Document ID: SEC-2016-0776-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2016-05-03T04:00Z

[Federal Register Volume 81, Number 85 (Tuesday, May 3, 2016)]
[Notices]
[Pages 26593-26595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-10273]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77726; File No. SR-FINRA-2016-013]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Delay Implementation of FINRA Rule 2242 (Debt 
Research Analysts and Debt Research Reports)

April 27, 2016.
    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 April 20, 2016, 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

[[Page 26594]]

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 the 
Substance of the Proposed Rule Change

    FINRA is proposing to delay implementation of FINRA Rule 2242 (Debt 
Research Analysts and Debt Research Reports) until July 16, 2016. The 
proposed rule change would not make any other changes to FINRA 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.

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 November 14, 2014, FINRA filed proposed rule change SR-FINRA-
2014-048 to adopt new FINRA Rule 2242 (Debt Research Analysts and Debt 
Research Reports) to address conflicts of interest relating to the 
publication and distribution of debt research reports.\4\ On February 
19, 2015, FINRA filed Amendment No. 1 responding to the comments 
received to the proposal as well as to propose amendments in response 
to these comments.\5\ The proposed rule change, as modified by 
Amendment No. 1 thereto, was approved by the Commission on July 16, 
2015.\6\
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    \4\ See Securities Exchange Act Release No. 73623 (November 18, 
2014), 79 FR 69905 (November 24, 2014) (Notice of Filing File No. 
SR-FINRA-2014-048).
    \5\ See Securities Exchange Act Release No. 74490 (March 12, 
2015), 80 FR 14198 (March 18, 2015) (Notice of Filing Amendment No. 
1 to File No. SR-FINRA-2014-048).
    \6\ See Securities Exchange Act Release No. 75472 (July 16, 
2015), 80 FR 43528 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-048).
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    Pursuant to proposed rule change SR-FINRA-2014-048, FINRA proposed 
to announce the effective date of the proposed rule change in a 
Regulatory Notice to be published no later than 60 days following 
Commission approval. FINRA further stated that the effective date will 
be no later than 180 days following publication of the Regulatory 
Notice announcing Commission approval. FINRA announced an effective 
date of February 22, 2016 in a Regulatory Notice published on August 
26, 2015.\7\ In response to industry questions regarding implementation 
of the requirements of Rule 2242, FINRA delayed implementation of Rule 
2242 until April 22, 2016.\8\
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    \7\ See Regulatory Notice 15-31 (August 2015).
    \8\ See Securities Exchange Act Release No. 77158 (February 17, 
2016), 81 FR 9065 (February 23, 2016) (Notice of Filing and 
Immediate Effectiveness of File No. SR-FINRA-2016-008).
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    FINRA continues to receive questions regarding implementation of 
the requirements of Rule 2242. Therefore, to give members additional 
time to implement the requirements of Rule 2242, FINRA believes that it 
is appropriate to extend the implementation date and is proposing to 
delay implementation of Rule 2242 until July 16, 2016.
    FINRA has filed the proposed rule change for immediate 
effectiveness and has requested that the Commission waive the 
requirement that the proposed rule change not become operative for 30 
days after the date of the filing.
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 the proposed rule change is consistent 
with the Act in that it provides members additional time to implement 
the requirements of Rule 2242, which addresses conflicts of interest 
relating to the publication and distribution of debt research reports.
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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 Act. The proposed delay in 
implementation of Rule 2242 will reduce the burden on members by 
allowing additional time to implement the requirements of the Rule.

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)(iii) of the Act \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
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    Under Rule 19b-4(f)(6) of the Act,\12\ the proposal does not become 
operative for 30 days after the date of its filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest. FINRA has requested that the 
Commission waive the 30-day operative delay so that the proposed rule 
change will become operative on filing. FINRA stated that its members 
continue to submit questions regarding implementation of Rule 2242 and 
it would like to respond to the industry's questions before the Rule is 
implemented. For these reasons, the Commission believes that waiver of 
the 30-day operative delay is consistent with the protection of 
investors and the public interest. Therefore, the Commission designates 
the proposed rule change to be operative upon filing.\13\
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    \12\ Id.
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in

[[Page 26595]]

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-2016-013 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-2016-013. 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-2016-013, and should 
be submitted on or before May 24, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-10273 Filed 5-2-16; 8:45 am]
 BILLING CODE 8011-01-P