Document ID: SEC-2015-0099-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2015-01-15T05:00Z

[Federal Register Volume 80, Number 10 (Thursday, January 15, 2015)]
[Notices]
[Page 2142]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00523]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74021; File No. SR-FINRA-2014-030]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Designation of Longer Period for Commission 
Action on Proceedings To Determine Whether To Approve or Disapprove 
Proposed Rule Change Relating to Quotation Requirements for Unlisted 
Equity Securities and Deletion of the Rules Related to the OTC Bulletin 
Board Service

January 9, 2015.
    On June 27, 2014, the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Exchange Act '' or ``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to adopt rules relating to 
quotation requirements for over-the-counter (``OTC'') equity securities 
and to delete the rules relating to the OTC Bulletin Board Service 
(``OTCBB'') and thus cease its operation. The proposed rule change was 
published for comment in the Federal Register on July 15, 2014.\3\ On 
August 8, 2014, FINRA consented to extending the time period for the 
Commission to either approve or disapprove the proposed rule change, or 
to institute proceedings to determine whether to approve or disapprove 
the proposed rule change, to October 10, 2014. The Commission received 
one comment letter on the proposed rule change.\4\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 72575 (July 9, 
2014), 79 FR 41339 (``Notice'').
    \4\ See Letter from Daniel Zinn, General Counsel, OTC Markets 
Group Inc., dated August 5, 2014 (``OTC Markets Letter'').
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    On October 7, 2014, the Commission instituted proceedings \5\ to 
determine whether to approve or disapprove the proposed rule change 
under Section 19(b)(2)(B) of the Act.\6\ The Commission thereafter 
received three comment letters in response to the Order Instituting 
Proceedings.\7\
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    \5\ See Securities Exchange Act Release No. 73313, 79 FR 61677 
(October 14, 2014) (``Order Instituting Proceedings'').
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Letter from Dr. Lee Jackson, PAHCII, dated October 8, 
2014 (``PAHCII Letter''); Letter from Barry Scadden, Vice President, 
ATS Trade Support and Operations, Global OTC, dated October 10, 2014 
(``Global OTC Letter''); and Letter from Michael R. Trocchio, Sidley 
Austin LLP, on behalf of OTC Markets Group Inc., dated November 4, 
2014 (``Sidley Letter'').
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    Section 19(b)(2) of the Act \8\ provides that, after initiating 
disapproval proceedings, the Commission shall issue an order approving 
or disapproving the proposed rule change not later than 180 days after 
the date of publication of notice of the filing of the proposed rule 
change. The Commission may extend the period for issuing an order 
approving or disapproving the proposed rule change, however, by not 
more than 60 days if the Commission determines that a longer period is 
appropriate and publishes the reasons for such determination. The 
proposed rule change was published for comment in the Federal Register 
on July 15, 2014. January 11, 2015 is 180 days from that date, and 
March 12, 2015 is an additional 60 days from that date.
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    \8\ 15 U.S.C. 78s(b)(2).
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    The Commission finds it appropriate to designate a longer period 
within which to issue an order approving or disapproving the proposed 
rule change so that it has sufficient time to consider the proposed 
rule change and the issues raised in the comment letters that have been 
submitted in connection with the proposal. As the Commission noted in 
the Order Instituting Proceedings, the proposal raises questions as to 
whether FINRA's proposed rule change is consistent with the 
requirements of Sections 15A(b)(6),\9\ 15A(b)(11),\10\ and 17B \11\ of 
the Act. Specifically, FINRA's proposal to delete the rules governing 
the OTCBB, and thus cease operation of the only self-regulatory 
organization (``SRO'') facility that collects, publishes and 
distributes quotations in OTC equity securities, raises questions as to 
whether the proposal is consistent with the requirements of the Act, 
particularly under circumstances where non-SRO quotation systems are 
experiencing operational difficulties. In such an event, reliable and 
accurate quotation information for OTC equity securities may not be 
widely available to investors through such non-SRO systems. Extending 
the time within which to approve or disapprove the proposed rule change 
will enable the Commission to more fully consider these issues and the 
other issues raised in the comment letters.
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    \9\ 15 U.S.C. 78o-3(b)(6).
    \10\ 15 U.S.C. 78o-3(b)(11).
    \11\ 15 U.S.C. 78q-2.
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    Accordingly, the Commission, pursuant to Section 19(b)(2) of the 
Act,\12\ designates March 12, 2015, as the date by which the Commission 
should either approve or disapprove the proposed rule change (File No. 
SR-FINRA-2014-030).
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(57).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-00523 Filed 1-14-15; 8:45 am]
BILLING CODE 8011-01-P