[Federal Register Volume 79, Number 199 (Wednesday, October 15, 2014)]
[Notices]
[Pages 61913-61915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24454]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73316; File No. SR-FINRA-2014-040]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Revise the Operative Date for Deletion of Rule
7740 Pursuant to SR-FINRA-2014-032
October 7, 2014.
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 September 25, 2014, 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 revise the operative date for the deletion of
Rule 7740 (Historical Research and Administrative Reports) pursuant to
SR-FINRA-2014-032. The proposed rule change would not make any changes
to the text of FINRA rules.
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
[[Page 61914]]
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, Proposed Rule Change
1. Purpose
On July 2, 2014, FINRA filed for immediate effectiveness proposed
rule change SR-FINRA-2014-032 to amend Rule 7710 relating to fees for
the OTC Reporting Facility (``ORF'') and delete Rule 7740.\4\ Rule 7740
sets forth the fees to be paid by the purchaser of historical research
reports regarding OTC Bulletin Board (``OTCBB'') securities through the
OTCBB Web site.
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\4\ See Securities Exchange Act Release No. 72595 (July 11,
2014), 79 FR 41711 (July 17, 2014) (Notice of Filing and Immediate
Effectiveness; SR-FINRA-2014-032).
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By its terms, SR-FINRA-2014-032 will be operative upon migration of
the ORF to FINRA's Multi-Product Platform (``MPP''). At the time of the
filing of SR-FINRA-2014-032, the ORF was scheduled to migrate to the
MPP on September 15, 2014. In response to requests by the industry,
FINRA recently delayed the migration of the ORF from September 15, 2014
to November 17, 2014.\5\ As such, the amendments to Rule 7710 relating
to fees for the ORF will be operative on the revised migration date of
November 17, 2014.
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\5\ See ``Revised Migration Date for New OTC Reporting Facility
Technology Platform,'' available at www.finra.org/Industry/Compliance/MarketTransparency/ORF/Notices/P580334.
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However, with respect to deletion of Rule 7740, FINRA is proposing
that the operative date be September 30, 2014. On that date, FINRA's
vendor that generates and bills for the historical research reports
under Rule 7740 will migrate to a new technology platform and will no
longer provide these services to FINRA. Because FINRA contemplated
migration of the ORF to the MPP, and the elimination of these reports,
as of September 15, 2014, FINRA did not make arrangements to connect to
the vendor's new technology platform. As such, the historical research
reports will not be produced as of September 30, 2014. (The last date
to order a report would be September 29, 2014.) As noted in SR-FINRA-
2014-032, the quotation activity through the OTCBB has decreased in
recent years and as such, the value of these reports has declined
significantly. In fact, some reports in recent months have been
generated with substantially all zeroes. Accordingly, the number of
requests for reports continues to decrease. For example, there were 274
requests for reports pursuant to Rule 7740 in 2012, 103 in 2013 and 57
through August 2014.
FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the Commission waive the
requirement that the proposed rule change not become operative for 30
days after the date of the filing. The operative date will be the date
of filing of the proposed rule change.
2. Statutory Basis
FINRA believes 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 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 is consistent
with the Act in that it ensures that FINRA rules accurately reflect the
functionality of its systems and will avoid the potential confusion of
having a fee rule in FINRA's manual for reports that FINRA no longer
provides.
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\6\ 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. As noted in SR-FINRA-2014-032,
with the deletion of Rule 7740, FINRA is eliminating fees for
historical research reports that are of little value today and not
relied on by market participants as a source of market data.
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 \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has asked the
Commission to waive the 30-day operative delay so that the proposal may
become operative upon filing. The Commission believes that waiving the
30-day operative delay is consistent with the protection of investors
and the public interest. FINRA is proposing to change the deletion date
of Rule 7740 due to the reports' unavailability as a result of a third-
party vendor's platform change. The Commission believes it is in the
interest of investors to implement this change immediately. The reports
referenced in Rule 7740 will be unavailable before the 30-day operative
delay is complete and, by making the filing operative immediately, this
will provide the most notice of this change to the firms. Therefore,
the Commission hereby waives the 30-day operative delay and designates
the proposal operative upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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:
[[Page 61915]]
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-2014-040 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549.
All submissions should refer to File Number SR-FINRA-2014-040. 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-2013-040 and should be
submitted on or before November 5, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24454 Filed 10-14-14; 8:45 am]
BILLING CODE 8011-01-P