Document ID: SEC-2010-0187-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2010-02-04T05:00Z

[Federal Register: February 4, 2010 (Volume 75, Number 23)]
[Notices]               
[Page 5834-5836]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe10-89]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61427; File No. SR-FINRA-2010-002]

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

January 27, 2010.
    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 January 14, 2010, 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 first would update rule cross-references 
to reflect recent changes adopted in the Consolidated FINRA Rulebook. 
The proposed rule change would update FINRA Rule 0150 to reflect the 
adoption into the Consolidated FINRA Rulebook of (1) FINRA Rule 2060 
and the deletion of NASD Rule 3120,\5\ (2) FINRA Rules 4120 and 4130 
and the deletion of NASD Rules 3130 and 3131 and NASD IM-3130,\6\ and 
(3) FINRA Rules 5210 and 5220 and the deletion of NASD Rules 3310 and 
3320 and NASD IM-3310 and IM-3320.\7\ The rule cross-references in 
FINRA Rule 6635 would be similarly updated to reflect the adoption of 
(1) FINRA Rule 2251 and the deletion of NASD Rule 2260,\8\ (2) FINRA 
Rules 5210 and 5520 and the deletion of NASD IM-3310 and IM-

[[Page 5835]]

3320,\9\ and (3) FINRA Rule 4120 and the deletion of NASD Rule 
3130.\10\ Finally, the rule references in FINRA Rule 9217, which sets 
forth FINRA's Minor Rule Violation Plan, would be updated to (1) delete 
the reference to Incorporated NYSE Rule 312(h) and (2) delete 
Incorporated NYSE Rule 421 and replace it with FINRA Rule 4521(d), as 
the provision is substantively similar.\11\
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    \5\ See Securities Exchange Act Release No. 61071 (November 30, 
2009), 74 FR 64109 (December 7, 2009) (Order Approving File No. SR-
FINRA-2009-067).
    \6\ See Securities Exchange Act Release No. 60933 (November 4, 
2009), 74 FR 58334 (November 12, 2009) (Order Approving File No. SR-
FINRA-2008-067).
    \7\ See Securities Exchange Act Release No. 60835 (October 16, 
2009), 74 FR 54616 (October 22, 2009) (Order Approving File No. SR-
FINRA-2009-055).
    \8\ See Securities Exchange Act Release No. 61052 (November 23, 
2009), 74 FR 62857 (December 1, 2009) (Order Approving File No. SR-
FINRA-2009-066).
    \9\ See note 7.
    \10\ See note 6.
    \11\ See note 6.
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    The proposed rule change also would amend FINRA Rules 6380A, 6380B, 
6622, 7230A, 7230B and 7330 to reflect the transfer of NASD Rule 11890 
into the Consolidated FINRA Rulebook as part of a new FINRA Rule 11890 
Series.\12\ The proposed rule change would also make a non-substantive 
change to FINRA Rule 11893 to re-label paragraph (d) as paragraph (c).
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    \12\ See Securities Exchange Act Release No. 61080 (December 1, 
2009), 74 FR 64117 (December 7, 2009) (Order Approving File No. SR-
FINRA-2009-068).
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    In addition, the proposed rule change would make a technical 
amendment to FINRA Rule 9610 to delete the reference to FINRA Rule 6183 
as such rule has been removed from the Consolidated FINRA Rulebook. 
FINRA Rule 6183 (formerly NASD Rule 5150) automatically terminated on 
July 9, 2008.\13\
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    \13\ See Securities Exchange Act Release No. 58643 (September 
25, 2008) 73 FR 57174 (October 1, 2008) (Order Approving File Nos. 
SR-FINRA-2008-021; SR-FINRA-2008-022; SR-FINRA-2008-026; SR-FINRA-
2008-028 and SR-FINRA-2008-029).
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    Finally, the proposed rule change would amend FINRA Rules 2251 \14\ 
and 4110 \15\ to reflect a change in FINRA's style convention when 
referencing federal securities laws. FINRA has filed the proposed rule 
change for immediate effectiveness. The implementation date for the 
proposed rule change to FINRA Rules 2251, 6380A, 6380B, 6622, 7230A, 
7230B, 7330, 9610, and 11893 will be February 15, 2010.\16\ The 
proposed rule change to FINRA Rule 0150 will be February 15, 2010, 
except the proposed rule change that would eliminate the references to 
NASD Rules 3130 and 3131 and IM-3130 and add references to FINRA Rules 
4120 and 4130, which will be implemented on February 8, 2010.\17\ The 
proposed rule change to FINRA Rule 6635 will be February 15, 2010, 
except the proposed rule change that would eliminate the reference to 
NASD Rule 3130 and add reference to FINRA Rule 4120, which will be 
implemented on February 8, 2010.\18\ The implementation date for the 
proposed rule change to FINRA Rules 4110 and 9217 will be February 8, 
2010.\19\
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    \14\ See note 8.
    \15\ See note 6.
    \16\ See Regulatory Notice 09-72 (December 2009). See also note 
12. The effective date of SR-FINRA-2009-068 will be announced in a 
Regulatory Notice and is intended to be February 15, 2010.
    \17\ See Regulatory Notice 09-71 (December 2009).
    \18\ See note 17.
    \19\ See note 17.
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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,\20\ 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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    \20\ 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 \21\ and Rule 19b-
4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 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 may summarily abrogate 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-2010-002 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-2010-002. 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 \23\, 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, 100 F Street, NE., Washington, DC 20549, 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-2010-002 and should be submitted on or before February 25, 
2010.
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    \23\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov/.

[[Page 5836]]

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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2330 Filed 2-3-10; 8:45 am]
BILLING CODE 8011-01-P