80 FR 62137 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA Rule 2210 (Communications With the Public)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 199 (October 15, 2015)
Federal Register Volume 80, Issue 199 (October 15, 2015)
| Page Range | 62137-62139 | |
| FR Document | 2015-26157 |
[Federal Register Volume 80, Number 199 (Thursday, October 15, 2015)] [Notices] [Pages 62137-62139] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-26157] [[Page 62137]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76105; File No. SR-FINRA-2015-022] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA Rule 2210 (Communications With the Public) October 8, 2015. I. Introduction On June 29, 2015, the Financial Industry Regulatory Authority, Inc. (``FINRA'') 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 2210, Communications With the Public. The proposed rule change was published for comment in the Federal Register on July 13, 2015.\3\ The Commission received nine comment letters on the proposed rule change \4\ and a response to the comments from FINRA.\5\ On August 13, 2015, FINRA extended the time period for Commission action on this proposed rule change to October 9, 2015. This order approves the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 75377 (July 7, 2015), 80 FR 40092 (``Notice''). \4\ See letters from David Neuman, Israels Neuman PLC, dated July 29, 2015 (``Neuman Letter''); Robert C. Port, Gaslowitz Frankel LLC, dated August 1, 2015 (``Gaslowitz Letter''); William Beatty, President, North American Securities Administrators Association, Inc., dated August 3, 2015 (``NASAA Letter''); David T. Bellaire, Executive Vice President & General Counsel, Financial Services Institute, dated August 3, 2015 (``FSI Letter''); Dorothy Donohue, Deputy General Counsel--Securities Regulation, Investment Company Institute, dated August 3, 2015 (``ICI Letter''); Elissa Germaine, Supervising Attorney and Jill Gross, Director, Pace Investor Rights Clinic, Pace Law School, dated August 3, 2015 (``PIRC Letter''); Melissa MacGregor, Managing Director and Associate General Counsel, Securities Industry and Financial Markets Association, dated August 3, 2015 (``SIFMA Letter''); Joseph C. Peiffer, President, Public Investors Arbitration Bar Association, dated August 3, 2015 (``PIABA Letter''); and Sutherland Asbill & Brennan LLP on behalf of the Committee of Annuity Insurers, dated August 3, 2015 (``CAI Letter''). \5\ See letter from Jeanette Wingler, Assistant General Counsel, FINRA, dated September 21, 2015 (``FINRA Letter''). --------------------------------------------------------------------------- II. Description of the Proposed Rule Change FINRA proposes to amend Rule 2210 to require each of its member's Web sites to include a readily apparent reference and hyperlink to BrokerCheck \6\ on: (i) The initial Web page that the member intends to be viewed by retail investors; and (ii) any other Web page that includes a professional profile of one or more registered persons who conducts business with retail investors. These requirements would not apply to a member that does not provide products or services to retail investors, or to a directory or list of registered persons limited to names and contact information. --------------------------------------------------------------------------- \6\ BrokerCheck provides the public with information on the professional background, business practices, and conduct of FINRA members and their associated persons. The information that FINRA releases through BrokerCheck is derived from the Central Registration Depository (``CRD''), the securities industry online registration and licensing database. --------------------------------------------------------------------------- III. Comment Letters Commenters generally support FINRA's proposal.\7\ As discussed below, some commenters recommend that the proposal be expanded and include additional requirements, and some request additional guidance regarding the application of the proposal. --------------------------------------------------------------------------- \7\ See Neuman Letter; Gaslowitz Letter; ICI Letter at 1 and 3; SIFMA Letter at 1; PIRC Letter at 1; NASAA Letter at 1; FSI Letter at 1; and PIABA Letter at 1. --------------------------------------------------------------------------- Requests for Additional Requirements Some commenters state that FINRA should require a reference and hyperlink to BrokerCheck in members' and registered persons' emails and account statements to customers.\8\ In its response letter, FINRA states that it did not propose these requirements because at this time FINRA believes such requirements would be overly burdensome and require significant system and operational changes without commensurate benefits.\9\ Some commenters state that FINRA should require firms to include BrokerCheck links on certain third party Web sites.\10\ In response, FINRA states that it recognizes the difficulties and costs associated with including links on third-party Web sites, and therefore has determined to limit the application of the proposed rule to members' Web sites at this time.\11\ However, FINRA notes that it will continue to monitor investors' awareness and use of BrokerCheck and consider whether to pursue further rulemaking.\12\ --------------------------------------------------------------------------- \8\ See Neuman Letter and PIRC Letter at 1-2. See also NASAA Letter at 2. \9\ See FINRA Letter at 3. \10\ See PIRC Letter at 1-2; NASAA Letter at 2; and PIABA Letter at 1-2. But see, e.g., SIFMA Letter at 2 and FSI Letter at 1 (both supporting the exclusion of third-party Web sites). \11\ See FINRA Letter at 3. \12\ See id. --------------------------------------------------------------------------- Some commenters state that FINRA should require deep links to firms' and individuals' BrokerCheck reports.\13\ In response, FINRA states while it has determined not to include deep links at this time, most investors should be able to find information concerning particular members and registered representatives without difficulty given the ease of operation of the BrokerCheck search feature.\14\ FINRA also states that, while the proposed rule does not require deep links, it does not prohibit members from using deep links.\15\ --------------------------------------------------------------------------- \13\ See PIRC Letter at 1; NASAA Letter at 1-2; and PIABA Letter at 1. But see, e.g., FSI Letter at 3 (supporting the exclusion of deep links). \14\ See FINRA Letter at 2. \15\ See id. --------------------------------------------------------------------------- Finally, some commenters note that BrokerCheck excludes certain information that is currently available on the CRD system, and state that investors should be able to view all relevant information that is available in the CRD system.\16\ FINRA notes that these comments are outside the scope of the current proposal, but that it regularly assesses the BrokerCheck program and may consider including additional information in BrokerCheck at a later time.\17\ --------------------------------------------------------------------------- \16\ See Neuman Letter; PIRC Letter at 2; and PIABA Letter at 2. \17\ See FINRA Letter at 3-4. --------------------------------------------------------------------------- Requests for Additional Guidance Two commenters seek guidance regarding the interpretation of the term ``readily apparent'' as used the proposed rule, including whether placing the link to BrokerCheck in a Web site's footer would satisfy the ``readily apparent'' requirement.\18\ One commenter seeks guidance regarding the placement of the BrokerCheck reference and hyperlink on Web sites that are optimized for mobile devices.\19\ One commenter requests confirmation that ``readily apparent reference'' is not meant to be an extensive disclosure and that a firm can simply reference the term BrokerCheck without any accompanying disclosure.\20\ Another commenter seeks confirmation that language such as ``check the background of an investment professional'' would satisfy the proposed rule's ``reference'' requirement.\21\ In its response letter, FINRA states that it is unable to provide specific guidance regarding what constitutes a readily apparent reference and hyperlink given the wide variety of Web pages that its members maintain.\22\ [[Page 62138]] FINRA states, however, that it generally does not believe that including the reference and hyperlink in a footer would satisfy the ``readily apparent'' standard.\23\ In addition, FINRA notes that members have flexibility as to the location of the BrokerCheck reference and hyperlink on Web sites that are optimized for mobile devices, so long as they are readily apparent.\24\ Moreover, FINRA states that it anticipates that the readily apparent reference to BrokerCheck would be brief.\25\ --------------------------------------------------------------------------- \18\ See SIFMA Letter at 3 and FSI Letter at 4. \19\ See SIFMA Letter at 3. \20\ See CAI Letter at 2-3. \21\ See SIFMA Letter at 3. \22\ See FINRA Letter at 6. \23\ See id. FINRA states that members should adopt the perspective of a reasonable retail investor when making a determination regarding the reference and hyperlink. FINRA states that some of the factors that members should consider include placement, font size, and font color. See id. at 6-7. \24\ See id. at 7. \25\ See id. at 6. --------------------------------------------------------------------------- One commenter seeks confirmation that, for firms that choose to provide the BrokerCheck link through an icon or button similar to that used by FINRA, such use would be a permissible use of any trademark or related intellectual property owned by FINRA.\26\ In response, FINRA states that it anticipates making BrokerCheck-related icons or similar resources available to members as one option for complying with the proposed rule, but use of any such icons or similar resources by members would be subject to FINRA's terms and conditions for use.\27\ --------------------------------------------------------------------------- \26\ See SIFMA Letter at 3. \27\ See FINRA Letter at 7. --------------------------------------------------------------------------- One commenter seeks clarification regarding the application of the proposed rule to Web sites maintained by independent contractor registered representatives.\28\ In its response letter, FINRA states that it expects member firms to supervise and review for compliance Web sites operated by a registered representative that promote the business of the member and, that for purposes of Rule 2210, views such Web sites to be Web sites of the member firm.\29\ --------------------------------------------------------------------------- \28\ See SIFMA Letter at 3-4. See also FSI Letter at 3-4 (asking whether the client-facing Web site of a financial advisor engaged in an independent contractor relationship with its broker-dealer would be considered a ``member Web site'' or a third-party Web site under the proposal). \29\ See FINRA Letter at 4. See also letter to Gordon S. Macklin, President, National Association of Securities Dealers, Inc. from Douglas Scarff, Director, Division of Market Regulation, dated June 18, 1982, regarding the status of ``independent contractors.'' --------------------------------------------------------------------------- One commenter seeks confirmation that, for multi-faceted financial institutions, the link to BrokerCheck should be placed on the homepage of the broker-dealer member firm as opposed to the enterprise-level homepage,\30\ as well as clarification that the term ``initial Web page that the member intends to be viewed by retail investors'' applies only to the main or primary homepage of a member firm, and not to any ``micro-sites'' or other sites maintained by the member firm.\31\ With respect to multi-faceted financial institutions, FINRA states that the proposed rule would apply to the affiliated broker-dealer's main Web page but not to the enterprise-level homepage.\32\ With respect to micro-sites, FINRA states that if a micro-site acts solely as a conduit to the member's main Web site that includes a readily apparent reference and hyperlink to BrokerCheck, then FINRA generally would not require a separate hyperlink and reference to BrokerCheck on the micro- site. Otherwise, the proposed rule would require a separate hyperlink and reference to BrokerCheck on the initial Web page of the micro-site that the member intends to be viewed by retail investors.\33\ --------------------------------------------------------------------------- \30\ See also CAI Letter at 2 (requesting confirmation that, where a broker-dealer does not maintain its own independent Web site (as is often the case with respect to insurance-affiliated broker- dealers), the BrokerCheck link would not be required on the broker- dealer affiliate's main Web page, but rather on the first Web page in which the broker-dealer is identified). \31\ See SIFMA Letter at 4. \32\ See FINRA Letter at 4. \33\ See id. at 5. --------------------------------------------------------------------------- One commenter seeks additional guidance on the treatment of Web pages of registered persons and/or branch offices under the proposal.\34\ In response, FINRA states that, if a separate retail Web site has been established for a branch office or branch office personnel, then such a Web site would be treated as a separate Web site of the member and would require a separate hyperlink and reference to BrokerCheck.\35\ On the other hand, if only a sub-page of the member's Web site was established for the branch office or branch office personnel, then such a Web page would not be treated as a separate Web site of the member.\36\ Moreover, FINRA confirms that hyperlinks and references to BrokerCheck would be required for all Web pages where a registered person's profile information appears, including Web pages on the member's Web site and Web pages on a branch office's Web site.\37\ --------------------------------------------------------------------------- \34\ See CAI Letter at 2 (noting that including the BrokerCheck link on the initial page of the branch Web site would be helpful to investors; however, the current proposal is unclear on how to treat additional pages of a branch office Web site and, in certain circumstances, requiring a BrokerCheck link on all possible Web pages where a branch office registered person's profile information appears could result in redundant and ineffective disclosure). \35\ See FINRA Letter at 5. \36\ See id. at 5-6. \37\ See id. at 6. --------------------------------------------------------------------------- One commenter requests guidance regarding the application of the proposed rule to third-party Web sites that contain professional profiles of financial advisors that engage in a networking relationship with these third parties, such as Web sites owned and operated by credit unions and other non-FINRA members.\38\ In response, FINRA notes that the proposed rule does not require hyperlinks and references to BrokerCheck on third-party Web sites and, therefore, the proposed rule would not apply to third party Web sites that contain the professional profiles of registered representatives who engage in networking or similar relationships with the third party.\39\ --------------------------------------------------------------------------- \38\ See FSI Letter at 4. See also SIFMA Letter at 4 (seeking clarification regarding the application of the proposed rule to Web sites of non-member firms who are parties to a networking or other similar arrangement with a member firm). \39\ See FINRA Letter at 5. --------------------------------------------------------------------------- One commenter requests that FINRA promulgate a Regulatory Notice to provide interpretive guidance or responses to frequently asked questions, accompanied by a succinct reiteration of what information is and is not disclosed through BrokerCheck.\40\ In response, FINRA states that its Web site provides readily available information regarding the information disclosed through BrokerCheck.\41\ This commenter also requests a limited safe harbor for links to BrokerCheck that are broken as a result of script or programming issues that would permit a reasonable amount of time to respond to any link maintenance issues.\42\ FINRA acknowledges that links occasionally may fail, but does not believe that the requested relief is necessary or warranted at this time.\43\ Rather, FINRA would consider all of the facts and circumstances surrounding any such failures.\44\ --------------------------------------------------------------------------- \40\ See SIFMA Letter at 2-3. \41\ See FINRA Letter at 4. \42\ See SIFMA Letter at 4. \43\ See FINRA Letter at 7. \44\ See id. --------------------------------------------------------------------------- One commenter requests a 12-month implementation period for the proposal.\45\ In its response letter, FINRA recognizes that members would be required to identify the Web pages that would need to be updated, determine where to place the references and hyperlinks within the Web pages, and test and deploy the updated Web site. FINRA stated that it will consider the need for system and operational changes [[Page 62139]] in establishing the effective date for the proposed rule change.\46\ --------------------------------------------------------------------------- \45\ See FSI Letter at 4. \46\ See FINRA Letter at 7. --------------------------------------------------------------------------- IV. Discussion and Commission Findings After careful review of the proposed rule change, the comment letters, and FINRA's response to the comments, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities association.\47\ Specifically, the Commission finds that the proposed rule change is consistent with Section 15A(b)(6) of the Act,\48\ 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 proposed rule change, by requiring a hyperlink to BrokerCheck on members' Web sites is designed to increase investors' awareness and use of BrokerCheck. BrokerCheck is an important tool for investors to use to help them make informed choices about the individuals and firms with which they conduct business.\49\ The Commission believes that the requirement for the hyperlink to BrokerCheck to be readily apparent should make it easy for investors to find and use BrokerCheck. The Commission appreciates FINRA's continuing efforts to enhance BrokerCheck and encourages FINRA to continue improving it and to consider the suggestions made by commenters that could result in increased use of BrokerCheck by the investing public. --------------------------------------------------------------------------- \47\ In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \48\ 15 U.S.C. 78o-3(b)(6). \49\ The Commission encourages investors to utilize all sources of information, including the databases of state regulators, as well as legal search engines and records searches to conduct a thorough search of any associated person or firm with which they are considering doing business. See also Securities Exchange Act Release No. 62476 (July 8, 2010), 75 FR 41254 (July 15, 2010) (SR-FINRA- 2010-012). --------------------------------------------------------------------------- V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,\50\ that the proposed rule change (SR-FINRA-2015-022) be, and hereby is, approved. --------------------------------------------------------------------------- \50\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\51\ --------------------------------------------------------------------------- \51\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-26157 Filed 10-14-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 199 / Thursday, October 15, 2015 / Notices 62137
SECURITIES AND EXCHANGE BrokerCheck 6 on: (i) The initial Web Some commenters state that FINRA
COMMISSION page that the member intends to be should require deep links to firms’ and
viewed by retail investors; and (ii) any individuals’ BrokerCheck reports.13 In
[Release No. 34–76105; File No. SR–FINRA–
2015–022]
other Web page that includes a response, FINRA states while it has
professional profile of one or more determined not to include deep links at
Self-Regulatory Organizations; registered persons who conducts this time, most investors should be able
Financial Industry Regulatory business with retail investors. These to find information concerning
Authority, Inc.; Order Approving a requirements would not apply to a particular members and registered
Proposed Rule Change To Amend member that does not provide products representatives without difficulty given
FINRA Rule 2210 (Communications or services to retail investors, or to a the ease of operation of the BrokerCheck
With the Public) directory or list of registered persons search feature.14 FINRA also states that,
limited to names and contact while the proposed rule does not
October 8, 2015. information. require deep links, it does not prohibit
I. Introduction members from using deep links.15
III. Comment Letters Finally, some commenters note that
On June 29, 2015, the Financial Commenters generally support BrokerCheck excludes certain
Industry Regulatory Authority, Inc. FINRA’s proposal.7 As discussed below, information that is currently available
(‘‘FINRA’’) filed with the Securities and some commenters recommend that the on the CRD system, and state that
Exchange Commission (‘‘Commission’’), proposal be expanded and include investors should be able to view all
pursuant to Section 19(b)(1) of the additional requirements, and some relevant information that is available in
Securities Exchange Act of 1934 request additional guidance regarding the CRD system.16 FINRA notes that
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a the application of the proposal. these comments are outside the scope of
proposed rule change to amend FINRA
Requests for Additional Requirements the current proposal, but that it
Rule 2210, Communications With the
regularly assesses the BrokerCheck
Public. The proposed rule change was Some commenters state that FINRA program and may consider including
published for comment in the Federal should require a reference and additional information in BrokerCheck
Register on July 13, 2015.3 The hyperlink to BrokerCheck in members’ at a later time.17
Commission received nine comment and registered persons’ emails and
letters on the proposed rule change 4 account statements to customers.8 In its Requests for Additional Guidance
and a response to the comments from response letter, FINRA states that it did Two commenters seek guidance
FINRA.5 On August 13, 2015, FINRA not propose these requirements because regarding the interpretation of the term
extended the time period for at this time FINRA believes such ‘‘readily apparent’’ as used the proposed
Commission action on this proposed requirements would be overly rule, including whether placing the link
rule change to October 9, 2015. This burdensome and require significant to BrokerCheck in a Web site’s footer
order approves the proposed rule system and operational changes without would satisfy the ‘‘readily apparent’’
change. commensurate benefits.9 Some requirement.18 One commenter seeks
II. Description of the Proposed Rule commenters state that FINRA should guidance regarding the placement of the
Change require firms to include BrokerCheck BrokerCheck reference and hyperlink on
links on certain third party Web sites.10 Web sites that are optimized for mobile
FINRA proposes to amend Rule 2210
In response, FINRA states that it devices.19 One commenter requests
to require each of its member’s Web
sites to include a readily apparent recognizes the difficulties and costs confirmation that ‘‘readily apparent
reference and hyperlink to associated with including links on reference’’ is not meant to be an
third-party Web sites, and therefore has extensive disclosure and that a firm can
1 15 U.S.C. 78s(b)(1).
determined to limit the application of simply reference the term BrokerCheck
2 17 CFR 240.19b–4. the proposed rule to members’ Web sites without any accompanying disclosure.20
3 See Securities Exchange Act Release No. 75377 at this time.11 However, FINRA notes Another commenter seeks confirmation
(July 7, 2015), 80 FR 40092 (‘‘Notice’’). that it will continue to monitor that language such as ‘‘check the
4 See letters from David Neuman, Israels Neuman
investors’ awareness and use of background of an investment
PLC, dated July 29, 2015 (‘‘Neuman Letter’’); Robert
C. Port, Gaslowitz Frankel LLC, dated August 1,
BrokerCheck and consider whether to professional’’ would satisfy the
2015 (‘‘Gaslowitz Letter’’); William Beatty, pursue further rulemaking.12 proposed rule’s ‘‘reference’’
President, North American Securities requirement.21 In its response letter,
Administrators Association, Inc., dated August 3, 6 BrokerCheck provides the public with
FINRA states that it is unable to provide
2015 (‘‘NASAA Letter’’); David T. Bellaire, information on the professional background,
Executive Vice President & General Counsel, business practices, and conduct of FINRA members
specific guidance regarding what
Financial Services Institute, dated August 3, 2015 and their associated persons. The information that constitutes a readily apparent reference
(‘‘FSI Letter’’); Dorothy Donohue, Deputy General FINRA releases through BrokerCheck is derived and hyperlink given the wide variety of
Counsel—Securities Regulation, Investment from the Central Registration Depository (‘‘CRD’’),
Company Institute, dated August 3, 2015 (‘‘ICI
Web pages that its members maintain.22
the securities industry online registration and
Letter’’); Elissa Germaine, Supervising Attorney and licensing database. 13 See PIRC Letter at 1; NASAA Letter at 1–2; and
Jill Gross, Director, Pace Investor Rights Clinic, Pace 7 See Neuman Letter; Gaslowitz Letter; ICI Letter
Law School, dated August 3, 2015 (‘‘PIRC Letter’’); PIABA Letter at 1. But see, e.g., FSI Letter at 3
at 1 and 3; SIFMA Letter at 1; PIRC Letter at 1;
Melissa MacGregor, Managing Director and (supporting the exclusion of deep links).
NASAA Letter at 1; FSI Letter at 1; and PIABA
Associate General Counsel, Securities Industry and 14 See FINRA Letter at 2.
Letter at 1.
Financial Markets Association, dated August 3,
mstockstill on DSK4VPTVN1PROD with NOTICES
15 See id.
8 See Neuman Letter and PIRC Letter at 1–2. See
2015 (‘‘SIFMA Letter’’); Joseph C. Peiffer, President, 16 See Neuman Letter; PIRC Letter at 2; and
Public Investors Arbitration Bar Association, dated also NASAA Letter at 2.
9 See FINRA Letter at 3. PIABA Letter at 2.
August 3, 2015 (‘‘PIABA Letter’’); and Sutherland 17 See FINRA Letter at 3–4.
10 See PIRC Letter at 1–2; NASAA Letter at 2; and
Asbill & Brennan LLP on behalf of the Committee 18 See SIFMA Letter at 3 and FSI Letter at 4.
of Annuity Insurers, dated August 3, 2015 (‘‘CAI PIABA Letter at 1–2. But see, e.g., SIFMA Letter at
19 See SIFMA Letter at 3.
Letter’’). 2 and FSI Letter at 1 (both supporting the exclusion
5 See letter from Jeanette Wingler, Assistant of third-party Web sites). 20 See CAI Letter at 2–3.
11 See FINRA Letter at 3. 21 See SIFMA Letter at 3.
General Counsel, FINRA, dated September 21, 2015
(‘‘FINRA Letter’’). 12 See id. 22 See FINRA Letter at 6.
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![Federal Register / Vol. 80, No. 199 / Thursday, October 15, 2015 / Notices 62139
in establishing the effective date for the For the Commission, by the Division of II. Self-Regulatory Organization’s
proposed rule change.46 Trading and Markets, pursuant to delegated Statement of the Purpose of, and
authority.51 Statutory Basis for, the Proposed Rule
IV. Discussion and Commission Robert W. Errett, Change
Findings Deputy Secretary. In its filing with the Commission, the
After careful review of the proposed [FR Doc. 2015–26157 Filed 10–14–15; 8:45 am] Exchange included statements
rule change, the comment letters, and BILLING CODE 8011–01–P concerning the purpose of and basis for
FINRA’s response to the comments, the the proposed rule change and discussed
Commission finds that the proposed any comments it received on the
rule change is consistent with the SECURITIES AND EXCHANGE proposed rule change. The text of these
requirements of the Act and the rules COMMISSION statements may be examined at the
and regulations thereunder that are places specified in Item IV below. The
[Release No. 34–76107; File No. SR–CBOE– Exchange has prepared summaries, set
applicable to a national securities
2015–084] forth in sections A, B, and C below, of
association.47 Specifically, the
the most significant aspects of such
Commission finds that the proposed Self-Regulatory Organizations; statements.
rule change is consistent with Section Chicago Board Options Exchange,
15A(b)(6) of the Act,48 which requires, A. Self-Regulatory Organization’s
Incorporated; Notice of Filing and
among other things, that FINRA rules be Statement of the Purpose of, and
Immediate Effectiveness of a Proposed Statutory Basis for, the Proposed Rule
designed to prevent fraudulent and Rule Change Relating to Delivery of
manipulative acts and practices, to Change
the Regulatory Element of the
promote just and equitable principles of Exchange’s Continuing Education 1. Purpose
trade, and, in general, to protect Program The CE requirements under Rule 9.3A
investors and the public interest. The consist of a Regulatory Element 5 and a
proposed rule change, by requiring a October 8, 2015.
Firm Element.6 The Regulatory Element
hyperlink to BrokerCheck on members’ Pursuant to Section 19(b)(1) of the applies to all registered persons 7 and
Web sites is designed to increase Securities Exchange Act of 1934 (the consists of periodic computer-based
investors’ awareness and use of ‘‘Act’’),1 and Rule 19b–4 thereunder,2 training on regulatory, compliance,
BrokerCheck. BrokerCheck is an notice is hereby given that on ethical, and supervisory subjects and
important tool for investors to use to September 30, 2015, Chicago Board sales practice standards, which must be
help them make informed choices about Options Exchange, Incorporated (the completed within prescribed
the individuals and firms with which ‘‘Exchange’’ or ‘‘CBOE’’) filed with the timeframes.8 In addition, a registered
they conduct business.49 The Securities and Exchange Commission person is required to retake the
Commission believes that the (the ‘‘Commission’’) the proposed rule Regulatory Element in the event that
requirement for the hyperlink to change as described in Items I, II, and such person: (i) Becomes subject to any
BrokerCheck to be readily apparent III below, which Items have been statutory disqualification as defined in
should make it easy for investors to find prepared by the Exchange. The Section 3(a)(39) of the Securities
and use BrokerCheck. The Commission Exchange filed the proposal as a ‘‘non- Exchange Act of 1934 (the ‘‘Act’’); (ii)
appreciates FINRA’s continuing efforts controversial’’ proposed rule change becomes subject to suspension or to the
pursuant to Section 19(b)(3)(A)(iii) of imposition of a fine of $5,000 or more
to enhance BrokerCheck and encourages
the Act 3 and Rule 19b–4(f)(6) for violation of any provision of any
FINRA to continue improving it and to
thereunder.4 The Commission is securities law or regulation, or any
consider the suggestions made by agreement with or rule or standard of
publishing this notice to solicit
commenters that could result in comments on the proposed rule change conduct of any securities governmental
increased use of BrokerCheck by the from interested persons. agency, securities self-regulatory
investing public. organization, or as imposed by any such
I. Self-Regulatory Organization’s regulatory or self-regulatory
V. Conclusion Statement of the Terms of Substance of organization in connection with a
It is therefore ordered, pursuant to the Proposed Rule Change disciplinary proceeding; or (iii) is
Section 19(b)(2) of the Act,50 that the The Exchange proposes to amend 5 See Rule 9.3A(a) (Regulatory Element).
proposed rule change (SR–FINRA– Rule 9.3A (Continuing Education for 6 See Rule 9.3A(c) (Firm Element).
2015–022) be, and hereby is, approved. Registered Persons) to provide for Web- 7 For purposes of the Regulatory Element, a
based delivery of the Regulatory ‘‘registered person’’ means a Trading Permit Holder
46 See FINRA Letter at 7. Element of the Exchange’s continuing (‘‘TPH’’), associated person, and/or Representative
47 In approving this proposed rule change, the education (‘‘CE’’) program. The text of approved by and registered with the Exchange. See
Interpretation and Policy .01 to Rule 9.3A.
Commission has considered the proposed rule’s the proposed rule change is available on 8 Pursuant to Rule 9.3A(a), each registered person
impact on efficiency, competition, and capital the Exchange’s Web site (http:// shall complete the Regulatory Element of the
formation. See 15 U.S.C. 78c(f). www.cboe.com/AboutCBOE/ continuing education program beginning with the
48 15 U.S.C. 78o–3(b)(6).
CBOELegalRegulatoryHome.aspx), at occurrence of their second registration anniversary
49 The Commission encourages investors to date and every three years thereafter, or as
the Exchange’s Office of the Secretary,
otherwise prescribed by the Exchange. On each
mstockstill on DSK4VPTVN1PROD with NOTICES
utilize all sources of information, including the
databases of state regulators, as well as legal search
and at the Commission’s Public occasion, the Regulatory Element must be
engines and records searches to conduct a thorough Reference Room. completed within one hundred twenty days after
search of any associated person or firm with which the person’s registration anniversary date. A
person’s initial registration date, also known as the
they are considering doing business. See also 51 17 CFR 200.30–3(a)(12).
‘‘base date’’, shall establish the cycle of anniversary
Securities Exchange Act Release No. 62476 (July 8, 1 15 U.S.C. 78s(b)(1). dates for purposes of the Rule. The content of the
2010), 75 FR 41254 (July 15, 2010) (SR–FINRA– 2 17 CFR 240.19b–4.
Regulatory Element of the program shall be
2010–012). 3 15 U.S.C. 78s(b)(3)(A)(iii).
determined by the Exchange for each registration
50 15 U.S.C. 78s(b)(2). 4 17 CFR 240.19b–4(f)(6). category of persons subject to the Rule.
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Document Created: 2018-02-27 08:52:12
Document Modified: 2018-02-27 08:52:12
| 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 62137 |
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