Document ID: SEC-2008-1058-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2008-07-30T04:00Z

[Federal Register: July 30, 2008 (Volume 73, Number 147)]
[Notices]               
[Page 44300-44302]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jy08-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58215; File No. SR-FINRA-2008-035]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Order Granting Accelerated 
Approval of Proposed Rule Change Relating to the Addition of Fees 
Imposed for the Series 14 and Series 16 Examinations to FINRA's Fee 
Schedule

July 23, 2008.
    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 June 26, 2008, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by FINRA. 
This order provides notice of the proposed rule change and approves the 
proposed rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend Section 4(c) of Schedule A to the FINRA 
By-Laws (``Schedule A'') to add the fees

[[Page 44301]]

charged for the Series 14 and Series 16 examinations. The text of the 
proposed rule change is available at FINRA, the Commission's Public 
Reference Room, and http://www.finra.org/RulesRegulation/RuleFilings/
index.htm.

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 III 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
    On July 30, 2007, NASD and the New York Stock Exchange (``NYSE'') 
consolidated their member firm regulation operations into a combined 
organization, FINRA. As part of the consolidation, FINRA assumed 
ownership of the Series 14 (Compliance Official) and Series 16 
(Supervisory Analyst) examinations.\3\ Thus, as of July 30, 2007, these 
two examinations became FINRA examinations and ceased being NYSE 
examinations, and FINRA retained the entire fee for those 
examinations.\4\ The proposed rule change would add the fee for these 
two examinations to the fee table in Schedule A. The proposed rule 
change does not change the fee charged for either of these 
examinations. The fee for the Series 14 examination remains $300,\5\ 
and the fee for the Series 16 examination remains $200.\6\
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    \3\ As part of the consolidation, FINRA also assumed sole 
ownership of the Series 7 (General Securities Representative), 
Series 86 (Research Analyst--Analysis), and Series 87 (Research 
Analyst--Regulatory) examinations. Before the consolidation, the 
Series 7 examination was owned by NYSE, and the Series 86 and Series 
87 examinations were jointly owned by NASD and NYSE. The fees for 
the Series 7, Series 86, and Series 87 examinations are already 
listed in Schedule A as required fees to be paid by FINRA members 
because, prior to the closing of the consolidation, the examination 
was either owned in part by NASD or required by NASD rules.
    \4\ Prior to the consolidation, NASD, which administered the 
examinations and collected the entire fee for the examinations, and 
NYSE, which owned or co-owned the examinations, each received a 
portion of the examination fee for the Series 7, Series 14, Series 
16, Series 86, and Series 87 examinations. Following the 
consolidation, as the sole owner of these examinations, FINRA has 
retained the entire examination fee.
    \5\ The $300 fee for the Series 14 examination has been in place 
since 2001. See Securities Exchange Act Release No. 44296 (May 11, 
2001), 66 FR 27714 (May 18, 2001) (SR-NYSE-2001-09).
    \6\ The $200 fee for the Series 16 examination has been in place 
since 1998. See Securities Exchange Act Release No. 40731 (December 
1, 1998), 63 FR 67964 (December 9, 1998) (SR-NYSE-98-39).
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    Because the proposed rule change does not change the amount of the 
examination fees for the Series 14 or Series 16, FINRA believes that it 
is appropriate for the amendments to Schedule A to have a retroactive 
effective date of July 30, 2007, the date FINRA assumed ownership of 
the two examinations. As noted above, the proposed rule change will 
have no effect on the amount of the fee for either the Series 14 or the 
Series 16 examination. Moreover, the retroactive effective date will 
not affect the fee paid by individuals who have already taken the 
exams.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(5) of the Act,\7\ which require, among 
other things, that FINRA rules provide for the equitable allocation of 
reasonable dues, fees, and other charges among members and issuers and 
other persons using any facility or system that FINRA operates or 
controls. Because FINRA now owns the Series 14 and Series 16 
examinations, FINRA believes that it is appropriate to reflect the fees 
charged in connection with those examinations in the fee table in 
Schedule A.
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    \7\ 15 U.S.C. 78o-3(b)(5).
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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.

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. 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 rule-comments@sec.gov. Please include 
File Number SR-FINRA-2008-035 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2008-035. 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, 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-2008-035 and should be submitted on or before August 20, 2008.

IV. Commission's Findings and Order Granting Accelerated Approval

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of Section 15 of the 
Act \8\ and the rules and regulations thereunder applicable to a 
national securities association.\9\ In particular, the Commission finds 
that the proposed rule change is consistent with Section

[[Page 44302]]

15A(b)(5) of the Act,\10\ which requires that FINRA rules provide for 
the equitable allocation of reasonable dues, fees, and other charges 
among members and issuers and other persons using any facility or 
system which FINRA operates or controls.
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    \8\ 15 U.S.C. 78o-3.
    \9\ In approving this rule change, the Commission notes that it 
has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78o-3(b)(5).
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    The Commission believes that FINRA's proposed rule change is 
consistent with Section 15A(b)(5) of the Act \11\ because it would 
clarify in FINRA's fee schedule the fees that FINRA charges for the 
Series 14 and Series 16 examinations. The Commission notes that the 
proposal, while adding references to the fees for the Series 14 and 
Series 16 examinations to FINRA's Schedule A, would not change the 
amount of the fees charged to persons who take these exams. Rather, the 
Commission notes, the proposed rule change simply would reflect the 
fact that FINRA, and not NYSE, is now the owner of these examinations 
and therefore it must incorporate the fees in its fee schedule. The 
Commission also believes that it is appropriate to approve these 
changes retroactive to July 30, 2007, because that is the date on which 
FINRA assumed ownership of these examinations as a result of the 
consolidation. The Commission notes that FINRA has represented that the 
retroactive effective date would not affect the fees paid by 
individuals who have already taken these examinations.
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    \11\ 15 U.S.C. 78o-3(b)(5).
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    FINRA has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of the notice thereof in the Federal Register. As noted 
above, the proposed rule change would not change the amount charged for 
either the Series 14 or 16 examinations, but would clarify the fees 
charged by FINRA for these examinations by including these fees on 
FINRA's fee schedule. The Commission believes that granting accelerated 
approval of the proposed rule change would reduce any possible 
confusion about the applicable fees for these examinations and would 
allow persons currently seeking to take these examinations to determine 
more easily the applicable fees. Accordingly, the Commission believes 
that there is good cause, consistent with Sections 15A(b)(5) and 19(b) 
of the Act,\12\ to approve the proposed rule change on an accelerated 
basis.
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    \12\ 15 U.S.C. 78o-3(b)(5), and 78s(b).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (File No. SR-FINRA-2008-035) be, 
and hereby is, approved on an accelerated basis.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-17410 Filed 7-29-08; 8:45 am]

BILLING CODE 8010-01-P