Document ID: SEC-2009-0647-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Implement Non-Substantive Changes to the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes
Posted Date: 2009-05-13T04:00Z

[Federal Register: May 13, 2009 (Volume 74, Number 91)]
[Notices]               
[Page 22621-22622]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13my09-101]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59872; File No. SR-FINRA-2009-026]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change to Implement Non-Substantive Changes to the Code 
of Arbitration Procedure for Customer Disputes and the Code of 
Arbitration Procedure for Industry Disputes

May 6, 2009.
    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 
Financial Industry Regulatory Authority, Inc. (``FINRA'') (f/k/a 
National Association of Securities Dealers, Inc. (``NASD'')) filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') on 
April 17, 2009, 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 the Code of Arbitration Procedure for 
Customer Disputes (``Customer Code'') and the Code of Arbitration 
Procedure for Industry Disputes (``Industry Code'') to correct 
typographical errors and implement other non-substantive technical 
changes. 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 proposing several technical amendments to the Customer and 
Industry Codes that would correct typographical errors and implement 
other non-substantive changes. FINRA will discuss the proposed changes 
as they appear in the Codes, beginning with the proposed amendments to 
the Customer Code.
Proposed Technical Amendments to the Customer Code

Rule 12504--Motions to Dismiss

    On December 31, 2008, the Commission approved new Rules 12504 and 
13504 and amendments to Rules 12206 and 13206, which establish 
procedures that govern motions to dismiss.\4\ FINRA is proposing to 
amend Rule 12504(b) to make a conforming change to the reference to 
``subparagraph (a)'' in the rule. In other rules of the Code, FINRA 
refers to lettered provisions by ``paragraph,'' not ``subparagraph.'' 
Thus, for consistency in the Codes, FINRA is proposing to change the 
reference in Rule 12504(b) to ``paragraph (a).''
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    \4\ See Securities Exchange Act Release No. 59189 (December 31, 
2008), 74 FR 731 (January 7, 2009) (Order Approving File No. SR-
FINRA-2007-021).
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Rule 12514--Pre-Hearing Exchange of Documents and Witness Lists Before 
Hearing

    FINRA is proposing to conform the spelling of the term ``pre-
hearing'' in the title of Rule 12514 to other instances in the Codes 
where it is spelled without the hyphen. Thus, the term ``pre-hearing'' 
would be changed to ``prehearing.''

Rule 12904(g)--Explained Decisions

    On February 4, 2009, the SEC approved a proposal to amend Rule 
12904 of the Customer Code and Rule 13904 of the Industry Code to 
require arbitrators to provide an explained decision upon the joint 
request of the parties.\5\ FINRA is proposing to correct a 
typographical error in Rule 12904(g)(2). The relevant sentence of the 
rule states that ``an explained decision is a fact-based award stating 
the general reasons(s) for the arbitrators' decision.'' The word 
``reasons(s)'' should be changed to ``reason(s).''
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    \5\ See Securities Exchange Act Release No. 59358 (February 4, 
2009); 74 FR 6928 (February 11, 2009) (Order Approving File No. SR-
FINRA-2008-051).
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    FINRA is also proposing to correct a typographical error in Rule 
12904(g)(6). The paragraph states that ``this paragraph (g) will not 
apply to simplified cases decided without a hearing under Rules 12800 
or to default cases conducted under Rule 12801.'' The phrase ``Rules 
12800'' should be changed to ``Rule 12800.'' Further, FINRA is 
proposing to change the term ``pre-hearing'' in Rule 12904(g)(3) to 
``prehearing'' to conform the spelling with other instances in the 
Codes.
Proposed Technical Amendments to the Industry Code \6\
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    \6\ Most rules of the Customer and Industry Codes are identical, 
except for panel composition, references to document production 
lists that apply only in customer cases, and rules relating to 
employment discrimination and injunctive relief that apply only to 
industry claims. Wherever possible, the last three digits of the 
rule numbers in the Customer and Industry Codes are the same. Thus, 
the explanations in this filing for the proposed amendments in the 
Customer Code also apply to the proposed amendments in the Industry 
Code.
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Rule 13504--Motions To Dismiss

    For an explanation of the proposed amendment, see the relevant 
section under ``Proposed Technical Amendments to the Customer Code'' 
above.

Rule 13514--Pre-Hearing Exchange of Documents and Witness Lists Before 
Hearing

    For an explanation of the proposed amendment, see the relevant 
section under ``Proposed Technical Amendments to the Customer Code'' 
above.

Rule 13904(g)--Explained Decisions

    For an explanation of the proposed amendment, see the relevant 
section under ``Proposed Technical Amendments to the Customer Code'' 
above.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions

[[Page 22622]]

of Section 15A(b)(6) of the Act,\7\ which requires, among other things, 
that the Association's 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 
assist in the efficient administration of arbitrations by correcting 
typographical errors in its rules and ensuring consistent spelling of 
terms throughout the Codes. FINRA believes these technical, non-
substantive amendments will enhance the Codes by making them easier to 
understand and apply.
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    \7\ 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, as amended.

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 by FINRA.

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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\ A proposed rule change filed under Rule 19b-
4(f)(6) \10\ normally does not become operative prior to 30 days after 
the date of the filing. However, pursuant to Rule19b-4(f)(6)(iii),\11\ 
the Commission may designate a shorter time if such action is 
consistent with the protection of investors and the public interest. 
FINRA has asked the Commission to waive the 30-day operative delay so 
that the proposal may become operative immediately upon filing. Such 
waiver would permit FINRA to implement these changes without delay, 
making the Codes easier to understand and apply. The Commission 
believes it is consistent with the protection of investors and the 
public interest to waive the 30-day operative delay for this reason, 
and hereby grants such waiver.\12\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ Id.
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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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-2009-026 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-2009-026. 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, 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 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 the File Number SR-FINRA-2009-026 and 
should be submitted on or before June 3, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11120 Filed 5-12-09; 8:45 am]

BILLING CODE 8010-01-P