Document ID: SEC-2010-1775-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2010-11-22T05:00Z

[Federal Register Volume 75, Number 224 (Monday, November 22, 2010)]
[Notices]
[Pages 71164-71166]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-29395]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63319; File No. SR-FINRA-2010-060]

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 Non-
Substantive Technical Changes to Certain FINRA Rules

November 16, 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 November 10, 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.
---------------------------------------------------------------------------

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

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

[[Page 71165]]

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.
---------------------------------------------------------------------------

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

    The proposed rule change would update rule cross-references to 
reflect recent changes adopted in the Consolidated FINRA Rulebook. In 
this regard, the proposed rule change would update references in FINRA 
Rules 0150 (Application of Rules to Exempted Securities Except 
Municipal Securities), 2130 (Approval Procedures for Day-Trading 
Accounts), 2140 (Interfering With the Transfer of Customer Accounts in 
the Context of Employment Disputes), 2150 (Improper Use of Customers' 
Securities or Funds; Prohibition Against Guarantees and Sharing in 
Accounts), 2270 (Day-Trading Risk Disclosure Statement), 2360 
(Options), 5110 (Corporate Financing Rule--Underwriting Terms and 
Arrangements), 5122 (Private Placements of Securities Issued By 
Members), 5250 (Payments for Market Making), 6630 (Applicability of 
FINRA Rules to Securities Previously Designated as PORTAL Securities), 
9217 (Violations Appropriate for Disposition Under Plan Pursuant to SEA 
Rule 19d-1(c)(2)), 9610 (Application), and 11574 (Certificate in Name 
of Deceased Person, Trustee, etc.) that are needed as the result of 
Commission approval of five recent FINRA proposed rule changes.\5\ In 
addition, the proposed rule change would amend FINRA Rules 11100 (Scope 
of Uniform Practice Code) and 11580 (Transfer of Limited Partnership 
Securities), to update cross-references to NASD Rule 2810, which was 
renumbered as FINRA Rule 2310.\6\ Finally, the proposed rule change 
would make non-substantive technical changes to FINRA Rules 6420 
(Definitions), 8313 (Release of Disciplinary Complaints, Decisions and 
Other Information), 11560 (Certificate of Company Whose Transfer Books 
Are Closed), 11720 (Irregular Delivery--Transfer Refused--Lost or 
Stolen Securities), and 11870 (Customer Account Transfer Contracts), 
and delete a reference to Rule 11830 (Reserved) to reflect changes in 
FINRA style and naming conventions.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 62482 (July 12, 
2010), 75 FR 41562 (July 16, 2010) (Order Approving File No. SR-
FINRA-2010-024); Securities Exchange Act Release No. 62539 (July 21, 
2010), 75 FR 44033 (July 27, 2010) (Order Approving File No. SR-
FINRA-2010-029); Securities Exchange Act Release No. 62702 (August 
12, 2010), 75 FR 51147 (August 18, 2010) (Order Approving File No. 
SR-FINRA-2010-026); Securities Exchange Act Release No. 62762 
(August 23, 2010), 75 FR 53362 (August 31, 2010) (Order Approving 
File No. SR-FINRA-2009-042); Securities Exchange Act Release No. 
62842 (September 3, 2010), 75 FR 55842 (September 14, 2010) (Order 
Approving File No. SR-FINRA-2010-030).
    \6\ See Securities Exchange Act Release No. 59987 (May 27, 
2009), 74 FR 26902 (June 4, 2009) (Order Approving File No. SR-
FINRA-2009-016).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date for the proposed rule change 
will be December 15, 2010, the date on which certain of the previously 
approved rule changes will be implemented,\7\ except for proposed rule 
changes to FINRA Rule 6630(d)(1) that would eliminate the references to 
NASD Rules 2730, 2740 and 2750 and add references to FINRA Rule 5141. 
Those proposed changes will be implemented on February 8, 2011, the 
date on which the relevant previously approved rule change will be 
implemented.\8\
---------------------------------------------------------------------------

    \7\ See Regulatory Notice 10-49 (October 2010) (regarding File 
Nos. SR-FINRA-2009-042, FINRA-2010-026, and SR-FINRA-2010-030, 
effective December 15, 2010). File No. SR-FINRA-2010-024 is 
effective December 2, 2010. See Regulatory Notice 10-45 (October 
2010).
    \8\ See Regulatory Notice 10-47 (October 2010) (regarding File 
No. SR-FINRA-2010-029).
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\9\ 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.
---------------------------------------------------------------------------

    \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.

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).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if

[[Page 71166]]

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-2010-060 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-2010-060. 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 available 
publicly. All submissions should refer to File Number SR-FINRA-2010-060 
and should be submitted on or before December 13, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-29395 Filed 11-19-10; 8:45 am]
BILLING CODE 8011-01-P