Document ID: SEC-2009-0516-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change Relating to FINRA's Regulatory Notice on the FINRA Rule 9520 Series (Eligibility Proceedings)
Posted Date: 2009-04-14T04:00Z

[Federal Register: April 14, 2009 (Volume 74, Number 70)]
[Notices]               
[Page 17267-17268]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ap09-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59722; File No. SR-FINRA-2009-022]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Order Granting Accelerated 
Approval of Proposed Rule Change Relating to FINRA's Regulatory Notice 
on the FINRA Rule 9520 Series (Eligibility Proceedings)

April 7, 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 March 31, 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'') the proposed rule change as described in Items I, II 
below, which Items have been substantially prepared by FINRA. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons and to approve the 
proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA proposes to make technical amendments to the proposed 
Regulatory Notice entitled ``Eligibility Proceedings: Amendments to 
FINRA Rule 9520 Series to Establish Procedures Applicable to Firms and 
Associated Persons Subject to Certain Statutory Disqualifications'' 
(the ``SD Regulatory Notice'') that details impending changes to the 
FINRA Rule 9520 Series. The Commission recently approved amendments to 
the FINRA Rule 9520 Series, which governs the eligibility procedures 
for persons subject to certain disqualifications, to comport with the 
amended definition of disqualification in the FINRA By-Laws.\3\ The 
amendments to the FINRA Rule 9520 Series will become effective on June 
15, 2009.
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    \3\ See Securities Exchange Act Release No. 59586 (March 17, 
2009), 74 FR 12166 (March 23, 2009) (SR-FINRA-2008-045) (``SD 
Approval Order'').
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    The proposed rule change makes technical amendments to the original 
SD Regulatory Notice filed on September 8, 2008, in connection with the 
amendments to the FINRA Rule 9520 Series.
    The text of the proposed rule change is available at FINRA, the 
Commission's Public Reference Room, and http://www.finra.org.

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 III 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
    In September 2008, FINRA filed a proposed rule change to amend the 
FINRA Rule 9520 Series, which governs eligibility proceedings under 
which FINRA may allow a person subject to a statutory disqualification 
to enter or remain in the securities industry, to comport with the 
amended definition of disqualification in the FINRA By-Laws. FINRA 
filed the original SD Regulatory Notice as part of its original filing 
on September 8, 2008, and amended its filing on December 11, 2008.\4\ 
The SD Regulatory Notice describes in detail the circumstances under 
which persons must obtain FINRA approval to enter or remain in the 
securities industry, notwithstanding the existence of additional 
categories of statutory disqualification. The proposed rule change was 
published for comment in the Federal Register on January 13, 2009.\5\ 
The Commission received no comments on the proposed rule change. On 
March 17, 2009, the Commission

[[Page 17268]]

approved the proposed rule change and issued the SD Approval Order.\6\
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    \4\ See SR-FINRA-2008-045, Exhibit 2 (filed September 8, 2008). 
Amendment No. 1 to SR-FINRA-2008-045 replaced and superseded the 
original rule filing except with regard to Exhibit 2.
    \5\ See Securities Exchange Act Release No. 59208 (January 6, 
2009), 74 FR 1738 (January 13, 2009) (SR-FINRA-2008-045) (notice).
    \6\ See supra note 3.
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    The current proposed rule change makes several technical amendments 
to the SD Regulatory Notice to, among other things, comport with the 
amendments to the FINRA Rule 9520 Series and the Commission's SD 
Approval Order.\7\ In addition, the proposed rule change updates the 
status of FINRA's rule filing regarding revising the questions on Forms 
U4 and U5, which is referenced in a footnote of the SD Regulatory 
Notice.\8\
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    \7\ See Exhibit 2. For example, the proposed amendments to the 
SD Regulatory Notice note that, with respect to the Department of 
Member Regulation review of applications, disqualified persons, in 
addition to disqualified members or sponsoring members, as the case 
may be, may be providing consent to supervisory plans. In addition, 
they replace the term ``sponsoring member firm'' with ``sponsoring 
member.'' Further, the proposed amendments replace the phrase ``[i]f 
the parties cannot agree on a supervisory plan'' with ``[i]f a 
supervisory plan is rejected.'' The proposed amendments also replace 
references to ``Securities Exchange Act'' with ``Exchange Act'' for 
consistency. Finally, the proposed amendments add a footnote that 
references the SD Approval Order and the current filing.
    \8\ See Exhibit 2, at note 7.
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    The effective date of the technical amendments to the SD Regulatory 
Notice pursuant to the proposed rule change will be the date of 
Commission approval of the proposed rule change. The effective date of 
the related amendments to the FINRA Rule 9520 Series, as detailed in 
the SD Regulatory Notice, will be June 15, 2009.
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's 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. FINRA believes that the proposed rule change is 
consistent with the provisions of the Act noted above in that the 
proposed technical amendments to the SD Regulatory Notice will conform 
the text to the proposed amendments to the FINRA Rule 9520 Series and 
the Commission's recent SD Approval Order.
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    \9\ 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.

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. 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-2009-022 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-2009-022. 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 
submissions should refer to File Number SR-FINRA-2009-022 and should be 
submitted on or before May 5, 2009.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of Section 15 of the 
Act and the rules and regulations thereunder applicable to a national 
securities association.\10\ In particular, the Commission finds that 
the proposed rule change is consistent with Section 15A(b)(6) of the 
Act \11\ because the proposed technical amendments will conform the SD 
Regulatory Notice to the FINRA Rule 9520 Series and the Commission's 
recent SD Approval Order.
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    \10\ In approving this proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78o-3(b)(6).
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    FINRA has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of the notice thereof in the Federal Register. Granting 
accelerated approval will allow FINRA to inform its members of the 
amendments to the FINRA Rule 9520 Series that will become effective on 
June 15, 2009. Accordingly, the Commission finds good cause, pursuant 
to Section 19(b)(2) of the Act,\12\ for approving the proposed rule 
change prior to the thirtieth day after publication of the notice 
thereof in the Federal Register.
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    \12\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-FINRA-2009-022) be, and 
hereby is, approved on an accelerated basis.
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    \13\ Id.
    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-8423 Filed 4-13-09; 8:45 am]

BILLING CODE 8010-01-P