Document ID: SEC-2011-0620-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2011-05-04T04:00Z

[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Notices]
[Pages 25399-25400]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10897]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64369; File No. SR-FINRA-2011-021]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change Relating to Extension of Implementation Date for 
Expansion of the Order Audit Trail System to All NMS Stocks

April 29, 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 April 26, 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.
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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 establish October 3, 2011, as the 
implementation date of the amendments to FINRA Rules 7410 and 7470 that 
the Commission approved on November 12, 2010.\4\
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    \4\ See Securities Exchange Act Rel. No. 63311 (November 12, 
2010), 75 FR 70757 (November 18, 2010) (SR-FINRA-2010-044).
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    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 filing the proposed rule change to establish October 3, 
2011, as the implementation date for the amendments to the OATS rules 
expanding the OATS recording and reporting requirements to all NMS 
stocks.
    On November 12, 2010, the SEC approved SR-FINRA-2010-044, which 
amended FINRA Rules 7410 and 7470 to expand the OATS recording and 
reporting requirements to include all NMS stocks.\5\ On January 11, 
2011, FINRA published Regulatory Notice 11-03 announcing that the 
Commission approved the amendments and that FINRA was publishing a new 
version of the OATS Reporting Technical Specifications. Pursuant to the 
SEC's approval of SR-FINRA-2010-044 and

[[Page 25400]]

the timing set forth in Regulatory Notice 11-03, the amendments to the 
OATS Rules are currently scheduled to begin to be phased in on July 11, 
2011, six months after the publication of Regulatory Notice 11-03 and 
the revised OATS Reporting Technical Specifications.
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    \5\ See Securities Exchange Act Rel. No. 63311 (November 12, 
2010), 75 FR 70757 (November 18, 2010) (SR-FINRA-2010-044).
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    Since the publication of the Notice and the OATS Reporting 
Technical Specifications, many firms and industry groups have requested 
that the implementation date for the new recording and reporting 
requirements be delayed to allow firms sufficient time to make 
necessary systems updates and changes. In addition, firms have noted 
that the time needed to make the necessary changes was increased 
because firms are also changing and updating their systems to comply 
with the SEC's new rule on risk management controls for broker-dealers 
with market access, Rule 15c3-5 under the Act,\6\ which has a 
compliance date of July 14, 2011.\7\ As a result of these discussions, 
FINRA is seeking to delay the implementation of the new OATS recording 
and reporting requirements for NMS stocks until October 3, 2011, to 
give firms sufficient time to make necessary changes to their systems 
to enable them to comply with the expanded OATS recording and reporting 
requirements. Consequently, FINRA will begin to phase-in the new 
recording and reporting requirements beginning on October 3, 2011.
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    \6\ 17 CFR 240.15c3-5.
    \7\ See Securities Exchange Act Release No. 63241 (November 3, 
2010), 75 FR 69792 (November 15, 2010).
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    FINRA has filed the proposed rule change for immediate 
effectiveness.
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. FINRA believes that extending the implementation date 
of the extension of the OATS Rules to all NMS stocks will ensure that 
firms have sufficient time to make the necessary changes to their 
systems to be able to comply with the new OATS recording and reporting 
requirements when they become effective.
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    \8\ 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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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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.

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-2011-021 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-2011-021. 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 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-2011-
021 and should be submitted on or before May 25, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10897 Filed 5-3-11; 8:45 am]
BILLING CODE 8011-01-P