SEC News Digest

COMMISSION ANNOUNCEMENTS

SEC, FRB Sign Agreement to Enhance Collaboration, Coordination and Information Sharing

Today, Securities and Exchange Commission Chairman Christopher Cox and Board of Governors of the Federal Reserve System Chairman Ben Bernanke signed a memorandum of understanding (MOU) between the two agencies that will deepen their information sharing and cooperation, permitting both agencies to better perform their responsibilities.

Under the MOU between the two agencies, the SEC and the Board would share information and cooperate across a number of important areas of common interest including anti-money laundering, bank brokerage activities under the Gramm-Leach-Bliley Act, clearance and settlement in the banking and securities industries, and the regulation of transfer agents. The MOU specifically covers bank holding companies and so-called Consolidated Supervised Entities that own securities firms. It builds on and formalizes the long-standing cooperative arrangements between the SEC and the Board, as well as the more recent cooperation on matters including banking and investment banking capital and liquidity following the Board's emergency opening of credit facilities to primary dealers.

"I am pleased with this agreement," said Federal Reserve Board Chairman Ben Bernanke. "It formalizes and strengthens the ongoing cooperation between our two agencies to enhance the stability of the financial system. I look forward to continuing this productive collaboration with Chairman Cox and his staff."

SEC Chairman Christopher Cox said, "This agreement represents a valuable coordination of the roles of the SEC and the Fed in our capital markets. Years ago, when the dividing lines between commercial and investment banking were bright, the high level of coordination we are establishing today was not a priority for the U.S. government. But today, the interconnectedness of mortgage and lending markets, credit derivatives, securitizations, and counterparty relationships requires the U.S. government to adopt a more coherent and coordinated approach. Just as with our similar arrangement with the CFTC, this agreement will permit the expanded sharing of information on a confidential basis, and help ensure that regulated entities receive a coherent message from Uncle Sam. This is smart government. We look forward to enhancing our collaborative relationship with the Fed within the formal framework covered by the agreement."

The MOU will improve the ability of the SEC to perform its role as primary supervisor of Consolidated Supervised Entities and Primary Dealers, and improve the ability of the Federal Reserve to perform its role in overseeing the stability of the financial system. The importance of this deepened cooperation is highlighted by the recent stress in the financial markets affecting commercial and investment banks, as well as many other market participants.

The SEC recently entered into a similar MOU with the Commodity Futures Trading Commission. An agreement between the SEC and the Department of Labor is anticipated later this summer. (Press Rel. 2008-134)

ENFORCMENT PROCEEDINGS

In the Matter of Phillip W. Offill, Jr., Esq.

On July 7th, the Commission issued an Order of Forthwith Suspension Pursuant to Rule 102(e)(2) of the Commission's Rules of Practice suspending Phillip W. Offill, Jr., Esq. from appearing or practicing before the Commission, based on the Texas State Bar's judgment (i) suspending him from practicing law for 36 months, and (ii) placing him on a period of probated suspension for an additional 24 months. The Commission's order finds that on March 13, 2008, a judgment was entered by the Texas State Bar, concluding that Offill, who has regularly appeared and practiced before the Commission, had committed multiple violations of the Texas Disciplinary Rules of Professional Conduct. Those violations included intending to destroy or conceal client documents when Offill knew that his former client was about to commence litigation against him, making misrepresentations to a federal judge in Florida, and misrepresenting in litigation pleadings his and his client's relationship to certain individuals. (Rel. 34-58105; File No. 3-13087)

SELF-REGULATORY ORGANIZATIONS

Proposed Rule Changes

The Financial Industry Regulatory Authority has filed a proposed rule change (SR-FINRA-2008-028) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, to adopt FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade), FINRA Rule 2020 (Use of Manipulative, Deceptive or Other Fraudulent Devices), and FINRA Rule 5150 (Fairness Opinions) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58095)

The Philadelphia Stock Exchange has filed a proposed rule change (SR-Phlx-2008-50) under Rule 19b-4 of the Exchange Act to establish an automated process for handling complex options orders on the Phlx's electronic trading platform for options, Phlx XL. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58099)

The National Securities Clearing Corporation filed a proposed rule change (SR-NSCC-2006-17) under Section 19(b)(1) of the Exchange Act that would allow NSCC to reorganize its Rules and Procedures related to membership standards and membership requirements to conform them to current practice and to harmonize them with similar rules of NSCC's affiliate, the Fixed Income Clearing Corporation. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58100)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by the Chicago Board Options Exchange related to the appointment cost of RVX and VXN options (SR-CBOE-2008-66) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58076)

A proposed rule change filed by the NASDAQ Stock Market to modify fees for members using the NASDAQ Options Market (SR-NASDAQ-2008-058) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58081)

A proposed rule change filed by the Boston Stock Exchange extending the current pilot program for Linkage fees on the Boston Options Exchange facility (SR-BSE-2008-35) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58082)

A proposed rule change filed by the American Stock Exchange (SR-Amex-2008-57) to Extend the Quarterly Options Series Pilot Program until July 10, 2009, has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58083)

A proposed rule change filed by the American Stock Exchange (SR-Amex-2008-55) to extend the Short Term Options Series Pilot Program until July 12, 2009, has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58084)

A proposed rule change filed by NYSE Arca (SR-NYSEArca-2008-68) to extend the One Week Options Series Pilot Program until July 12, 2009, has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58085)

A proposed rule change filed by the American Stock Exchange relating to an extension of the linkage fee pilot program (SR-Amex-2008-52) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58086)

A proposed rule change filed by NYSE Arca to enable the Exchange to conduct Market Order and Closing Auctions in NYSE-listed securities subject to a sub-penny trading condition (SR-NYSEArca-2008-71) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58089)

A proposed rule change filed by International Securities Exchange (SR-ISE-2008-55) relating to market maker fee changes has become immediately effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58091)

A proposed rule change filed by the NASDAQ Stock Market regarding technical and conforming changes to NASDAQ rules governing options trading (SR-NASDAQ-2008-057) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58093)

A proposed rule change filed by the New York Stock Exchange to extend the operative date of the NYSE Rule 2 requirement that NYSE-only member organizations apply for and be approved as members of the Financial Industry Regulatory Authority, Inc. (SR-NYSE-2008-54) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58096)

National Securities Clearing Corporation filed a proposed rule change (File No. SR-NSCC-2008-05) under Section 19(b)(1) of the Exchange Act, which became effective upon filing, to revise its fee schedule to lower fees for certain NSCC services. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58104)

Accelerated Approval of Proposed Rule Change

The Commission published notice of, and granted accelerated approval to, a proposed rule change, as modified by Amendment No. 1 thereto (SR-CHX-2008-11), submitted by the Chicago Stock Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to equity-linked debt securities. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58087)

Designation of Longer Period for Commission Action on a Proposed Rule

The Commission has designated a longer period for Commission action under Section 19(b)(2) of the Securities Exchange Act of 1934 on proposed rule change (SR-NASDAQ-2008-035) filed by the NASDAQ Stock Market which relates to the acquisition of BSE and BSECC by NASDAQ OMX. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58098)

Approval of Proposed Rule Change

The Commission granted approval of a proposed rule change (SR-CBOE-2008-16) submitted by the Chicago Board Options Exchange under Rule 19b-4 of the Securities Exchange Act of 1934 to reduce certain order exposure periods from three seconds to one second. Publication is expected in the Federal Register during the week of July 7. (Rel. 34-58088)

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