Document ID: SEC-2011-1347-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2011-09-07T04:00Z

[Federal Register Volume 76, Number 173 (Wednesday, September 7, 2011)]
[Notices]
[Pages 55441-55443]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-22764]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65221; File No. SR-FINRA-2011-04]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change Relating to Fee for the Operations Professional 
Examination

August 30, 2011.
    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 August 22, 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 ``establishing or changing a due, fee, or 
other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 
19b-4(f)(2) thereunder,\4\ 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.\5\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
    \5\ The proposed rule change is related to FINRA's recently 
established registration category and qualification examination 
requirement for Operations Professionals. See Securities Exchange 
Act Release No. 64687 (June 16, 2011), 76 FR 36586 (June 22, 2011) 
(Order Approving File No. SR-FINRA-2011-013).
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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 Schedule A to the FINRA By-Laws to 
establish a fee for the new Operations Professional Examination 
(``Series 99''). Specifically, the proposed rule change would amend 
Section 4 of Schedule A to the FINRA By-Laws to establish a fee of $125 
for a person to take the Series

[[Page 55442]]

99 examination. The fee is based on the costs to FINRA to develop and 
administer the exam.
    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 June 16, 2011, the Commission approved FINRA Rule 1230(b)(6), 
which establishes a registration category and qualification examination 
requirement for certain operations personnel--Operations 
Professionals.\6\ FINRA is expanding its registration provisions to 
require registration of certain individuals (``covered persons'') who 
are engaged in, responsible for or supervising certain member 
operations functions (``covered functions'') to enhance the regulatory 
structure surrounding these areas.\7\ FINRA Rule 1230(b)(6) is 
intended, among other things, to increase covered persons' awareness 
and knowledge that they are operating in a regulated environment 
designed to protect investors' interests and the integrity of the 
operations of a broker-dealer.
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    \6\ See Securities Exchange Act Release No. 64687 (June 16, 
2011), 76 FR 36586 (June 22, 2011) (Order Approving File No. SR-
FINRA-2011-013). In addition to adopting FINRA Rule 1230(b)(6), the 
rule change adopted NASD Rule 1120 (Continuing Education 
Requirements) as new FINRA Rule 1250 (Continuing Education 
Requirements) with certain changes, including expanding the scope of 
``covered registered persons'' subject to the Firm Element to 
include persons registered as Operations Professionals. See also 
Regulatory Notice 11-33 (July 2011).
    \7\ See Regulatory Notice 11-33 (July 2011) for information 
regarding the implementation period for Operations Professionals 
subject to FINRA Rule 1230(b)(6).
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    FINRA has developed the Series 99 examination program to provide 
reasonable assurance that covered persons understand their professional 
responsibilities, including key regulatory and control themes, as well 
as the importance of identifying and escalating red flags that may harm 
a firm, its customers, the integrity of the marketplace or the public. 
The examination will test applicants on general securities industry 
knowledge and its associated regulations and rules.\8\ On August 19, 
2011, [sic] FINRA filed with the Commission the Series 99 selection 
specifications and content outline.\9\ The examination will be 
implemented on October 17, 2011.\10\
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    \8\ FINRA Rule 1230(b)(6)(D) sets forth an exception to the 
Operations Professional qualification examination requirement for 
persons who currently hold certain registrations (each an ``eligible 
registration'') or have held one during the two years immediately 
prior to registering as an Operations Professional. The exception 
also applies to persons who do not hold an eligible registration, 
but prefer an alternative to taking the Operations Professional 
examination. Such persons may register in an eligible registration 
category (subject to passing the corresponding qualification 
examination or obtaining a waiver) and use such registration to 
qualify for Operations Professional registration.
    \9\ See SR-FINRA-2011-041.
    \10\ See Regulatory Notice 11-33 (July 2011).
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    The proposed rule change would amend Section 4 of Schedule A to the 
FINRA By-Laws to establish a fee of $125 for a person to take the 
Series 99 examination. The fee is based on the costs to FINRA to 
develop and administer the exam.\11\
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    \11\ Candidates for the Series 99 examination will be able to 
schedule and take the examination starting on October 17, 2011. 
Because this is a new examination for a new registration category, 
FINRA will be assessing the effectiveness of the examination by, in 
part, evaluating the candidates' performance during the first 60 
days of the administration of the examination. Therefore, candidates 
who take the examination within the first 60 days (between October 
17, 2011 and December 16, 2011) will not receive their test results 
on the day that they take the examination. Instead, such candidates' 
firms will be notified of test results (i.e., the candidate's score 
and whether the candidate has passed or failed the examination) on 
or shortly after December 16, 2011. The test results will be posted 
to the Central Registration Depository system (``CRD[supreg] 
system'') at that time. Candidates who fail the examination during 
the initial 60-day rollout will be provided an opportunity to retake 
the examination at no additional cost.
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date of the proposed rule change and 
corresponding FINRA Rule 1230(b)(6) will be October 17, 2011.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(5) of the Act,\12\ which requires, among 
other things, that FINRA rules provide for the equitable allocation of 
reasonable dues, fees, and other charges among members and issuers and 
other persons using any facility or system that FINRA operates or 
controls. FINRA believes the proposed rule change is designed to 
accomplish these ends by equitably assessing by means of a reasonable 
examination fee the costs associated with developing and administering 
the examination program.
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    \12\ 15 U.S.C. 78o-3(b)(5).
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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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \13\ and paragraph (f)(2) of Rule 19b-4 
thereunder.\14\ 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(2).
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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-2011-042 on the subject line.

[[Page 55443]]

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-2011-042. 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, 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; 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-2011-042 
and should be submitted on or before September 28, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-22764 Filed 9-6-11; 8:45 am]
BILLING CODE 8011-01-P