Document ID: SEC-2009-0588-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Non-Substantive, Technical Changes to FINRA Trade Reporting Rules Upon Implementation of SR-FINRA-2008-011
Posted Date: 2009-04-28T04:00Z

[Federal Register Volume 74, Number 80 (Tuesday, April 28, 2009)]
[Notices]
[Pages 19249-19251]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-9559]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59805; File No. SR-FINRA-2009-027]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Make Non-Substantive, Technical Changes to 
FINRA Trade Reporting Rules Upon Implementation of SR-FINRA-2008-011

April 21, 2009.
    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 16, 2009, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by FINRA. FINRA has 
designated the proposed rule change as constituting a ``non-
controversial'' rule change under Section 19(b)(3)(A) of the Act\3\ and 
paragraph (f)(6) 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    FINRA is proposing to (1) replace references to ``MMID'' or 
``OEID'' in Rules 6282, 7130, 7230A, 7230B and 7330 that will be 
obsolete upon the implementation of proposed rule change SR-FINRA-2008-
011; and (2) update rule cross-references in Rules 6380B and 7230B, as 
amended pursuant to SR-FINRA-2008-011.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 58903 (November 5, 
2008), 73 FR 67905 (November 17, 2008) (order approving SR-FINRA-
2008-011); and Securities Exchange Act Release No. 58903A (November 
13, 2008), 73 FR 69700 (November 19, 2008) (correction to order 
approving SR-FINRA-2008-011). SR-FINRA-2008-011 will be implemented 
on August 3, 2009. See FINRA Regulatory Notice 09-08 (January 2009).
---------------------------------------------------------------------------

    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 5, 2008, the SEC approved amendments to FINRA trade

[[Page 19250]]

reporting rules applicable to over-the-counter (``OTC'') equity 
transactions \6\ to (1) replace the current market maker-based trade 
reporting structure with an ``executing party'' structure; and (2) 
require members with the trade reporting obligation under FINRA rules 
that are acting in a riskless principal or agency capacity on behalf of 
one or more other member firms to submit non-tape report(s) to FINRA, 
as necessary, to identify such other member firm(s) as a party to the 
trade.
---------------------------------------------------------------------------

    \6\ OTC equity transactions include transactions in NMS stocks 
effected otherwise than on an exchange, which are reported through 
the Alternative Display Facility (``ADF'') or a Trade Reporting 
Facility (``TRF''), and transactions in OTC Equity Securities, as 
defined in Rule 6420, which are reported through the OTC Reporting 
Facility (``ORF''). The ADF, TRFs and ORF are collectively referred 
to herein as the ``FINRA Facilities.''
---------------------------------------------------------------------------

    This proposed rule change would make technical, non-substantive 
changes to certain FINRA rules upon the implementation of SR-FINRA-
2008-011. Specifically, FINRA is proposing to delete the references to 
``MMID'' and ``OEID'' in Rules 6282(c) and (d), 7130(b), 7230A(d), 
7230B(d) and 7330(d). When the market maker-based trade reporting 
structure is replaced with the executing party structure, references to 
``MMID'' (which corresponds to the ``market maker'' side) and ``OEID'' 
(which corresponds to the ``order entry'' side) will be obsolete, and 
they will be deleted from the revised system technical specifications 
for the FINRA Facilities. As such, FINRA is proposing to amend the 
rules to refer to the Reporting Member (denoted as the ``Executing 
Party'' or ``EPID'') and the Non-Reporting Member or Party, as 
applicable (denoted as the ``Contra Party'' or ``CPID'').
    In this regard, FINRA also is proposing to amend Rule 6282 to (1) 
replace references in paragraphs (c) and (d) to ``Non-Reporting 
Member'' with ``Non-Reporting Member (or other contra party),'' where 
applicable, to clarify that the contra party to a trade may not always 
be a FINRA member, and (2) replace references in paragraph (c) to 
``Reporting FINRA Member'' with ``Reporting Member'' to maintain 
consistency in the terminology used in the rule.\7\
---------------------------------------------------------------------------

    \7\ FINRA also is proposing technical amendments to correct the 
cross-references in paragraphs (c) and (d) of Rule 6282 that 
incorrectly refer to numbered subparagraphs of (e) and (f), 
respectively; these cross-references should refer to numbered 
subparagraphs of (c) and (d), respectively.
---------------------------------------------------------------------------

    In addition, on December 22, 2008, FINRA filed proposed rule change 
SR-FINRA-2008-066 to reflect the closing of the FINRA/NSX TRF. As part 
of that proposed rule change, FINRA proposed to renumber the rules 
relating to the FINRA/NYSE TRF, and Rules 6380C and 7230C became Rules 
6380B and 7230B, respectively.\8\ In this filing, FINRA is proposing to 
update the cross-references in Rules 6380B(d)(4) and 7230B(c), as 
amended pursuant to SR-FINRA-2008-011, to reflect the renumbering of 
the pertinent rules.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 59175 (December 30, 
2008), 74 FR 840 (January 8, 2009) (notice of filing and immediate 
effectiveness of SR-FINRA-2008-066). SR-FINRA-2008-066 was filed for 
immediate effectiveness with an operative date of January 1, 2009.
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness. The proposed rule change will be operative on August 3, 
2009, the date on which SR-FINRA-2008-011 will be implemented.
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 will provide 
greater clarity to members and the public regarding FINRA's trade 
reporting rules.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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

    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) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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.

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-2009-027 on the subject line.

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-2009-027. 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 inspection 
and copying 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

[[Page 19251]]

submissions should refer to File Number SR-FINRA-2009-027 and should be 
submitted on or before May 19, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-9559 Filed 4-27-09; 8:45 am]
BILLING CODE 8010-01-P