Document ID: SEC-2012-0962-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2012-06-15T04:00Z

[Federal Register Volume 77, Number 116 (Friday, June 15, 2012)]
[Notices]
[Pages 36029-36031]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14621]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67176; File No. SR-FINRA-2012-027]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Update Rule Cross-References and Make Non-
Substantive Technical Changes to Certain FINRA and NASD Rules

June 11, 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 June 5, 2012, 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'') 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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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 non-substantive technical changes to certain FINRA and NASD 
Rules.
    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.

[[Page 36030]]

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, 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 changes adopted in the Consolidated FINRA Rulebook. In this 
regard, the proposed rule change would update references in FINRA Rules 
0150 (Application of Rules to Exempted Securities Except Municipal 
Securities), 2111 (Suitability), 2330 (Members' Responsibilities 
Regarding Deferred Variable Annuities), 5220 (Offers at Stated Prices), 
5320 (Prohibition Against Trading Ahead of Customer Orders), and 6630 
(Applicability of FINRA Rules to Securities Previously Designated as 
PORTAL Securities) that are needed as the result of Commission approval 
of three recent FINRA proposed rule changes.\5\ The proposed rule 
change would also make technical changes to FINRA Rules 3230 
(Telemarketing) and 13204 (Class Action & Collective Actions Claims) to 
reflect FINRA Manual style convention. The proposed rule change would 
also delete from the FINRA Manual the Series heading for NASD Rule 0100 
(General Provisions) to reflect that the NASD Rule 0100 Series has been 
replaced by FINRA Rule 0100 Series (General Standards).\6\
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    \5\ See Securities Exchange Act Release No. 63325 (November 17, 
2010), 75 FR 71479 (November 23, 2010) (Order Approving File No. SR-
FINRA-2010-039); Securities Exchange Act Release No. 63784 (January 
27, 2011), 76 FR 5850 (February 2, 2011) (Order Approving File No. 
SR-FINRA-2010-052); and Securities Exchange Act Release No. 65895 
(December 5, 2011), 76 FR 77042 (December 9, 2011) (Order Approving 
File No. SR-FINRA-2011-052).
    \6\ See Securities Exchange Act Release No. 58643 (September 25, 
2008), 73 FR 57174 (October 1, 2008) (Order Approving File No. SR-
FINRA-2008-026); and Securities Exchange Act Release No. 65599 
(October 20, 2011), 76 FR 66344 (October 26, 2011) (Order Approving 
File No. SR-FINRA-2010-029).
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    FINRA also is proposing to delete the definitions of ``Stop Stock 
Price'' and ``Stop Stock Transaction'' from paragraph (i) of Rule 6140 
(Other Trading Practices). Those definitions were inadvertently 
included in Rule 6140, which generally relates to certain prohibited 
trading practices. However, the terms ``Stop Stock Price'' and ``Stop 
Stock Transaction'' are not used in Rule 6140, but in the equity trade 
reporting rules, and the definitions are separately--and more 
appropriately--contained in those rules (see Rules 6220, 6320A, 6320B 
and 6420 (Definitions)).
    In addition, FINRA is relocating the definition of ``inter-dealer 
quotation system'' from former NASD Rule 2320(f)(4)(A) to FINRA Rule 
6420 (Definitions).\7\
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    \7\ See Securities Exchange Act Release No. 65895 (December 5, 
2011), 76 FR 77042 (December 9, 2011) (Order Approving File No. SR-
FINRA-2011-052).
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date for the proposed rule changes to 
FINRA Rules 0150, 2111, 2330, 3230, 5220, 5320, 6140, 6420, 6630, 13204 
and NASD Rule 0100 will be July 9, 2012.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ 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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    \8\ 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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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 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-2012-027 on the subject line.

[[Page 36031]]

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2012-027. 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-2012-027 and should be 
submitted on or before July 6, 2012.
    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).

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14621 Filed 6-14-12; 8:45 am]
BILLING CODE 8011-01-P