Federal Register / Vol. 74, No. 151 / Friday, August 7, 2009 / Notices 39725 

5 15 U.S.C. 78s(b)(3)(A)(iii). 

6 17 CFR 240.19b–4(f)(4). 

7 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The 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 FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments relating to the 

proposed rule change have been 

solicited or received. FICC will notify 

the Commission of any written 

comments received by FICC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective upon filing pursuant to Section 

19(b)(3)(A)(iii) of the Act 5 and Rule 

19b–4(f)(4) 6 thereunder because the 

proposed rule change effects a change in 

an existing service of FICC that (i) does 

not adversely affect the safeguarding of 

securities or funds in the custody or 

control of FICC or for which it is 

responsible and (ii) does not 

significantly affect the respective rights 

of the clearing agency or persons using 

the service. At any time within sixty 

days of the filing of such rule change, 

the Commission may summarily 

abrogate 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. 

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 rulecomments@sec.gov. Please include File 

Number SR–FICC–2009–07 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–FICC–2009–07. 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 inspection and copying in 

the Commission’s Public Reference 

Section, 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 filings also will be 

available for inspection and copying at 

the principal office of FICC and on 

FICC’s Web site at http://www.dtcc.com/ 

legal/rule_filings/FICC/2009.php. 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–FICC–2009–07 and should 

be submitted on or before August 28, 

2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18977 Filed 8–6–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60422; File No. SR–FINRA– 

2009–048] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change to Adopt 

FINRA Rule 5230 (Payments Involving 

Publications that Influence the Market 

Price of a Security) in the Consolidated 

FINRA Rulebook 

August 3, 2009. 

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 July 21, 

2009, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

FINRA is proposing to adopt NASD 

Rule 3330 (Payment Designed to 

Influence Market Prices, Other than 

Paid Advertising) as FINRA Rule 5230 

in the consolidated FINRA rulebook, 

with several changes to clarify the scope 

of the rule. 

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 

As part of the process of developing 

a new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’),3

FINRA is proposing to adopt NASD 

Rule 3330 into the Consolidated FINRA 

Rulebook as FINRA Rule 5230 with 


pwalker on DSK8KYBLC1PROD with NOTICES
39726 Federal Register / Vol. 74, No. 151 / Friday, August 7, 2009 / Notices 

4The proposed rule change also changes the title 

of the rule to ‘‘Payments Involving Publications that 

Influence the Market Price of a Security.’’ 

5Section 17(b) of the Securities Act of 1933 

provides that no person may ‘‘publish, give 

publicity to, or circulate any * * * communication 

which, though not purporting to offer a security for 

sale, describes such security for a consideration 

received or to be received, directly or indirectly, 

from an issuer, underwriter, or dealer, without fully 

disclosing the receipt, whether past or prospective, 

of such consideration and the amount thereof.’’ 15 

U.S.C. 77q(b). 

6Although the proposed rule change would 

exempt research reports from FINRA Rule 5230, 

research reports would still be subject to applicable 

FINRA rules and guidance governing research 

reports and other communications with the public. 

See NASD Rules 2711, 2210(d), IM–2210–1. Among 

other things, these rules require that research 

reports include certain disclosures, be fair and 

balanced, and not be misleading. 

7 15 U.S.C. 78o–3(b)(6). 8 17 CFR 200.30–3(a)(12). 

several changes, which are described 

below.4

NASD Rule 3330 provides that no 

member may, ‘‘directly or indirectly, 

give, permit to be given, or offer to give, 

anything of value to any person for the 

purpose of influencing or rewarding the 

action of such person in connection 

with the publication or circulation in 

any newspaper, investment service, or 

similar publication, of any matter which 

has, or is intended to have, an effect 

upon the market price of any 

security.* * *’’ The rule includes an 

exception for any matter that is ‘‘clearly 

distinguishable as paid advertising.’’ 

As part of transferring NASD Rule 

3330 into the Consolidated FINRA 

Rulebook, FINRA is proposing two 

changes to the rule to modernize its 

terms and clarify its scope. First, the 

proposed rule change updates the list of 

media to which the rule refers. Because 

NASD Rule 3330 has not been amended 

for over 60 years, it refers only to 

matters published or circulated in any 

‘‘newspaper, investment service, or 

similar publication.’’ The proposed rule 

change updates this language to include 

electronic and other types of media, 

including magazines, Web sites, and 

television programs. 

Second, the proposed rule change 

expands the exceptions in the rule 

beyond paid advertising to also include 

compensation paid in connection with 

research reports and communications 

published in reliance on Section 17(b) 

of the Securities Act of 1933.5 FINRA is 

proposing these changes to clarify that 

the prohibitions in the rule are not 

intended to cover compensation paid for 

publications that are explicitly 

permitted pursuant to other rules. For 

example, NASD Rule 3330 could be 

read to prohibit a member from paying 

for a third-party research report if the 

report affected the market price of a 

security; however, NASD Rule 

2711(h)(13) contemplates that members 

might pay for and distribute third-party 

research reports.6 In addition, FINRA 

does not believe that the rule should be 

read to prohibit compensation paid in 

connection with the publication of 

information that is specifically 

permitted pursuant to Section 17(b) of 

the Securities Act, provided the 

required disclosures are made. 

FINRA will announce the 

implementation date of the proposed 

rule change in a Regulatory Notice to be 

published no later than 90 days 

following 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,7 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 clarify the 

scope of the rule in the new 

Consolidated FINRA Rulebook. 

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 

Within 35 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 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 e-mail to rulecomments@sec.gov. Please include File 

Number SR–FINRA–2009–048 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–2009–048. 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 inspection and copying 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 the 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– 

2009–048 and should be submitted on 

or before August 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18978 Filed 8–6–09; 8:45 am] 

BILLING CODE 8010–01–P 


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