Document ID: SEC-2011-1780-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2011-11-18T05:00Z

[Federal Register Volume 76, Number 223 (Friday, November 18, 2011)]
[Notices]
[Pages 71612-71614]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29786]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65722; File No. SR-FINRA-2011-065]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Update Rule Cross-References Within Certain 
FINRA Rules

November 10, 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 November 2, 2011, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``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 Rule 19b-4(f)(6) under the Act,\3\ which renders the 
proposal effective upon filing with the Commission. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).

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[[Page 71613]]

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

    FINRA is proposing to update cross-references within certain FINRA 
rules to reflect changes adopted in the consolidated FINRA rulebook.
    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
    FINRA is in the process of developing a new consolidated rulebook 
(``Consolidated FINRA Rulebook'').\4\ That process involves FINRA 
submitting to the Commission for approval a series of proposed rule 
changes over time to adopt rules in the Consolidated FINRA Rulebook. 
The phased adoption and implementation of those rules necessitates 
periodic amendments to update rule cross-references and other non-
substantive technical changes in the Consolidated FINRA Rulebook.
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    \4\ The current FINRA rulebook consists of (1) FINRA Rules; (2) 
NASD Rules; and (3) rules incorporated from NYSE (``Incorporated 
NYSE Rules'') (together, the NASD Rules and Incorporated NYSE Rules 
are referred to as the ``Transitional Rulebook''). While the NASD 
Rules generally apply to all FINRA members, the Incorporated NYSE 
Rules apply only to those members of FINRA that are also members of 
the NYSE (``Dual Members''). The FINRA Rules apply to all FINRA 
members, unless such rules have a more limited application by their 
terms. For more information about the rulebook consolidation 
process, see Information Notice, March 12, 2008 (Rulebook 
Consolidation Process).
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    The proposed rule change would update rule cross-references to 
reflect changes adopted in the Consolidated FINRA Rulebook. In this 
regard, the proposed rule change would update references in FINRA Rules 
0150 (Application of Rules to Exempted Securities Except Municipal 
Securities),\5\ 2114 (Recommendations to Customers in OTC Equity 
Securities), 2124 (Net Transactions with Customers), 2130 (Approval 
Procedures for Day-Trading Accounts), 2264 (Margin Disclosure 
Statement), 2270 (Day-Trading Risk Disclosure Statement), 2330 
(Members' Responsibilities Regarding Deferred Variable Annuities), 2360 
(Options), 2370 (Security Futures), 5122 (Private Placements of 
Securities Issued by Members), 5320 (Prohibition Against Trading Ahead 
of Customer Orders), 6630 (Applicability of FINRA Rules to Securities 
Previously Designated as PORTAL Securities),\6\ 7230A (Trade Report 
Input), 7330 (Trade Report Input), 9217 (Violations Appropriate for 
Disposition Under Plan Pursuant to SEA Rule 19d-1(c)(2)), 9559 (Hearing 
Procedures for Expedited Proceedings Under the Rule 9550 Series), and 
9610 (Application) that are needed as the result of Commission approval 
of three recent FINRA proposed rule changes.\7\ Also, the proposed rule 
change will delete the general recordkeeping provisions of NYSE Rule 
440 (Books and Records).\8\ In addition, the proposed rule change would 
update reference to former MSRB Rule G-36 (Delivery of Official 
Statements, Advance Refunding Documents and Forms G-36(OS) and G-
36(ARD) to Board or its Designee) in FINRA Rule 9217 to reflect changes 
made in a MSRB Rule filing.\9\
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    \5\ The proposed rule change would update FINRA Rule 0150 to 
reflect (1) the adoption of Rules 2268, 4510 Series, and 5340 and 
the deletion of NASD Rule 3110 and NASD IM-3110, effective December 
5, 2011, and (2) the deletion of NASD Rule 3020 to add Rule 4360, 
effective January 1, 2012. See Regulatory Notice 11-19 (April 2011) 
(regarding File No. SR-FINRA-2010-052) and Regulatory Notice 11-21 
(May 2011) (regarding File No. SR-FINRA-2010-059).
    \6\ The proposed rule change would update FINRA Rule 6630 to 
reflect (1) the adoption of Rules 4510 Series and the deletion of 
NASD Rule 3110, effective December 5, 2011, and (2) the deletion of 
NASD Rule 3020 to add Rule 4360, effective January 1, 2012. See 
Regulatory Notice 11-19 (April 2011) (regarding File No. SR-FINRA-
2010-052) and Regulatory Notice 11-21 (May 2011) (regarding File No. 
SR-FINRA-2010-059).
    \7\ See Securities Exchange Act Release No. 63784 (January 27, 
2011), 76 FR 5850 (February 2, 2011) (Order Approving File No. SR-
FINRA-2010-052); Securities Exchange Act Release No. 63961 (February 
24, 2011), 76 FR 11542 (March 2, 2011) (Order Approving File No. SR-
FINRA-2010-059); and Securities Exchange Act Release No. 65281 
(September 7, 2011), 76 FR 56848 (September 14, 2011) (Order 
Approving File No. SR-FINRA-2011-031).
    \8\ See Securities Exchange Act Release No. 63784 (January 27, 
2011), 76 FR 5850 (February 2, 2011) (Order Approving File No. SR-
FINRA-2010-052). See also Securities Exchange Act Release No. 63999 
(March 1, 2011), 76 FR 12380 (March 7, 2011) (Order Approving File 
No. SR-FINRA-2010-061).
    \9\ See Securities Exchange Act Release No. 59966 (May 21, 
2009), 74 FR 25790 (May 29, 2009) (Order Approving File No. SR-MSRB-
2009-02).
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    As noted in Item 2 of this filing, FINRA has filed the proposed 
rule change for immediate effectiveness. The implementation date for 
the proposed change to FINRA Rule 9559 will be December 2, 2011.\10\ 
The implementation date for certain proposed rule changes to FINRA 
Rules 0150 and 6630, and proposed rule changes to FINRA Rules 2114, 
2124, 2130, 2264, 2270, 2330, 2360, 2370, 5122, 5320, 7230A, 7330 and 
9217 will be December 5, 2011. The implementation date for the proposed 
rule changes to update certain references in FINRA Rules 0150, 
6630(c)(2) and 9610(a) that would delete the reference to NASD Rule 
3020 and add the reference to FINRA Rule 4360 will be January 1, 2012.
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    \10\ See Regulatory Notice 11-50 (November 2011) (regarding File 
No. SR-FINRA-2011-031).
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2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\11\ 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 rules.
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    \11\ 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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not 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

[[Page 71614]]

19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    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.

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 email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2011-065 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-2011-065. This 
file number should be included on the subject line if email 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 publicly available. All 
submissions should refer to File Number SR-FINRA-2011-065 and should be 
submitted on or before December 9, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-29786 Filed 11-17-11; 8:45 am]
BILLING CODE 8011-01-P