Document ID: SEC-2010-0781-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2010-05-27T04:00Z

[Federal Register: May 27, 2010 (Volume 75, Number 102)]
[Notices]               
[Page 29793-29795]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27my10-98]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62146; File No. SR-FINRA-2010-023]

 
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 a Non-
Substantive Technical Change to a FINRA Rule

May 20, 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 May 4, 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, 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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[[Page 29794]]

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 a non-substantive technical change to a 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.

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.
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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 update rule cross-references to 
reflect recent changes adopted in the Consolidated FINRA Rulebook. The 
proposed rule change would update FINRA Rule 0150 to reflect (1) the 
adoption into the Consolidated FINRA Rulebook of FINRA Rule 2261 and 
the deletion of NASD Rules 2270 and 2910 \5\ and (2) the deletion of 
NASD Rules 2450 \6\ and 2780.\7\ The rule cross-references in FINRA 
Rule 6630 \8\ would be similarly updated to reflect (1) the adoption of 
FINRA Rule 2261 and the deletion of NASD Rule 2270 \9\ and (2) the 
deletion of NASD Rule 2450.\10\ Finally, the rule references in FINRA 
Rule 9217, which sets forth FINRA's Minor Rule Violation Plan, would be 
updated to reflect the deletion of Incorporated NYSE Rule 411(b).\11\
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    \5\ See Securities Exchange Act Release No. 61540 (February 18, 
2010), 75 FR 8771 (February 25, 2010) (Order Approving File No. SR-
FINRA-2009-081).
    \6\ See Securities Exchange Act Release No. 61542 (February 18, 
2010), 75 FR 8768 (February 25, 2010) (Order Approving File No. SR-
FINRA-2009-093).
    \7\ See Securities Exchange Act Release No. 61473 (February 2, 
2010), 75 FR 6422 (February 9, 2010) (Order Approving File No. SR-
FINRA-2009-087).
    \8\ The text of FINRA Rule 6635 has recently been amended and 
been renumbered as FINRA Rule 6630. The amended rule text is 
reflected in the attached Exhibit 5. See Securities Exchange Act 
Release No. 61979 (April 23, 2010), 75 FR 23316 (May 3, 2010) (SEC 
Approval Order for File No. SR-FINRA-2010-003).
    \9\ See note 5.
    \10\ See note 6.
    \11\ See note 7.
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    In addition, the proposed rule change would make a technical 
amendment to FINRA Rule 3160 to reflect a change in FINRA's style 
convention when referencing federal securities regulations.
    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date for the proposed rule change 
will be June 14, 2010, the date on which the previously approved rule 
changes will be implemented.\12\
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    \12\ See Regulatory Notice 10-21 (April 2010).
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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,\13\ 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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    \13\ 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

    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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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 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.

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-2010-023 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-2010-023. 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

[[Page 29795]]

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 publicly available. All submissions should refer to File Number 
SR-FINRA-2010-023 and should be submitted on or before June 17, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12747 Filed 5-26-10; 8:45 am]
BILLING CODE 8010-01-P