Document ID: SEC-2015-2018-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2015-12-07T05:00Z

[Federal Register Volume 80, Number 234 (Monday, December 7, 2015)]
[Notices]
[Pages 76053-76055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-30721]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76532; File No. SR-FINRA-2015-050]

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

December 1, 2015.
    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 November 24, 2015, 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 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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[[Page 76054]]

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    FINRA is proposing to update cross-references and make other non-
substantive changes within FINRA rules, primarily as the result of 
approval of a new consolidated FINRA rule.
    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 in the process of developing a 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 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 make several such changes, as well 
as other non-substantive changes unrelated to the adoption of rules in 
the Consolidated FINRA Rulebook.
    First, the proposed rule change would update rule cross-references 
to reflect the adoption of a consolidated equity research conflict of 
interest rule. On July 16, 2015, the SEC approved a proposed rule 
change to adopt NASD Rule 2711 as FINRA Rule 2241 (Research Analysts 
and Research Reports), with several modifications. As part of that rule 
filing, FINRA also amended FINRA Rule 9610, NASD Rule 1050, and 
Incorporated NYSE Rules 344 and 472, and deleted in their entirety the 
corresponding Incorporated NYSE Rule 351 and Incorporated NYSE Rule 
Interpretation 472.\5\ Rule 2241 will be fully implemented on December 
24, 2015. As such, the proposed rule change would update references to 
the new rule number in FINRA Rules 1250 (Continuing Education 
Requirements), 2210 (Communications with the Public), 5230 (Payments 
Involving Publications that Influence the Market Price of a Security), 
and 9217 (Violations Appropriate for Disposition Under Plan Pursuant to 
SEA Rule 19d-1(c)(2)).\6\
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    \5\ See Securities Exchange Act Release No. 75471 (July 16, 
2015), 80 FR 43482 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-047) and Regulatory Notice 15-30 (August 2015).
    \6\ The proposed rule change also would delete a reference in 
FINRA Rule 9217 to Incorporated NYSE Rule 345.11, which was 
previously deleted from the FINRA Manual. See Securities Exchange 
Act Release No. 73966 (December 30, 2014), 80 FR 546 (January 6, 
2015) (Order Approving File No. SR-FINRA-2014-038).
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    Second, the proposed rule change would make technical changes to 
FINRA Rules 2272 (Sales and Offers of Sales of Securities on Military 
Installations) \7\ and 6250 (Quote and Order Access Requirements) \8\ 
to reflect FINRA Manual style convention changes and correct cross 
references within Rule 6250, respectively.
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    \7\ See Securities Exchange Act Release No. 75633 (August 6, 
2015), 80 FR 48376 (August 12, 2015) (Order Approving File No. SR-
FINRA-2015-009) and Regulatory Notice 15-34 (October 2015).
    \8\ See Securities Exchange Act Release No. 71467 (February 3, 
2014), 79 FR 7485 (February 7, 2014) (Order Approving File No. SR-
FINRA-2013-053).
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    Finally, the proposed rule change would also delete from the FINRA 
Manual the Series heading for NASD Rules 2400 (Commissions, Mark-ups 
and Charges) and 2700 (Securities Distributions) to reflect that the 
NASD Rules 2400 \9\ and 2700 \10\ Series have fully been consolidated 
into the FINRA rules.
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    \9\ See Securities Exchange Act Release No. 73954 (December 30, 
2014), 80 FR 553 (January 6, 2015) (Order Approving File No. SR-
FINRA-2014-037).
    \10\ See Securities Exchange Act Release No. 75471 (July 16, 
2015), 80 FR 43482 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-047).
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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 that FINRA can implement the proposed rule 
change to coincide with effective dates of the relevant consolidated 
FINRA rules. The implementation date for the proposed changes to FINRA 
Rules 1250, 2210, 5230, 6250, and 9217 and the proposed deletion of the 
NASD Rule 2400 and 2700 Series headings will be December 24, 2015. The 
implementation date for the proposed rule change to FINRA Rule 2272 
will be March 30, 2016.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\11\ 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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    \11\ 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 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)(iii) of the Act \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative before 30 days from

[[Page 76055]]

the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ 
the Commission may designate a shorter time if such action is 
consistent with the protection of investors and the public interest.
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    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    FINRA has asked the Commission to waive the 30-day operative delay. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Such waiver will allow FINRA to implement the proposed rule change to 
coincide with the effective dates of the relevant consolidated FINRA 
rules. Therefore, the Commission hereby waives the 30-day operative 
delay and designates the proposed rule change to be operative upon 
filing with the Commission.\15\
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    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission 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 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-2015-050 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-2015-050. 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 offices 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-2015-050, and should 
be submitted on or before December 28, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-30721 Filed 12-4-15; 8:45 am]
BILLING CODE 8011-01-P