[Federal Register Volume 79, Number 235 (Monday, December 8, 2014)]
[Notices]
[Pages 72743-72745]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-28641]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73714; File No. SR-FINRA-2014-049]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Adopt FINRA Rule 2122 (Charges for Services
Performed) in the Consolidated FINRA Rulebook
December 2, 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 November 21, 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 adopt NASD Rule 2430 (Charges for Services
Performed) as FINRA Rule 2122 (Charges for Services Performed) without
any substantive changes. FINRA also proposes to update a cross-
reference within FINRA Rule 0150 accordingly.
Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in brackets.
* * * * *
FINRA Rules
* * * * *
0150. Application of Rules to Exempted Securities Except Municipal
Securities
(a) through (b) No Change.
(c) Unless otherwise indicated within a particular Rule, the
following FINRA and NASD rules are applicable to transactions in, and
business activities relating to, exempted securities, except municipal
securities, conducted by members and associated persons: FINRA Rules
2010, 2020, 2060, 2111, 2122, 2150, 2210, 2212, 2261, 2268, 2269,
2320(g), 3110, 3220, 3270, 4120, 4130, 4210, 4311, 4330, 4360, 4510
Series, 4530, 5160, 5210, 5220, 5230, 5310, 5340, 8110, 8120, 8210,
8310, 8311, 8312, 8320, 8330 and 9552; NASD Rules IM-2210-2, 2340,
[2430,] 2510, 3040, 3050 and 3140.
* * * * *
[2430] 2122. Charges for Services Performed
Charges, if any, for services performed, including, but not limited
to, miscellaneous services such as collection of monie[y]s due for
principal, dividends, or interest; exchange or transfer of securities;
appraisals, safe-keeping or custody of securities, and other
services[,] shall be reasonable and not unfairly discriminatory
[between] among customers.
* * * * *
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
As part of the process of developing a new consolidated rulebook
(``Consolidated FINRA Rulebook''),\4\ FINRA is proposing to transfer
NASD Rule 2430 (Charges for Services Performed) into the Consolidated
FINRA Rulebook as FINRA Rule 2122 (Charges for Services Performed)
without any substantive changes. Proposed FINRA Rule 2122 states that
charges, if any, for services performed, including, but not limited to,
miscellaneous services such as collection of monies due for principal,
dividends, or interest; exchange or transfer of securities; appraisals,
safe-keeping or custody of securities, and other services shall be
reasonable and not unfairly discriminatory among customers. Proposed
FINRA Rule 2122 closely tracks the language of NASD Rule 2430 but makes
non-substantive changes to the text of the NASD rule.\5\
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\4\ The current FINRA rulebook consists of: (1) FINRA Rules; (2)
NASD Rules; and (3) rules incorporated from New York Stock Exchange
LLC (``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).
\5\ FINRA previously solicited comment on a proposal to move
NASD Rule 2430 to the Consolidated FINRA Rulebook with substantive
changes. See Regulatory Notice 11-08 (February 2011); see also
Regulatory Notice 13-07 (January 2013). Given that FINRA would like
to proceed with the rulebook consolidation process expeditiously to
provide greater clarity and regulatory efficiency to FINRA members,
FINRA is proposing in this rule change to move NASD Rule 2430 to the
FINRA rules without substantive changes, and will defer proposing
any substantive changes to the rule for a future rule proposal.
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[[Page 72744]]
FINRA also proposes to update a cross-reference within FINRA Rule
0150 to reflect the transfer of NASD Rule 2430 to FINRA Rule 2122.
FINRA has filed the proposed rule change for immediate
effectiveness pursuant to Section 19(b)(3) of the Act \6\ and paragraph
(f)(6) of Rule 19b-4 thereunder,\7\ in that the proposed rule change
does not significantly affect the protection of investors or the public
interest; does not impose any significant burden on competition; and
does not become operative for 30 days after filing or such shorter time
as the Commission may designate. FINRA has requested that the SEC waive
the requirement that the proposed rule change not become operative for
30 days after the date of the filing so that FINRA can implement the
proposed rule change immediately.
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\6\ 15 U.S.C. 78s(b)(3).
\7\ 17 CFR 240.19b-4(f)(6).
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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,\8\ 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, and Section 15A(b)(9) of the Act,\9\ which requires
that FINRA rules not impose any burden on competition that is not
necessary or appropriate in furtherance of the Act. FINRA believes that
this proposed rule change, which does not substantively change the
rule, is consistent with the Act because it is being undertaken
pursuant to the rulebook consolidation process, which is designed to
provide additional clarity and regulatory efficiency to FINRA members
by consolidating the applicable NASD, Incorporated NYSE, and FINRA
rules into one rule set.
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\8\ 15 U.S.C. 78o-3(b)(6).
\9\ 15 U.S.C. 78o-3(b)(9).
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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 above, this proposal
will not substantively change either the text or application of the
rule. FINRA would like to proceed with the rulebook consolidation
process expeditiously, which it believes will provide additional
clarity and regulatory efficiency to members.
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 with respect
to this proposal to transfer NASD Rule 2430 into the Consolidated FINRA
Rulebook without any substantive changes.\10\
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\10\ But see note 5 supra.
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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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19(b)(3)(A) of the Act \13\
normally does not become operative prior to 30 days after the date of
the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ 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. Because FINRA is proposing to
transfer NASD Rule 2430 (Charges for Services Performed) into the
Consolidated FINRA Rulebook as FINRA Rule 2122 (Charges for Services
Performed) without any substantive changes, and because the rulebook
consolidation process is designed to provide additional clarity and
regulatory efficiency to members, the Commission believes that a waiver
of the requirement is appropriate so that the rule change may become
operative immediately. Therefore, the Commission hereby waives the 30-
day operative delay and designates the proposal operative upon
filing.\15\
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\13\ Id.
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ 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:
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-2014-049 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 20549-1090.
All submissions should refer to File Number SR-FINRA-2014-049. 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
[[Page 72745]]
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-2014-049 and
should be submitted on or before December 29, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-28641 Filed 12-5-14; 8:45 am]
BILLING CODE 8011-01-P