Document ID: SEC-2012-2138-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2012-12-26T05:00Z

[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Notices]
[Pages 76112-76113]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31012]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68468; File No. SR-FINRA-2012-055]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Extend the Date by Which Eligible Registrants 
Must Complete a Firm-Element Continuing Education Program To Qualify To 
Engage in a Security Futures Business

December 19, 2012.
    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 12, 2012, 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 amend NASD Rule 1022 (Categories of Principal 
Registration) and NASD Rule 1032 (Categories of Representative 
Registration) to extend the deadline by which eligible registrants must 
complete a firm-element continuing education requirement to engage in a 
security futures business to December 31, 2015, or one business day 
prior to the date a revised examination that includes security futures 
products is offered.
    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
    In 2002, FINRA modified the following registration categories to 
include the activities of engaging in and supervising securities 
futures: (1) Registered Options Principal (Series 4); (2) Limited 
Principal--General Securities Sales Supervisor (Series 9/10); (3) 
General Securities Representative (Series 7); and (4) Registered 
Options Representative (Series 42).\4\ FINRA also required that persons 
currently registered or becoming registered in these categories 
complete a firm-element continuing education requirement addressing 
security futures before they conducted any security futures business. 
FINRA instituted this continuing education requirement to ensure that 
registered personnel, who may not be familiar with risks, trading 
characteristics, terms and nomenclature of these products, or the fact 
that they are subject to the joint jurisdiction of the SEC and CFTC, 
receive the necessary training.
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    \4\ See Securities Exchange Act Release No. 46663 (October 15, 
2002), 67 FR 64944 (October 22, 2002) (Order Approving File No. SR-
NASD-2002-40).
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    FINRA initially considered replacing the firm-element continuing 
education requirement with revised qualification examinations for these 
categories that addressed security futures; however, due to low trading 
volume in security futures and limited interest for registered 
representatives to engage in security futures business, such 
qualification examinations have not been implemented. Accordingly, 
FINRA has twice extended the deadline for completing a firm-element 
continuing education requirement.\5\ In view of the fact that there are 
no revised

[[Page 76113]]

qualification examinations addressing security futures, FINRA intends 
to continue to require eligible registrants to complete the mandated 
firm-element continuing education requirement before engaging in any 
security futures business. The proposed rule change amends NASD Rule 
1022 and NASD Rule 1032 to extend the deadline by which eligible 
registrants must complete the firm-element continuing education 
requirement to engage in a security futures business from December 31, 
2012 to December 31, 2015, or one business day prior to the date a 
revised examination that includes security futures products is offered.
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    \5\ In 2006, FINRA extended the deadline for completing a firm-
element continuing education requirement from December 31, 2006 to 
December 31, 2009. See Securities Exchange Act Release No. 54617 
(October 17, 2006), 71 FR 62498 (October 25, 2006) (Notice of Filing 
and Immediate Effectiveness of File No. SR-NASD-2006-118). In 2009, 
FINRA extended the deadline for completing a firm-element continuing 
education requirement from December 31, 2009 to December 31, 2012. 
See Securities Exchange Act Release No. 61231 (December 23, 2009), 
74 FR 69173 (December 30, 2009) (Notice of Filing and Immediate 
Effectiveness of File No. SR-FINRA-2009-092).
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date will be December 31, 2012.
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. The proposed rule change is necessary to continue to 
allow eligible registrants to complete a firm-element continuing 
education program that will qualify them to engage in a security 
futures business.
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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. FINRA believes that the 
proposed rule change is necessary to continue to allow eligible 
registrants to complete a firm-element continuing education program 
that will qualify them to engage in a security futures business.

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\7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    FINRA has requested that the Commission waive the 30-day operative 
delay to permit the proposed rule change to become operative on 
December 31, 2012. The Commission finds that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the waiver will keep in place the ability of 
registered persons to qualify to sell security futures by completing a 
firm-element continuing education program in lieu of an exam. 
Therefore, the Commission designates the proposal operative on December 
31, 2012.\9\
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    \9\ For purposes only of waiving the 30-day operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
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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
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2012-055 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-2012-055. 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 20549-1090, on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be 
available for inspection and copying at the FINRA's principal office. 
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-2012-
055, and should be submitted on or before January 16, 2013.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31012 Filed 12-21-12; 4:15 pm]
BILLING CODE 8011-01-P