[Federal Register Volume 78, Number 224 (Wednesday, November 20, 2013)]
[Notices]
[Pages 69732-69734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27760]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70880; File No. SR-FINRA-2013-047]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend
FINRA Rule 8312 (FINRA BrokerCheck Disclosure) To Include Information
About Members and Their Associated Persons of Any Registered National
Securities Exchange That Uses the CRD System for Registration Purposes
November 14, 2013.
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 November 1, 2013, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by FINRA. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to amend FINRA Rule 8312 (FINRA BrokerCheck
Disclosure) to include in BrokerCheck information about members and
their associated persons of any registered national securities exchange
that uses
[[Page 69733]]
the Central Registration Depository (``CRD[supreg]'') for registration
purposes. The proposed rule change also would make non-substantive
technical changes to FINRA Rule 8312 to reflect a change in FINRA's
style convention for referencing the CRD system.
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 BrokerCheck provides the public with information on the
professional background, business practices, and conduct of FINRA
member firms and their associated persons. The information that FINRA
releases to the public through BrokerCheck is derived from the CRD
system, the securities industry online registration and licensing
database. FINRA member firms, their associated persons, and regulators
report information to the CRD system via the uniform registration
forms. By making most of this information publicly available,
BrokerCheck, among other things, helps investors make informed choices
about the individuals and firms with which they conduct
business.BrokerCheck allows investors and others to obtain registration
information about firms and their associated persons by telephone \3\
and the Internet.\4\
---------------------------------------------------------------------------
\3\ The BrokerCheck Hotline telephone number is (800) 289-9999.
\4\ BrokerCheck is available online at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck.
---------------------------------------------------------------------------
In 2006, Congress amended Section 15A(i) of the Act \5\ with the
enactment of the Military Personnel Financial Services Protection Act
(``MPFSPA'').\6\ The amendment requires, among other things, that
FINRA, as a registered securities association, maintain a toll-free
telephone listing and a readily accessible electronic or other process
to receive and promptly respond to inquiries regarding (i) registration
information on its members and their associated persons, and (ii)
registration information on the members and their associated persons of
any registered national securities exchange that uses the CRD system
for the registration of its members and their associated persons (``CRD
Exchange'').\7\
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78o-3(i).
\6\ Public Law 109-290, 120 Stat. 1317 (2006).
\7\ For purposes of Section 15A(i) of the Act, registration
information is defined as ``the information reported in connection
with the registration or licensing of brokers and dealers and their
associated persons, including disciplinary actions, regulatory,
judicial, and arbitration proceedings, and other information
required by law, or exchange or association rule, and the source and
status of such information.''
---------------------------------------------------------------------------
The registration information currently available through
BrokerCheck is limited to firms and individuals that are currently or
were previously registered with FINRA. BrokerCheck does not contain
information regarding firms or individuals whose registrations have
been exclusively with a registered national securities exchange
(although such information is contained in the CRD system).
The proposed rule change would amend FINRA Rule 8312 to include
these non-FINRA member firms and their associated persons in
BrokerCheck. Specifically, the proposed rule change would make publicly
available in BrokerCheck information about members and their associated
persons of any CRD Exchange.\8\ The information that would be disclosed
through BrokerCheck about CRD Exchange members and their associated
persons would be the same as the information disclosed about FINRA
members and their associated persons pursuant to FINRA Rule 8312. CRD
Exchange members and their associated persons would be able to dispute
inaccuracies in their BrokerCheck reports as provided for in FINRA Rule
8312(e).
---------------------------------------------------------------------------
\8\ Firms and individuals that have been registered exclusively
with a CRD Exchange will be included in BrokerCheckonly if such
registration occurred on or after August 16, 1999. Filings for those
firms and individuals whose registrations terminated prior to August
16, 1999 were not made electronically so BrokerCheck reports for
such firms and individuals cannot be made in an automated fashion.
See proposed Supplementary Material .03 to FINRA Rule 8312.
---------------------------------------------------------------------------
The proposed rule change also would make non-substantive technical
changes to FINRA Rule 8312 to reflect a change in FINRA's style
convention for referencing the CRD system.
FINRA will announce the effective date of the proposed rule change
in a Regulatory Notice to be published no later than 60 days following
Commission approval. The effective date will be no later than 180 days
following publication of the Regulatory Notice announcing Commission
approval.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\9\ 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 that the proposed rule change will
enhance investor protection by providing investors and other users of
BrokerCheck with information regarding the professional background,
business practices, and conduct of additional firms and their
associated persons.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
FINRA also believes that the proposed rule change is consistent
with the provisions of Section 15A(i)(1) of the Act,\10\ which
requires, among other things, that FINRA maintain a toll-free telephone
listing and a readily accessible electronic or other process to receive
and promptly respond to inquiries regarding registration information on
CRD Exchange members and their associated persons. FINRA believes that
the proposed rule change satisfies this requirement by expanding
BrokerCheck to include registration information about CRD Exchange
members and their associated persons.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78o-3(i)(1).
---------------------------------------------------------------------------
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. As discussed above, Section
15A(i) of the Act requires FINRA to maintain a toll-free telephone
listing and a readily accessible electronic or other process to respond
to inquiries regarding registration information on FINRA members and
their associated persons, as well as CRD Exchange members and their
associated persons. BrokerCheck is the program by which FINRA releases
to the public registration information on its members and their
associated persons and, consistent with Section 15A(i) of the Act,
FINRA intends to expand
[[Page 69734]]
BrokerCheck to include CRD Exchange members and their associated
persons. The proposed rule change will enhance consistency with respect
to the information available via BrokerCheck by providing public access
to the same information for FINRA and CRD Exchange members and their
associated persons. Such information allows investors to make informed
choices about the individuals and firms with which they conduct
business. FINRA does not anticipate that the proposed rule change will
impose any costs or burdens on CRD Exchange members or their associated
persons. Specifically, FINRA expects that the only costs associated
with the proposed rule change will involve programming changes to
BrokerCheck, which will be borne by FINRA. No action will be required
on the part of CRD Exchange members or their associated persons to
implement the proposed rule change. In addition, the proposed rule
change will have no impact on the reporting requirements or
registration process for CRD Exchange members or their associated
persons.
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be 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 email to [email protected]. Please include
File Number SR-FINRA-2013-047 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-2013-047. This
file number should be included on the subject line if email 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 Web site 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
10:00 a.m. and 3:00 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-2013-047 and should be
submitted on or before December 11, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-27760 Filed 11-19-13; 8:45 am]
BILLING CODE 8011-01-P