Document ID: SEC-2008-0179-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2008-02-04T05:00Z

[Federal Register: February 4, 2008 (Volume 73, Number 23)]
[Notices]               
[Page 6537-6539]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04fe08-73]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57225; File No. SR-FINRA-2007-042]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change Relating to Amendments to the Codes of Arbitration 
Procedure To Remove the Page Limit on Statements of Claim Filed Through 
the Online Arbitration Claim Filing System

January 29, 2008.
    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 December 27, 2007, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by FINRA. 
FINRA has designated the proposed rule change as concerned solely with 
the administration of the self-regulatory organization under section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(3) thereunder,\4\ 
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\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend Rule 12302 of the Code of Arbitration 
Procedure for Customer Disputes (``Customer Code'') and Rule 13302 of 
the Code of Arbitration Procedure for Industry Disputes (``Industry 
Code'') to remove the 50-page limit on Statements of Claim filed 
through the Online Arbitration Claim Filing System (``the System''), to 
allow parties to submit exhibits to Statements of Claim through the 
System, and to reflect the new FINRA name.\5\ Below is the text of the 
proposed rule change. Proposed new language is in italics; proposed 
deletions are in brackets.
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    \5\ Specifically, FINRA is updating its Internet address and the 
title of the Tracking Form generated by the System.
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* * * * *
12302. Filing an Initial Statement of Claim
    (a) Filing Claim with the Director
    (1) To initiate an arbitration, a claimant must file the following 
with the Director:
     Signed and dated Uniform Submission Agreement; and
     A statement of claim specifying the relevant facts and 
remedies requested.
    The claimant may include any additional documents supporting the 
statement of claim.
    (2) A claimant may use the online claim notification and filing 
procedure to complete part of the arbitration claim filing process 
through the Internet. To commence this process, a claimant may complete 
a Claim Information Form that can be accessed through [http://www.nasd.com] http://www.finra.org. In completing the Claim Information 

Form, the claimant may attach an electronic version of the statement of 
claim, and any additional documents supporting the statement of claim, 
to the form[, provided it does not exceed 50 pages]. Once this online 
form has been completed, [an NASD] a FINRA Dispute Resolution Tracking 
Form will be generated and displayed for the claimant to reproduce as 
necessary. The claimant shall then file with the Director the rest of 
the materials required in subparagraph (1) of the rule, along with a 
hard copy of the [NASD] FINRA Dispute Resolution Tracking Form.
    (b)-(d) No change.
13302. Filing an Initial Statement of Claim
    (a) Filing Claim with the Director
    (1) To initiate an arbitration, a claimant must file the following 
with the Director:
     Signed and dated Uniform Submission Agreement; and
     A statement of claim specifying the relevant facts and 
remedies requested.
    The claimant may include any additional documents supporting the 
statement of claim.
    (2) A claimant may use the online claim notification and filing 
procedure to complete part of the arbitration claim filing process 
through the Internet. To commence this process, a claimant may complete 
a Claim Information Form that can be accessed through [http://www.nasd.com] http://www.finra.org. In completing the Claim Information 

Form, the claimant may attach an electronic version of the statement of 
claim, and any additional documents supporting the statement of claim, 
to the form[, provided it does not exceed 50 pages]. Once this online 
form has been

[[Page 6538]]

completed, [an NASD] a FINRA Dispute Resolution Tracking Form will be 
generated and displayed for the claimant to reproduce as necessary. The 
claimant shall then file with the Director the rest of the materials 
required in subparagraph (1) of the rule, along with a hard copy of the 
[NASD] FINRA Dispute Resolution Tracking Form.
    (b)-(d) No change.
* * * * *

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 amending its Customer Code and Industry Code to remove the 
50-page limit on Statements of Claim filed through the System, to allow 
parties to submit exhibits to Statements of Claim through the System, 
and to reflect the new FINRA name. The proposed rule change is intended 
to encourage more claimants to use online filing. The System will not 
have any limitation on the number of pages submitted so long as they 
are submitted as a single document.
    To begin an arbitration, a claimant submits a signed and dated 
Uniform Submission Agreement, a Statement of Claim specifying the 
relevant facts and remedies requested, any exhibits supporting the 
Statement of Claim, and the required fees. When a claim is filed in 
hard copy, the claimant is required to submit sufficient copies of the 
Statement of Claim for the forum, each arbitrator and each other party.
    Since August 2004, FINRA has allowed claimants to file an 
electronic version of the Statement of Claim so long as the submission 
does not exceed 50 pages. The Statement of Claim may include exhibits 
if they are part of the same document and the total number of pages is 
no more than 50. Claimants who file online also complete an online 
Claim Information Form containing details about the names and addresses 
of the parties and their counsel, the issues in controversy, and so 
forth. Once the Claim Information Form is completed, a Dispute 
Resolution Tracking Form is generated by the System. Claimants then 
mail in a signed and dated Uniform Submission Agreement, a copy of the 
Dispute Resolution Tracking Form, the required fees, and any exhibits. 
The case is deemed to be filed when all such materials are received.
    With electronically filed claims, FINRA staff prints the required 
copies for the arbitrators and the other parties. The 50-page limit was 
originally imposed to ensure that FINRA had sufficient resources to 
process electronic claims efficiently. Having gained experience with 
electronic filing, FINRA is prepared to process efficiently the 
additional volume associated with longer Statements of Claim and 
exhibits.
2. Statutory Basis
    FINRA believes 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 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. By removing the page limitation on submissions through 
the System, the proposed rule change will provide investors, and other 
claimants, with expanded access to the System and will make claim 
processing more efficient.
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    \6\ 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

    The foregoing rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \7\ and paragraph (f)(3) of Rule 19b-4 
thereunder \8\ because it is concerned solely with the administration 
of FINRA.\9\ 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(3).
    \9\ The applicability of Rule 19b-4(f)(3) is limited to matters 
concerned solely with the administration of a self-regulatory 
organization. Because this narrowly tailored rule change is limited 
to relaxing administrative restrictions on the length of documents 
solely for claims processed online and updating FINRA's name and 
Internet address for purposes of these claims, it meets the Rule 
19b-4(f)(3) standard.
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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-2007-042 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2007-042. 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 inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington,

[[Page 6539]]

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-2007-042 and should be submitted 
on or before February 25, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-1960 Filed 2-1-08; 8:45 am]

BILLING CODE 8011-01-P