Document ID: SEC-2014-1664-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2014-10-02T04:00Z

[Federal Register Volume 79, Number 191 (Thursday, October 2, 2014)]
[Notices]
[Pages 59534-59535]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23445]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73230; File No. SR-FINRA-2014-036]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Granting Approval of Proposed Rule Change 
Relating to the Composition of Hearing Panels and Extended Hearing 
Panels in Disciplinary Proceedings

September 26, 2014.

I. Introduction

    On August 7, 2014, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to expand the pool of persons eligible to serve as 
Panelists on a Hearing Panel or an Extended Hearing Panel. The proposed 
rule change was published for comment in the Federal Register on August 
21, 2014.\3\ The Commission received no comments on the proposed rule 
change. The

[[Page 59535]]

Commission is approving the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 72854 (August 15, 2014), 
79 FR 49549.
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II. Description of the Proposal

    FINRA proposes to amend Rule 9231 to establish a category of 
persons eligible to serve as Panelists on a Hearing Panel or an 
Extended Hearing Panel that includes persons currently serving, or 
having served previously, on a committee appointed or approved by the 
FINRA Board. FINRA also proposes to make a conforming amendment to Rule 
9232, which establishes criteria for the appointment of eligible 
Panelists to Hearing Panels and Extended Hearing Panels. The proposed 
rule change would provide FINRA with a larger pool of individuals with 
experience and expertise that could serve as Panelists.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities association 
and, in particular, the requirements of Section 15A of the Act.\4\
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    \4\ 15 U.S.C. 78o-3.
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    Specifically, the Commission finds that the proposed rule change is 
consistent with Section 15A(b)(8) of the Act,\5\ which requires, among 
other things, that FINRA's rules provide a fair procedure for the 
disciplining of members and persons associated with members. The 
Commission believes that the proposed rule change will allow FINRA to 
address complaints filed with the Office of Hearing Officers in a 
timely manner, and that the complaints will be heard by Panelists who 
should possess the requisite knowledge and experience to enable them to 
render a proper and informed judgment. The Commission believes the 
proposed rule change will allow the Chief Hearing Officer enough 
flexibility to appoint Extended Hearing Panels that are composed of 
qualified Panelists capable of responding to complex issues often 
associated with Extended Hearings, while simultaneously reducing the 
burdens and time constraints shouldered by all who serve as Panelists.
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    \5\ 15 U.S.C. 78o-3(b)(8).
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    The Commission also finds that the proposed rule change is 
consistent with the provisions of Section 15A(b)(6) of the Act,\6\ 
which requires, among other things, that FINRA's rules 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. The Commission believes that 
expanding the pool of eligible Panelists to include those persons 
currently serving, or those having served previously, on a committee 
appointed or approved by the FINRA Board will allow qualified Panelists 
to promptly address allegations of misconduct by FINRA members and 
their associated persons. The Commission believes it is in the public 
interest, and consistent with the Act, that FINRA's mechanism for 
conducting disciplinary proceedings be designed to address allegations 
of misconduct properly and in a timely manner. The Commission believes 
that expanding the pool of applicants to include persons currently 
serving, or those having served previously, on a Committee appointed or 
approved by the FINRA Board should enhance FINRA's ability to conduct 
disciplinary proceedings in a fair and reasonable manner.
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    \6\ 15 U.S.C. 78o-3(b)(6).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-FINRA-2014-036), be, and 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23445 Filed 10-1-14; 8:45 am]
BILLING CODE 8011-01-P