Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 19b-4 -- Filings with Respect to Proposed Rule Changes by Self-Regulatory Organizations

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1. Filings with respect to proposed rule changes by a self-regulatory organization, except filings with respect to proposed rules changes by self-regulatory organizations submitted pursuant to section 19(b)(7) of the Act shall be made electronically on Form 19b-4.
   
   
2. The term "stated policy, practice, or interpretation" means:

   1. Any material aspect of the operation of the facilities of the self-regulatory organization; or

   2. Any statement made generally available to the membership of, to all participants in, or to persons having or seeking access (including, in the case of national securities exchanges or registered securities associations, through a member) to facilities of, the self-regulatory organization ("specified persons"), or to a group or category of specified persons, that establishes or changes any standard, limit, or guideline with respect to:
      
      
      1. the rights, obligations, or privileges of specified persons or, in the case of national securities exchanges or registered securities associations, persons associated with specified persons; or
         
         
      2. the meaning, administration, or enforcement of an existing rule.
         
         
3. A stated policy, practice, or interpretation of the self-regulatory organization shall be deemed to be a proposed rule change unless
   
   
   1. it is reasonably and fairly implied by an existing rule of the self-regulatory organization or
      
      
   2. it is concerned solely with the administration of the self-regulatory organization and is not a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule of the self-regulatory organization.
      
      
4. Regardless of whether it is made generally available, an interpretation of an existing rule of the self-regulatory organization shall be deemed to be a proposed rule change if
   
   
   1. it is approved or ratified by the governing body of the self-regulatory organization and
      
      
   2. it is not reasonably and fairly implied by that rule.
      
      
5. For the purposes of this paragraph, new derivative securities product means any type of option, warrant, hybrid securities product or any other security, other than a single equity option or a security futures product, whose value is based, in whole or in part, upon the performance of, or interest in, an underlying instrument.
   
   
   1. The listing and trading of a new derivative securities product by a self- regulatory organization shall not be deemed a proposed rule change, pursuant to paragraph (c)(1) of this section, if the Commission has approved, pursuant to section 19(b) of the Act, the self-regulatory organization's trading rules, procedures and listing standards for the product class that would include the new derivative securities product and the self-regulatory organization has a surveillance program for the product class.
      
      
   2. Recordkeeping and reporting:
      
      
      1. Self-regulatory organizations shall retain at their principal place of business a file, available to Commission staff for inspection, of all relevant records and information pertaining to each new derivative securities product traded pursuant to this paragraph (e) for a period of not less than five years, the first two years in an easily accessible place, as prescribed in Rule 17a-1.
         
         
      2. When relying on this paragraph (e), a self-regulatory organization shall submit Form 19b-4(e) to the Commission within five business days after commencement of trading a new derivative securities product.
         
         
6. A proposed rule change may take effect upon filing with the Commission pursuant to Section 19(b)(3) of the Act, if properly designated by the self-regulatory organization as:
   
   
   1. Constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule;
      
      
   2. Establishing or changing a due, fee, or other charge applicable to a member;
      
      
   3. Concerned solely with the administration of the self-regulatory organization;
      
      
   4. Effecting a change in an existing service of a registered clearing agency that:
      
      
      1. Does not adversely affect the safeguarding of securities or funds in the custody or control of the clearing agency or for which it is responsible; and
         
         
      2. Does not significantly affect the respective rights or obligations of the clearing agency or persons using the service;
         
         
   5. Effecting a change in an existing order-entry or trading system of a self-regulatory organization that:
      
      
      1. Does not significantly affect the protection of investors or the public interest;
         
         
      2. Does not impose any significant burden on competition; and
         
         
      3. Does not have the effect of limiting the access to or availability of the system; or
         
         
   6. Effecting a change that:
      
      
      1. Does not significantly affect the protection of investors or the public interest;
         
         
      2. Does not impose any significant burden on competition; and
         
         
      3. By its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission.
         
         
7. After instituting a proceeding to determine whether a proposed rule change should be disapproved, the Commission will afford the self-regulatory organization and interested persons an opportunity to submit additional written data, views, and arguments and may afford, in the discretion of the Commission, an opportunity to make oral presentations.
   
   
8. Notice of orders issued pursuant to Section 19(b) of the Act will be given by prompt publication thereof, together with a statement of written reasons therefor.
   
   
9. Self-regulatory organizations shall retain at their principal place of business a file, available to interested persons for public inspection and copying, of all filings made pursuant to this section and all correspondence and other communications reduced to writing (including comment letters) to and from such self-regulatory organization concerning any such filing, whether such correspondence and communications are received or prepared before or after the filing of the proposed rule change.
   
   
10. Filings with respect to proposed rule changes by a self-regulatory organization submitted on Form 19b-4 (17 CFR 249.819) electronically shall contain an electronic signature. For the purposes of this section, the term electronic signature means an electronic entry in the form of a magnetic impulse or other form of computer data compilation of any letter or series of letters or characters comprising a name, executed, adopted or authorized as a signature. The signatory to an electronically submitted rule filing shall manually sign a signature page or other document, in the manner prescribed by Form 19b-4, authenticating, acknowledging or otherwise adopting his or her signature that appears in typed form within the electronic filing. Such document shall be executed before or at the time the rule filing is electronically submitted and shall be retained by the filer in accordance with Rule 17a-1.



11. If the conditions of this section and Form 19b-4 (17 CFR 249.819) are otherwise satisfied, all filings submitted electronically on or before 5:30 p.m. Eastern Standard Time or Eastern Daylight Saving Time, whichever is currently in effect, on a business day, shall be deemed filed on that business day, and all filings submitted after 5:30 p.m. Eastern Standard Time or Eastern Daylight Saving Time, whichever is currently in effect, shall be deemed filed on the next business day.



12. The self-regulatory organization shall post the proposed rule change, and any amendments thereto, on its Web site within two business days after the filing of the proposed rule change, and any amendments thereto, with the Commission. Such proposed rule change and amendments shall be maintained on the self-regulatory organization’s Web site until:
    
    
1. In the case of a proposed rule change filed under section 19(b)(2) of the Act, the Commission approves the proposed rule change or the self-regulatory organization withdraws the proposed rule change, or any amendments, or is notified that the proposed rule change is not properly filed; or
   
   
2. In the case of a proposed rule change filed under section 19(b)(3)(A) of the Act, or any amendment thereto, 60 days after the date of filing, unless the self-regulatory organization withdraws the proposed rule change or is notified that the proposed rule change is not properly filed; and



3. In the case of proposed rule changes approved by the Commission pursuant to section 19(b)(2) of the Act or noticed by the Commission pursuant to section 19(b)(3)(A) of the Act, the self-regulatory organization updates its rule text as required by paragraph (m) of this section; and



4. In the case of a proposed rule change, or any amendment thereto, that has been withdrawn or not properly filed, the self-regulatory organization shall remove the proposed rule change, or any amendment, from its Web site within two business days of notification of improper filing or withdrawal by the SRO of the proposed rule change.



13. 
    
    
    1. Each self-regulatory organization shall post and maintain a current and complete version of its rules on its Web site.
       
       
    2. A self-regulatory organization, other than a self-regulatory organization that is registered with the Commission under section 6(g) of the Act or pursuant to section 15A(k) of the Act, shall update its Web site to reflect rule changes filed pursuant to section 19(b)(2) of the Act within two business days after it has been notified of the Commission's approval of a proposed rule change, and to reflect rule changes filed pursuant to section 19(b)(3)(A) of the Act within two business days of the Commission's notice of such proposed rule change.
       
       
    3. A self-regulatory organization that is registered with the Commission under section 6(g) of the Act or pursuant to section 15A(k) of the Act, shall update its Web site to reflect rule changes filed pursuant to section 19(b)(2) of the Act by two business days after the later of:
       
       
       1. Notification that the Commission has approved a proposed rule change; and
          
          
       2. 
          
          
          1. The filing of a written certification with the Commodity Futures Trading Commission under section 5c(c) of the Commodity Exchange Act (7 U.S.C. 7a-2(c));
             
             
          2. Receipt of notice from the Commodity Futures Trading Commission that it has determined that review of the proposed rule change is not necessary; or
             
             
          3. Receipt of notice from the Commodity Futures Trading Commission that it has approved the proposed rule change.
             
             
    4. If a rule change is not effective for a certain period, the self-regulatory organization shall clearly indicate the effective date in the relevant rule text.
       

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