Document ID: SEC-2014-0748-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2014-05-06T04:00Z

[Federal Register Volume 79, Number 87 (Tuesday, May 6, 2014)]
[Notices]
[Pages 25979-25981]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10359]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72066; File No. SR-FINRA-2014-022]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Delay the Implementation Date of SR-FINRA-2013-
046

May 1, 2014.
    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 April 24, 2014, the 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to delay the implementation date of amendments 
pursuant to SR-FINRA-2013-046. The proposed rule change would not make 
any changes to the text of 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.

[[Page 25980]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On November 13, 2013, FINRA filed a proposed rule change (SR-FINRA-
2013-046) to amend the FINRA Rule 6700 Series and the Trade Reporting 
and Compliance Engine (``TRACE'') dissemination protocols to provide 
for dissemination of additional Asset-Backed Securities (``ABS'') 
transactions and to reduce the reporting period for such securities.\4\ 
The proposed rule change also included amendments to: (1) Redefine the 
term ``Asset-Backed Security'' to accurately describe the securities 
for which FINRA will commence dissemination pursuant to the rule 
change; and (2) make other definitional, technical and conforming 
changes.\5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 70906 (November 20, 
2013), 78 FR 70602 (November 26, 2013) (Notice of Filing of File No. 
SR-FINRA-2013-046) (``Proposing Release'').
    \5\ See Proposing Release.
---------------------------------------------------------------------------

    The proposed rule change, as amended,\6\ was approved by the 
Commission on February 24, 2014.\7\
---------------------------------------------------------------------------

    \6\ In response to comments received by the Commission, on 
February 14, 2014, FINRA filed Amendment No. 1 to, among other 
things, modify certain definitions in FINRA Rule 6710 (Definitions) 
to revise the types of products that are to be included in the 
additional ABS transactions that would be subject to dissemination 
under FINRA Rule 6750 (Dissemination of Transaction Information) and 
the reduced reporting times specified in FINRA Rule 6730 
(Transaction Reporting).
    \7\ See Securities Exchange Act Release No. 71607 (February 24, 
2014), 79 FR 11481 (February 28, 2014) (Order Approving File No. SR-
FINRA-2013-046).
---------------------------------------------------------------------------

    FINRA is filing this proposed rule change to revise the time frame 
for implementation of SR-FINRA-2013-046 to provide additional time to 
complete the technological changes required for the dissemination of 
the additional securities. In SR-FINRA-2013-046, FINRA stated that it 
would announce the effective date of the rule change in a Regulatory 
Notice to be published no later than April 25, 2014, and that the 
effective date would be no later than 270 days following publication of 
the Regulatory Notice. However, FINRA has since discovered that the 
technology changes required to implement the rule change will require 
additional time and, therefore, is delaying the time frame both for the 
publication of the Regulatory Notice and the implementation of the 
amendments pursuant to SR-FINRA-2013-046. Specifically, FINRA will 
issue a Regulatory Notice announcing the implementation date of SR-
FINRA-2013-046 no later than August 22, 2014. The implementation date 
of the amendments pursuant to SR-FINRA-2013-046 will be no later than 
365 days following publication of the Regulatory Notice.
    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 
immediately.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    FINRA believes the proposed rule change is consistent with Section 
15A(b)(6) of the Act in that it provides the required additional time 
to complete technological changes that will enable the dissemination of 
the additional securities, which will improve transparency for 
investors, including by facilitating the ability of investors to 
identify and negotiate fair and competitive prices for ABSs. 
Dissemination of ABS transactions also may assist both buy and sell-
side market participants in price discovery when pricing and trading 
such securities. Thus, the proposed rule change is consistent with 
Section 15A(b)(6) of the Act,\9\ in that it will provide adequate time 
for FINRA to properly implement the required technology changes such 
that the launch of the new functionality will operate effectively when 
dissemination is commenced.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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. Based on the characteristics of 
the market, FINRA believes that additional price transparency in the 
ABS market may enhance the ability of investors to identify and 
negotiate fair and competitive prices for these securities. In 
addition, dissemination may assist institutional and retail customers 
in determining the quality of executions provided to them, which should 
encourage broker-dealers to provide competitive executions in such 
securities.
    Further, because the additional securities that are the subject of 
SR-FINRA-2013-046 currently are not being disseminated, the delay of 
the implementation does not change the status quo or involve any 
disparate treatment among affected parties. Finally, FINRA believes 
that providing adequate time to properly implement the required 
technology changes such that the launch of the new functionality 
operates effectively when dissemination is commenced will benefit all 
interested parties. Thus, 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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
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 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.
---------------------------------------------------------------------------

    FINRA has asked the Commission to waive the 30-day operative delay 
because the deadline set forth in SR-FINRA-2013-046 for publication of 
a Regulatory Notice announcing that filing's effective date would occur 
during the operative delay. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest because such action would implement the 
extension for FINRA's publication of a Regulatory Notice announcing SR-
FINRA-2013-046's effective date before the current

[[Page 25981]]

deadline for such publication expires. Therefore, the Commission hereby 
waives the 30-day operative delay and designates the proposal operative 
upon filing.\12\
---------------------------------------------------------------------------

    \12\ 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).
---------------------------------------------------------------------------

    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-2014-022 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-2014-022. 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-2014-022 and should be 
submitted on or before May 27, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-10359 Filed 5-5-14; 8:45 am]
BILLING CODE 8011-01-P