Form SEC2450 Proposed Rule Change by [Select SRO] Pursuant to Rule 19

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 19b-7

Page 1 of

Proposed Rule Change by

File No. SR
Amendment No.

Select SRO

Pursuant to Rule 19b-7 under the Securities Exchange Act of 1934
Initial

Amendment

Exhibit 2 Sent As Paper Document

Withdrawal

Exhibit 3 Sent As Paper Document

Description
Provide a brief description of the proposed rule change (limit 250 characters).

Contact Information
Provide the name, telephone number and e-mail address of the person on the staff of the self-regulatory organization
prepared to respond to questions and comments on the proposed rule change.

Last Name

First Name
Title
E-mail
Fax

Telephone

SRO Governing Body Action
Describe action on the proposed rule change taken by the members or board of directors or other governing body of the SRO
(limit 250 characters).

Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,

has duly caused this filing to be signed on its behalf by the undersigned thereunto duly authorized officer.

Date
By
(Name)
NOTE: Clicking the button at right will digitally sign and lock
this form. A digital signature is as legally binding as a physical
signature, and once signed, this form cannot be changed.

(Title)

Digitally Sign and Lock Form

-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
For complete Form 19b-7 instructions please refer to the EFFS website.

Exhibit 1- Notice of Proposed Rule
Change
Add

Remove

The self-regulatory organization must provide all required information, presented in a
clear and comprehensible manner, to enable the public to provide meaningful
comment on the proposal.

View
The Notice section of this Form 19b-7 must comply with the guidelines for publication
in the Federal Register, as well as any requirements for electronic filing as published
by the Commission (if applicable). The Office of the Federal Register (OFR) offers
guidance on Federal Register publication requirements in the Federal Register
Document Drafting Handbook, October 1998 Revision. For example, all references to
the federal securities laws must include the corresponding cite to the United States
Code in a footnote. All references to SEC and CFTC rules must include the
corresponding cite to the Code of Federal Regulations in a footnote. All references to
Securities Exchange Act Releases and Commodities Exchange Act Releases must
include the release number, release date, Federal Register cite, Federal Register
date, and corresponding file number (e.g., SR-[SRO]-xx-xx). A material failure to
comply with these guidelines will result in the proposed rule change being deemed
not properly filed. See also Rule 0-3 under the Act (17 CFR 240.0-3)

Exhibit 2- Notices, Written Comments,
Transcripts, Other Communications
Add

Remove

Copies of notices, written comments, transcripts, other communications. If such
documents cannot be filed electronically in accordance with Instruction E, they shall
be filed in accordance with Instruction F.

View

Exhibit Sent As Paper Document

Exhibit 3 - Form, Report, or Questionnaire
Add

Remove

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Exhibit Sent As Paper Document

Exhibit 4 - Proposed Rule Text
Add

Remove

View

Exhibit 5 - Date of Effectiveness of
Proposed Rule Change

Copies of any form, report, or questionnaire that the self-regulatory organization
proposes to use to help implement or operate the proposed rule change, or that is
referred to by the proposed rule change. If such documents cannot be filed
electronically in accordance with Instruction E, they shall be filed in accordance with
Instruction F.

The self-regulatory organization must attach as Exhibit 4 proposed changes to rule
text. Exhibit 4 shall be considered part of the proposed rule change.

The self-regulatory ogranization must attach one of the following:

CFTC Certification
CFTC Request that Review of Proposed Rule Change is not Necessary
Request for CFTC Approval of Proposed Rule Change
CFTC Determination that Review of Proposed Rule Change is not Necessary
Indication of CFTC Approval of Proposed Rule Change

Exhibit Sent As Paper Document

Partial Amendment
Add

Remove

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If the self-regulatory organization is amending only part of the text of a lengthy proposed rule
change, it may, with the Commission staff's permission, file only those portions of the text of
the proposed rule change in which changes are being made if the filing (i.e. partial
amendment) is clearly understandable on its face. Such partial amendment shall be clearly
identified and marked to show deletions and additions.

GENERAL INSTRUCTIONS FOR FORM 19b-7
A.

Use of the Form
All self-regulatory organization proposed rule changes submitted pursuant to

Section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”), shall be filed
electronically through the Electronic Form Filing System (“EFFS”), a secure Web site
operated by the Commission. This form shall be used for filings of proposed rule
changes by all self-regulatory organizations pursuant to Section 19(b)(7) of the Act.
National securities exchanges registered pursuant to Section 6(g) of the Act and limited
purpose national securities associations registered pursuant to Section 15A(k) of the Act
are self-regulatory organizations for purposes of this form.
B.

Need for Careful Preparation of the Completed Form, Including Exhibits
This form, including the exhibits, is intended to elicit information necessary for

the public to provide meaningful comment on the proposed rule change and for the
Commission to determine whether abrogation of the proposal is appropriate because it
unduly burdens competition or efficiency, conflicts with the securities laws, or is
inconsistent with the public interest and the protection of investors. The self-regulatory
organization must provide all the information called for by the form, including the
exhibits, and must present the information in a clear and comprehensible manner.
The proposed rule change shall be considered filed with the Commission on the
date on which the Commission receives the proposed rule change if the filing complies
with all requirements of this form. Any filing that does not comply with the requirements
of this form may be returned to the self-regulatory organization at any time before the
issuance of the notice of filing. Any filing so returned shall for all purposes be deemed

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not to have been filed with the Commission. See also Rule 0-3 under the Act (17 CFR
240.0-3).
C.

Documents Comprising the Completed Form
The completed form filed with the Commission shall consist of the Form 19b-7

Page 1, numbers and captions for all items, responses to all items, and exhibits required
in Instruction H. In responding to an item, the completed form may omit the text of the
item as contained herein if the response is prepared to indicate to the reader the coverage
of the item without the reader having to refer to the text of the item or its instructions.
Each filing shall be marked on the Form 19b-7 with the initials of the self-regulatory
organization, the four-digit year, and the number of the filing for the year (i.e., SRO­
YYYY-XX). If the self-regulatory organization is filing Exhibit 2 or 3 via paper, the
exhibits must be filed within 5 business days of the electronic submission of all other
required documents.
D.

Amendments
If information on this form or exhibit thereto is or becomes inaccurate before the

proposed rule change becomes effective, the self-regulatory organization shall file
amendments correcting any such inaccuracy. Amendments shall be filed as specified in
Instruction E.
Amendments to a filing shall include the Form 19b-7 Page 1 marked to number
consecutively the amendments, numbers and captions for each amended item, amended
response to the item, and required exhibits. The amended description in Section II. A. 1.
of Exhibit 1 shall explain the purpose of the amendment and, if the amendment changes
the purpose of or basis for the proposed rule change, the amended response shall also

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provide a revised purpose and basis statement for the proposed rule change. Exhibit 1
shall be re-filed if there is a material change from the immediately preceding filing in the
language of the proposed rule change or in the information provided.
If the amendment alters the text of an existing rule, the amendment shall include
the text of the existing rule, marked in the manner described in Section I. of Exhibit 1
using brackets to indicate words to be deleted from the existing rule and underscoring to
indicate words to be added. The purpose of this marking requirement is to maintain a
current copy of how the text of the existing rule is being changed.
If the self-regulatory organization is amending only part of the text of a lengthy
proposed rule change, it may, with the Commission staff’s permission, file only those
portions of the text of the proposed rule change in which changes are being made if the
filing (i.e., partial amendment) is clearly understandable on its face. Such partial
amendment shall be clearly identified and marked to show deletions and additions.
If, after the rule change is filed but before it becomes effective, the self-regulatory
organization receives or prepares any correspondence or other communications reduced
to writing (including comment letters) to and from such self-regulatory organization
concerning the proposed rule change, the communications shall be filed as Exhibit 2. If
information in the communication makes the rule change filing inaccurate, the filing shall
be amended to correct the inaccuracy. If such communications cannot be filed
electronically in accordance with Instruction E, the communications shall be filed in
accordance with Instruction F.

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E.

Signature and Filing of the Completed Form
All proposed rule changes, amendments, extensions, and withdrawals of proposed

rule changes shall be filed through the EFFS. In order to file Form 19b-7 through EFFS,
self-regulatory organizations must request access to the SEC’s External Application
Server by completing a request for an external account user ID and password for the use
of the External Application User Authentication Form.
Initial requests will be received by contacting the Division of Trading and
Markets Administrator located on our Web site (http://www.sec.gov). An e-mail will be
sent to the requestor that will provide a link to a secure Web site where basic profile
information will be requested.
A duly authorized officer of the self-regulatory organization shall electronically
sign the completed Form 19b-7 as indicated on Page 1 of the Form. In addition, a duly
authorized officer of the self-regulatory organization shall manually sign one copy of the
completed Form 19b-7, and the manually signed signature page shall be maintained
pursuant to Section 17 of the Act.
F.

Procedures for Submission of Paper Documents for Exhibits 2 and 3
To the extent that Exhibit 2 or 3 cannot be filed electronically in accordance with

Instruction E, four copies of Exhibit 2 or 3 shall be filed with the Division of Trading and
Markets, Securities and Exchange Commission, 100 F Street, NE, Washington, DC
20549-6628. Page 1 of the electronic Form 19b-7 shall accompany paper submissions of
Exhibit 2 or 3. If the self-regulatory organization is filing Exhibit 2 or 3 via paper, they
must be filed within five days of the electronic filing of all other required documents.

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G.

Withdrawals of Proposed Rule Changes
If a self-regulatory organization determines to withdraw a proposed rule change, it

must complete Page 1 of the Form 19b-7 and indicate by selecting the appropriate check
box to withdraw the filing.
H.

Exhibits
List of exhibits to be filed, as specified in Instructions C and D:
Exhibit 1.

Completed Notice of Proposed Rule Change for publication in the

Federal Register. It is the responsibility of the self-regulatory organization to prepare
Items I, II and III of the notice. Leave a 1-inch margin at the top, bottom, and right hand
side, and a 1 ½ inch margin at the left hand side. Number all pages consecutively.
Double space all primary text and single space lists of items, quoted material when set
apart from primary text, footnotes, and notes to tables. Amendments to Exhibit 1 should
be filed in accordance with Instructions D and E.
Exhibit 2.

(a)

Copies of notices issued by the self-regulatory organization

soliciting comment on the proposed rule change and copies of all written comments on
the proposed rule change received by the self-regulatory organization (whether or not
comments were solicited), presented in alphabetical order, together with an alphabetical
listing of such comments. If such notices and comments cannot be filed electronically in
accordance with Instruction E, the notices and comments shall be filed in accordance
with Instruction F.
(b)

Copies of any transcript of comments on the proposed rule change made at

any public meeting or, if a transcript is not available, a copy of the summary of comments
on the proposed rule change made at such meeting. If such transcript of comments or

6

summary of comments cannot be filed electronically in accordance with Instruction E,
the transcript of comments or summary of comments shall be filed in accordance with
Instruction F.
(c)

Any correspondence or other communications reduced to writing

(including comment letters and e-mails) concerning the proposed rule change prepared or
received by the self-regulatory organization. All correspondence or other
communications should be presented in alphabetical order together with an alphabetical
listing of the authors, and shall be filed in accordance with Instruction E. If such
communications cannot be filed electronically in accordance with Instruction E, the
communications shall be filed in accordance with Instruction F.
(d)

If after the proposed rule change is filed but before it becomes effective,

the self-regulatory organization prepares or receives any correspondence or other
communications reduced to writing (including comment letters and e-mails) to and from
such self-regulatory organization concerning the proposed rule change, the
communications shall be filed in accordance with Instruction E. All correspondence or
other communications should be presented in alphabetical order together with an
alphabetical listing of the authors. If such communications cannot be filed electronically
in accordance with Instruction E, the communications shall be filed in accordance with
Instruction F.
Exhibit 3.
(a)

If any form, report, or questionnaire is

proposed to be used in connection with the implementation or operation of
the proposed rule change, or

(b)

prescribed or referred to in the proposed rule change,

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then the form, report, or questionnaire must be attached and shall be considered as part of
the proposed rule change. If completion of the form, report or questionnaire is voluntary
or is required pursuant to an existing rule of the self-regulatory organization, then the
form, report, or questionnaire, together with a statement identifying any existing rule that
requires completion of the form, report, or questionnaire, shall be attached as Exhibit 3.
If the form, report, or questionnaire cannot be filed electronically in accordance with
Instruction E, the documents shall be filed in accordance with Instruction F.
Exhibit 4.

The self-regulatory organization must attach as Exhibit 4 proposed

changes to its rule text. Changes in, additions to, or deletions from, any existing rule
shall be set forth with brackets used to indicate words to be deleted and underscoring
used to indicate words to be added. Exhibit 4 shall be considered part of the proposed
rule change.
Exhibit 5.

The self-regulatory organization must attach one of the following:

Certificate of Effectiveness of Proposed Rule Change: Attach a copy of the
certification submitted to the CFTC pursuant to Section 5c(c) of the Commodity
Exchange Act.
CFTC Request or Determination that Review of the Proposed Rule Change is Not
Necessary: Attach a copy of any request submitted to the CFTC for determination that
review of the proposed rule change is not necessary and any indication from the CFTC
that it has determined that review of the proposed rule change is not necessary.
Request for CFTC Approval of Proposed Rule Change: Attach a copy of any
request submitted to the CFTC for approval of the proposed rule change and any
indication received from the CFTC that the proposed rule change has been approved.

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Information To Be Included in the Completed Exhibit 1
SECURITIES AND EXCHANGE COMMISSION

(Release No. 34-

; File No. SR-[SRO Name]-[YYYY]-[XX])

SELF-REGULATORY ORGANIZATIONS; [SRO Name]; Proposed Rule Change

Relating to [brief description of the subject matter of the proposed rule change].

Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (“Act”),1
notice is hereby given that on [date2], the [name of self-regulatory organization] filed
with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed
rule change 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. [Name of self-regulatory
organization] also has filed this proposed rule change concurrently with the Commodity
Futures Trading Commission (“CFTC”). [Section 19(b)(7)(B) provides that a proposed
rule change may take effect upon the occurrence of one of three events. The selfregulatory organization should include one of the following sentences, whichever is
applicable:]
The [name of self-regulatory organization] filed a written certification with the CFTC
under Section 5c(c) of the Commodity Exchange Act on [date]; or
The [name of self-regulatory organization] on [date], has requested that the CFTC make a
determination that review of the proposed rule change of the [self-regulatory

1

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

2

To be completed by the Commission. This date will be the date on which the
Commission receives the proposed rule change filing if the filing complies with
all requirements of this form. See General Instructions for Form 19b-7.

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organization] is not necessary. The CFTC has [made such determination on [date]]; or
[has not made such determination]; or
The [name of self-regulatory organization] on [date] submitted the proposed rule change
to the CFTC for approval. The CFTC [approved the proposed rule change on [date]]; or
[has not approved the proposed rule change].
I.

Self-Regulatory Organization's Description and Text of the Proposed Rule
Change

[Supply a brief statement of the terms of substance of the proposed rule change.

If the proposed rule change is relatively brief, a separate statement need not be prepared,

and the text of the proposed rule change may be inserted in lieu of the statement of the

terms of substance. If the proposed rule change amends an existing rule, indicate the

changes in the rule by brackets for words to be deleted and underscoring for words to be

added.]

II.

Self-Regulatory Organization's Statement of the Purpose of, and Statutory
Basis for the Proposed Rule Change
In its filing with the Commission, the 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
statements may be examined at the places specified in Item IV below. The selfregulatory 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 Statutory
Basis for the Proposed Rule Change

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1.

Purpose

[Provide a statement of the purpose of the proposed rule change. The statement must
describe the text of the proposed rule change in a sufficiently detailed and specific
manner as to enable the public to provide meaningful comment on the proposal. At a
minimum, the statement should:]
(a) [Describe the reasons for adopting the proposed rule change, any problems the
proposed rule change is intended to address, the manner in which the proposed rule
change will resolve those problems, the manner in which the proposed rule change will
affect various persons (e.g. brokers, dealers, issuers, and investors), and any significant
problems known to the self-regulatory organization that persons affected are likely to
have in complying with the proposed rule change; and]
(b) [Describe how the proposed rule change relates to existing rules of the selfregulatory organization. If the self-regulatory organization reasonably expects that the
proposed rule change will have any direct effect, or significant indirect effect, on the
application of any other rule of the self-regulatory organization, set forth the designation
or title of any such rule and describe the anticipated effect of the proposed rule change on
the application of such other rule. Include the file numbers for prior filings with respect
to any existing rule specified.]
2.

Statutory Basis

[Explain why the proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to the self-regulatory organization. A
mere assertion that the proposed rule change is consistent with those requirements is not

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sufficient. Certain limitations that the Act imposes on self-regulatory organizations are
summarized in the notes that follow.
NOTE 1. National Securities Exchanges. Under Section 6 of the Act, rules of a
national securities exchange may not permit unfair discrimination between customers,
issuers, brokers, or dealers, and may not regulate, by virtue of any authority conferred by
the Act, matters not related to the purposes of the Act or the administration of the selfregulatory organization.
NOTE 2. Limited Purpose National Securities Associations. Under Section
15A(k) of the Act, rules of a national securities association registered for the limited
purpose of regulating the activities of members who are registered as brokers or dealers
in security futures products 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, including rules governing sales practices and the
advertising of security futures products reasonably comparable to those of other national
securities associations registered pursuant to Section 15A(a) that are applicable to
security futures products. The rules may not be designed to regulate, by virtue of any
authority conferred by the Act, matters not related to the purposes of the Act or the
administration of the association.]
B.

Self-Regulatory Organization's Statement on Burden on Competition

[The information required by this section must be sufficiently detailed and specific to
support the premise that the proposed rule change does not unduly burden competition.
In responding to this section, the self-regulatory organization must:
•

State whether the proposed rule change will have an impact on competition and, if so

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(i)

state whether the proposed rule change will impose any burden on
competition or whether it will relieve any burden on, or otherwise
promote, competition, and

(ii)

specify the particular categories of persons and kinds of businesses on
which any burden will be imposed and the ways in which the proposed
rule change will affect them.

• Explain why any burden on competition is not undue; or, if the self-regulatory
organization does not believe that the burden on competition is significant,
explain why.
In providing those explanations, set forth and respond in detail to written comments as to
any significant impact or burden on competition perceived by any person who has made
comments on the proposed rule change to the self-regulatory organization.]
C.

Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
[If written comments were received (whether or not comments were solicited)

from members of or participants in the self-regulatory organization or others, summarize
the substance of all such comments received and respond in detail to any significant
issues that those comments raised about the proposed rule change.
If an issue is summarized and responded to in detail under Section II.A.1. or
Section II.B. of this Form 19b-7 Notice, that response need not be duplicated if
appropriate cross-reference is made to the place where the response can be found. If
comments were not or are not to be solicited, so state.]

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III.

Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
[The self-regulatory organization shall include the following with the applicable

phrase on the proposed rule change’s effectiveness:]
The proposed rule change has become effective on [insert date of filing of written
certification with the CFTC under Section 5c(c) of the Commodity Exchange Act; or the
date of determination by the CFTC that review of the proposed rule change is not
necessary; or the date of approval of the proposed rule change by the CFTC]. [or]
The proposed rule change is not effective because the CFTC [has not determined
that review of the proposed rule changes is not necessary or has not approved the
proposed rule change].
At any time within 60 days of the date of effectiveness of the proposed rule
change, the Commission, after consultation with the CFTC, may summarily abrogate the
proposed rule change and require that the proposed rule change be refiled in accordance
with the provisions of Section 19(b)(1) of the Act.
IV.

Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments

concerning the foregoing, including whether the proposed rule change is consistent with
the Act. Comments may be submitted by any of the following methods:
Electronic comments:
• Use the Commission's Internet comment form

(http://www.sec.gov/rules/sro.shtml); or

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• Send an e-mail to [email protected]. Please include File Number SR­
[SRO]-[YYYY]-[XX] on the subject line.

Paper comments:

• Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and
Exchange Commission, Station Place, 100 F Street, NE, Washington, DC 20549­
1090.
All submissions should refer to File Number SR-[SRO]-[YYYY]-[XX]. 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 10:00 am and
3:00 pm. Copies of such filing also will be available for inspection and copying at the
principal office of the [SRO]. 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 publicly available. All

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submissions should refer to File Number SR-[SRO]-[YYYY]-[XX] and should be
submitted on or before [insert date 21 days from publication in the Federal Register].
For the Commission, by the Division of Trading and Markets, pursuant to
delegated authority.1
Secretary

1

17 CFR 200.30-3(a)(73).