Document ID: SEC-2017-0338-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2017-03-02T05:00Z

[Federal Register Volume 82, Number 40 (Thursday, March 2, 2017)]
[Notices]
[Pages 12387-12389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04033]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80105; File No. SR-FINRA-2017-004]

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

February 24, 2017.
    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 February 17, 2017, 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, 
II, and III 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 the 
Substance of the Proposed Rule Change

    FINRA is proposing to update cross-references and make other non-
substantive changes within FINRA rules, due in part to the adoption of 
a new consolidated FINRA rule.
    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.

[[Page 12388]]

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 has been developing a 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 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 make some of those changes, as well 
as other non-substantive changes unrelated to the adoption of rules in 
the Consolidated FINRA Rulebook.
    First, the proposed rule change would update rule cross-references 
to reflect the adoption of FINRA Rule 3210 (Accounts At Other Broker-
Dealers and Financial Institutions), a new consolidated rule addressing 
accounts opened or established by associated persons of members at 
firms other than the firm with which they are associated. The SEC 
approved the new rule on April 7, 2016. As part of that rule filing, 
FINRA also deleted in their entirety NASD Rule 3050, Incorporated NYSE 
Rules 407, 407A, and Incorporated NYSE Rule Interpretation 407.\5\ Rule 
3210 will be implemented on April 3, 2017. As such, the proposed rule 
change would update references to the new rule number in FINRA Rules 
0150 (Application of Rules to Exempted Securities Except Municipal 
Securities), 2150 (Improper Use of Customers' Securities or Funds; 
Prohibition Against Guarantees and Sharing in Accounts), 3110 
(Supervision), 3280 (Private Securities Transactions of an Associated 
Person), and 6630 (Applicability of FINRA Rules to Securities 
Previously Designated as PORTAL Securities). Also, the proposed rule 
change would update the reference to Incorporated NYSE Rule 407 in 
FINRA Rule 9217 (Violations Appropriate for Disposition Under Plan 
Pursuant to SEA Rule 19d-1(c)(2)), given that, as explained more fully 
in SR-FINRA-2015-029, new FINRA Rule 3210 is the consolidated successor 
to the NYSE rule.\6\
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    \5\ See Securities Exchange Act Release No. 77550 (April 7, 
2016), 81 FR 21924 (April 13, 2016) (Order Approving File No. SR-
FINRA-2015-029).
    \6\ See supra note 5. In addition, current FINRA Rule 9217 
includes reference to Incorporated NYSE Rule 407A. Such reference 
would be deleted pursuant to the rule change. As explained more 
fully in SR-FINRA-2015-029, FINRA deleted Incorporated NYSE Rule 
407A because that rule is superseded by FINRA Rule 3210.
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    Furthermore, the proposed rule change would make technical changes 
to FINRA Rules 5210 (Publication of Transactions and Quotations) \7\ 
and 6750 (Dissemination of Transaction Information) \8\ to reflect 
FINRA Manual style convention changes.
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    \7\ See Securities Exchange Act Release No. 79361 (November 21, 
2016), 81 FR 85650 (November 28, 2016) (Notice of Filing and 
Immediate Effectiveness of File No. SR-FINRA-2016-043).
    \8\ See Securities Exchange Act Release No. 78925 (September 23, 
2016), 81 FR 67023 (September 29, 2016) (Order Approving File No. 
SR-FINRA-2016-023).
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date for the changes to FINRA Rule 
6750 will be March 20, 2017, to coincide with the implementation date 
of earlier changes to the rule.\9\ The implementation date for the 
proposed changes to FINRA Rules 0150, 2150, 3110, 3280, 5210, 6630 and 
9217 will be April 3, 2017.
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    \9\ See supra note 8 for additional detail.
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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,\10\ 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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    \10\ 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. The proposed rule change brings 
clarity and consistency to FINRA rules without adding any burden on 
firms.

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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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. 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

[[Page 12389]]

     Send an email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2017-004 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-2017-004. 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-2017-004, and should 
be submitted on or before March 23, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-04033 Filed 3-1-17; 8:45 am]
 BILLING CODE 8011-01-P