80 FR 31429 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify the Scope of the Definition of “Asset-Backed Security” for Purposes of Reporting to FINRA's Trade Reporting and Compliance Engine (TRACE) System

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 105 (June 2, 2015)

Page Range		31429-31430
FR Document		2015-13378
Federal Register, Volume 80 Issue 105 (Tuesday, June 2, 2015)
[Federal Register Volume 80, Number 105 (Tuesday, June 2, 2015)]
[Notices]
[Pages 31429-31430]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-13378]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75058; File No. SR-FINRA-2015-012]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Clarify the Scope of the Definition of ``Asset-
Backed Security'' for Purposes of Reporting to FINRA's Trade Reporting 
and Compliance Engine (TRACE) System

May 28, 2015.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on May 19, 2015, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which items have been prepared by FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ 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.
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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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to clarify the scope of the definition of 
``Asset-Backed Security'' for purposes of reporting to FINRA's Trade 
Reporting and Compliance Engine (TRACE) system.
    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 13, 2013, FINRA proposed a revised definition of 
``Asset-Backed Security'' in Rule 6710 and also proposed new 
supplementary material to provide further guidance on the intended 
scope of the definition.\4\ In Amendment No. 1 to the Proposal, FINRA 
modified the definition of ``Asset-Backed Security'' to provide that 
the term excludes any securitized product backed by ``residential or 
commercial mortgage loans, mortgage-backed securities, or other 
financial assets derivative of mortgage-backed securities.'' \5\ 
However, a corresponding change to the supplementary material to delete 
such security types from the scope of Asset-Backed Security was not 
made at that time. FINRA is now proposing to amend Supplementary 
Material .01 of Rule 6710 to make clear that home equity loans and home 
equity lines of credit are not within the scope of the defined term 
``Asset-Backed Security.'' \6\
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    \4\ See Securities Exchange Act Release No. 70906 (November 20, 
2013), 78 FR 70602 (November 26, 2013) (Notice of Filing of File No. 
SR-FINRA-2013-046) (``Proposal'').
    \5\ See Amendment No. 1 to SR-FINRA-2013-046.
    \6\ TRACE dissemination of additional Asset-Backed Securities 
will begin on June 1, 2015. See Regulatory Notice 14-34 (August 
2014).
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date of the proposed rule change will 
be June 1, 2015.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\7\ 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 that the proposed rule change will 
clarify the intended scope and operation of the amendments adopted by 
SR-FINRA-2013-046 by making clear that home equity loans and home 
equity lines of credit are not within the scope of the definition of 
``Asset-Backed Security.''
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    \7\ 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. The proposed rule change 
clarifies the intended operation of an existing rule.

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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), FINRA provided the Commission with written notice of 
its intent to file the proposed rule change, along with a brief 
description and the text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    FINRA has requested that the Commission waive the requirement that 
the rule change, by its terms, not become operative for 30 days after 
the date of the filing as set forth in Rule 19b-4(f)(6)(iii),\10\ so 
that the proposal may become operative on June 1, 2015, which is the 
date that TRACE dissemination of the additional Asset-Backed Securities 
information will begin. The Commission notes that the proposed rule 
change, by making a conforming change to Supplementary Material .01 of 
Rule 6710, would clarify the definition of Asset-Backed Security in 
that Rule. The Commission notes that without such a waiver there could 
be a period of time during which

[[Page 31430]]

Supplementary Material .01 and Rule 6710 are inconsistent and, as a 
result, there could be some ambiguity about the operative definition of 
Asset-Backed Security. Therefore, the Commission believes that waiving 
the operative delay for the proposed rule change and allowing it to be 
implemented on June 1, 2015, which is the date that the definition of 
Asset-Backed Security in Rule 6710 is effective and TRACE dissemination 
of Asset-Backed Security information begins, would be appropriate in 
the public interest and consistent with the protection of investors.
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    \10\ 17 CFR 240.19b-4(f)(6)(iii).
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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 [email protected]. Please include 
File Number SR-FINRA-2015-012 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

    All submissions should refer to File Number SR-FINRA-2015-012. 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 
10:00 a.m. and 3:00 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-2015-012 and should be 
submitted on or before June 23, 2015.

    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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-13378 Filed 6-1-15; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 105 / Tuesday, June 2, 2015 / Notices 31429

For the Commission, by the Division of II. Self-Regulatory Organization’s equitable principles of trade, and, in
Trading and Markets, pursuant to delegated Statement of the Purpose of, and general, to protect investors and the
authority.5 Statutory Basis for, the Proposed Rule public interest. FINRA believes that the
Robert W. Errett, Change proposed rule change will clarify the
Deputy Secretary. In its filing with the Commission, intended scope and operation of the
[FR Doc. 2015–13173 Filed 6–1–15; 8:45 am] FINRA included statements concerning amendments adopted by SR–FINRA–
the purpose of and basis for the 2013–046 by making clear that home
BILLING CODE 8011–01–P
proposed rule change and discussed any equity loans and home equity lines of
comments it received on the proposed credit are not within the scope of the
definition of ‘‘Asset-Backed Security.’’
SECURITIES AND EXCHANGE rule change. The text of these statements
COMMISSION may be examined at the places specified B. Self-Regulatory Organization’s
in Item IV below. FINRA has prepared Statement on Burden on Competition
[Release No. 34–75058; File No. SR–FINRA– summaries, set forth in sections A, B, FINRA does not believe that the
2015–012] and C below, of the most significant proposed rule change will result in any
aspects of such statements. burden on competition that is not
Self-Regulatory Organizations; A. Self-Regulatory Organization’s necessary or appropriate in furtherance
Financial Industry Regulatory Statement of the Purpose of, and of the purposes of the Act. The
Authority, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule proposed rule change clarifies the
Immediate Effectiveness of a Proposed Change intended operation of an existing rule.
Rule Change To Clarify the Scope of C. Self-Regulatory Organization’s
the Definition of ‘‘Asset-Backed 1. Purpose
Statement on Comments on the
Security’’ for Purposes of Reporting to On November 13, 2013, FINRA Proposed Rule Change Received From
FINRA’s Trade Reporting and proposed a revised definition of ‘‘Asset- Members, Participants, or Others
Compliance Engine (TRACE) System Backed Security’’ in Rule 6710 and also
proposed new supplementary material Written comments were neither
May 28, 2015. to provide further guidance on the solicited nor received.
Pursuant to section 19(b)(1) of the intended scope of the definition.4 In III. Date of Effectiveness of the
Securities Exchange Act of 1934 Amendment No. 1 to the Proposal, Proposed Rule Change and Timing for
(‘‘Act’’),1 and Rule 19b–4 2 thereunder, FINRA modified the definition of Commission Action
notice is hereby given that on May 19, ‘‘Asset-Backed Security’’ to provide that
Because the foregoing proposed rule
2015, Financial Industry Regulatory the term excludes any securitized
change does not: (i) Significantly affect
product backed by ‘‘residential or the protection of investors or the public
Authority, Inc. (‘‘FINRA’’) filed with the
commercial mortgage loans, mortgage- interest; (ii) impose any significant
Securities and Exchange Commission
backed securities, or other financial burden on competition; and (iii) become
(‘‘Commission’’) the proposed rule
assets derivative of mortgage-backed operative for 30 days from the date on
change as described in Items I and II securities.’’ 5 However, a corresponding
below, which items have been prepared which it was filed, or such shorter time
change to the supplementary material to as the Commission may designate, it has
by FINRA. FINRA has designated the delete such security types from the
proposed rule change as constituting a become effective pursuant to section
scope of Asset-Backed Security was not 19(b)(3)(A) of the Act 8 and Rule 19b–
‘‘non-controversial’’ rule change under made at that time. FINRA is now
paragraph (f)(6) of Rule 19b–4 under the 4(f)(6) thereunder.9
proposing to amend Supplementary FINRA has requested that the
Act,3 which renders the proposal Material .01 of Rule 6710 to make clear Commission waive the requirement that
effective upon receipt of this filing by that home equity loans and home equity the rule change, by its terms, not
the Commission. The Commission is lines of credit are not within the scope become operative for 30 days after the
publishing this notice to solicit of the defined term ‘‘Asset-Backed date of the filing as set forth in Rule
comments on the proposed rule change Security.’’ 6 19b–4(f)(6)(iii),10 so that the proposal
from interested persons. FINRA has filed the proposed rule may become operative on June 1, 2015,
change for immediate effectiveness. The which is the date that TRACE
I. Self-Regulatory Organization’s implementation date of the proposed
Statement of the Terms of Substance of dissemination of the additional Asset-
rule change will be June 1, 2015. Backed Securities information will
the Proposed Rule Change
2. Statutory Basis begin. The Commission notes that the
FINRA is proposing to clarify the proposed rule change, by making a
FINRA believes that the proposed rule conforming change to Supplementary
scope of the definition of ‘‘Asset-Backed change is consistent with the provisions
Security’’ for purposes of reporting to Material .01 of Rule 6710, would clarify
of Section 15A(b)(6) of the Act,7 which the definition of Asset-Backed Security
FINRA’s Trade Reporting and requires, among other things, that
Compliance Engine (TRACE) system. in that Rule. The Commission notes that
FINRA rules must be designed to without such a waiver there could be a
The text of the proposed rule change prevent fraudulent and manipulative period of time during which
is available on FINRA’s Web site at acts and practices, to promote just and
asabaliauskas on DSK5VPTVN1PROD with NOTICES

http://www.finra.org, at the principal 8 15 U.S.C. 78s(b)(3)(A).
4 See Securities Exchange Act Release No. 70906
office of FINRA and at the 9 17 CFR 240.19b–4(f)(6). As required under Rule
(November 20, 2013), 78 FR 70602 (November 26, 19b–4(f)(6)(iii), FINRA provided the Commission
Commission’s Public Reference Room. 2013) (Notice of Filing of File No. SR–FINRA– with written notice of its intent to file the proposed
2013–046) (‘‘Proposal’’). rule change, along with a brief description and the
5 See Amendment No. 1 to SR–FINRA–2013–046.
5 17 text of the proposed rule change, at least five
CFR 200.30–3(a)(12). 6 TRACE dissemination of additional Asset- business days prior to the date of filing of the
1 15 U.S.C. 78s(b)(1). Backed Securities will begin on June 1, 2015. See proposed rule change, or such shorter time as
2 17 CFR 240.19b–4.
Regulatory Notice 14–34 (August 2014). designated by the Commission.
3 17 CFR 240.19b–4(f)(6). 7 15 U.S.C. 78o–3(b)(6). 10 17 CFR 240.19b–4(f)(6)(iii).

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31430 Federal Register / Vol. 80, No. 105 / Tuesday, June 2, 2015 / Notices

Supplementary Material .01 and Rule Commission and any person, other than I. Self-Regulatory Organization’s
6710 are inconsistent and, as a result, those that may be withheld from the Statement of the Terms of Substance of
there could be some ambiguity about the public in accordance with the the Proposed Rule Change
operative definition of Asset-Backed provisions of 5 U.S. C. 552, will be The Exchange proposes to amend
Security. Therefore, the Commission available for Web site viewing and section 804.00 of the Listed Company
believes that waiving the operative printing in the Commission’s Public Manual (the ‘‘Manual’’) to specify that
delay for the proposed rule change and Reference Room, 100 F Street NE., issuers seeking a review of a delisting
allowing it to be implemented on June Washington, DC 20549, on official decision made by the staff of NYSE
1, 2015, which is the date that the business days between the hours of Regulation, Inc. (‘‘NYSE Regulation’’)
definition of Asset-Backed Security in 10:00 a.m. and 3:00 p.m. Copies of such must have paid all prior fees owed to
Rule 6710 is effective and TRACE filing also will be available for the Exchange before the Exchange will
dissemination of Asset-Backed Security inspection and copying at the principal accept payment of the applicable appeal
information begins, would be office of FINRA. All comments received fee.
appropriate in the public interest and will be posted without change; the The text of the proposed rule change
consistent with the protection of Commission does not edit personal is available on the Exchange’s Web site
investors. identifying information from at www.nyse.com, at the principal office
At any time within 60 days of the submissions. You should submit only of the Exchange, and at the
filing of the proposed rule change, the information that you wish to make Commission’s Public Reference Room.
Commission summarily may available publicly. All submissions
temporarily suspend such rule change if should refer to File Number SR–FINRA– II. Self-Regulatory Organization’s
it appears to the Commission that such 2015–012 and should be submitted on Statement of the Purpose of, and
action is necessary or appropriate in the or before June 23, 2015. Statutory Basis for, the Proposed Rule
public interest, for the protection of Change
For the Commission, by the Division of
investors, or otherwise in furtherance of In its filing with the Commission, the
Trading and Markets, pursuant to delegated
the purposes of the Act. If the authority.11 self-regulatory organization included
Commission takes such action, the statements concerning the purpose of,
Robert W. Errett,
Commission shall institute proceedings and basis for, the proposed rule change
to determine whether the proposed rule Deputy Secretary.
[FR Doc. 2015–13378 Filed 6–1–15; 8:45 am]
and discussed any comments it received
should be approved or disapproved. on the proposed rule change. The text
BILLING CODE 8011–01–P
IV. Solicitation of Comments of those statements may be examined at
the places specified in Item IV below.
Interested persons are invited to
SECURITIES AND EXCHANGE The Exchange has prepared summaries,
submit written data, views, and
COMMISSION set forth in sections A, B, and C below,
arguments concerning the foregoing,
of the most significant parts of such
including whether the proposed rule
statements.
change is consistent with the Act. [Release No. 34–75057; File No. SR–NYSE–
Comments may be submitted by any of 2015–25] A. Self-Regulatory Organization’s
the following methods: Statement of the Purpose of, and the
Self-Regulatory Organizations; New Statutory Basis for, the Proposed Rule
Electronic Comments York Stock Exchange LLC; Notice of Change
• Use the Commission’s Internet Filing and Immediate Effectiveness of
comment form (http://www.sec.gov/ Proposed Rule Change To Amend 1. Purpose
rules/sro.shtml); or Section 804.00 of the Listed Company The Exchange proposes to amend
• Send an email to rule-comments@ Manual To Specify That Issuers section 804.00 of the Manual to specify
sec.gov. Please include File Number SR– Seeking a Review of a Delisting that issuers seeking a review of a
FINRA–2015–012 on the subject line. Decision Made by the Staff of NYSE delisting decision made by the staff of
Paper Comments Regulation, Inc. Must Have Paid All NYSE Regulation must have paid all
Prior Fees Owed to the Exchange prior fees owed to the Exchange before
• Send paper comments in triplicate the Exchange will accept payment of the
to Secretary, Securities and Exchange May 28, 2015. applicable appeal fee.
Commission, 100 F Street NE., Pursuant to section 19(b)(1) 1 of the Companies listed on the Exchange are
Washington, DC 20549–1090. Securities Exchange Act of 1934 subject to certain fees throughout the
All submissions should refer to File (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 life of their listing, including annual
Number SR–FINRA–2015–012. This file notice is hereby given that on May 13, fees for each class or series of security
number should be included on the 2015, New York Stock Exchange LLC listed on the Exchange as well as fees
subject line if email is used. To help the (‘‘NYSE’’ or ‘‘Exchange’’) filed with the associated with initial and
Commission process and review your Securities and Exchange Commission supplemental listing applications.
comments more efficiently, please use (‘‘Commission’’) the proposed rule Although all fees are due immediately
only one method. The Commission will change as described in Items I and II when billed, on some limited occasions
post all comments on the Commission’s below, which Items have been prepared listed companies fail to remit payment
Internet Web site (http://www.sec.gov/ for fees due to the Exchange. If payment
asabaliauskas on DSK5VPTVN1PROD with NOTICES

by the self-regulatory organization. The
rules/sro.shtml). Copies of the Commission is publishing this notice to is not received when due, the Exchange
submission, all subsequent solicit comments on the proposed rule has procedures in place to collect on
amendments, all written statements change from interested persons. outstanding bills. In the event that a
with respect to the proposed rule listed company repeatedly fails to pay
change that are filed with the 11 17 CFR 200.30–3(a)(12). fees due to the Exchange, it can be
Commission, and all written 1 15 U.S.C. 78s(b)(1). subject to delisting.
communications relating to the 2 15 U.S.C. 78a. NYSE Regulation monitors listed
proposed rule change between the 3 17 CFR 240.19b–4. companies for compliance with

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Document Created: 2015-12-15 15:12:17
Document Modified: 2015-12-15 15:12:17
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 31429