Document ID: SEC-2011-0645-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2011-05-10T04:00Z

[Federal Register Volume 76, Number 90 (Tuesday, May 10, 2011)]
[Notices]
[Pages 27123-27125]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11325]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64397; File No. SR-FINRA-2011-019]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Rename the OTC Bulletin Board in the FINRA 
Rulebook

May 4, 2011.
    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 April 25, 2011, 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 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 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 amend FINRA Rule 6500 Series and Rules 7700, 
7720 and 7740 to replace references to ``OTC Bulletin Board'' and 
``OTCBB'' with ``Non-NMS Quotation Service'' and ``NNQS.''
    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, at the 
Commission's Public Reference Room, and on the Commission's Web site at 
http://www.sec.gov.

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,

[[Page 27124]]

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
    As initially announced by FINRA in September 2009, FINRA currently 
is seeking to divest itself of the OTCBB trademark, related domain 
name, and all informational content from the http://www.OTCBB.com Web 
site that is not otherwise required to be retained by FINRA for 
regulatory purposes (``OTCBB assets''). FINRA reached agreement with an 
entity for the sale of the OTCBB assets in the third quarter of 
2010.\4\ In connection with this effort, and to remove certain current 
impediments to the completion of such a transaction, FINRA is filing 
the proposed rule change to rename the OTC Bulletin Board (``OTCBB'') 
as the Non-NMS Quotation Service (``NNQS'').
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    \4\ See Rodman & Renshaw Capital Group, Inc., Press Release 
September 14, 2010 (``Rodman and FINRA Reach Preliminary Agreement 
on Terms for Rodman Acquisition of OTCBB Assets'').
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    The OTCBB assets do not include the technology comprising the 
interdealer quotation system operated by FINRA, which is currently 
known as ``OTCBB.'' Thus, the renaming of OTCBB as NNQS, as proposed 
here, enables FINRA to proceed with the sale of the OTCBB assets by 
removing references to OTCBB from the current FINRA Rulebook, while 
continuing to permit FINRA to operate its interdealer quotation system 
under the new name without change or interruption to the availability 
of this service by FINRA. The FINRA Rule 6500 Series will govern the 
operation of the NNQS as it currently does for OTCBB, and the 
functionality of the NNQS will be identical to that of the current 
OTCBB.
    While FINRA has filed the proposed rule change for immediate 
effectiveness, the renaming, transitioning of the related domain name, 
and consummation of the sale transaction will be implemented at a later 
date to be announced by FINRA (the ``implementation date'').\5\ 
However, the implementation date will be no sooner than 120 days 
following the date of filing of the proposed rule change. Until such 
implementation date, FINRA will continue to operate the http://www.OTCBB.com Web site and the OTCBB interdealer quotation system in 
the same manner as it currently does. Thus, the operation of the OTCBB 
facilities as an inter-dealer quotation system by FINRA and support of 
the http://www.OTCBB.com Web site will not change in any respect until 
the actual implementation date, which is anticipated to be before the 
end of 2011, but in no event will be sooner than 120 days following the 
date of this filing. Subsequent to the implementation date, FINRA will 
continue to operate the NNQS in the same manner it currently operates 
the OTCBB, consistent with FINRA's statutory obligations under Section 
15A \6\ of the Exchange Act.\7\
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    \5\ Upon implementation of the proposed rule change, FINRA's 
interdealer quotation system will be known as NNQS, and FINRA no 
longer will own the http://www.OTCBB.com Web site.
    \6\ 15 U.S.C. 78o-3(b)(11).
    \7\ On August 7, 2009, FINRA filed with the Commission a 
proposed rule change to restructure quotation collection and 
dissemination for OTC Equity Securities that is currently pending 
with the Commission. See Securities Exchange Act Release No. 60999 
(November 13, 2009), 74 FR 61183 (November 23, 2009) (``QCF 
Proposal''). The instant proposed rule change does not alter FINRA's 
current quotation transparency activities in the over-the-counter 
market through the operation of an interdealer quotation system 
unless the QCF Proposal is approved by the Commission and takes 
effect. Thus, unless and until the SEC approves the QCF and it takes 
effect, FINRA intends to operate the NNQS after the implementation 
date.
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    Upon the implementation of the proposed rule change, FINRA will 
offer data on or through the FINRA Web site that is substantially 
equivalent to the type of quotation and last sale data for OTC equity 
securities currently available on http://www.OTCBB.com. In addition, 
FINRA will undertake a concerted communications campaign to ensure that 
the public (including retail investors) is well-informed with respect 
to the pending changes. This campaign will include outreach to OTCBB-
quoted issuers regarding the status of their continued eligibility to 
quote on the NNQS upon the implementation date.
    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA will announce the implementation date no later 
than 270 days following the date of filing of the proposed rule change, 
but in no event will be sooner than 120 days following the date of 
filing of the proposed rule change.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Exchange 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. Section 15A(b)(11) of the Exchange Act \9\ 
requires that FINRA rules include provisions governing the form and 
content of quotations relating to securities sold otherwise than on a 
national securities exchange which may be distributed or published by 
any member or person associated with a member, and the persons to whom 
such quotations may be supplied. In addition, Section 15A(b)(11) of the 
Exchange Act \10\ requires that such rules be designed to produce fair 
and informative quotations, to prevent fictitious or misleading 
quotations, and to promote orderly procedures for collecting, 
distributing, and publishing quotations.
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    \8\ 15 U.S.C. 78o-3(b)(6).
    \9\ 15 U.S.C. 78o-3(b)(11).
    \10\ Id.
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    FINRA believes the proposed rule change is consistent with Section 
15A(b)(6) and (11) of the Exchange Act in that it facilitates FINRA's 
continued ability to operate an interdealer quotation system for use by 
market makers in OTC equity securities that is functionally identical 
to the service provided under the current name, thereby supporting the 
availability of quotation information in the over-the-counter equity 
securities market.

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.

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, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \11\ 
and Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. FINRA has satisfied this requirement.

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[[Page 27125]]

    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.

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-2011-019 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-2011-019. 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 Web site 
viewing and printing in the Commission's Public Reference Room 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 the Exchange. 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-2011-019 and should be submitted on or before May 
31, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Elizabeth M. Murphy,
Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2011-11325 Filed 5-9-11; 8:45 am]
BILLING CODE 8011-01-P