[Federal Register Volume 75, Number 66 (Wednesday, April 7, 2010)]
[Notices]
[Pages 17806-17810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7843]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61819; File No. SR-FINRA-2009-061]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of Amendment No. 2 to a Proposed Rule 
Change and Order Granting Accelerated Approval to the Proposed Rule 
Change, as Modified by Amendments Nos. 1 and 2 Thereto, To Require 
Members To Report OTC Transactions in Equity Securities Within 30 
Seconds of Execution

March 31, 2010.

I. Introduction

    On September 16, 2009, the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to require members to report OTC transactions in 
equity securities within 30 seconds of execution. On October 30, 2009, 
FINRA filed Amendment No. 1 to the proposed rule change. The Commission 
published the proposed rule change, as amended, for comment in the 
Federal Register on November 17, 2009.\3\ The Commission received two 
comment letters in response to the proposed rule change.\4\ On March 
22, 2010, FINRA responded to the comment letters and filed Amendment 
No. 2 to the proposed rule change.\5\ This Commission is publishing 
this notice and order to solicit comments on Amendment No. 2 and to 
approve the proposed rule change, as

[[Page 17807]]

modified by Amendments Nos. 1 and 2, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60960 (November 6, 
2009), 74 FR 59272 (``Notice'').
    \4\ See Letters from James R. Downing, CCO, Cheevers and 
Company, Inc., received November 12, 2009 (``Cheevers Letter''); and 
Neal E. Nakagiri, President, CEO, and CCO, NPB Financial Group, LLC, 
dated November 24, 2009 (``NPB Letter'').
    \5\ See Amendment No. 2 dated March 22, 2010 (``Amendment No. 
2''). The text of the Amendment No. 2 is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA, and 
on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml).
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II. Description of the Amended Proposal

    FINRA proposed to amend its trade reporting rules to: (1) Require 
that members report over-the-counter (``OTC'') equity transactions \6\ 
to FINRA within 30 seconds of execution; (2) require that members 
report secondary market transactions in non-exchange-listed direct 
participation program (``DPP'') \7\ securities to FINRA within 30 
seconds of execution; (3) require that members report trade 
cancellations that are subject to the 90-second reporting under current 
FINRA rules within 30 seconds of the time the trade is canceled; \8\ 
and (4) make certain conforming changes to the rules relating to the 
OTC Reporting Facility (``ORF'').
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    \6\ Specifically, OTC equity transactions are: (1) Transactions 
in NMS stocks, as defined in SEC Rule 600(b) of Regulation NMS, 
effected otherwise than on an exchange, which are reported through 
the Alternative Display Facility (``ADF'') or a Trade Reporting 
Facility (``TRF''); and (2) transactions in ``OTC Equity 
Securities,'' as defined in FINRA Rule 6420 (e.g., OTC Bulletin 
Board and Pink Sheets securities), which are reported through the 
OTC Reporting Facility (``ORF''). The ADF, TRFs and ORF are 
collectively referred to herein as the ``FINRA Facilities.''
    \7\ ``Direct participation program or DPP, means a program which 
provides for flow-through tax consequences regardless of the 
structure of the legal entity or vehicle for distribution including, 
but not limited to, oil and gas programs, real estate programs, 
agricultural programs, cattle programs, condominium securities, 
Subchapter S corporate offerings and all other programs of a similar 
nature, regardless of the industry represented by the program, or 
any combination thereof. A program may be composed of one or more 
legal entities or programs but when used herein, the term shall mean 
each of the separate entities or programs making up the overall 
program and/or the overall program itself. Excluded from this 
definition are real estate investment trusts, tax qualified pension 
and profit sharing plans pursuant to Sections 401 and 403(a) of the 
Internal Revenue Code and individual retirement plans under Section 
408 of that Code, tax sheltered annuities pursuant to the provisions 
of Section 403(b) of the Internal Revenue Code, and any company, 
including separate accounts, registered pursuant to the Investment 
Company Act of 1940.'' See FINRA Rule 6420, as proposed to be 
amended.
    \8\ See Amendment No. 2. See also Securities Exchange Act 
Release No. 61359 (January 14, 2010), 75 FR 3772 (January 22, 2010) 
(approving SR-FINRA-2009-082) (``Cancellations Order''). This new 
requirement would include trades executed during normal market hours 
and canceled at or before 4:00 p.m. on the date of execution. See 
FINRA Rules 6282(j), 6380A(g), 6380B(f) and 6622(f).
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A. 30-Second Reporting Requirement

    Under current FINRA trade reporting rules, members generally must 
report OTC equity transactions that are executed during the hours that 
the FINRA Facilities are open within 90 seconds of execution.\9\ Last 
sale information for such trades is publicly disseminated on a real-
time basis. For trades executed during normal market hours and canceled 
at or before 4:00 p.m. on the date of execution, members are required 
to report the cancelation of the trades within 90 seconds of 
cancellation.\10\ There are certain limited exceptions to this general 
requirement, including for trades in non-exchange-listed DPP 
securities, as discussed below.\11\
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    \9\ See, e.g., FINRA Rules 6282(a), 6380A(a), 6380B(a), and 
6622(a).
    \10\ See, e.g., FINRA Rules 6282(j), 6380A(g), 6380B(f) and 
6622(f). See also Cancellations Order, supra note 8.
    \11\ Additionally, FINRA noted that transactions in PORTAL 
securities, as defined in FINRA Rule 6631, are not subject to the 
90-second reporting requirement, but must be reported to the ORF by 
the end of the day. See FINRA Rule 6633.
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    FINRA proposed to amend the trade reporting rules to require that 
members report OTC equity transactions to FINRA within 30 seconds of 
execution. In addition, for trades executed during normal market hours 
and canceled at or before 4 p.m. on the date of execution, FINRA 
proposed to amend the trade reporting rules to require that members 
report cancellations within 30 seconds of cancellation.\12\ 
Specifically, the trade reporting rules would be amended to replace the 
references to 90 seconds with 30 seconds.\13\ Trades not reported 
within 30 seconds, unless expressly subject to a different reporting 
requirement or excluded from the trade reporting rules altogether, 
would be late.\14\
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    \12\ See note 8, supra.
    \13\ See FINRA Rules 6282(a) and (j); 6380A(a) and (g); 6380B(a) 
and (f); 6622(a) and (f); 7130(b); 7230A(b); 7230B(b); and 7330(b). 
FINRA also proposed to amend FINRA Rules 6181 and 6623 to replace 
the reference to 90 seconds with a more general reference to ``the 
required time period'' to clarify that these provisions also apply 
to trades that are subject to a different reporting requirement 
(e.g., certain trades executed outside normal market hours).
    \14\ Although members would have 30 seconds to report, FINRA 
reiterated that--as is the case today--members must report trades as 
soon as practicable and cannot withhold trade reports, e.g., by 
programming their systems to delay reporting until the last 
permissible second.
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B. Reporting Requirements Applicable to Trades in Non-Exchange-Listed 
DPP Securities

    Pursuant to current FINRA Rule 6643(a)(1), members are required to 
report trades in non-exchange-listed DPP securities to the ORF by 1:30 
p.m. Eastern Time on the next business day (T+1) after the date of 
execution; members that have the operational capability to report 
transactions within 90 seconds of execution may do so at their 
option.\15\ By contrast, OTC trades in exchange-listed DPP securities 
are reported to a TRF or the ADF and are subject to the 90-second 
reporting requirement (like any other OTC trade in an NMS stock).\16\
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    \15\ Transaction information for such trades is not disseminated 
on a real-time trade-by-trade basis, but is included in end-of-day 
summary information.
    \16\ See FINRA Rules 6282(a), 6380A(a), and 6380B(a).
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    FINRA proposed to amend the trade reporting rules to require that 
transactions in non-exchange-listed DPP securities be reported within 
30 seconds of execution to conform to the reporting requirements 
applicable to other OTC transactions, including OTC transactions in 
exchange-listed DPP securities. Specifically, FINRA proposed to delete 
the Rule 6640 Series (Reporting Transactions in Direct Participation 
Program Securities) in its entirety, so that secondary market 
transactions in non-exchange-listed DPPs would be reported to FINRA as 
any other OTC Equity Security pursuant to Rules 6622, 6623, 7310, and 
7330 as proposed to be revised.\17\ FINRA also proposed to make other 
changes necessary to implement the new reporting regime applicable to 
non-exchange listed DPP securities.\18\
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    \17\ See Section II.C below.
    \18\ For a detailed description of these changes see Notice, 
supra note 3, at 59273-59274. In the Notice, FINRA noted that 
transactions in non-exchange-listed DPPs currently are not subject 
to regulatory transaction fees because they are not subject to 
prompt last sale reporting under FINRA rules. As a result of the 
proposed rule change, transactions in non-exchange-listed DPPs would 
become subject to regulatory transaction fees. See Notice, at 59274.
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C. Proposed Conforming Amendments

    In addition to the changes described above, FINRA proposed certain 
changes to a number of subparagraphs within paragraph (a) of Rule 6622 
relating to the ORF to conform, to the extent practicable, to the rules 
relating to the ADF and TRFs.\19\
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    \19\ For a detailed description of these changes see Notice, 
supra note 3, at 59274. FINRA noted that most of the proposed 
conforming changes to FINRA Rule 6622(a) are technical in nature; 
however, some members may need to make systems changes to comply 
with some of the requirements that are not included expressly in the 
current rule.
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    In addition to the proposed amendments to Rule 6622, FINRA proposed 
to amend Rule 6420 to add ``normal market hours'' and ``OTC Reporting 
Facility Participant'' as defined terms.\20\
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    \20\ The proposed definition of ``normal market hours'' is 
identical to the TRF rules, and the proposed definition of ``OTC 
Reporting Facility Participant'' is substantially similar to the 
definition of ``Trade Reporting Facility Participant'' in the TRF 
rules. See, e.g., FINRA Rules 6320A and 6320B.

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[[Page 17808]]

III. Summary of Comment Letters and FINRA's Response

    The Commission received two comment letters on the proposed rule 
change.\21\
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    \21\ See note 4, supra.
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A. 30-Second Reporting Requirement

    One commenter raised the following issues related to the proposed 
30-second reporting requirement.\22\ First, the commenter pointed out 
that the proposal does not reflect the manual processes many firms have 
in place when reporting to a TRF, such as using WeblinkACT 2.0, a 
NASDAQ product which requires the user to type information into a 
browser based window in order to report transactions. According to the 
commenter, if the reporting time is changed to 30 seconds ``it is 
plausible that firms using WeblinkACT would have difficulty reporting 
within 30 seconds.''\23\ The commenter stated that this places an undue 
burden on firms with processes that are manual in nature.\24\
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    \22\ See Cheevers Letter, supra note 4.
    \23\ Id. at 1.
    \24\ Id.
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    In the original filing, FINRA proposed to implement the proposed 
rule change between six and nine months following the date of 
Commission approval. In responding to the first comment, FINRA 
recognized that firms that use a manual process such as WeblinkACT to 
report trades may have difficulty entering all of the required 
information within 30 seconds.\25\ However, FINRA represented that the 
number of trades reported in this manner is a tiny fraction of the 
overall number of trades reported to FINRA on a daily basis, and that 
the number of firms that use this manual reporting process is small. 
Moreover, FINRA noted that there are steps that firms using WeblinkACT 
could take to expedite trade reporting, including, for example, setting 
defaults to automatically populate certain fields in the trade report 
or separating the process of reporting for tape purposes from any 
associated clearing entry (i.e., the submission of additional clearing 
information may be the reason a firm cannot complete the reporting 
within 30 seconds). Accordingly, in Amendment No. 2, FINRA proposed to 
provide an additional six months for member firms that utilize manual 
trade reporting systems to make the systems changes necessary to comply 
with the 30-second trade reporting requirement \26\
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    \25\ See Amendment No. 2, supra note 5.
    \26\ FINRA will phase-in implementation of the 30-second 
reporting requirement. The implementation date for ``Manual 
Reporting Firms'' would be between twelve and fifteen months 
following the date of Commission approval (``Phase II''). For 
purposes of Phase II implementation, FINRA defined a ``Manual 
Reporting Firm'' as a firm that uses a manual process such as 
WeblinkACT (or the Nasdaq or ACT workstation) for all, or 
substantially all, of its trade reporting of OTC trades. Firms with 
automated processes that on occasion manually report trades would 
not fall within the scope of this definition and must comply with 
the Phase I implementation date for all of their trade reporting. In 
other words, firms with automated trade reporting processes would 
not qualify for Phase I implementation for some trades and Phase II 
implementation for other trades. For a detailed description of the 
steps necessary to qualify as a Manual Reporting Firm, see Amendment 
No. 2, supra note 5. For all other firms, the implementation date 
would be between six and nine months following the date of 
Commission approval, as proposed in the original filing (``Phase 
I''). FINRA would announce the implementation dates in a Regulatory 
Notice. The proposed phased-in implementation schedule would apply 
to the 30-second reporting requirement only. The conforming changes 
to the rules relating to the ORF that were proposed in the original 
filing would be implemented for all firms on the Phase I 
implementation date. Prior to the Phase II implementation date, 
Manual Reporting Firms would continue to be subject to the current 
trade reporting requirements, i.e., firms must report as promptly as 
practicable--and in no event more than 90 seconds--following trade 
execution. These firms also would continue to be subject to all 
other reporting time frames under FINRA rules. FINRA also stated 
that the proposed phased-in implementation schedule would not 
establish a separate standard for purposes of modifying trade 
reports as timely versus late. Upon Phase I implementation, all 
trades reported more than 30 seconds after execution will be 
modified as late for reporting and dissemination purposes.
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    Second, the commenter noted that the proposed rule change will not 
materially enhance market transparency and questioned the need for 
reducing the reporting time given that 99.90% of all trades are already 
being reported within 30 seconds.\27\
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    \27\ See Cheevers Letter at 1.
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    In responding to the second comment, FINRA stated that the original 
filing cited a number of compelling reasons for the proposed rule 
change. Additionally, FINRA noted that under the 90-second reporting 
requirement, market participants have no way of distinguishing among 
trades reported 30 or 60 or 90 seconds after execution; they all appear 
on the tape as timely reported trades.\28\ FINRA stated that the 
proposed rule change would provide market participants the certainty 
that any trade disseminated as timely reported was executed within the 
previous 30 seconds.
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    \28\ See Amendment No. 2, supra note 5.
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    Third, the commenter stated that Qualified Contingent (QCT) trades 
\29\ should be exempt from the 30-second reporting requirement.\30\ In 
responding to the comment, FINRA stated that such trades currently are 
subject to real-time trade reporting and dissemination, and FINRA does 
not believe that a blanket exemption is warranted in this instance.\31\ 
FINRA noted, however, that if a firm reports QCT trades via a manual 
process such as WeblinkACT, it may qualify for the later Phase II 
implementation date, as discussed above, and have additional time to 
make necessary systems changes.\32\
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    \29\ See Securities Exchange Act Release No. 54389 (August 31, 
2006), 71 FR 52829 (September 7, 2006) (Order Granting an Exemption 
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS 
under the Securities Exchange Act of 1934); and Securities Exchange 
Act Release No. 57620 (April 4, 2008), 73 FR 19271 (April 9, 2008) 
(Order Modifying the Exemption for Qualified Contingent Trades from 
Rule 611(a) of Regulation NMS under the Securities Exchange Act of 
1934).
    \30\ See Cheevers Letter at 2. The commenter noted that such 
orders are not exposed to the open marketplace and the reported 
prices are not indicative of the current available market for the 
security, therefore their increased timeliness adds little to the 
transparency of the actionable market.
    \31\ See Amendment No. 2, supra note 5.
    \32\ Id.
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    Finally, the commenter recommended that FINRA adopt a rule that 
requires firms to report ``as soon as practicable,'' rather than impose 
a 30-second reporting requirement, to afford firms with manual 
processes the ability to remain compliant and to require that automated 
processes are programmed to report promptly.\33\ In responding to the 
comment, FINRA stated that a bright-line, uniform standard is crucial 
for surveillance and enforcement purposes, and provides meaningful 
information to the market.\34\
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    \33\ See Cheevers Letter at 2-3.
    \34\ See Amendment No. 2, supra note 5.
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B. Reporting Requirements Applicable to Trades in Non-Exchange-Listed 
DPP Securities

    The second commenter addressed the proposal relating to the trade 
reporting of transactions in non-exchange-listed DPPs.\35\ The 
commenter asserted that a 30-second reporting requirement for non-
exchange-listed DPPs would be problematic because the time of execution 
for such trades is not a precise time. The commenter asserted that 
``there is a lot of paperwork to complete before a `trade' takes place 
between a buyer and a seller, and then the transfer itself has to be 
accepted and completed by the issuer or an agent of the issuer.'' \36\ 
The commenter further asserted that ``[i]f a trade report is required 
at all, it should be within 24 hours of the `last act' that is required 
between the buyer, seller and issuer to ultimately complete the 
trade.'' \37\
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    \35\ See NPB Letter, supra note 4.
    \36\ See NPB Letter at 1.
    \37\ Id.
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    In responding to the comment, FINRA stated that, as discussed in 
the original filing, pursuant to current Rule

[[Page 17809]]

6643(a)(1), members are required to report trades in non-exchange-
listed DPP securities to the ORF by 1:30 p.m. Eastern Time on the next 
business day (T+1) after the date of execution; members that have the 
operational capability to report transactions within 90 seconds of 
execution may do so at their option.\38\ The original filing proposed 
to amend Rule 6622 to include as Supplementary Material the definitions 
of ``date of execution'' and ``time of execution'' for non-exchange-
listed DPP transactions.\39\ Thus, FINRA stated that under current 
rules and the proposed rule change, there is no uncertainty as to the 
time of execution of the trade or the point at which a firm's reporting 
obligation is triggered. With respect to the commenter's suggestion 
that a trade report should be required (if at all) within 24 hours of 
the `last act' that is required between the buyer, seller and issuer to 
ultimately complete the trade, FINRA reiterated that under its trade 
reporting rules, the reporting obligation is triggered upon execution, 
not settlement, of the trade and the fact that the ultimate transfer of 
the securities may be contingent on subsequent events or actions of 
other parties is irrelevant.\40\
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    \38\ See Notice, supra note 3, at 59273.
    \39\ FINRA stated that the proposed definitions are identical to 
the definitions in current Rule 6642, and specifically, ``time of 
execution'' is defined as the time when the parties to a transaction 
in a DPP have agreed to all of the essential terms of the 
transaction, including the price and number of the units to be 
traded. See Amendment No. 2, supra note 5.
    \40\ See Amendment No. 2, supra note 5. Moreover, FINRA noted 
that delaying the trade report until a later date when the transfer 
actually occurs could be confusing to market participants, because 
intervening events, such as the payment of a distribution or sale of 
partnership assets, could affect the price or value of the DPP. See 
id.
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IV. Discussion and Commission Findings

    After carefully considering the proposal, the comments submitted, 
and FINRA's response to the comments, the Commission finds that the 
proposed rule change is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to a national 
securities association.\41\ In particular, the Commission finds that 
the proposed rule change is consistent with Section 15A(b)(6) of the 
Act,\42\ which requires, among other things, that FINRA rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, and, in general, to 
protect investors and the public interest. The Commission has 
considered the commenters' view on the proposed rule change and 
believes that FINRA responded appropriately to the concerns raised. 
Indeed, the Commission believes that the proposal promotes the goals of 
transparency, consistency in trade reporting and dissemination, and 
timely reporting by FINRA members.
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    \41\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \42\ 15 U.S.C. 78o-3(b)(6).
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    Furthermore, the Commission believes that the proposal is 
consistent with Section 11A(a)(1)(C)(iii) of the Act,\43\ which sets 
forth Congress' finding that it is in the public interest and 
appropriate for the protection of investors and the maintenance of fair 
and orderly markets to assure the availability to brokers, dealers, and 
investors of information with respect to quotations and transactions in 
securities. The Commission believes that these goals are furthered by 
the proposed amendments requiring that FINRA members report OTC equity 
transactions to FINRA within 30 seconds of execution; requiring that 
members report trade cancellations within 30 seconds of the time the 
trade is canceled; requiring that members report secondary market 
transactions in non-exchange-listed DPP securities to FINRA within 30 
seconds of execution; and making certain conforming changes to the 
rules relating to the ORF. The proposed rule change is reasonably 
designed to accomplish these goals by shortening the time within which 
FINRA members must report trades from 90 seconds to 30 seconds. As 
FINRA stated in its proposal, the 90-second reporting requirement has 
been in effect since 1982, when OTC trading was ``more manual in 
nature.'' The regulatory landscape has changed substantially in the 
intervening 28 years and, as trading has become increasingly automated, 
the vast majority of trades are now reported in a much shorter period 
of time.\44\
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    \43\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \44\ For example, FINRA noted that during the period of February 
23 through February 27, 2009, overall member compliance with the 
current 90-second reporting requirement was 99.95% (for all trades 
submitted to a FINRA Facility for public dissemination), and 99.90% 
of trades were reported in 30 seconds or less. See Notice, supra 
note 3.
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    The Commission shares FINRA's belief that the proposed rule change 
will promote consistent and timely reporting by all members and enhance 
market transparency and price discovery by ensuring that trades are 
disseminated closer in time to execution. As FINRA stated in submitting 
its proposal, timely reporting has become even more critical with the 
implementation of Regulation NMS. Additionally, the proposed rule 
change will lessen the ability of members to withhold important market 
information from investors and other market participants for 
competitive or other improper reasons.\45\ Going forward, the 
Commission expects FINRA to monitor the effect of this change and to 
consider the need to lower the time within which trades must be 
reported even further.
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    \45\ FINRA reiterated the importance of timely reporting and 
reminds members that a pattern and practice of late reporting may be 
considered inconsistent with high standards of commercial honor and 
just and equitable principles of trade in violation of FINRA Rule 
2010. See Notice, supra note 3.
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    However, one commenter asserted that the proposal places an undue 
burden on firms with processes that are manual in nature.\46\ In 
response to this comment, in Amendment No. 2, FINRA proposed to provide 
an additional six months for member firms that utilize manual trade 
reporting systems to make the systems changes necessary to comply with 
the 30-second trade reporting requirement.\47\
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    \46\ See note 24, supra, and accompanying text.
    \47\ See notes 25-26, supra, and accompanying text.
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    With respect to FINRA's proposal to amend the trade reporting rules 
to require that transactions in non-exchange-listed DPP securities be 
reported within 30 seconds to conform to the reporting requirements 
applicable to other OTC transactions, including those in exchange-
listed DPP securities, the Commission shares FINRA's belief that the 
inconsistency in the reporting and dissemination of DPPs can create 
confusion for market participants, especially when an exchange-listed 
DPP is delisted and dissemination of trading in the security goes from 
real-time to only twice daily. Therefore, the Commission believes that 
there is a value in such uniform reporting for DPP securities.
    In its filing with the Commission, FINRA stated its belief that the 
proposed rule change would enhance market transparency and promote 
consistency in trade reporting and dissemination and that increasing 
the public availability of information would allow FINRA to obtain a 
more complete audit trail of transactions in the market and enhance 
FINRA's ability to oversee its members' compliance with Regulation NMS. 
Although the Commission acknowledges the potential for firms covered by 
these new reporting requirements to incur additional compliance burdens 
and costs, the Commission believes that any such burdens are outweighed 
by the overall

[[Page 17810]]

benefits of increased transparency and access to more comprehensive 
trade information in the OTC markets.

V. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\48\ for approving the proposed rule change, as modified by 
Amendments No. 1 and 2 thereto, prior to the 30th day after the date of 
publication of Amendment No. 2 in the Federal Register. The changes 
proposed in Amendment No. 2 are minor in nature or respond to specific 
concerns raised by commenters. In Amendment No. 2, the Exchange 
proposed to change the requirement to report the cancellation of a 
trade executed during normal market hours and canceled before 4 p.m. on 
the date of execution from 90 seconds to 30 seconds in Rule 
6282(j)(2)(A).\49\ Amendment No. 2 also reflects changes approved in 
SR-FINRA-2009-082 to the text of Rules 6380A(g)(2)(A), 6380B(f)(2)(A) 
and 6622(f)(2)(A).\50\
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    \48\ 15 U.S.C. 78s(b)(2).
    \49\ The requirement to report cancellations in 90 seconds was 
established by SR-FINRA-2009-082. See Cancellations Order, supra 
note 8.
    \50\ See Cancellations Order, supra note 8.
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    Accordingly, the Commission finds that good cause exists to approve 
the proposal, as modified by Amendments Nos. 1 and 2, on an accelerated 
basis.

VI. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 2 
to the proposed rule change is consistent with the Act. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-FINRA-2009-061 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2009-061. This 
file number should be included on the subject line if e-mail is used. 
To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for Web site 
viewing and printing in the Commission's Public Reference Room, on 
official business days between the hours of 10 a.m. and 3 p.m. Copies 
of the filing will also be available for inspection and copying at the 
principal office of FINRA.\51\ 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 No. SR-FINRA-2009-061 and should be submitted on or before April 
28, 2010.
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    \51\ The text of the proposed rule change, as modified by 
Amendments Nos. 1 and 2, is available on FINRA's Web site at http://www.finra.org, on the Commission's Web site at http://www.sec.gov, 
at FINRA, and at the Commission's Public Reference Room.
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VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-FINRA-2009-061), as modified by 
Amendments Nos. 1 and 2, be, and hereby is, approved on an accelerated 
basis.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\52\
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    \52\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7843 Filed 4-6-10; 8:45 am]
BILLING CODE 8011-01-P