Document ID: SEC-2022-1087-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2022-08-15T04:00Z

[Federal Register Volume 87, Number 156 (Monday, August 15, 2022)]
[Notices]
[Pages 50143-50144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17429]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95454; File No. SR-FINRA-2022-022]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Make Technical and Other Non-Substantive 
Changes Within FINRA Rules

August 9, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on, the 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 Exchange 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 make technical and other non-substantive 
changes within FINRA rules.
    The text of the proposed rule change is available on FINRA's 
website 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
    On May 18, 2022, the SEC announced the immediate effectiveness of 
amendments to the Code of Arbitration Procedure for Industry Disputes 
(``Industry Code'') to permit persons with sexual assault claims and 
sexual harassment claims to elect not to enforce predispute arbitration 
agreements in cases that relate to those disputes.\4\ The rule change, 
File No. SR-FINRA-2022-012, aligned FINRA rules with the Ending Forced 
Arbitration of Sexual Assault and Sexual Harassment Act of 2021 
(``Act'').\5\
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    \4\ See Securities Exchange Act Release No. 94942 (May 18, 
2022), 87 FR 31592 (May 24, 2022) (Notice of Filing and Immediate 
Effectiveness of File No. SR-FINRA-2022-012).
    \5\ Ending Forced Arbitration of Sexual Assault and Sexual 
Harassment Act of 2021, Public Law 117-90, 136 Stat. 26 (2022).
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    In File No. SR-FINRA-2022-012, FINRA amended FINRA Rule 13201 to 
provide, among other things, that sexual assault claims and sexual 
harassment claims would be administered in the forum under FINRA Rule 
13802.\6\ FINRA amended FINRA Rule 13802 to add the terms ``sexual 
assault claim'' and ``sexual harassment claim'' to the title and 
throughout the rule to clarify that it applies to these types of 
claims. However, File No. SR-FINRA-2022-012 did not include these terms 
in paragraph (d) of FINRA Rule 13802. The proposed rule change would 
add references to ``sexual assault'' and ``sexual harassment'' to 
conform paragraph (d) with the rest of the provisions in FINRA Rule 
13802.\7\
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    \6\ FINRA Rule 13802 sets forth requirements as to the number of 
arbitrators on the panel, the composition of the panel, the filing 
fee, the relief available, and the availability of attorneys' fees 
for such claims.
    \7\ The proposed rule change would apply to all members, 
including members that are funding portals or have elected to be 
treated as capital acquisition brokers (``CABs''), given that the 
funding portal and CAB rule sets incorporate the impacted FINRA 
rules by reference.
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    In addition, the proposed rule change would make technical, non-
substantive changes to the Industry Code and the Code of Arbitration 
Procedure for Customer Disputes (``Customer Code''). The proposed rule 
change would update FINRA Rules 12100(aa) and 13100(x) by correcting a 
typographical error in the name of the Commodities Future Trading 
Commission, from ``Commodities'' to ``Commodity.'' The proposed rule 
change also would update FINRA Rules 12301(b) and 13301(b) by deleting 
a duplicate word, the second ``the'' in the first sentence of these 
rules. In addition, the proposed rule change would update FINRA Rule 
13303(b) to insert a phrase that was inadvertently omitted. Under FINRA 
Rule 13303(b), when a third party is added to a claim, the respondent 
must serve the party with the answer and all documents previously 
served by any party or sent to the parties by the Director of FINRA 
Dispute Resolution Services. The current rule inadvertently omits 
``parties by the'' in the second sentence. Thus, the proposed rule 
change would insert this phrase for clarity and consistency with other 
FINRA rules.
    Finally, FINRA would update the citation in FINRA Rule 5122(c)(12) 
for the definition of ``commodity pool operator'' under the Commodity 
Exchange Act from Section 1a(5) to Section 1a(11) to reflect the 
reorganization of the defined terms in the Commodity Exchange Act.\8\
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    \8\ 7 U.S.C. 1a.
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    FINRA has filed the proposed rule change for immediate 
effectiveness and has requested that the SEC waive the requirement that 
the proposed rule change not become operative for 30 days after the 
date of the filing, so FINRA can implement the proposed rule change 
immediately.

[[Page 50144]]

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Exchange 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 provide greater clarity to members and the public regarding FINRA 
rules by conforming paragraph (d) of FINRA Rule 13802 with the rest of 
the provisions in current FINRA Rule 13802 and by making technical 
updates to FINRA Rule 5122 and provisions of the Industry and Customer 
Codes.
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    \9\ 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 Exchange Act. The proposed rule 
change brings clarity and consistency to FINRA rules without adding any 
burden on firms.

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 Exchange Act \10\ and 
Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 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 Exchange 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 Exchange 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 [email protected]. Please include 
File Number SR-FINRA-2022-022 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2022-022. 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 website (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 website 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. Persons submitting comments are cautioned that 
we do not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly.
    All submissions should refer to File Number SR-FINRA-2022-022 and 
should be submitted on or before September 6, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17429 Filed 8-12-22; 8:45 am]
BILLING CODE 8011-01-P