14052 Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Notices 

35See supra note 6. 

36 15 U.S.C. 78f(b)(5). 

37 15 U.S.C. 78s(b)(2). 

38 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3NASD Rule 1011(k) defines a ‘‘material change 

in business operations’’ as including, but not 

limited to: (1) Removing or modifying a 

membership agreement restriction; (2) market 

making, underwriting, or acting as a dealer for the 

first time; and (3) adding business activities that 

require a higher minimum net capital under SEA 

Rule 15c3–1. 

investment objective; and (c) consistent 

with the Exemptive Order, invest in 

derivatives, including options, swaps, or 

futures. 

(7) The Fund may hold in the 

aggregate up to 15% of its net assets in: 

(a) Illiquid securities; and (b) Rule 144A 

securities.35

(8) A minimum of 100,000 Shares of 

the Fund will be outstanding at the 

commencement of trading on the 

Exchange. 

This approval order is based on the 

Exchange’s representations. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act 36 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,37 that the 

proposed rule change (SR–NYSEArca– 

2011–81), as modified by Amendment 

No. 3 thereto, be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5610 Filed 3–7–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66508; File No. SR–FINRA– 

2012–018] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Amend 

NASD Rules 1012 (General Provisions) 

and 1017 (Application for Approval of 

Change in Ownership, Control, or 

Business Operations) To Adopt New 

Standardized Electronic Form CMA 

March 2, 2012. 

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 February 

28, 2012, 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 amend NASD 

Rules 1012 (General Provisions) and 

1017 (Application for Approval of 

Change in Ownership, Control, or 

Business Operations) to adopt new 

standardized electronic Form CMA. 

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 

NASD Rule 1017 (Application for 

Approval of Change in Ownership, 

Control, or Business Operations) 

provides parameters for certain changes 

in a member’s ownership, control, or 

business operations that would require 

a continuing membership application. 

Among other things, those changes 

include a merger of a member with 

another member, a direct or indirect 

acquisition by a member of another 

member, a change in equity ownership 

or partnership capital of the member 

that results in one person or entity 

directly or indirectly owning or 

controlling 25 percent or more of the 

equity or partnership capital, or a 

material change in business operations 

as defined in NASD Rule 1011(k) 

(‘‘material change in business 

operations’’).3 Currently, NASD Rule 

1017 does not require an applicant 

seeking approval of a change of 

ownership, control, or business 

operations (‘‘continuing membership 

applicant’’ or ‘‘applicant’’) to submit a 

standardized form as part of its 

continuing membership application and 

provides little detail regarding an 

application’s required contents. Instead, 

each applicant is responsible for 

determining the contents of its 

continuing membership application. 

This often results in information 

deficiencies, which in turn, creates 

unnecessary delays in efficiently 

processing the applications. NASD Rule 

1017 also generally requires a 

continuing membership application to 

be filed in the district office in which an 

applicant’s principal place of business 

is located. Additionally, NASD Rule 

1012 (General Provisions) provides that, 

unless otherwise prescribed by FINRA, 

applicants may submit continuing 

membership applications via first-class 

mail, overnight courier, or handdelivery (or facsimile upon agreement 

by FINRA and the applicant). 

This manner of submitting a 

continuing membership application 

reduces the overall efficiency of the 

process and also creates unnecessary 

delays in properly forwarding 

information within FINRA, such as in 

conveying information to and from the 

centralized Membership Application 

Program Group formed in January 2011. 

To address these deficiencies, the 

proposed rule change amends NASD 

Rule 1012 to require continuing 

membership applicants to file an 

application in the manner prescribed in 

Rule 1017. In addition, the proposed 

rule change amends NASD Rule 1017(b) 

to require continuing membership 

applicants to file an application in the 

manner prescribed by FINRA with the 

Department of Member Regulation (‘‘the 

Department’’) and to include the 

completed Form CMA as part of the 

contents of a continuing membership 

application. 

New Form CMA will provide 

continuing membership applicants with 

the benefits of a streamlined application 

process that new member applicants 

currently experience via the 

standardized online Form NMA and is 

intended to significantly reducing 

administrative delays that exists in 

today’s manual application processes. 

New Form CMA is structured 

similarly to revisions proposed for Form 

NMA with adjustments in the content of 


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Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Notices 14053 

4See SR–FINRA–2012–017 (proposed rule change 

to restructure the content of existing Form NMA to, 

among other things, make the requested information 

and documentation more consistent with the 

standards in NASD Rule 1014 (Department 

Decision)). 

5See id. 6 15 U.S.C. 78o–3(b)(6). 

new Form CMA based on the differing 

nature of the application types.4 As with 

revised Form NMA, new Form CMA 

will seek to elicit information from 

applicants in a manner consistent with 

the standards of admission, contained in 

NASD Rule 1014, against which NASD 

Rule 1017 requires each application to 

be evaluated. Additionally, the structure 

and guidance provided by new Form 

CMA is designed to obtain the basic 

information needed for all applicants 

with embedded flexibility to allow for 

variations based on the particular 

application type being submitted. 

Also, new Form CMA, as with the 

revised Form NMA, will pre-populate 

certain fields with information provided 

to FINRA in other submissions (e.g., 

Central Registration Depository (CRD®) 

entitlement forms and Form BD) or 

otherwise available to FINRA from CRD 

records (e.g. continuing education 

status), thereby minimizing the time 

necessary for applicants to complete the 

new form.5 In addition, new Form CMA 

will include a number of optional 

information request fields that can be 

used by applicants to provide additional 

information if and when it is applicable 

to the applicant’s proposed change. The 

optional field approach is intended to 

provide flexibility for the significant 

level of variation seen in members’ 

structures, business lines, and proposed 

changes. 

Below is a synopsis of the content of 

new Form CMA, by standard: 

• Standard 1 (Overview of the 

Applicant): 

This standard seeks certain applicant 

overview information (e.g., details of the 

proposed business change, verification 

of current business activities, new 

business lines added, supervisors for 

new business lines, identification of 

other persons associated with the 

proposed business change). 

• Standard 2 (Licenses and 

Registrations): 

This standard consists of information 

requests regarding the continuing 

membership applicant’s licenses and 

registrations that will be affected by the 

proposed business change (e.g., changes 

to required licenses and registrations, 

new or continuing registration or 

examination waivers, new or continuing 

two-principal requirement waiver, new 

or continuing Securities Information 

Center exemption, other self-regulatory 

organization (‘‘SRO’’) registrations and/ 

or withdrawals from other SRO 

registrations, new non-registered 

officers, directors, or control persons). 

• Standard 3 (Compliance With 

Securities Laws, Just and Equitable 

Principles of Trade): 

This standard consists of specific 

requests for information (e.g., 

disciplinary history) and documentation 

(e.g., state or federal orders or decrees, 

statements of claims, cancelled checks 

for payment of arbitration awards, 

proofs of settlement, settlement 

agreements) that FINRA considers 

necessary for the applicant to 

demonstrate compliance with the 

requirements of this standard. 

• Standard 4 (Contractual and 

Business Relationships): 

This standard includes the 

information requests regarding a 

continuing membership applicant’s 

contractual and business relationships 

(e.g., description of contractual 

arrangements, expense sharing 

agreements, financing arrangements, 

fidelity bonds or fidelity bond 

applications, support and service 

agreements). 

• Standard 5 (Facilities): 

This standard consists of information 

requests regarding a continuing 

membership applicant’s facilities (e.g., 

material changes to facilities or 

locations, departmental information 

barriers, space sharing arrangements, 

lease and/or sub-lease agreements). 

• Standard 6 (Communications and 

Operational Systems): 

This standard includes information 

requests regarding a continuing 

membership applicant’s 

communications and operational 

systems (e.g., communications and 

operational systems changes, 

supervision arrangements of multiple 

locations, business continuity plan 

documents, information relating to the 

applicant’s use of social media sites). 

• Standard 7 (Maintaining Adequate 

Net Capital): 

This standard includes information 

regarding an applicant’s net capital 

requirements (e.g., information on the 

nature and source of capital, additional 

funding plans, minimum net capital 

requirements, future funding sources). 

• Standard 8 (Financial Controls): 

This standard seeks information 

regarding a continuing membership 

applicant’s financial controls (e.g., 

information regarding changes to the 

applicant’s registered financial and 

operations principal (‘‘FINOP’’), impact 

of proposed business change on 

financial controls). 

• Standard 9 (Written Procedures): 

This standard seeks information 

regarding a continuing membership 

applicant’s written procedures (e.g., 

impact of proposed change on written 

supervisory procedures (‘‘WSP’’), WSP 

checklist, sample reports to support 

supervision and financial controls). 

• Standard 10 (Supervisory 

Structure): 

This standard seeks information 

regarding a continuing membership 

applicant’s supervisory structure (e.g., 

changes to supervisory or management 

personnel, information regarding 

supervisors’ experience and duties, 

chief compliance officer experience, 

non-FINOP outside business activities 

notifications). 

• Standard 11 (Books and Records): 

This standard seeks information 

regarding a continuing membership 

applicant’s books and records (e.g., 

impact of potential business change on 

applicant’s recordkeeping systems and 

recordkeeping service providers, sample 

books and records relating to new 

business activities). 

• Standard 12 (Continuing 

Education): 

This standard seeks information 

regarding a continuing membership 

applicant’s continuing education (‘‘CE’’) 

obligations (e.g., changes to the 

applicant’s CE program, revised CE 

training needs assessment and written 

training plan). 

FINRA worked closely with an 

industry task force, comprised of seven 

representatives from small and large 

firms, several of whom also act as 

consultants, during the development of 

the new Form CMA. Among other 

things, the task force’s input assisted 

FINRA to make changes intended to 

reduce applicants’ administrative 

burden when completing Form CMA. 

Overall, FINRA believes that the new 

Form CMA will facilitate more effective 

and efficient application processing for 

the applicants. 

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 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,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 


wreier-aviles on DSK5TPTVN1PROD with NOTICES
14054 Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Notices 

7 17 CFR 200.30–3(a)(12). 

public interest. The proposed rule 

change amends NASD Rules 1012 and 

1017 to adopt a new standardized 

electronic form, Form CMA, to be used 

by all continuing membership 

applicants as part of their continuing 

membership applications. Form CMA 

elicits information from applicants in a 

manner consistent with the standards of 

admission contained in NASD Rule 

1014, against which continuing 

membership applications are evaluated. 

FINRA believes that new Form CMA 

will reduce applicants’ administrative 

burden and ensure a more streamlined 

and efficient continuing membership 

application process for both FINRA and 

applicants. 

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 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 rulecomments@sec.gov. Please include File 

Number SR–FINRA–2012–018 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–2012–018. 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 

a.m. and 3 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 publicly available. All 

submissions should refer to File 

Number SR–FINRA–2012–018 and 

should be submitted on or before March 

29, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 7

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–5631 Filed 3–7–12; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF TRANSPORTATION 

Maritime Administration 

[Docket No. MARAD–2012 0023] 

Requested Administrative Waiver of 

the Coastwise Trade Laws: Vessel 

CABARET V; Invitation for Public 

Comments 

AGENCY: Maritime Administration, 

Department of Transportation. 

ACTION: Notice. 

SUMMARY: As authorized by 46 U.S.C. 

12121, the Secretary of Transportation, 

as represented by the Maritime 

Administration (MARAD), is authorized 

to grant waivers of the U.S.-build 

requirement of the coastwise laws under 

certain circumstances. A request for 

such a waiver has been received by 

MARAD. The vessel, and a brief 

description of the proposed service, is 

listed below. 

DATES: Submit comments on or before 

April 9, 2012. 

ADDRESSES: Comments should refer to 

docket number MARAD–2012–0023. 

Written comments may be submitted by 

hand or by mail to the Docket Clerk, 

U.S. Department of Transportation, 

Docket Operations, M–30, West 

Building Ground Floor, Room W12–140, 

1200 New Jersey Avenue SE., 

Washington, DC 20590. You may also 

send comments electronically via the 

Internet at http://www.regulations.gov. 

All comments will become part of this 

docket and will be available for 

inspection and copying at the above 

address between 10 a.m. and 5 p.m., 

E.T., Monday through Friday, except 

federal holidays. An electronic version 

of this document and all documents 

entered into this docket is available on 

the World Wide Web at http:// 

www.regulations.gov. 

FOR FURTHER INFORMATION CONTACT: 

Joann Spittle, U.S. Department of 

Transportation, Maritime 

Administration, 1200 New Jersey 

Avenue SE, Room W21–203, 

Washington, DC 20590. Telephone 202– 

366–5979, Email Joann.Spittle@dot.gov. 

SUPPLEMENTARY INFORMATION: 

As described by the applicant the 

intended service of the vessel CABARET 

V is: 

Intended Commercial Use of Vessel: 

‘‘Sportfishing without commercial sale 

and carrying of passengers for whale 

watching, etc. (When not carrying 

passengers, the vessel will continue to 

engage in commercial fisheries as an 

undertonnage vessel).’’ 


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