Document ID: SEC-2009-1334-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2009-09-21T04:00Z

[Federal Register: September 21, 2009 (Volume 74, Number 181)]
[Notices]               
[Page 48117-48118]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21se09-90]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60659; File No. SR-FINRA-2009-044]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Approving Proposed Rule Change, as Modified by 
Amendment No. 1, To Adopt FINRA Rules 2262 (Disclosure of Control 
Relationship With Issuer), 2269 (Disclosure of Participation or 
Interest in Primary or Secondary Distribution) and 5260 (Prohibition on 
Transactions, Publication of Quotations, or Publication of Indications 
of Interest During Trading Halts) in the Consolidated FINRA Rulebook

September 11, 2009.
    On June 29, 2009, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to adopt without material change NASD Rules 2240 
(Disclosure of Control Relationship with Issuer), 2250 (Disclosure of 
Participation or Interest in Primary or Secondary Distribution) and 
3340 (Prohibition on Transactions, Publication of Quotations, or 
Publication of Indications of Interest During Trading Halts) as FINRA 
rules in the Consolidated FINRA Rulebook and to delete NYSE Rules 
312(f)(1) through 312(f)(3) and 321.24. The proposed rule change would 
renumber NASD Rules 2240, 2250 and 3340 as FINRA Rules 2262, 2269 and 
5260, respectively, in the Consolidated FINRA Rulebook.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on July 24, 2009.\3\ FINRA filed Amendment No. 1 to the 
proposed rule change on September 11, 2009.\4\ The Commission received 
no comment letters on the proposed rule change. This order approves the 
proposed rule change, as modified by Amendment No. 1.
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    \3\ See Securities Exchange Act Release No. 60330 (July 17, 
2009), 74 FR 36787.
    \4\ Amendment No. 1 is a technical amendment that clarifies that 
the proposed rule change would not change Incorporated NYSE Rule 
312(h); therefore, Amendment No. 1 does not require notice and 
comment.
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    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities 
association.\5\ In particular, the Commission finds that the proposed 
rule change is consistent with the provisions of Section 15A(b)(6) of 
the Act,\6\ which requires, among other things, that FINRA rules 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.
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    \5\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78o-3(b)(6).
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    The Commission believes that transferring NASD Rules 2240 and 2250 
into the Consolidated FINRA Rulebook as FINRA Rules 2262 and 2269 will 
ensure that disclosures or notifications that member firms must provide 
to customers in connection with certain securities transactions will 
continue to be made. These rules are intended to provide disclosure to 
a customer about certain relationships involving the member that may 
present a conflict of interest. The Commission believes that repealing 
NYSE Rules 312(f) and 321.24

[[Page 48118]]

is appropriate because the purposes they serve are addressed by 
proposed FINRA Rules 2262 and 2269, other FINRA rules or Commission 
Rules. The Commission believes that transferring NASD Rule 3340 into 
the Consolidated FINRA Rulebook as FINRA Rule 5260 will ensure that 
members are aware that the trading and quoting conduct prohibited by 
this rule when a trading halt is in effect will continue to be 
prohibited under the new FINRA rules. The proposed rule change makes 
non-material changes to NASD rules that have been useful in protecting 
investors.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\7\ that the proposed rule change, as modified by Amendment No. 1 
(SR-FINRA-2009-044) be, and hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
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    \8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E9-22514 Filed 9-18-09; 8:45 am]

BILLING CODE 8010-01-P