Document ID: SEC-2011-1646-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2011-10-26T04:00Z

[Federal Register: October 26, 2011 (Volume 76, Number 207)]
[Notices]               
[Page 66344-66345]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26oc11-102]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65599; File No. SR-FINRA-2011-043]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Approving Proposed Rule Change To Amend FINRA 
Rule 0160 (Definitions in FINRA By-Laws)

October 20, 2011.

I. Introduction

    On August 31, 2011, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers 
(``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 amend FINRA Rule 1060 (Definitions in FINRA By-
Laws). The proposed rule change was published for comment in the 
Federal Register on September 16, 2011.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change.
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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. 65313 (September 12, 
2011), 76 FR 57784 (``Notice'').
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II. Description of the Proposal

    FINRA is proposing to amend FINRA Rule 0160 (Definitions in FINRA 
By-Laws). As part of the process of developing the new consolidated 
rulebook (``Consolidated FINRA Rulebook''),\4\ the proposed rule change

[[Page 66345]]

will amend FINRA Rule 0160. The proposed rule change will transfer 
certain defined terms from NASD Rule 0120 (Definitions) to FINRA Rule 
0160, subject to certain amendments, as well as add new defined terms 
to reflect the conventions of the Consolidated FINRA Rulebook.\5\ The 
proposed rule change will also eliminate as unnecessary or duplicative 
certain definitions contained in NASD Rule 0120. In addition, the 
proposed rule change will eliminate NASD Rule 0120 from the current 
FINRA rulebook.\6\
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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. 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). 
For convenience, the Incorporated NYSE Rules are referred to as the 
NYSE Rules.
    \5\ FINRA Rule 0160 would be reorganized so that the defined 
terms are arranged alphabetically, as amended.
    \6\ Notwithstanding the proposed transfer of certain defined 
terms from NASD Rule 0120 to FINRA Rule 0160 in the Consolidated 
FINRA Rulebook, the defined terms in FINRA Rule 0160 would continue 
to apply equally to both the Transitional Rulebook and the 
Consolidated FINRA Rulebook, as applicable. See also Securities 
Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174 
(October 1, 2008) (Order Approving SR-FINRA-2008-021), discussing 
``Rules of General Applicability.''
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    The proposed rule change will also transfer certain terms with 
either no or minor substantive changes to FINRA Rule 0160, as well as 
make minor and conforming changes to NASD Rule 0120(f)(2) and (f)(3) 
and FINRA Rule 0160(b)(3)(B) and (3)(C). The proposed rule change will 
also add defined terms to FINRA Rule 0160 because such terms are used 
throughout the Consolidated FINRA Rulebook.\7\ Although the proposed 
rule change will not incorporate certain defined terms in NASD Rule 
0120, FINRA represents that this will not eliminate any substantive 
FINRA requirements.\8\
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    \7\ See Notice at 57785.
    \8\ Id.
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    FINRA will announce the implementation date of the proposed rule 
change in a Regulatory Notice to be published no later than 90 days 
following this Commission approval. The effective date will be no later 
than 150 days following this Commission approval.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with Section 15A(b)(6) of the Act,\9\ 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. The Commission believes that the proposed rule 
change will provide clarity with respect to the defined terms for the 
Consolidated FINRA Rulebook by transferring certain defined terms from 
NASD Rule 0120 to FINRA Rule 0160 (subject to certain amendments), 
adding new defined terms to FINRA Rule 0160 to reflect the conventions 
of the Consolidated FINRA Rulebook and eliminating as unnecessary or 
duplicative certain definitions contained in NASD Rule 0120.
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    \9\ 15 U.S.C. 78o-3(b)(6).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-FINRA-2011-043) be, and it 
hereby is, approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-27697 Filed 10-25-11; 8:45 am]
BILLING CODE 8011-01-P