Document ID: SEC-2011-0770-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2011-06-03T04:00Z

[Federal Register Volume 76, Number 107 (Friday, June 3, 2011)]
[Notices]
[Pages 32246-32248]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13738]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64560; File No. SR-FINRA-2011-024]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Update Rule Cross-References and Make Non-
Substantive Technical Changes to Certain FINRA Rules

 May 27, 2011.
    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 May 17, 2011, 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 update cross-references within certain FINRA 
rules to reflect changes adopted in the consolidated FINRA rulebook and 
to make non-substantive technical changes to certain FINRA Rules.
    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
    FINRA is in the process of developing a new consolidated rulebook 
(``Consolidated FINRA Rulebook'').\4\ That process involves FINRA 
submitting to the Commission for approval a series of proposed rule 
changes over time to adopt rules in the Consolidated FINRA Rulebook. 
The phased adoption and implementation of those rules necessitates 
periodic amendments to update rule cross-references and other non-
substantive technical changes in the Consolidated FINRA Rulebook.
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    \4\ The 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 Information Notice, March 12, 2008 (Rulebook 
Consolidation Process).
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    The proposed rule change would update rule cross-references to 
reflect changes adopted in the Consolidated FINRA Rulebook. In this 
regard, the proposed rule change would update references in FINRA Rules 
0150 (Application of Rules to Exempted Securities Except Municipal 
Securities), 6630 (Applicability of FINRA Rules to Securities 
Previously Designated as PORTAL Securities), 7230A (Trade Report 
Input), 7330 (Trade Report Input) and 9217 (Violations Appropriate for 
Disposition Under Plan Pursuant to SEA Rule 19d-1(c)(2)) that are 
needed as the result of Commission approval of two recent FINRA 
proposed rule changes.\5\ Furthermore, the proposed rule change would 
update a reference in FINRA Rule 9120 (Definitions) to reflect that the 
NASD Rule 3300 Series has been replaced by FINRA Rule 4560 and the 
FINRA Rule 5200 Series.\6\ The proposed

[[Page 32247]]

rule change would also make a technical change to FINRA Rule 4530 
(Reporting Requirements) to clarify in Supplementary Material .03 that 
the proper referenced term is ``Order Accepting an Offer of 
Settlement.'' The proposed rule change would also make a technical 
change to FINRA Rule 6622 (Transaction Reporting) by moving the word 
``and'' from subparagraph (c)(3) to subparagraph (c)(4). Additionally, 
the proposed rule change would correct the numbering of Incorporated 
NYSE Rule Interpretation 409 (Statements of Accounts to Customers) due 
to an inadvertent deletion.\7\
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    \5\ See Securities Exchange Act Release No. 63150 (October 21, 
2010), 75 FR 66173 (October 27, 2010) (Order Approving File No. SR-
FINRA-2009-058); and Securities Exchange Act Release No. 63260 
(November 5, 2010), 75 FR 69508 (November 12, 2010) (Order Approving 
File No. SR-FINRA-2010-034).
    \6\ See Securities Exchange Act Release No. 58461 (September 4, 
2008), 73 FR 52710 (September 10, 2008) (Order Approving File No. 
SR-FINRA-2008-033); Securities Exchange Act Release No. 60648 
(September 10, 2009), 74 FR 47837 (September 17, 2009) (Order 
Approving File No. SR-FINRA-2009-048); Securities Exchange Act 
Release No. 60659 (September 11, 2009), 74 FR 48117 (September 21, 
2009) (Order Approving File No. SR-FINRA-2009-044); Securities 
Exchange Act Release No. 60835 (October 16, 2009), 74 FR 54616 
(October 22, 2009) (Order Approving File No. SR-FINRA-2009-055); 
Securities Exchange Act Release No. 61071 (November 30, 2009), 74 FR 
64109 (December 7, 2009) (Order Approving File No. SR-FINRA-2009-
067); and Securities Exchange Act Release No. 62842 (September 3, 
2010), 75 FR 55842 (September 14, 2010) (Order Approving File No. 
SR-FINRA-2010-030). When SR-FINRA-2010-030 became effective, the 
last remaining provision of the NASD Rule 3300 Series was deleted, 
thereby necessitating the proposed rule change to FINRA Rule 9120.
    \7\ See Securities Exchange Act Release No. 63999 (March 1, 
2011), 76 FR 12380 (March 7, 2011) (Order Approving File No. SR-
FINRA-2010-061).
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    FINRA also is proposing to move the definition of ``initial public 
offering'' from Rule 6220 (Definitions) to Rule 6130 (Transactions 
Related to Initial Public Offerings). FINRA is not proposing 
substantive changes to the definition of ``initial public offering.'' 
FINRA believes that Rule 6130 is the more appropriate location for the 
definition of ``initial public offering'' and that relocating this 
definition, as proposed, will reduce confusion for members.
    Finally, FINRA is proposing a change to FINRA Rule 2268(a)(5) \8\ 
to reflect amendments to the Code of Arbitration Procedure for Customer 
Disputes allowing customers to choose an all public arbitration 
panel.\9\
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    \8\ FINRA Rule 2268 was adopted as part of the consolidated 
FINRA rules governing books and records. See Regulatory Notice 11-19 
(April 2011). FINRA Rule 2268 will become effective on December 5, 
2011.
    \9\ See Securities Exchange Act Release No. 63799 (January 31, 
2011), 76 FR 6500 (February 4, 2011) (Order Approving File No. SR-
FINRA-2010-053).
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date for the proposed rule changes to 
FINRA Rules 6130, 6220, 6622, 6630, 7230A, 7330 and 9120 will be June 
17, 2011. The implementation date for the proposed rule changes to 
FINRA Rules 0150, 4530 and 9217 will be July 1, 2011. The 
implementation date for the proposed rule change to FINRA Rule 2268 
will be December 5, 2011. The implementation date for the proposed rule 
change to Incorporated NYSE Rule Interpretation 409 will be the 
effective date of SR-FINRA-2010-061.\10\
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    \10\ See Securities Exchange Act Release No. 63999 (March 1, 
2011), 76 FR 12380 (March 7, 2011) (Order Approving File No. SR-
FINRA-2010-061).
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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,\11\ 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 will provide 
greater clarity to members and the public regarding FINRA's rules.
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    \11\ 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.

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 \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. FINRA has satisfied this requirement.
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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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2011-024 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-2011-024. 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 website 
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 available 
publicly. All submissions should refer to File Number SR-FINRA-2011-024 
and

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should be submitted on or before June 24, 2011.

    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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-13738 Filed 6-2-11; 8:45 am]
BILLING CODE 8011-01-P