Document ID: SEC-2014-0074-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2014-01-15T05:00Z

[Federal Register Volume 79, Number 10 (Wednesday, January 15, 2014)]
[Notices]
[Pages 2741-2745]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00581]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71272; File No. SR-FINRA-2013-056]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend FINRA Rule 2251 (Forwarding of Proxy and 
Other Issuer-Related Materials), Which Includes Fees for Processing and 
Forwarding Proxy and Other Issuer Communications to Beneficial Owners, 
and Establish a Fee Under Certain Conditions for an Enhanced Brokers' 
Internet Platform

January 9, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act,'' ``SEA'' or ``Exchange Act'') \1\ and Rule 19b-4 
thereunder,\2\ notice is hereby given that, on December 30, 2013, 
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 amend the provisions of FINRA Rule 2251 
(Forwarding of Proxy and Other Issuer-Related Materials) relating to 
rates of reimbursement for expenses incurred in forwarding proxy and 
other issuer-related material, to establish a five-year fee for the 
development of an enhanced brokers internet platform and to make 
miscellaneous conforming revisions.
    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 Rule 2251 requires FINRA members to transmit proxy materials 
and other communications to beneficial owners of securities and limits 
the circumstances in which FINRA members may vote proxies without 
instructions from those beneficial owners.\4\ The Supplementary 
Material under FINRA Rule 2251 (FINRA Rule 2251.01) sets forth the rate 
reimbursement provisions pursuant to which FINRA members are entitled 
to receive fees in connection with the rule's forwarding obligations. 
FINRA has previously indicated that, in the interest of ensuring 
regulatory clarity and harmonization with respect to proxy rate 
reimbursement, it intends to conform the rate reimbursement provisions 
of FINRA Rule 2251 with the New York Stock Exchange (``NYSE'') 
provisions in this area.\5\
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    \4\ FINRA Rule 2251 was adopted as a consolidation of former 
NASD Rule 2260 and IM-2260 as part of FINRA's rulebook consolidation 
process. See Securities Exchange Act Release No. 61052 (November 23, 
2009), 74 FR 62857 (December 1, 2009) (Order Granting Approval of 
Proposed Rule Change; File No. SR-FINRA-2009-066).
    \5\ See Securities Exchange Act Release No. 47392 (February 21, 
2003), 68 FR 9730 (February 28, 2003) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change; File No. SR-NASD-
2003-019).
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    On February 1, 2013, NYSE filed with the Commission a proposed rule 
change \6\ to amend the provisions set forth under NYSE Rules 451 and 
465, and the related provisions of Section 402.10 of the NYSE Listed 
Company Manual, for the reimbursement of expenses by issuers to NYSE 
member organizations for the processing and transmission of proxy 
materials and

[[Page 2742]]

other issuer communications, and to establish a specified success fee 
for the development of qualified internet platforms for proxy voting 
purposes (the ``Enhanced Brokers' Internet Platform'' or ``EBIP''). The 
SEC approved NYSE's proposed rule change on October 18, 2013 (for 
purposes of this filing, referred to as the ``new NYSE proxy rate 
rules'').\7\ Consistent with the NYSE action, FINRA is proposing to 
amend FINRA Rule 2251 to establish, in language virtually identical to 
the corresponding provisions under the new NYSE proxy rate rules, the 
same rate reimbursement provisions that have been adopted by the NYSE, 
including the specified success fee for the development of EBIPs, and 
to delete the provisions under FINRA Rule 2251 that are rendered 
obsolete by the NYSE rule change, as described below.
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    \6\ See Securities Exchange Act Release No. 68936 (February 15, 
2013), 78 FR 12381 (February 22, 2013) (Notice of Filing of Proposed 
Rule Change; File No. SR-NYSE-2013-07).
    \7\ See Securities Exchange Act Release No. 70720 (October 18, 
2013), 78 FR 63530 (October 24, 2013) (Order Granting Approval of 
Proposed Rule Change; File No. SR-NYSE-2013-07) (the ``Approval 
Order'').
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     Processing Unit Fees: Proposed FINRA Rule 2251.01(a)(1)(B) 
\8\ establishes, for each set of proxy material, i.e., proxy statement, 
form of proxy and annual report when processed as a unit, a Processing 
Unit Fee based on the following schedule according to the number of 
nominee \9\ accounts through which the issuer's securities are 
beneficially owned:
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    \8\ Proposed FINRA Rule 2251.01(a)(1)(B) corresponds to NYSE 
Rule 451.90(1)(b).
    \9\ Proposed FINRA Rule 2251.01(a)(1)(A)(i) defines ``nominee'' 
to mean a broker or bank subject to SEA Rule 14b-1 or Rule 14b-2, 
respectively. This provision corresponds with NYSE Rule 
451.90(1)(a)(i). The new rule, in combination with proposed new 
FINRA Rule 2251.01(a)(1)(A)(ii) as set forth in note 10 below, 
replaces current FINRA Rule 2251.01(a)(1)(A) [sic]. The Commission 
notes that it is proposed FINRA Rule 2251.01(a)(1)(B)(i) that 
replaces current FINRA Rule 2251.01(a)(1)(A) and current FINRA Rule 
2251 does not define ``nominee.''
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     50 cents for each account up to 10,000 accounts;
     47 cents for each account above 10,000 accounts, up to 
100,000 accounts;
     39 cents for each account above 100,000 accounts, up to 
300,000 accounts;
     34 cents for each account above 300,000 accounts, up to 
500,000 accounts;
     32 cents for each account above 500,000 accounts.
    The proposed rule change provides that, under the above schedule, a 
member may charge the issuer the tier one rate for the first 10,000 
accounts, or portion thereof, with decreasing rates applicable only on 
additional accounts in the additional tiers. The proposed rule change 
provides that references in the Supplementary Material to the number of 
accounts means the number of accounts holding securities of the issuer 
at any nominee that is providing distribution services without the 
services of an intermediary, or when an intermediary \10\ is involved, 
the aggregate number of nominee accounts with beneficial ownership in 
the issuer served by the intermediary. Further, the proposed rule 
change provides that, in the case of a meeting for which an opposition 
proxy has been furnished to security holders, the Processing Unit Fee 
shall be $1.00 per account, in lieu of the fees in the above schedule.
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    \10\ Proposed FINRA Rule 2251.01(a)(1)(A)(ii) defines 
``intermediary'' to mean a proxy service provider that coordinates 
the distribution of proxy or other materials for multiple nominees. 
This provision corresponds to NYSE Rule 451.90(1)(a)(ii).
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     Intermediaries: Proposed FINRA Rule 2251.01(a)(1)(C) \11\ 
establishes the following supplemental fees for intermediaries:
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    \11\ Proposed FINRA Rule 2251.01(a)(1)(C) corresponds to NYSE 
Rule 451.90(1)(c).
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     $22.00 for each nominee served by the intermediary that 
has at least one account beneficially owning shares in the issuer;
     an Intermediary Unit Fee for each set of proxy material, 
based on the following schedule according to the number of nominee 
accounts through which the issuer's securities are beneficially owned:
     14 cents for each account up to 10,000 accounts;
     13 cents for each account above 10,000 accounts, up to 
100,000 accounts;
     11 cents for each account above 100,000 accounts, up to 
300,000 accounts;
     9 cents for each account above 300,000 accounts, up to 
500,000 accounts;
     7 cents for each account above 500,000 accounts.
    The proposed rule change provides that, under the above schedule, a 
member may charge the issuer the tier one rate for the first 10,000 
accounts, or portion thereof, with decreasing rates applicable only on 
additional accounts in the additional tiers. For special meetings, the 
proposed rule change provides that the Intermediary Unit Fee shall be 
based on the following schedule, in lieu of the fees described in the 
schedule above:
     19 cents for each account up to 10,000 accounts;
     18 cents for each account above 10,000 accounts, up to 
100,000 accounts;
     16 cents for each account above 100,000 accounts, up to 
300,000 accounts;
     14 cents for each account above 300,000 accounts, up to 
500,000 accounts;
     12 cents for each account above 500,000 accounts.
    The proposed rule change provides that, under the above schedule, a 
member may charge the issuer the tier one rate for the first 10,000 
accounts, or portion thereof, with decreasing rates applicable only on 
additional accounts in the additional tiers. For purposes of the 
proposed rule, a special meeting is a meeting other than the issuer's 
meeting for the election of directors. Further, the proposed rule 
change provides that, in the case of a meeting for which an opposition 
proxy has been furnished to security holders, the Intermediary Unit Fee 
shall be 25 cents per account, with a minimum fee of $5,000 per 
soliciting entity, in lieu of the fees described in the two schedules 
given in this paragraph above, as the case may be. Where there are 
separate solicitations by management and an opponent, the opponent is 
to be separately billed for the costs of its solicitation.
     Proxy Follow-up Material: The proposed rule change revises 
FINRA Rule 2251.01(a)(2) \12\ (Charges for Proxy Follow-Up Mailings) to 
establish, for each set of proxy follow-up material, a Processing Unit 
Fee of 40 cents per account, except for those relating to an issuer's 
annual meeting for the election of directors, for which the Processing 
Unit Fee shall be 20 cents per account. The proposed rule change 
revises the header of FINRA Rule 2251.01(a)(2) to read ``Charges for 
Proxy Follow-Up Material'' and deletes the current text under that rule 
provision.
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    \12\ FINRA Rule 2251.01(a)(2), as revised by the proposed rule 
change, corresponds to NYSE Rule 451.90(2).
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     Beneficial Ownership Information: Current FINRA Rule 
2251.01(a)(3) \13\ (Charge for Providing Beneficial Ownership 
Information) establishes a rate of six and one-half cents per name of 
non-objecting beneficial owner (``NOBO'') provided to the issuer 
pursuant to the issuer's request. The proposed rule change revises Rule 
2251.01(a)(3) to provide that, where the non-objecting beneficial 
ownership information is not furnished directly to the issuer by the 
member, but is furnished through an agent designated by the member, the 
issuer will be expected to pay in addition the

[[Page 2743]]

following fee to the agent, with a minimum fee of $100 per requested 
list:
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    \13\ FINRA Rule 2251.01(a)(3), as revised by the proposed rule 
change, corresponds to NYSE Rule 451.92.
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     10 cents per name for the first 10,000 names or portion 
thereof;
     5 cents per name for additional names up to 100,000 names; 
and
     4 cents per name above 100,000.
    The rule currently provides that any member that designates an 
agent for the purpose of furnishing requesting issuers with beneficial 
ownership information pursuant to SEA Rule 14b-1(c) and thereafter 
cancels that designation or appoints a new agent for such purpose 
should promptly inform interested issuers. The proposed rule change 
retains this language and provides that, when an issuer requests 
beneficial ownership information as of a date which is the record date 
for an annual or special meeting or a solicitation of written 
shareholder consent, the issuer may ask to eliminate names holding more 
or less than a specified number of shares, or names of shareholders 
that have already voted, and the issuer may not be charged a fee for 
the NOBO names so eliminated. In all other cases the issuer may be 
charged for all the names in the NOBO list.
     Interim Report, Post Meeting Report and Other Material: 
The proposed rule change revises FINRA Rule 2251.01(a)(4) \14\ (Charges 
for Interim Report, Post Meeting Report and Other Material Mailings) to 
establish for interim reports, annual reports if processed separately, 
post meeting reports, or other material, a Processing Unit Fee of 15 
cents per account. The proposed rule change revises the header of FINRA 
Rule 2251.01(a)(4) to read ``Charges for Interim Report, Post Meeting 
Report and Other Material.''
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    \14\ FINRA Rule 2251.01(a)(4), as revised by the proposed rule 
change, corresponds to NYSE Rule 451.90(3).
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     Preference Management Fees: The proposed rule change 
deletes the current text under FINRA Rule 2251.01(a)(5) \15\ (Incentive 
Fees) and establishes, with respect to each account for which the 
nominee has eliminated the need to send materials in paper format 
through the mails (or by courier service), a Preference Management Fee 
in the following amount:
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    \15\ FINRA Rule 2251.01(a)(5), as revised by the proposed rule 
change, corresponds to NYSE Rule 451.90(4).
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     32 cents for each set of proxy material described in 
proposed FINRA Rule 2251.01(a)(1)(B); provided, however, that if the 
account is a Managed Account (as defined in proposed FINRA Rule 
2251.01(a)(7), below), the Preference Management Fee shall be 16 cents.
     10 cents for each set of material described in either 
FINRA Rule 2251.01(a)(2) or (a)(4), as discussed above.
    The proposed rule change provides that the Preference Management 
Fee is in addition to, and not in lieu of, the other fees set forth 
under FINRA Rule 2251.01 as revised by the rule change. The proposed 
rule change revises the header of FINRA Rule 2251.01(a)(5) to read 
``Preference Management Fees.''
     Notice and Access Fees: Proposed FINRA Rule 2251.01(a)(6) 
\16\ (Notice and Access Fees) provides that, when an issuer elects to 
utilize Notice and Access for a proxy distribution, there is an 
incremental fee based on all nominee accounts through which the 
issuer's securities are beneficially owned as follows:
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    \16\ Proposed FINRA Rule 2251.01(a)(6) corresponds to NYSE Rule 
451.90(5).
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     25 cents for each account up to 10,000 accounts;
     20 cents for each account over 10,000 accounts, up to 
100,000 accounts;
     15 cents for each account over 100,000 accounts, up to 
200,000 accounts;
     10 cents for each account over 200,000 accounts, up to 
500,000 accounts;
     5 cents for each account over 500,000 accounts.
    The proposed rule change provides that, under the above schedule, a 
member may charge the issuer the tier one rate for the first 10,000 
accounts, or portion thereof, with decreasing rates applicable only on 
additional accounts in the additional tiers. The proposed rule change 
further provides that follow up notices will not incur an incremental 
fee for Notice and Access. In addition, no incremental fee will be 
imposed for fulfillment transactions (i.e., a full package sent to a 
notice recipient at the recipient's request), although out of pocket 
costs such as postage will be passed on as in ordinary distributions.
     Managed Accounts: Proposed FINRA Rule 2251.01(a)(7) \17\ 
(Fee Exclusion in Certain Circumstances) provides that, notwithstanding 
any other provision under the rule, no fee shall be imposed for a 
nominee account that is a Managed Account and contains five or fewer 
shares or units of the security involved. The proposed rule defines 
``Managed Account'' to mean an account at a nominee which is invested 
in a portfolio of securities selected by a professional adviser, and 
for which the account holder is charged a separate asset-based fee for 
a range of services which may include ongoing advice, custody and 
execution services. The adviser can be either employed by or affiliated 
with the nominee, or a separate investment advisor contracted for the 
purpose of selecting investment portfolios for the managed account. 
Requiring that investments or changes to the account be approved by the 
client shall not preclude an account from being a ``Managed Account,'' 
nor shall the fact that commissions or transaction-based charges are 
imposed in addition to the asset-based fee. Proposed FINRA Rule 
2251.01(a)(7) further provides that, notwithstanding any other 
provision under the rule, no fee shall be imposed for any nominee 
account which contains only a fractional share, i.e., less than one 
share or unit of the security involved.
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    \17\ Proposed FINRA Rule 2251.01(a)(7) corresponds to NYSE Rule 
451.90(6).
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     EBIP Fee: Proposed FINRA Rule 2251.01(a)(8) \18\ (Enhanced 
Brokers' Internet Platform Fee) provides that, during the period ending 
December 31, 2018, there shall be a supplemental fee of 99 cents for 
each new account that elects, and each full package recipient among a 
brokerage firm's accounts that converts to, electronic delivery while 
having access to an EBIP. The proposed rule change provides that this 
fee does not apply to electronic delivery consents captured by issuers 
(for example, through an open-enrollment program), nor to positions 
held in Managed Accounts (as defined in proposed FINRA Rule 
2251.01(a)(7)) nor to accounts voted by investment managers using 
electronic voting platforms.\19\ The proposed rule change provides that 
this is a one-time fee, meaning that an issuer may be billed this fee 
by a particular member only once for each account covered by this rule. 
Further, billing for this fee should be separately indicated on the 
issuer's invoice and must await the next proxy or consent solicitation 
by the issuer that follows the triggering election of electronic 
delivery by an eligible account. Accounts receiving a notice pursuant 
to the use of notice and access by the issuer, and accounts to which 
mailing is suppressed by householding, will not trigger the fee under 
the proposed rule change. The proposed rule change further provides:
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    \18\ Proposed FINRA Rule 2251.01(a)(8) corresponds to NYSE Rule 
451.90(7).
    \19\ FINRA notes that the EBIP fee does not apply to accounts 
that converted to electronic delivery prior to January 1, 2014.
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     To qualify under the rule, an EBIP must provide notices of 
upcoming corporate votes (including record and shareholder meeting 
dates) and the

[[Page 2744]]

ability to access proxy materials and a voting instruction form, and 
cast the vote, through the investor's account page on the member's Web 
site without an additional log-in.
     Any member that is not also a member of the NYSE with a 
qualifying EBIP must provide notice thereof to FINRA,\20\ including the 
date such EBIP became operational, and any limitations on the 
availability of the EBIP to its customers.
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    \20\ Under the new NYSE proxy rate rules, the notification 
applies to NYSE member organizations as to the NYSE. To avoid 
regulatory duplication, the proposed rule change applies the EBIP 
notification requirement only to FINRA members that are not NYSE 
members. However, as noted below, all FINRA members would need to 
maintain, and would be subject to requests by FINRA for, the 
specified EBIP tracking information and records.
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     Conversions to electronic delivery by accounts with access 
to an EBIP need to be tracked for the purpose of reporting the activity 
to FINRA when requested, as do records of marketing efforts to 
encourage account holders to use the EBIP. In addition, records need to 
be maintained and reported to FINRA when requested regarding the 
proportion of non-institutional accounts that vote proxies after being 
provided access to an EBIP.
     Miscellaneous Revisions: The proposed rule change revises 
the header of FINRA Rule 2251.01(a)(1) to read ``Basic Processing and 
Intermediary Unit Fees.'' To reflect the use of the term ``process'' 
throughout the new NYSE proxy rate rules, the proposed rule change 
revises ``forward,'' ``forwarding'' and ``transmit'' throughout FINRA 
Rule 2251 to read ``process and forward,'' ``processing and 
forwarding'' and ``process and transmit,'' respectively.
    FINRA notes that the guidance applicable to the new NYSE proxy rate 
rules as set forth in the Commission's Approval Order shall apply to 
Rule 2251 as revised by the proposed rule change.
    FINRA has filed the proposed rule change for immediate 
effectiveness and 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 FINRA can implement the proposed rule change on 
January 1, 2014.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\21\ 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, by conforming the rate 
reimbursement provisions under FINRA Rule 2251 with the new NYSE proxy 
rate rules, the proposed rule change helps to ensure regulatory clarity 
and harmonization with respect to proxy rate reimbursement, thereby 
facilitating the processing and transmittal of proxy and other issuer-
related materials to investors and conducing to the orderly 
administration of the Commission's proxy rules. Further, for the 
reasons set forth in the Approval Order, the Commission found that the 
new NYSE proxy rate rules are consistent with the requirements of 
Section 6(b)(4),\22\ Section 6(b)(5) \23\ and Section 6(b)(8) \24\ of 
the Act. Because the proposed rule change conforms with the new NYSE 
proxy rate rules, FINRA believes that the proposed rule change is 
consistent with the corresponding provisions under Section 
15A(b)(5),\25\ Section 15A(b)(6) \26\ and Section 15A(b)(9) \27\ of the 
Act.
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    \21\ 15 U.S.C. 78o-3(b)(6).
    \22\ 15 U.S.C. 78f(b)(4). Section 6(b)(4) requires that an 
exchange have rules that provide for the equitable allocation of 
reasonable dues, fees and other charges among its members, issuers 
and other persons using its facilities.
    \23\ 15 U.S.C. 78f(b)(5). Section 6(b)(5) requires that the 
rules of an exchange be designed, among other things, to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system 
and, in general to protect investors and the public interest, and 
not be designed to permit unfair discrimination between customers, 
issuers, brokers or dealers.
    \24\ 15 U.S.C. 78f(b)(8). Section 6(b)(8) prohibits any exchange 
rule from imposing any burden on competition that is not necessary 
or appropriate in furtherance of the Act.
    \25\ 15 U.S.C. 78o-3(b)(5). Section 15A(b)(5) 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 that FINRA operates or controls. 
Relatedly, SEA Rule 14b-1 conditions a broker-dealer's obligation to 
forward issuer proxy materials to beneficial owners on the issuer's 
assurance that it will reimburse the broker-dealer's reasonable 
expenses, both direct and indirect, incurred in connection with 
performing that obligation. See 17 CFR 240.14b-1.
    \26\ 15 U.S.C. 78o-3(b)(6).
    \27\ 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. FINRA believes that, by 
conforming the rate reimbursement provisions under FINRA Rule 2251 with 
the new NYSE proxy rate rules, the proposed rule change helps to ensure 
regulatory clarity and harmonization with respect to proxy rate 
reimbursement. FINRA believes that this will help FINRA members avoid 
conflicting requirements and related burdens that would otherwise 
result in the absence of the proposed rule change.

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 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 if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \28\ and Rule 19b-4(f)(6) 
thereunder.\29\
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    \28\ 15 U.S.C. 78s(b)(3)(A).
    \29\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and the 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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    A proposed rule change filed under Rule 19b-4(f)(6) \30\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\31\ 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 FINRA can implement 
the proposed rule change on January 1, 2014, in alignment with the 
implementation date of the new NYSE proxy rate rules. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because it will allow 
FINRA to harmonize its rules with the new NYSE proxy rate rules, which 
should reduce the potential for investor confusion regarding the 
applicable proxy fees. Therefore, the Commission hereby waives the 30-
day operative delay and

[[Page 2745]]

designates the proposal operative upon filing.\32\
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    \30\ 17 CFR 240.19b-4(f)(6).
    \31\ 17 CFR 240.19b-4(f)(6)(iii).
    \32\ 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 rule-comments@sec.gov. Please include 
File Number SR-FINRA-2013-056 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-2013-056. 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 
10:00 a.m. and 3:00 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-2013-056 and should be 
submitted on or before February 5, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00581 Filed 1-14-14; 8:45 am]
BILLING CODE 8011-01-P