Proposed Rule Change to Extend to July 16, 2011, the Implementation of FINRA Rule 4240 (Margin Requirements for Credit Default Swaps)

Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend to July 16, 2011 the implementation of FINRA Rule 4240 (Margin Requirements for Credit Default Swaps) on an interim pilot program basis. FINRA Rule 4240, as approved by the SEC on May 22, 2009, and as extended by FINRA on September 21, 2009, will expire on November 30, 2010. The rule implements an interim pilot program with respect to margin requirements for transactions in credit default swaps executed by a member (regardless of the type of account in which the transaction is booked), including those in which the offsetting matching hedging transactions are effected by the member in credit default swap contracts that are cleared through the central counterparty clearing services of the Chicago Mercantile Exchange.