Document ID: SEC-2013-1981-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2013-11-20T05:00Z

[Federal Register Volume 78, Number 224 (Wednesday, November 20, 2013)]
[Notices]
[Pages 69732-69734]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-27760]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70880; File No. SR-FINRA-2013-047]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend 
FINRA Rule 8312 (FINRA BrokerCheck Disclosure) To Include Information 
About Members and Their Associated Persons of Any Registered National 
Securities Exchange That Uses the CRD System for Registration Purposes

November 14, 2013.
    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 1, 2013, the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') 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 prepared by FINRA. 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.
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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 FINRA Rule 8312 (FINRA BrokerCheck 
Disclosure) to include in BrokerCheck information about members and 
their associated persons of any registered national securities exchange 
that uses

[[Page 69733]]

the Central Registration Depository (``CRD[supreg]'') for registration 
purposes. The proposed rule change also would make non-substantive 
technical changes to FINRA Rule 8312 to reflect a change in FINRA's 
style convention for referencing the CRD system.
    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 BrokerCheck provides the public with information on the 
professional background, business practices, and conduct of FINRA 
member firms and their associated persons. The information that FINRA 
releases to the public through BrokerCheck is derived from the CRD 
system, the securities industry online registration and licensing 
database. FINRA member firms, their associated persons, and regulators 
report information to the CRD system via the uniform registration 
forms. By making most of this information publicly available, 
BrokerCheck, among other things, helps investors make informed choices 
about the individuals and firms with which they conduct 
business.BrokerCheck allows investors and others to obtain registration 
information about firms and their associated persons by telephone \3\ 
and the Internet.\4\
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    \3\ The BrokerCheck Hotline telephone number is (800) 289-9999.
    \4\ BrokerCheck is available online at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck.
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    In 2006, Congress amended Section 15A(i) of the Act \5\ with the 
enactment of the Military Personnel Financial Services Protection Act 
(``MPFSPA'').\6\ The amendment requires, among other things, that 
FINRA, as a registered securities association, maintain a toll-free 
telephone listing and a readily accessible electronic or other process 
to receive and promptly respond to inquiries regarding (i) registration 
information on its members and their associated persons, and (ii) 
registration information on the members and their associated persons of 
any registered national securities exchange that uses the CRD system 
for the registration of its members and their associated persons (``CRD 
Exchange'').\7\
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    \5\ 15 U.S.C. 78o-3(i).
    \6\ Public Law 109-290, 120 Stat. 1317 (2006).
    \7\ For purposes of Section 15A(i) of the Act, registration 
information is defined as ``the information reported in connection 
with the registration or licensing of brokers and dealers and their 
associated persons, including disciplinary actions, regulatory, 
judicial, and arbitration proceedings, and other information 
required by law, or exchange or association rule, and the source and 
status of such information.''
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    The registration information currently available through 
BrokerCheck is limited to firms and individuals that are currently or 
were previously registered with FINRA. BrokerCheck does not contain 
information regarding firms or individuals whose registrations have 
been exclusively with a registered national securities exchange 
(although such information is contained in the CRD system).
    The proposed rule change would amend FINRA Rule 8312 to include 
these non-FINRA member firms and their associated persons in 
BrokerCheck. Specifically, the proposed rule change would make publicly 
available in BrokerCheck information about members and their associated 
persons of any CRD Exchange.\8\ The information that would be disclosed 
through BrokerCheck about CRD Exchange members and their associated 
persons would be the same as the information disclosed about FINRA 
members and their associated persons pursuant to FINRA Rule 8312. CRD 
Exchange members and their associated persons would be able to dispute 
inaccuracies in their BrokerCheck reports as provided for in FINRA Rule 
8312(e).
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    \8\ Firms and individuals that have been registered exclusively 
with a CRD Exchange will be included in BrokerCheckonly if such 
registration occurred on or after August 16, 1999. Filings for those 
firms and individuals whose registrations terminated prior to August 
16, 1999 were not made electronically so BrokerCheck reports for 
such firms and individuals cannot be made in an automated fashion. 
See proposed Supplementary Material .03 to FINRA Rule 8312.
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    The proposed rule change also would make non-substantive technical 
changes to FINRA Rule 8312 to reflect a change in FINRA's style 
convention for referencing the CRD system.
    FINRA will announce the effective date of the proposed rule change 
in a Regulatory Notice to be published no later than 60 days following 
Commission approval. The effective date will be no later than 180 days 
following publication of the Regulatory Notice announcing Commission 
approval.
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 that the proposed rule change will 
enhance investor protection by providing investors and other users of 
BrokerCheck with information regarding the professional background, 
business practices, and conduct of additional firms and their 
associated persons.
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    \9\ 15 U.S.C. 78o-3(b)(6).
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    FINRA also believes that the proposed rule change is consistent 
with the provisions of Section 15A(i)(1) of the Act,\10\ which 
requires, among other things, that FINRA maintain a toll-free telephone 
listing and a readily accessible electronic or other process to receive 
and promptly respond to inquiries regarding registration information on 
CRD Exchange members and their associated persons. FINRA believes that 
the proposed rule change satisfies this requirement by expanding 
BrokerCheck to include registration information about CRD Exchange 
members and their associated persons.
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    \10\ 15 U.S.C. 78o-3(i)(1).
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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. As discussed above, Section 
15A(i) of the Act requires FINRA to maintain a toll-free telephone 
listing and a readily accessible electronic or other process to respond 
to inquiries regarding registration information on FINRA members and 
their associated persons, as well as CRD Exchange members and their 
associated persons. BrokerCheck is the program by which FINRA releases 
to the public registration information on its members and their 
associated persons and, consistent with Section 15A(i) of the Act, 
FINRA intends to expand

[[Page 69734]]

BrokerCheck to include CRD Exchange members and their associated 
persons. The proposed rule change will enhance consistency with respect 
to the information available via BrokerCheck by providing public access 
to the same information for FINRA and CRD Exchange members and their 
associated persons. Such information allows investors to make informed 
choices about the individuals and firms with which they conduct 
business. FINRA does not anticipate that the proposed rule change will 
impose any costs or burdens on CRD Exchange members or their associated 
persons. Specifically, FINRA expects that the only costs associated 
with the proposed rule change will involve programming changes to 
BrokerCheck, which will be borne by FINRA. No action will be required 
on the part of CRD Exchange members or their associated persons to 
implement the proposed rule change. In addition, the proposed rule 
change will have no impact on the reporting requirements or 
registration process for CRD Exchange members or their associated 
persons.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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-2013-047 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-2013-047. 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, 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 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-2013-047 and should be 
submitted on or before December 11, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-27760 Filed 11-19-13; 8:45 am]
BILLING CODE 8011-01-P