[Federal Register Volume 79, Number 191 (Thursday, October 2, 2014)]
[Notices]
[Pages 59534-59535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23445]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73230; File No. SR-FINRA-2014-036]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Granting Approval of Proposed Rule Change
Relating to the Composition of Hearing Panels and Extended Hearing
Panels in Disciplinary Proceedings
September 26, 2014.
I. Introduction
On August 7, 2014, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to expand the pool of persons eligible to serve as
Panelists on a Hearing Panel or an Extended Hearing Panel. The proposed
rule change was published for comment in the Federal Register on August
21, 2014.\3\ The Commission received no comments on the proposed rule
change. The
[[Page 59535]]
Commission is approving the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 72854 (August 15, 2014),
79 FR 49549.
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II. Description of the Proposal
FINRA proposes to amend Rule 9231 to establish a category of
persons eligible to serve as Panelists on a Hearing Panel or an
Extended Hearing Panel that includes persons currently serving, or
having served previously, on a committee appointed or approved by the
FINRA Board. FINRA also proposes to make a conforming amendment to Rule
9232, which establishes criteria for the appointment of eligible
Panelists to Hearing Panels and Extended Hearing Panels. The proposed
rule change would provide FINRA with a larger pool of individuals with
experience and expertise that could serve as Panelists.
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities association
and, in particular, the requirements of Section 15A of the Act.\4\
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\4\ 15 U.S.C. 78o-3.
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Specifically, the Commission finds that the proposed rule change is
consistent with Section 15A(b)(8) of the Act,\5\ which requires, among
other things, that FINRA's rules provide a fair procedure for the
disciplining of members and persons associated with members. The
Commission believes that the proposed rule change will allow FINRA to
address complaints filed with the Office of Hearing Officers in a
timely manner, and that the complaints will be heard by Panelists who
should possess the requisite knowledge and experience to enable them to
render a proper and informed judgment. The Commission believes the
proposed rule change will allow the Chief Hearing Officer enough
flexibility to appoint Extended Hearing Panels that are composed of
qualified Panelists capable of responding to complex issues often
associated with Extended Hearings, while simultaneously reducing the
burdens and time constraints shouldered by all who serve as Panelists.
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\5\ 15 U.S.C. 78o-3(b)(8).
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The Commission also finds that the proposed rule change is
consistent with the provisions of Section 15A(b)(6) of the Act,\6\
which requires, among other things, that FINRA's rules 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. The Commission believes that
expanding the pool of eligible Panelists to include those persons
currently serving, or those having served previously, on a committee
appointed or approved by the FINRA Board will allow qualified Panelists
to promptly address allegations of misconduct by FINRA members and
their associated persons. The Commission believes it is in the public
interest, and consistent with the Act, that FINRA's mechanism for
conducting disciplinary proceedings be designed to address allegations
of misconduct properly and in a timely manner. The Commission believes
that expanding the pool of applicants to include persons currently
serving, or those having served previously, on a Committee appointed or
approved by the FINRA Board should enhance FINRA's ability to conduct
disciplinary proceedings in a fair and reasonable manner.
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\6\ 15 U.S.C. 78o-3(b)(6).
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VI. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\7\ that the proposed rule change (SR-FINRA-2014-036), be, and
hereby is, approved.
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\7\ 15 U.S.C. 78s(b)(2).
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23445 Filed 10-1-14; 8:45 am]
BILLING CODE 8011-01-P