9526(d) (Call for Review) would be amended to
conform to changes made to the FINRA By-Laws as a result of the
consolidation transaction by eliminating reference to the Non-
Industry classification of Governor. See Release No. 34-56145, supra
note 4.
    \16\ As part of a 2004 rule proposal approved by the Commission,
FINRA moved the hearing provisions of the NASD Rule 9530 Series to
NASD Rule 9559 and the remaining provisions to NASD Rule 9553. See
Securities Exchange Act Release No. 49380 (March 9, 2004), 69 FR
12386 (March 16, 2004) (Order Approving File No. SR-NASD-2003-110).
However, the corresponding rule text inadvertently was not deleted
as part of that filing and remained in the NASD Manual. FINRA is
thus proposing to delete the NASD Rule 9530 Series.
    \17\ As part of the rulebook consolidation process, FINRA is
considering changes relating to FINRA's rules governing financial
responsibility, including NASD Rules 9557 and 9559, which provide
the notice and procedural framework applicable when a member is
experiencing financial or operational difficulties. See Regulatory
Notice 08-23 (May 14, 2008) (Proposed Consolidated FINRA Rules
Governing Financial Responsibility). For administrative ease, the
proposed rule change transfers NASD Rules 9557 and 9559 without
substantive change to the Consolidated FINRA Rulebook. However,
FINRA anticipates proposing changes to Rules 9557 and 9559 as part
of a future filing governing the financial responsibility rules.
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    FINRA is amending Rules 8313(b)(1) and (c)(1), 9556(a), 9558(a),
9810(a) and 9860, respectively, to change references from ``NASD
Chairman and CEO'' or ``President of NASD Regulatory Policy and
Oversight'' to ``FINRA's Chief Executive Officer'' to reflect FINRA's
new organizational structure. Mary L. Schapiro now serves as FINRA's
Chief Executive Officer. The proposed rule change also would permit
FINRA's Chief Executive Officer to delegate his or her authority to
such other senior officers as he or she may designate. Certain rules
previously granted alternative authority to NASD's Senior Executive
Vice President for Regulatory Policy and Programs. In light of FINRA's
new organizational structure, FINRA believes it appropriate to permit
the CEO to delegate his or her authority to other senior officers of
FINRA.
Code of Arbitration Procedure
    The NASD Rule 10000 Series sets forth the Code of Arbitration
Procedure, including rules governing arbitration and mediation matters
filed prior to April 16, 2007. This Code continues to be relevant to
those matters, until they are closed by award, settlement or otherwise.
    The NASD Rule 12000 through 14000 Series contains the revised Code
of Arbitration Procedure, which is organized into three sections: the
Customer, Industry and Mediation Codes. These three Codes apply to
matters filed on or after April 16, 2007. The Rule 12000 Series
contains the Code of Arbitration Procedure for Customer Disputes. The
Rule 13000 Series contains the Code of Arbitration Procedure for
Industry Disputes. The Rule 14000 Series contains the Code of Mediation
Procedure.
Rules of General Applicability
    FINRA notes that certain rules in the Transitional Rulebook have
general application to the entirety of rules that govern FINRA members.
For example, NASD Rule 0115 states that all rules apply to both members
and their associated persons and that associated persons have the same
duties and obligations as the member. And the definitions in NASD Rule
0120 apply to all rules, unless the context otherwise requires. Those
rules of general applicability would apply equally to both the
Transitional Rulebook and the Consolidated FINRA Rulebook.
Rule References
    Because the Consolidated FINRA Rulebook will be populated over the
course of multiple rule filings, certain remaining rules in the
Transitional Rulebook will refer to NASD rules or Incorporated NYSE
Rules that have been transferred to, or otherwise incorporated into,
the Consolidated FINRA Rulebook under the proposed rule change or
future filings. In those instances, FINRA intends for the reference to
NASD rules or Incorporated NYSE Rules to be treated as a reference to
the corresponding rules in the Consolidated FINRA Rulebook. Thus, for
example, NASD IM-1013-1 states that firms admitted to FINRA membership
pursuant to the IM are subject to, among others, the NASD Rule 8000 and
9000 Series. Upon Commission approval and effectiveness of the proposed
rule change, those members would remain subject to the 8000 and 9000
Series in the Consolidated FINRA Rulebook.\18\ In the event that the
referenced NASD Rule has been renumbered in the Consolidated FINRA
Rulebook, members need to be cognizant of the rule's new number to
ensure they are cross-referencing the correct rule in the Consolidated
FINRA Rulebook. FINRA will be preparing a conversion chart that will
map the eliminated legacy NASD and Incorporated NYSE Rules to the final
FINRA rules.
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    \18\ See also supra note 14 discussing application of the FINRA
rules to the waive-in firms.
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    Similarly, certain rules that would be transferred to the
Consolidated FINRA Rulebook under the proposed rule change refer to
remaining rules in the Transitional Rulebook. For the time being, the
remaining rules in the Transitional Rulebook will be identified as
``NASD Rules'' or ``NYSE Rules,'' as the case may be, in the
Consolidated FINRA Rulebook and references to Consolidated FINRA
Rulebook rules will not be qualified. Thus, for example, rules in the
Consolidated FINRA Rulebook that refer to NASD Rule 2110 will
specifically identify that rule as ``NASD'' Rule 2110 until such time
as that rule is transferred to the Consolidated FINRA Rulebook.
    As noted in Item 2 of this filing, FINRA will announce the

implementation date(s) of the proposed rule change in a Regulatory
Notice to be published no later than 60 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,\19\ 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; and Section 15A(b)(5) of the Act,\20\ which requires,
among other things, that FINRA rules provide for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facility or system that FINRA
operates or controls. The proposed rule change makes non-material
changes to rules that have proven effective in meeting statutory
mandates.
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    \19\ 15 U.S.C. 78o-3(b)(6).
    \20\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

    Written comments were neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which FINRA consents, the Commission will:
    A. By order approve such proposed rule change; or
    B. Institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2008-021 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2008-021. 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 the filing also will be available for
inspection and copying at the principal office of FINRA. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-FINRA-2008-021 and should be
submitted on or before August 13, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16826 Filed 7-22-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: June 5, 2008 (Volume 73, Number 109)]
[Notices]
[Page 32061-32063]
[DOCID:fr05jn08-94]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57894; File Nos. SR-Amex-2008-15; SR-CBOE-2005-11; SR-
ISE-2008-12; SR-NYSEArca-2008-52; and SR-Phlx-2008-17]

Self-Regulatory Organizations; American Stock Exchange LLC,
Chicago Board Options Exchange, Incorporated, International Securities
Exchange, LLC, Philadelphia Stock Exchange, Inc., and NYSE Arca, Inc.;
Order Granting Approval of a Proposed Rule Change, as Modified, and
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Changes, as Modified, Relating to Listing and Trading Options on
the SPDR Gold Trust

May 30, 2008.
    On January 25, 2005, the Chicago Board Options Exchange,
Incorporated (``CBOE'') filed with the Securities and Exchange
Commission (``Commission'' or ``SEC'') a proposed rule change pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 \2\ thereunder to list and trade options on shares
of the SPDR Gold Trust (formerly, the streetTRACKS Gold Trust) (``Gold
Trust Options''). On April 12, 2005, CBOE submitted Amendment No. 1 to
the proposed rule change. On March 7, 2008, CBOE submitted Amendment
No. 2 to the proposed rule change. The proposed rule change, as
amended, was published for comment in the Federal Register on March 17,
2008 for a 21-day comment period.\3\ On May 21, 2008, CBOE submitted
Amendment No. 3 to the proposed rule change.\4\ This order approves the
proposed rule change, as modified by Amendment Nos. 1, 2, and 3.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57465 (March 11,
2008), 73 FR 14284.
    \4\ In Amendment No. 3, CBOE updated its proposed rule text to
reflect the change in name, effective May 21, 2008, of the
underlying trust from streetTRACKS Gold Trust to SPDR Gold Trust.
This is a technical amendment and is not subject to notice and
comment.
---------------------------------------------------------------------------

    In addition, four other exchanges submitted proposals to list and
trade Gold Trust Options. Specifically, the International Securities
Exchange, LLC (``ISE'') submitted its proposal on February 7, 2008, the
American Stock Exchange LLC (``Amex'') filed on February 20, 2008, the
Philadelphia Stock Exchange, Inc. (``Phlx'') filed on February 28,
2008, and NYSE Arca, Inc. (``NYSE Arca'') filed on May 21, 2008 with
the Commission the proposed rule changes as described in Items I and II
below, which items have been prepared substantially by the Amex, ISE,
NYSE Arca, and Phlx. On May 20, 2008, ISE and Phlx submitted Amendment
No. 1 to their respective proposals. On May 21, 2008, ISE and Phlx
submitted Amendment No. 2 to their respective proposals and Amex
submitted Amendment No. 1 to its proposal. The proposals submitted by
the Amex, ISE, NYSE Arca, and Phlx are substantively identical to
CBOE's proposal. Pursuant to Section 19(b)(1) of the Act \5\ and Rule
19b-4 \6\ thereunder, the Commission is publishing this notice to
solicit comments on these four proposed rule changes, as modified, from
interested persons and is approving the proposals, as modified, on an
accelerated basis.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(1).
    \6\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    Amex, ISE, NYSE Arca, and Phlx each propose to amend certain of
their respective rules to enable the listing and trading of Gold Trust
Options on their markets. The text of the proposals is available at
each of the respective exchanges, the Commission's Public Reference
Room, and http://www.amex.com, http://www.iseoptions.com, http://
www.nysearca.com, and http://www.phlx.com.

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

    In their filings with the Commission, the Amex, ISE, NYSE Arca, and
Phlx included statements concerning the purpose of, and basis for, the
proposed rule change. The text of these statements may be examined at
the places specified in Item III below. These exchanges have prepared
summaries, set forth in Sections A, B, and C below, of the most
significant aspects of such statements.

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

1. Purpose
    Amex, ISE, NYSE Arca, and Phlx each state that the purpose of its
proposed rule changes is to permit the listing and trading of Gold
Trust Options.
    Currently, the rules of these exchanges permit only certain
``Units'' (also referred to herein as exchange traded funds (``ETFs''))
to underlie options traded on their markets.\7\ Specifically, to be
eligible as an underlying security for options traded on the Amex, ISE,
NYSE Arca, or Phlx, an ETF must represent: (i) Interests in registered
investment companies (or series thereof) organized as open-end
management investment companies, unit investment trusts or similar
entities that hold portfolios of securities, and/or financial
instruments including, but not limited to, stock index futures
contracts, options on futures, options on securities and indexes,
equity caps, collars and floors, swap agreements, forward contracts,
repurchase agreements and reverse purchase agreements (``Financial
Instruments''), and money market instruments, including, but not
limited to, U.S. government securities and repurchase agreements
(``Money Market Instruments'') comprising or otherwise based on or
representing investments in indexes or portfolios of securities and/or
Financial Instruments and Money Market Instruments (or that hold
securities in one or more other registered investment companies that
themselves hold such portfolios of securities and/or Financial
Instruments and Money Market Instruments); or (ii) interests in a trust
or similar entity that holds a specified non-U.S. currency deposited
with the trust or similar entity when aggregated in some specified
minimum number may be surrendered to the trust by the beneficial owner
to receive the specified non-U.S. currency and pays the beneficial
owner interest and other distributions on deposited non-U.S. currency,
if any, declared and paid by the trust; or (iii) commodity pool
interests principally engaged, directly or indirectly, in holding and/
or managing portfolios or baskets of securities, commodity futures
contracts, options on commodity futures contracts, swaps, forward
contracts and/or options on physical commodities and/or non-

U.S. currency. The proposed rule change would expand the types of ETFs
that may be approved for options trading on the Exchanges to include
the SPDR Gold Trust.
---------------------------------------------------------------------------

    \7\ See Amex Rule 915 Commentary .06; ISE Rule 5.2(h); NYSE Arca
Rule 5.3; and Phlx Rule 1009 Commentary .06.
---------------------------------------------------------------------------

    Apart from allowing the SPDR Gold Trust to be an underlying for
options traded on Amex, ISE, NYSE Arca, and Phlx as described above,
the listing standards for ETFs would remain unchanged from those that
apply under the current rules of these exchanges. ETFs on which options
may be listed and traded would still have to be listed and traded on a
national securities exchange and satisfy the other listing standards
set forth in the respective rules of each of these exchanges.\8\
---------------------------------------------------------------------------

    \8\ See Amex Rule 916 Commentary .07; ISE Rule 502(h); NYSE Arca
Rule 5.3(g); and Phlx Rule 1009 Commentary .06.
---------------------------------------------------------------------------

    Specifically, in addition to satisfying the aforementioned listing
requirements, Units would have to continue to: (1) Meet the criteria
and guidelines under the exchanges' rules for underlying ETFs; or (2)
be available for creation or redemption each business day from or
through the issuer in cash or in kind at a price related to net asset
value, and the issuer must be obligated to issue Units in a specified
aggregate number even if some or all of the investment assets required
to be deposited have not been received by the issuer, subject to the
condition that the person obligated to deposit the investments has
undertaken to deliver the investment assets as soon as possible and
such undertaking is secured by the delivery and maintenance of
collateral consisting of cash or cash equivalents satisfactory to the
issuer, as provided in the respective prospectus.\9\
---------------------------------------------------------------------------

    \9\ See Amex Rule 915 Commentary .06; ISE Rule 502(h)(A)-(B);
NYSE Arca Rule 5.3(g)(1)(A)-(B); and Phlx Rule 1009 Commentary .06.
---------------------------------------------------------------------------

    Amex, ISE, NYSE Arca, and Phlx each propose that the current
continued listing standards for options on ETFs would apply to Gold
Trust Options. Specifically, options on Units may be subject to the
suspension of opening transactions as follows: (1) Following the
initial twelve-month period beginning upon the commencement of trading
of the Units, there are fewer than 50 record and/or beneficial holders
of the Units for 30 or more consecutive trading days; (2) the value of
the index or portfolio of securities, non-U.S. currency, or portfolio
of commodities including commodity futures contracts, options on
commodity futures contracts, swaps, forward contracts and/or options on
physical commodities and/or Financial Instruments and Money Market
Instruments on which Units are based is no longer calculated or
available; or (3) such other event occurs or condition exists that in
the opinion of the exchanges makes further dealing on the exchange
inadvisable.\10\
---------------------------------------------------------------------------

    \10\ See Amex Rule 916 Commentary .07; ISE Rule 503(h); NYSE
Arca Rule 5.4(k); and Phlx Rule 1010 Commentary .08.
---------------------------------------------------------------------------

    In addition, shares of the SPDR Gold Trust would not be deemed to
meet the requirements for continued approval, and the Amex, ISE, NYSE
Arca, and Phlx would not open for trading any additional series of
option contracts of the class covering shares of the SPDR Gold Trust,
if the shares of the SPDR Gold Trust cease to be an ``NMS stock'' as
provided for in rules of these exchanges \11\ or shares of the SPDR
Gold Trust are halted from trading on their primary market.
---------------------------------------------------------------------------

    \11\ See Amex Rule 916 Commentary .07; ISE Rule 503(h); NYSE
Arca Rule 5.4(b); and Phlx Rule 1010.
---------------------------------------------------------------------------

    Amex, ISE, NYSE Arca, and Phlx each represented that the addition
of the SPDR Gold Trust to types of Units that may underlie listed
options traded on the exchange would not have any effect on the rules
pertaining to position and exercise limits \12\ or margin.\13\
---------------------------------------------------------------------------

    \12\ See Amex Rules 904 and 905; ISE Rules 412 and 414; NYSE
Arca Rules 6.8 and 6.9; and Phlx Rules 1001 and 1002.
    \13\ See Amex Rule 462; ISE Rule 1202; NYSE Arca Rules 4.15 and
4.16; and Phlx Rule 722.
---------------------------------------------------------------------------

    Amex, ISE, NYSE Arca, and Phlx also represent that the respective
surveillance procedures applicable to Gold Trust Options would be
similar to those applicable to all other options on ETFs currently
traded on these exchanges. In addition, the Amex, ISE, NYSE Arca, and
Phlx note that they may obtain information from the New York Mercantile
Exchange, Inc. (``NYMEX'') through the Intermarket Surveillance Group
(``ISG'') related to any financial instrument traded there that is
based, in whole or in part, upon an interest in, or performance of,
gold.\14\
---------------------------------------------------------------------------

    \14\ The Commission noted a surveillance arrangement between the
New York Stock Exchange, Inc. and NYMEX in its order approving
proposed rule changes to permit the listing and trading of shares of
the SPDR Gold Trust. See Securities Exchange Act Release No. 50603
(October 28, 2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-
22).
---------------------------------------------------------------------------

2. Statutory Basis
    Amex, ISE, NYSE Arca, and Phlx each state that amending its rules
to accommodate the listing and trading of Gold Trust Options will
benefit investors by providing them with valuable risk management
tools. Accordingly, these exchanges believe that the proposed rule
changes are consistent with the requirements of Section 6(b) of the Act
\15\ in general, and further the objectives of Section 6(b)(5) \16\ of
the Act in particular, in that they are designed to remove impediments
to, and perfect the mechanism of, a free and open market in a manner
consistent with the protection of investors and the public interest.
---------------------------------------------------------------------------

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

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

    Amex, ISE, NYSE Arca, and Phlx each believe that the proposed rule
changes will not 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

    Amex, ISE, NYSE Arca, and Phlx each state that no written comments
were solicited or received with respect to the proposed rule changes.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
changes are 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 Nos. SR-Amex-2008-15; SR-ISE-2008-12; SR-NYSEArca-2008-52; and SR-
Phlx-2008-17 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 Numbers SR-Amex-2008-15; SR-
ISE-2008-12; SR-NYSEArca-2008-52; and SR-Phlx-2008-17. This file number
should be included on the subject line if e-mail is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the

Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room, 100 F Street, NE., Washington, DC
20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of the Exchange. 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 Numbers SR-Amex-2008-15; SR-ISE-2008-12, SR-
NYSEArca-2008-52; and SR-Phlx-2008-17 and should be submitted on or
before June 26, 2008.

IV. Commission Findings

    After careful consideration, the Commission finds that the proposed
rule changes are consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange \17\ and, in particular, the requirements of Section 6 of the
Act.\18\ Specifically, the Commission finds that the proposed rule
changes are consistent with Section 6(b)(5) of the Act,\19\ which
requires, among other things, that the rules of a national securities
exchange be designed to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest. In accordance with the
Memorandum of Understanding entered into between the Commodity Futures
Trading Commission (``CFTC'') and the Commission on March 11, 2008, and
in particular the addendum thereto concerning Principles Governing the
Review of Novel Derivative Products, the Commission believes that novel
derivative products that implicate areas of overlapping regulatory
concern should be permitted to trade in either or both a CFTC-or
Commission-regulated environment, in a manner consistent with laws and
regulations (including the appropriate use of all available exemptive
and interpretive authority).
---------------------------------------------------------------------------

    \17\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
    \18\ 15 U.S.C. 78f.
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As national securities exchanges, each of Amex, CBOE, ISE, NYSE
Arca, and Phlx is required under Section 6(b)(1) of the Act \20\ to
enforce compliance by its members, and persons associated with its
members, with the provisions of the Act, Commission rules and
regulations thereunder, and its own rules. In addition, brokers that
trade Gold Trust Options will also be subject to best execution
obligations and FINRA rules.\21\ Applicable exchange rules also require
that customers receive appropriate disclosure before trading Gold Trust
Options.\22\ Further, brokers opening accounts and recommending options
transactions must comply with relevant customer suitability
standards.\23\
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78f(b)(1).
    \21\ See FINRA Rule 2320.
    \22\ See Amex Rule 926; CBOE Rule 9.15; ISE Rule 616; NYSE Arca
Rule 9.18(g); and Phlx Rule 1029.
    \23\ See FINRA Rules 2860, 2860-2 and 2310; Amex Rule 923; CBOE
Rules 9.7 and 9.9; ISE Rules 608 and 610; NYSE Arca Rule 918(b)-(c);
and Phlx Rules 1024 and 1026.
---------------------------------------------------------------------------

    Gold Trust Options will trade as options under the trading rules of
each of the exchanges. These rules, among other things, are designed to
avoid trading through better displayed prices for Gold Trust Options
available on other exchanges and, thereby, satisfy each exchange's
obligation under the Options Intermarket Linkage Plan.\24\ Series of
the Gold Trust Options will be subject to exchange rules regarding
continued listing requirements, including standards applicable to the
underlying SPDR Gold Trust. Shares of the SPDR Gold Trust must continue
to be traded through a national securities exchange or through the
facilities of a national securities association, and must be ``NMS
stock'' as defined under Rule 600 of Regulation NMS.\25\ In addition,
the underlying shares must continue to be available for creation or
redemption each business day from or through the issuer in cash or in
kind at a price related to net asset value.\26\ If the SPDR Gold Trust
shares fail to meet these requirements, the exchanges will not open for
trading any new series of Gold Trust Options.
---------------------------------------------------------------------------

    \24\ See Amex Rule 942; CBOE Rule 6.83; ISE Rule 1902; NYSE Arca
Rule 6.94; and Phlx Rule 1085. Specifically, each of the exchanges
is a participant in the Options Intermarket Linkage Plan.
    \25\ 17 CFR 242.600.
    \26\ See Amex Rule 915 Commentary .06, Interpretation and Policy
.06 to CBOE Rule 5.3; ISE Rule 502(a)-(b); NYSE Arca Rule 5.3(a)-
(b); and Phlx Rule 1009 Commentary .06.
---------------------------------------------------------------------------

    The Amex, CBOE, ISE, NYSE Arca, and Phlx have all represented that
they have surveillance programs in place for the listing and trading of
options based on the SPDR Gold Trust. For example, these exchanges may
obtain trading information via the ISG from the NYMEX related to any
financial instrument traded there that is based, in whole or in part,
upon an interest in, or performance of, gold. Additionally, the listing
and trading of Gold Trust Options will be subject to the exchanges'
rules pertaining to position and exercise limits \27\ and margin.\28\
---------------------------------------------------------------------------

    \27\ See Amex Rules 904 and 905; CBOE Rules 4.11 and 4.12; ISE
Rules 412 and 414; NYSE Arca Rules 6.8 and 6.9; and Phlx Rules 1001
and 1002.
    \28\ See Amex Rule 462; CBOE Rule 12.3; ISE Rule 1202; NYSE Arca
Rules 4.15 and 4.16; and Phlx Rule 722. See also FINRA Rules 2860
and 2860-1.
---------------------------------------------------------------------------

    In addition, the Commission finds good cause, pursuant to Section
19(b)(2) of the Act,\29\ for approving the proposed rule changes of the
Amex, ISE, Phlx, and NYSE Arca prior to the thirtieth day after the
date of publication of notice in the Federal Register. The Commission
notes that proposals of the Amex, ISE, Phlx, and NYSE Arca are
substantively identical to the CBOE proposal, which was published for a
21-day comment period and generated no comments. Therefore, the
Commission does not believe that the proposals of the Amex, ISE, Phlx,
and NYSE Arca raise any new regulatory issues different from that of
the CBOE proposal. Accordingly, the Commission finds that there is good
cause, consistent with Section 6(b)(5) of the Act,\30\ to approve the
proposals by Amex, ISE, NYSE Arca, and Phlx on an accelerated basis.
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78s(b)(2).
    \30\ 15 U.S.C. 78s(b)(5).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-CBOE-2005-11), as modified,
be and is hereby approved and that the proposed rule changes (SR-SR-
Amex-2008-15; SR-ISE-2008-12, SR-NYSEArca-2008-52; and SR-Phlx-2008-
17), as modified, be, and are hereby approved on an accelerated basis.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78s(b)(2).

    By the Commission.
Florence E. Harmon,
Acting Secretary.
 [FR Doc. E8-12520 Filed 6-4-08; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register Volume 77, Number 156 (Monday, August 13, 2012)]
[Notices]
[Pages 48133-48134]
[FR Doc No: 2012-19751]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings 2

    Take notice that the Commission received the following electric
rate filings:

    Docket Numbers: ER12-1726-001.
    Applicants: Michigan Electric Transmission Company, LLC.
    Description: Michigan Electric Transmission Company, LLC submits
tariff filing per 35: METC Certificate of Concurrence Compliance Filing
to be effective 7/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5139.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2355-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-Geneseo SA 2459 WDS to be effective 9/1/
2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5036.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2356-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN-Buffalo SA 2460 to be effective 9/1/
2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5037.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2357-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN-Carlisle SA 2461 to be effective 9/1/
2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5038.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2358-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN Indianola WDS SA 2462 to be effective
9/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5045.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2359-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAm-MEAN Rockford WDS SA 2463 to be effective 9/1/
2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5046.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2360-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN Wall Lake SA 2464 WDS to be effective
9/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5048.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2361-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN Fonda SA 2203 WDS to be effective 9/
1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5049.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2362-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-Cornbelt-Auburn WDS SA2331 to be effective
9/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5050.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2363-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN-Breda 1st Rev SA 2340 to be effective
9/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5051.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2364-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: MidAmerican-MEAN-Waverly WDS 2nd Rev. SA2164 to be
effective 9/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5052.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2365-000.
    Applicants: Midwest Independent Transmission System Operator, Inc.
    Description: SA 2338 MidAm-MEAN WDS Denver to be effective 9/1/
2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5053.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2366-000.
    Applicants: Southwest Power Pool, Inc.
    Description: Compliance Filing Docket Nos. ER09-659-002 and EL12-2
Attachment O Section VII to be effective 7/31/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5087.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2367-000.
    Applicants: Southern California Edison Company.
    Description: Amendment to LGIA with North Sky River Energy, LLC.,
North Sky River Wind Proj. to be effective 8/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5099.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2368-000.
    Applicants: Denver City Energy Associates, LP.
    Description: Denver City Energy Associates, LP submits tariff
filing per 35.15: Tariff Cancelation to be effective 7/31/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5126.
    Comments Due: 5 p.m. ET 8/21/12

    .Docket Numbers: ER12-2369-000.
    Applicants: The Detroit Edison Company.
    Description: The Detroit Edison Company submits tariff filing per
35.13(a)(2)(iii: Refile of Wyandotte Interconnection Agreement RS 44 to
be effective 8/1/2012.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5128.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: ER12-2370-000.
    Applicants: FPL Energy Oliver Wind, LLC.
    Description: FPL Energy Oliver Wind, LLC Notice of Cancellation of
Market-Based Rate Tariff.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5154.
    Comments Due: 5 p.m. ET 8/21/12.

    Take notice that the Commission received the following land
acquisition reports:

    Docket Numbers: LA12-2-000.
    Applicants: Rockland Wind Farm LLC, Goshen Phase II LLC, Grays
Ferry Cogeneration Partnership, MATEP, LP, MATEP, LLC, Trigen-St. Louis
Energy Corp.
    Description: Quarterly Land Acquisition Report of Ridgeline Energy
LLC et al.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5074.
    Comments Due: 5 p.m. ET 8/21/12.

    Docket Numbers: LA12-2-000.
    Applicants: Spring Canyon Energy LLC, Judith Gap Energy LLC,
Invenergy TN LLC, Wolverine Creek Energy LLC, Grays Harbor Energy LLC,
Forward Energy LLC, Willow Creek Energy LLC, Sheldon Energy LLC, Hardee
Power Partners Limited, Spindle Hill Energy LLC, Invenergy Cannon Falls
LLC, Beech Ridge Energy LLC, Grand Ridge Energy LLC, Grand Ridge Energy
II LLC, Grand Ridge Energy III LLC, Grand Ridge Energy IV LLC, Grand
Ridge Energy V LLC, Vantage Wind Energy LLC, Stony Creek Energy LLC,
Gratiot County Wind LLC, Gratiot County Wind II LLC, Bishop Hill Energy
LLC, Bishop Hill Energy III LLC, California Ridge Wind Energy LLC.
    Description: Generation Site Report Second Quarter 2012 of Spring
Canyon Energy LLC, et al.
    Filed Date: 7/31/12.
    Accession Number: 20120731-5092.
    Comments Due: 5 p.m. ET 8/21/12.

    The filings are accessible in the Commission's eLibrary system by
clicking on the links or querying the docket number.
    Any person desiring to intervene or protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00
p.m. Eastern time on the specified comment date. Protests may be
considered, but intervention is necessary to become a party to the
proceeding.
    eFiling is encouraged. More detailed information relating to filing
requirements, interventions, protests, service, and qualifying
facilities filings can be found at: http://www.ferc.gov/docs-filing/efiling/filing-req.pdf. For other information, call<PHONE_NUMBER>
(toll free). For TTY, call<PHONE_NUMBER>.

    Dated: July 31, 2012.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2012-19751 Filed 8-10-12; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register: October 28, 2010 (Volume 75, Number 208)]
[Rules and Regulations]
[Page 66308-66309]
[DOCID:fr28oc10-11]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket No. USCG-2010-0973]

Drawbridge Operation Regulation; New Jersey Intracoastal Waterway
(NJICW), Point Pleasant Canal, NJ

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation from regulations.

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

SUMMARY: The Commander, Fifth Coast Guard District, has issued a
temporary deviation from the regulations governing the operation of the
Route 88/Veterans Memorial Bridge across Point Pleasant Canal, at NJICW
mile 3.0, in Point Pleasant, NJ. This closure is necessary to
facilitate extensive mechanical rehabilitation and to maintain the
bridge's operational integrity.

DATES: This deviation is effective from 7 a.m. on December 15, 2010
through 11:59 p.m. on March 15, 2011.

ADDRESSES: Documents mentioned in this preamble as being available in
the docket are part of docket USCG-2010-0973 and are available online
by going to http://www.regulations.gov, inserting USCG-2010-0973 in the
``Keyword'' box and then clicking ``Search.'' They are also available
for inspection or copying at the Docket Management Facility (M-30),
U.S. Department of Transportation, West Building Ground Floor, Room
W12-140, 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 e-mail Waverly W. Gregory, Jr., Bridge Administrator, Fifth
Coast Guard District; telephone<PHONE_NUMBER>, e-mail
<EMAIL_ADDRESS>If you have questions on viewing the
docket, call Renee V. Wright, Program Manager, Docket Operations,
telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The New Jersey Department of Transportation
(NJDOT) owns and operates the vertical-lift span of the Route 88/
Veterans Memorial Bridge across Point Pleasant Canal along the NJICW,
in Point Pleasant, NJ. The bridge has a vertical clearance in the
closed position to vessels of 10 feet, above mean high water. The
current operating regulations are outlined at 33 CFR 117.5, which
require the bridge to open is given.

    The contractor, Agate Construction on behalf of NJDOT, has
requested a temporary deviation to the existing regulations for the
Route 88/Veterans Memorial Bridge to facilitate necessary repairs. The
repairs consist of the replacement of bridge traffic control devices
(barrier gates, warning gates, and bridge traffic control signals)
along with major electrical rehabilitation. Under this deviation, the
vertical-lift span of the drawbridge will be maintained in the closed-
to-navigation position from 7 a.m. on December 15, 2010, through 11:59
p.m. on March 15, 2011.
    Bridge opening data, supplied by NJDOT and reviewed by the Coast
Guard, revealed a small amount of vessel openings of the draw span
between the months of December and March in 2008 and 2009.
Specifically, the bridge opened for vessels 15, 0, 0, and 4 times
during the months of December 2008 to March 2009; and during the months
of December 2009 to March 2010, the bridge opened for vessels 14, 0, 0,
and 8 times, respectively.
    The Coast Guard will inform the users of the waterway through our
Local and Broadcast Notices to Mariners of the closure period so that
vessels can arrange their transits to minimize any impact caused by the
temporary deviation.
    Vessels that can pass under the bridge without a bridge opening may
continue to do so at anytime. The Atlantic Ocean is an alternate route
for vessels with mast heights greater than 10 feet. In the event of an
emergency, the drawbridge will open for vessels if at least 24 hours'
advance notice is given to the bridge operator.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the designated
time period. This deviation from the operating regulation is authorized
under 33 CFR 117.35.

    Dated: October 14, 2010.
Waverly W. Gregory, Jr.,
Chief, Bridge Administration Branch, Fifth Coast Guard District.
[FR Doc. 2010-27237 Filed 10-27-10; 8:45 am]
BILLING CODE 9110-04-P


Review of ACGIH’s Proposed Threshold Limit Value for 1-Bromopropane
(n-Propyl Bromide, nPB)

Introduction and Conclusions

At the request of EPA, ICF has reviewed ACGIH’s proposed TLV on nPB
(ACGIH 2004).  In their report, it appears that ACGIH used the decrease
in fetal body weight observed in the developmental study performed by
Rodwell et al. (2001) as the point of departure (POD) for deriving the
Threshold Limit Value (TLV) for nPB.  ICF and the authors of this
developmental study believe the decrease in fetal weight to be an
artifact of study design and conduct and not a treatment-related effect.
 In addition, the expert panel of The Center for the Evaluation of Risks
to Human Reproduction (CERHR) conducted a benchmark dose analysis on the
data and found that reduced fetal weight was not the most sensitive
endpoint for this chemical.  The ACGIH’s TLV-TWA of 10 ppm is lower
than ICF’s acceptable exposure limit (AEL) (17 ppm) for occupational
exposure and may be based on an effect not considered of toxicological
significance by ICF.  It is ICF’s belief that reproductive toxicity is
a more appropriate endpoint for development of a TLV.

Additionally, ACGIH’s development of the TLV for nPB lacks
transparency.  They did not discuss or identify the uncertainty, and/or
safety factors applied in the development of the TLV, nor did they
articulate whether the NOEL (No Observed Effect Level) was adjusted or
calculated for an equivalent human exposure concentration (e.g.,
adjusted for exposure duration).  It is possible that ACGIH did not use
any one study to develop the TLV, but instead asserted a TLV of 10 ppm
to be protective of all endpoints of toxicity.  This is problematic if
EPA were to consider reduced fetal body weight to be the critical
effect, as it provides only a 10-fold margin of exposure from an effect
level of 100 ppm (Rodwell et al. 2001) to its recommended exposure limit
of 10 ppm, as compared to the same margin of exposure from a
no-effect-level to the exposure limit.

Background

ACGIH identified several critical endpoints pertaining to neurotoxicity,
hepatotoxicity, developmental, and reproductive toxicity of nPB.  The
critical threshold values in animal toxicity tests were as follows:
neurotoxicity NOEL was 200 ppm (Ichihara et al. 2000a); hepatotoxicity
NOEL was 200 ppm (ClinTrials 1997b); reproductive NOEL was 100 ppm
(Stump, 2001); and the developmental NOEL was <100 ppm (Rodwell et al.
2001).

Selection of Points of Departure

It appears from the TLV documentation that ACGIH identified the POD to
be the decreased fetal weight observed in the developmental toxicity
study by Rodwell et al. (2001).  This study involved the exposure of 25
pregnant rats (Crl:CD® [SD] IGS BR strain) via whole body inhalation to
the following exposure concentrations of nPB for 6 hours/day from
gestation day 6 to gestation day 19 (0 (air control), 100, 498, and 996
ppm).  Developmental effects observed were reduced ossification (mid and
high dose) of the fetus and an increased incidence of bent ribs (high
dose); the NOEL for these endpoints was 100 ppm.  Maternal toxicity
effects were treatment-related decreases in body weight, body weight
gain, and feed consumption in the mid- and high-dose groups. ACGIH
mentions statistically-significant decreases in fetal body weight
observed in all dose groups as a treatment- related effect and
identifies a NOEL of <100 ppm.  ICF and the study authors believe the
decrease observed in fetal weight to be an artifact of sampling
procedure (specifically, the difference in timeframe of measurement of
the treated versus control animals).  Thus, the decrease in fetal body
weight was not considered a direct toxic effect.  If it is assumed that
the decreased fetal body weight is not a sampling effect, then the
endpoint should be considered a secondary effect of reduced maternal
weight; therefore, this endpoint should not inform a developmental NOEL.

The reduced ossification of the ribs and skull seen in the mid- and
high-concentration fetuses is secondary to reduced fetal body weight and
is a common effect in the offspring of dams that exhibit maternal
toxicity (i.e., decreased food consumption, and decreased body weight
and/or body weight gain). Delayed ossification is reversible and is
generally not considered by developmental toxicologists to be a
significant adverse effect (Manson and Kang 1994).  The CERHR panel was
concerned with whether the reduced fetal body weight was a result of
sampling error as indicated by the study authors or if it represented a
LOAEL.  The CERHR conducted a BMD analysis and found that the BMD5 (5%
change from control mean value) for reduced fetal body weight was 561
ppm and the BMDL5 was 305 ppm.  The CERHR noted that the BMD was
consistent with the LOAEL of 500 ppm for skeletal variations.  This
result provides further evidence that skeletal variations are secondary
to reduced fetal weight gain in this study.  Further, the BMDL5 of 305
ppm is higher than the NOAEL observed for other endpoints, making it an
inappropriate choice for development of the TLV.

  SEQ CHAPTER \h \r 1 The brevity of the dosing in this developmental
study is of particular concern in the development of an occupational
exposure limit.  When available, longer-term studies are recommended to
instruct occupational exposure limits.  By contrast, it appears that
ACGIH based the development of their occupational exposure limit
primarily on the Rodwell et. al (2002) study that was used to determine
the dose range for the 2-generation study performed by Stump (2001).
The Stump (2001) study produced the POD that was the basis of ICF’s
Acceptable Exposure Limit.  ICF finds that this 2-generation study
identifies the most sensitive endpoints of sperm motility in the F1
generation and hepatic effects in the parental generation with a NOAEL
of 100 ppm.  ICF utilized Benchmark Dose Analysis to better identify the
threshold limit for this study and to inform the AEL.  This study was
best suited for determining an occupational exposure limit because the
large sample sizes of 25 animals/dose provide the greatest statistical
power compared to other studies.  The exposures covered sensitive
life-stages (dosing occurred during preconception, gestation, and
preweaning periods) over two generations.  Multiple toxicological
endpoints (including potential developmental effects) were assessed.

Choice of Uncertainty Factors

ACGIH reported a TLV-TWA for nPB to be 10 ppm without defining or
identifying the method used to determine this value.  ACGIH stated that
the TLV may protect sufficiently against potential neurotoxicity,
hepatotoxicity, reproductive, and developmental toxicity.  The method
utilized to derive the TLV-TWA, including application of safety factors,
was not reported in the draft; therefore, no statement or calculations
were presented on adjustments of the dose to human equivalency.  The
uncertainty factors or safety factors utilized were not discussed.
Because the proposed TLV is roughly a factor of 10 lower than the lowest
NOEL cited, ICF can only assume ACGIH utilized a combination of UFs
totaling 10.  This is consistent with using UFs of 3 to account for both
animal to human extrapolation (i.e., differences in pharmacodynamics and
pharmacokinetics) and variation within the working population.  ICF
performed sample calculations that ACGIH may have used based on current
risk assessment practices.

POD: 	Fetal weight decrease

Study: 	A Developmental Toxicity Study in Rat Via Whole Body Inhalation
Exposure.  Conducted by Huntingdon Life Sciences, Study No. 98-4141.
Sponsored by Brominated Solvents Consortium.  August 23, 2001. (Rodwell
D.E.  2001)

Protocol: Whole-body inhalation, 6 hours/day, gestation days 6-19

Concentrations: 	0, 100, 498, or 996 ppm

NOEL:		<100 ppm

LOEL:		100 ppm (reduced fetal body weight)

HEC [adj]:  	100 ppm × 6 hours / 8 hours × 7 days / 5 days  = 105 ppm

Uncertainty Factors:	3  - animal to human extrapolation

			3 - sensitive individuals

TLV-TWA:		~10 ppm

Conclusion

ICF believes that the ACGIH approach for setting an occupational
exposure limit should be revised in its final TLV, or EPA should not use
the same approach in setting an AEL, for several reasons:

Firstly, the developmental effect of decreased fetal weight in the
Rodwell et al. (2001) study was possibly a product of sampling
techniques and very likely secondary to maternal toxicity (particularly
decreased maternal weight gain).  ICF, supported by the CERHR Expert
Panel, believes that reduced fetal weight does not represent a direct
toxic effect of nPB exposure nor does it represent the most sensitive
toxicological endpoint in the database because other studies have not
found reduced pup weight to be the most sensitive endpoint.  There are
other, more sensitive and toxicologically relevant endpoints identified
from the database for nPB, including reduced sperm motility in the F1
generation of the 2-generation study (Stump 2001) and decreased number
of estrous cycles in a three-week period in the F0 generation of the
same study.

Secondly, ICF is concerned by the lack of transparency of the TLV-TWA
determination, particularly the lack of discussion of uncertainty
factors.

Lastly, the calculations used to arrive at the TLV were not presented in
the draft documentation.

References

ACGIH 2004.  Draft TLV-TWA for 1-Bromopropane.
NIC\CS\2004\1-Bromopropane_2003-10-26.

Center for the Evaluation of Risks to Human Reproduction (CERHR) Expert
Panel Report on the Reproductive and Developmental Toxicity of
1-Bromopropane.  October 2003. National Toxicology Program, U.S.
Department of Health and Human Services.

ClinTrials.  1997b.  ALBTA1: A 13-Week Inhalation Study of a Vapor
Formulation of ALBTA1 in the Albino Rat.  Report No. 91190.   Prepared
by ClinTrials BioResearch Laboratories, Ltd., Senneville, Quebec,
Canada.  February 28, 1997.  Sponsored by Albemarle Corporation, Baton
Rouge, LA.

  SEQ CHAPTER \h \r 1 U.S. Environmental Protection Agency (US EPA).
1994.  Methods for derivation of inhalation reference concentrations and
application of inhalation dosimetry.  EPA/600/8-90/066F.  Office of
Health and Environmental Assessment, Washington, DC. October 1994.

Ichihara G., Yu X., Kitoh J., et al. 2000a. Reproductive toxicity of
1-bromopropane, a newly introduced alternative to ozone layer depleting
solvents, in male rats.  Toxicol Sciences 54:416-423.

Manson JM and Kang YJ. 1994. Test Methods for Assessing Female
Reproductive and Developmental Toxicology. In: Principles and Methods of
Toxicology, 3rd Edition. Ed.: A. Wallace Hayes. Raven Press,

Ltd., New York.

Rodwell D.E.  2001.  A Developmental Toxicity Study in Rat Via Whole
Body Inhalation Exposure.  Conducted by Huntingdon Life Sciences, Study
No. 98-4141.  Sponsored by Brominated Solvents Consortium.  August 23,
2001.

Stump D.G.  2001.  An Inhalation Two-Generation Reproductive Toxicity
Study of 1-Bromopropane in Rats.  Conducted by WIL Research
Laboratories, Inc., Sponsored by Brominated Solvents Consortium.  May
24, 2001.

***DRAFT (March 29, 2007) - DO NOT CITE OR QUOTE***

  PAGE  1


[Federal Register Volume 82, Number 155 (Monday, August 14, 2017)]
[Notices]
[Pages 37973-37975]
[FR Doc No: 2017-17051]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81346; File No. SR-IEX-2017-25]

Self-Regulatory Organizations; Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Make a
Correction to the Exchange Fee Schedule Related to Fees for Executions
That Involve Taking Resting Interest With Non-Displayed Priority With a
Displayable Order

August 8, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on August 7, 2017, the Investors Exchange LLC (``IEX'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule

change as described in Items I, II and III below, which Items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------

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

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

    Pursuant to the provisions of Section 19(b)(1) under the Securities
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\
Investors Exchange LLC (``IEX'' or ``Exchange'') is filing with the
Commission a proposed rule change to make a correction to the Exchange
Fee Schedule related to fees for executions that involve taking resting
interest with non-displayed priority with a displayable order. The
Exchange proposes to implement the change beginning on September 1,
2017.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
Web site at www.iextrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend its Fee Schedule, pursuant to IEX
Rule 15.110(a) and (c), to make a correction related to the fees for
executions that involve taking non-displayed resting interest with a
displayable order. Subject to certain exceptions, the Exchange charges
$0.0009 per share (or 0.30% of the total dollar value of the
transaction for securities priced below $1.00) to Members for
executions on IEX that include resting non-displayed interest \6\ for
both the liquidity providing and liquidity removing order (the ``Non-
Displayed Match Fee'').\7\ One exception relates to certain displayable
orders that remove non-displayed liquidity upon entry. The Exchange Fee
Schedule provides that the Non-Displayed Match Fee is not charged for
displayable orders \8\ that remove non-displayed liquidity upon entry
if, on a monthly basis, at least 90% of the liquidity removing Member's
aggregate executed shares of displayable orders added liquidity during
the month in question.\9\
---------------------------------------------------------------------------

    \6\ Non-displayed priority refers to an order or portion of a
reserve order that is booked and ranked with non-display priority on
the Order Book. See Rules 11.190(b)(3) and 11.190(b)(2).
    \7\ This pricing is referred to by the Exchange as the ``Non-
Displayed Match Fee'' on the Fee Schedule with a Fee Code of `I'
which is provided by the Exchange on execution reports.
    \8\ See Rule 11.190(b)(3).
    \9\ However, in such transactions, the non-displayed liquidity
adding interest will be subject to the Non-Displayed Match Fee. The
Exchange also does not charge a fee where the adding and removing
order originated from the same Exchange Member.
---------------------------------------------------------------------------

    The Fee Schedule describes the calculation to determine if the Non-
Displayed Match Fee is charged with reference to ``TMVD'' which means
``total monthly volume displayable calculated as the sum of executions
from the Member's displayable orders during the calendar month.'' \10\
However, the reference to a ``Member's'' displayable orders was
inadvertent, and should instead have referred to each of a Member's
market participant identifiers, or MPIDs, which is how the Exchange in
practice has been calculating TMVD and thus determines whether the Non-
Displayed Match Fee is applicable to particular executions.
---------------------------------------------------------------------------

    \10\ See IEX Fee Schedule.
---------------------------------------------------------------------------

    Accordingly, the Exchange proposes to correct the IEX Fee Schedule
to provide that TMVD means ``total monthly volume displayable
calculated as the sum of executions from each of the Member's MPIDs (on
a per MPID basis) displayable orders during the calendar month.'' In
addition, the Exchange proposes a clarifying amendment to the single
asterisked footnote related to the Non-Displayed Match Fee to specify
that the 90% calculation will be performed on a per MPID basis. Thus,
the phrase ``on a per MPID basis'' would be added after the phrase ``at
least 90% of TMVD'' in the footnote. Finally, the Exchange proposes to
add a definition of MPID to the Fee Schedule.
    With respect to the calculation of the Non-Displayed Match Fee and
the applicable 90% threshold exception for executions of displayable
orders that remove resting non-displayed liquidity upon entry, IEX
reviewed Member invoices since its launch as an exchange in August 2016
through June 30, 2017 to assess whether any Members were charged fees
that differed from those described in the Fee Schedule. In other words,
IEX recalculated the Non-Displayed Match Fee and the 90% threshold
exception on a ``per Member'' basis (which is how the Fee Schedule
currently reads) instead of on a ``per MPID'' basis (which is how IEX
in practice had been calculating that fee). This assessment identified
that nine Members were charged such differential fees in particular
months, in some cases more than the fees described in the Fee Schedule
and in some cases less than the fees described in the Fee Schedule. In
total, seven Members were charged and paid $18,948.54 in excess fees
\11\ and eight Members were not charged $44,175.28 in fees that should
have been charged.\12\ Five Members were overcharged and undercharged
in different months.
---------------------------------------------------------------------------

    \11\ The range is from $0.09 to 7811.66.
    \12\ The range is from $1.51 to $29,482.12.
---------------------------------------------------------------------------

    In order to address the discrepancies, IEX will charge or credit
each impacted member for the net amount overpaid or underpaid and will
be included in the August 2017 monthly invoices to be sent in September
2017 pursuant to IEX Rule 15.120 notwithstanding that fees included
thereof are for trading activity that occurred over prior months.\13\
---------------------------------------------------------------------------

    \13\ In the event that a Member owed a credit declines the
credit, IEX will make a charitable donation in the amount of such
credit.
---------------------------------------------------------------------------

    The Exchange proposes to implement the revised fee on a going
forward basis as of September 1, 2017, after which IEX will assess this
fee on a MPID basis. Members will be charged for July and August based
on the current Fee Schedule whereby the 90% calculation will be
performed on a per Member basis, aggregating all of the Member's MPIDs.
2. Statutory Basis
    IEX believes that the proposed rule change is consistent with the
provisions of Section 6(b) \14\ of the Act in general, and furthers the
objectives of Sections 6(b)(4) \15\ of the Act, in particular, in that
it is designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities. In addition, the Exchange believes that it is
consistent with the Act to correct the Fee Schedule so that the Fee
Schedule is accurate, avoiding

any potential confusion among Members. The Exchange further believes
that the correction to the Fee Schedule is reasonable, equitable, and
not unfairly discriminatory because all similar situated Members will
be subject to the same fee structure.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f.
    \15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange also believes that it is consistent with the Act and
an equitable allocation of reasonable dues, fees and other charges
among its members and other persons using its facilities to measure
whether the 90% threshold for adding liquidity with displayable orders
is reached on an MPID basis. As explained in IEX's rule change adopting
the exception to the Non-Displayed Match Fee, the flexibility is
designed to address limited inadvertent liquidity removal by Members
who are largely adding displayed liquidity and generally intend to add
displayed liquidity on IEX, to further encourage aggressively priced
displayed orders.\16\ The Exchange believes that Members that utilize
multiple MPIDs generally use different MPIDs for different trading
strategies or customers. Therefore, the Exchange believes that
measuring by MPIDs is a more precise manner of assessing whether a
Member's trading strategy (or that of a customer) is largely adding
displayed liquidity and generally intends to add displayed liquidity
with displayable orders.
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release No. 78550 (August 11,
2016), 81 FR 54873 (August 17, 2016) (SR-IEX-2016-09).
---------------------------------------------------------------------------

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

    IEX does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is
designed to correct an inadvertent error rather than a competitive
issue. The Exchange does not believe the proposed rule change will
result on a burden on intramarket competition because all Members will
be subject to the Non-Displayed Match Fee in the same manner on a fair
and consistent basis. While different fees will be assessed in some
circumstances, these different fees are not based on the type of Member
entering the order and all Members can submit any type of order.
Further, assessing whether the Non-Displayed Match Fee is applicable on
a per MPID basis is intended to encourage market participants to enter
aggressively priced displayed orders on the Exchange, which enhances
price discovery and deepens the Exchange's liquidity pool to the
benefit of all market participants. Further, the Exchange operates in a
highly competitive environment in which market participants can readily
favor competing venues if fee schedules at other venues are viewed as
more favorable.
    The Exchange also does not believe that the proposed rule change
will result in any burden on intermarket competition because other
venues are free to adopt comparable pricing.

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 foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) \17\ of the Act. At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings under Section 19(b)(2)(B) \18\
of the Act to determine whether the proposed rule change should be
approved or disapproved.
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    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-IEX-2017-25 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-IEX-2017-25. This
file number should be included in the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at principal office of the Exchange. 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-IEX-2017-25 and should be
submitted on or before September 5, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17051 Filed 8-11-17; 8:45 am]
 BILLING CODE 8011-01-P