[Federal Register Volume 76, Number 107 (Friday, June 3, 2011)]
[Notices]
[Pages 32246-32248]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-13738]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64560; File No. SR-FINRA-2011-024]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Update Rule Cross-References and Make Non-
Substantive Technical Changes to Certain FINRA Rules
May 27, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 17, 2011, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to update cross-references within certain FINRA
rules to reflect changes adopted in the consolidated FINRA rulebook and
to make non-substantive technical changes to certain FINRA Rules.
The text of the proposed rule change is available on FINRA's Web
site at http://www.finra.org, at the principal office of FINRA and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA 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. FINRA 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
1. Purpose
FINRA is in the process of developing a new consolidated rulebook
(``Consolidated FINRA Rulebook'').\4\ That process involves FINRA
submitting to the Commission for approval a series of proposed rule
changes over time to adopt rules in the Consolidated FINRA Rulebook.
The phased adoption and implementation of those rules necessitates
periodic amendments to update rule cross-references and other non-
substantive technical changes in the Consolidated FINRA Rulebook.
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\4\ The current FINRA rulebook consists of (1) FINRA Rules; (2)
NASD Rules; and (3) rules incorporated from NYSE (``Incorporated
NYSE Rules'') (together, the NASD Rules and Incorporated NYSE Rules
are referred to as the ``Transitional Rulebook''). While the NASD
Rules generally apply to all FINRA members, the Incorporated NYSE
Rules apply only to those members of FINRA that are also members of
the NYSE (``Dual Members''). The FINRA Rules apply to all FINRA
members, unless such rules have a more limited application by their
terms. For more information about the rulebook consolidation
process, see Information Notice, March 12, 2008 (Rulebook
Consolidation Process).
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The proposed rule change would update rule cross-references to
reflect changes adopted in the Consolidated FINRA Rulebook. In this
regard, the proposed rule change would update references in FINRA Rules
0150 (Application of Rules to Exempted Securities Except Municipal
Securities), 6630 (Applicability of FINRA Rules to Securities
Previously Designated as PORTAL Securities), 7230A (Trade Report
Input), 7330 (Trade Report Input) and 9217 (Violations Appropriate for
Disposition Under Plan Pursuant to SEA Rule 19d-1(c)(2)) that are
needed as the result of Commission approval of two recent FINRA
proposed rule changes.\5\ Furthermore, the proposed rule change would
update a reference in FINRA Rule 9120 (Definitions) to reflect that the
NASD Rule 3300 Series has been replaced by FINRA Rule 4560 and the
FINRA Rule 5200 Series.\6\ The proposed
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rule change would also make a technical change to FINRA Rule 4530
(Reporting Requirements) to clarify in Supplementary Material .03 that
the proper referenced term is ``Order Accepting an Offer of
Settlement.'' The proposed rule change would also make a technical
change to FINRA Rule 6622 (Transaction Reporting) by moving the word
``and'' from subparagraph (c)(3) to subparagraph (c)(4). Additionally,
the proposed rule change would correct the numbering of Incorporated
NYSE Rule Interpretation 409 (Statements of Accounts to Customers) due
to an inadvertent deletion.\7\
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\5\ See Securities Exchange Act Release No. 63150 (October 21,
2010), 75 FR 66173 (October 27, 2010) (Order Approving File No. SR-
FINRA-2009-058); and Securities Exchange Act Release No. 63260
(November 5, 2010), 75 FR 69508 (November 12, 2010) (Order Approving
File No. SR-FINRA-2010-034).
\6\ See Securities Exchange Act Release No. 58461 (September 4,
2008), 73 FR 52710 (September 10, 2008) (Order Approving File No.
SR-FINRA-2008-033); Securities Exchange Act Release No. 60648
(September 10, 2009), 74 FR 47837 (September 17, 2009) (Order
Approving File No. SR-FINRA-2009-048); Securities Exchange Act
Release No. 60659 (September 11, 2009), 74 FR 48117 (September 21,
2009) (Order Approving File No. SR-FINRA-2009-044); Securities
Exchange Act Release No. 60835 (October 16, 2009), 74 FR 54616
(October 22, 2009) (Order Approving File No. SR-FINRA-2009-055);
Securities Exchange Act Release No. 61071 (November 30, 2009), 74 FR
64109 (December 7, 2009) (Order Approving File No. SR-FINRA-2009-
067); and Securities Exchange Act Release No. 62842 (September 3,
2010), 75 FR 55842 (September 14, 2010) (Order Approving File No.
SR-FINRA-2010-030). When SR-FINRA-2010-030 became effective, the
last remaining provision of the NASD Rule 3300 Series was deleted,
thereby necessitating the proposed rule change to FINRA Rule 9120.
\7\ See Securities Exchange Act Release No. 63999 (March 1,
2011), 76 FR 12380 (March 7, 2011) (Order Approving File No. SR-
FINRA-2010-061).
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FINRA also is proposing to move the definition of ``initial public
offering'' from Rule 6220 (Definitions) to Rule 6130 (Transactions
Related to Initial Public Offerings). FINRA is not proposing
substantive changes to the definition of ``initial public offering.''
FINRA believes that Rule 6130 is the more appropriate location for the
definition of ``initial public offering'' and that relocating this
definition, as proposed, will reduce confusion for members.
Finally, FINRA is proposing a change to FINRA Rule 2268(a)(5) \8\
to reflect amendments to the Code of Arbitration Procedure for Customer
Disputes allowing customers to choose an all public arbitration
panel.\9\
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\8\ FINRA Rule 2268 was adopted as part of the consolidated
FINRA rules governing books and records. See Regulatory Notice 11-19
(April 2011). FINRA Rule 2268 will become effective on December 5,
2011.
\9\ See Securities Exchange Act Release No. 63799 (January 31,
2011), 76 FR 6500 (February 4, 2011) (Order Approving File No. SR-
FINRA-2010-053).
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FINRA has filed the proposed rule change for immediate
effectiveness. The implementation date for the proposed rule changes to
FINRA Rules 6130, 6220, 6622, 6630, 7230A, 7330 and 9120 will be June
17, 2011. The implementation date for the proposed rule changes to
FINRA Rules 0150, 4530 and 9217 will be July 1, 2011. The
implementation date for the proposed rule change to FINRA Rule 2268
will be December 5, 2011. The implementation date for the proposed rule
change to Incorporated NYSE Rule Interpretation 409 will be the
effective date of SR-FINRA-2010-061.\10\
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\10\ See Securities Exchange Act Release No. 63999 (March 1,
2011), 76 FR 12380 (March 7, 2011) (Order Approving File No. SR-
FINRA-2010-061).
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2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among
other things, that FINRA rules 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. FINRA believes the proposed rule change will provide
greater clarity to members and the public regarding FINRA's rules.
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\11\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to submit to 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. FINRA has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
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
Send an e-mail to [email protected]. Please include
File Number SR-FINRA-2011-024 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-2011-024. 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 website
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of FINRA.
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 Number SR-FINRA-2011-024
and
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should be submitted on or before June 24, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-13738 Filed 6-2-11; 8:45 am]
BILLING CODE 8011-01-P