80_FR_76287 80 FR 76053 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Rule Cross-References and Make Non-Substantive Technical Changes to Certain FINRA Rules

80 FR 76053 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Update Rule Cross-References and Make Non-Substantive Technical Changes to Certain FINRA Rules

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 234 (December 7, 2015)

Page Range76053-76055
FR Document2015-30721

Federal Register, Volume 80 Issue 234 (Monday, December 7, 2015)
[Federal Register Volume 80, Number 234 (Monday, December 7, 2015)]
[Notices]
[Pages 76053-76055]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-30721]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76532; File No. SR-FINRA-2015-050]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Update Rule Cross-References and Make Non-
Substantive Technical Changes to Certain FINRA Rules

December 1, 2015.
    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 24, 2015, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission (``SEC'' 
or ``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.
---------------------------------------------------------------------------

    \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 76054]]

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

    FINRA is proposing to update cross-references and make other non-
substantive changes within FINRA rules, primarily as the result of 
approval of a new consolidated FINRA rule.
    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 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 changes in the Consolidated FINRA Rulebook.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    The proposed rule change would make several such changes, as well 
as other non-substantive changes unrelated to the adoption of rules in 
the Consolidated FINRA Rulebook.
    First, the proposed rule change would update rule cross-references 
to reflect the adoption of a consolidated equity research conflict of 
interest rule. On July 16, 2015, the SEC approved a proposed rule 
change to adopt NASD Rule 2711 as FINRA Rule 2241 (Research Analysts 
and Research Reports), with several modifications. As part of that rule 
filing, FINRA also amended FINRA Rule 9610, NASD Rule 1050, and 
Incorporated NYSE Rules 344 and 472, and deleted in their entirety the 
corresponding Incorporated NYSE Rule 351 and Incorporated NYSE Rule 
Interpretation 472.\5\ Rule 2241 will be fully implemented on December 
24, 2015. As such, the proposed rule change would update references to 
the new rule number in FINRA Rules 1250 (Continuing Education 
Requirements), 2210 (Communications with the Public), 5230 (Payments 
Involving Publications that Influence the Market Price of a Security), 
and 9217 (Violations Appropriate for Disposition Under Plan Pursuant to 
SEA Rule 19d-1(c)(2)).\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 75471 (July 16, 
2015), 80 FR 43482 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-047) and Regulatory Notice 15-30 (August 2015).
    \6\ The proposed rule change also would delete a reference in 
FINRA Rule 9217 to Incorporated NYSE Rule 345.11, which was 
previously deleted from the FINRA Manual. See Securities Exchange 
Act Release No. 73966 (December 30, 2014), 80 FR 546 (January 6, 
2015) (Order Approving File No. SR-FINRA-2014-038).
---------------------------------------------------------------------------

    Second, the proposed rule change would make technical changes to 
FINRA Rules 2272 (Sales and Offers of Sales of Securities on Military 
Installations) \7\ and 6250 (Quote and Order Access Requirements) \8\ 
to reflect FINRA Manual style convention changes and correct cross 
references within Rule 6250, respectively.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 75633 (August 6, 
2015), 80 FR 48376 (August 12, 2015) (Order Approving File No. SR-
FINRA-2015-009) and Regulatory Notice 15-34 (October 2015).
    \8\ See Securities Exchange Act Release No. 71467 (February 3, 
2014), 79 FR 7485 (February 7, 2014) (Order Approving File No. SR-
FINRA-2013-053).
---------------------------------------------------------------------------

    Finally, the proposed rule change would also delete from the FINRA 
Manual the Series heading for NASD Rules 2400 (Commissions, Mark-ups 
and Charges) and 2700 (Securities Distributions) to reflect that the 
NASD Rules 2400 \9\ and 2700 \10\ Series have fully been consolidated 
into the FINRA rules.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 73954 (December 30, 
2014), 80 FR 553 (January 6, 2015) (Order Approving File No. SR-
FINRA-2014-037).
    \10\ See Securities Exchange Act Release No. 75471 (July 16, 
2015), 80 FR 43482 (July 22, 2015) (Order Approving File No. SR-
FINRA-2014-047).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness and has requested that the SEC waive the requirement that 
the proposed rule change not become operative for 30 days after the 
date of the filing, so that FINRA can implement the proposed rule 
change to coincide with effective dates of the relevant consolidated 
FINRA rules. The implementation date for the proposed changes to FINRA 
Rules 1250, 2210, 5230, 6250, and 9217 and the proposed deletion of the 
NASD Rule 2400 and 2700 Series headings will be December 24, 2015. The 
implementation date for the proposed rule change to FINRA Rule 2272 
will be March 30, 2016.
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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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 brings 
clarity and consistency to FINRA rules without adding any burden on 
firms.

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)(iii) of the Act \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative before 30 days from

[[Page 76055]]

the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ 
the Commission may designate a shorter time if such action is 
consistent with the protection of investors and the public interest.
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    FINRA has asked the Commission to waive the 30-day operative delay. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Such waiver will allow FINRA to implement the proposed rule change to 
coincide with the effective dates of the relevant consolidated FINRA 
rules. Therefore, the Commission hereby waives the 30-day operative 
delay and designates the proposed rule change to be operative upon 
filing with the Commission.\15\
---------------------------------------------------------------------------

    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-2015-050 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-2015-050. 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 offices 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-2015-050, and should 
be submitted on or before December 28, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-30721 Filed 12-4-15; 8:45 am]
BILLING CODE 8011-01-P



                                                                              Federal Register / Vol. 80, No. 234 / Monday, December 7, 2015 / Notices                                                      76053

                                                  minimum price variance above (for                       pursuant to Section 19(b)(3)(A) 11 of the                 printing in the Commission’s Public
                                                  offers) or below (for bids) the national                Act and Rule 19b–4(f)(6) thereunder.12                    Reference Room, 100 F Street NE.,
                                                  best price.                                                At any time within 60 days of the                      Washington, DC 20549, on official
                                                     The Exchange believes that the                       filing of the proposed rule change, the                   business days between the hours of
                                                  amendment to the Market Order Spread                    Commission summarily may                                  10:00 a.m. and 3:00 p.m. Copies of the
                                                  Protection language does not otherwise                  temporarily suspend such rule change if                   filing also will be available for
                                                  create an impediment to a free and open                 it appears to the Commission that such                    inspection and copying at the principal
                                                  market because the repricing due to                     action is: Necessary or appropriate in                    office of the Exchange. All comments
                                                  trade throughs and locked and crossed                   the public interest; for the protection of                received will be posted without change;
                                                  markets exists today and serve to protect               investors; or otherwise in furtherance of                 the Commission does not edit personal
                                                  against trading through or locking or                   the purposes of the Act. If the                           identifying information from
                                                  crossing another market. This proposal                  Commission takes such action, the                         submissions. You should submit only
                                                  reflects the impact of repricing due to                 Commission shall institute proceedings                    information that you wish to make
                                                  trade-through and locked and crossed                    to determine whether the proposed rule                    available publicly. All submissions
                                                  market restrictions on the Market Order                 should be approved or disapproved.                        should refer to File Number SR–BX–
                                                  Spread Protection feature.                                                                                        2015–074 and should be submitted on
                                                     By reflecting the proper rule text to                IV. Solicitation of Comments
                                                                                                                                                                    or before December 28, 2015.
                                                  account for trade-through and locked                      Interested persons are invited to
                                                  and crossed market restrictions, the                    submit written data, views, and                             For the Commission, by the Division of
                                                  Exchange is providing Participants with                 arguments concerning the foregoing,                       Trading and Markets, pursuant to delegated
                                                  additional information with which to                    including whether the proposed rule                       authority.13
                                                  anticipate the impact of the Market                     change is consistent with the Act.                        Robert W. Errett,
                                                  Order Spread Protection feature.                        Comments may be submitted by any of                       Deputy Secretary.
                                                  B. Self-Regulatory Organization’s                       the following methods:                                    [FR Doc. 2015–30720 Filed 12–4–15; 8:45 am]
                                                  Statement on Burden on Competition                      Electronic Comments                                       BILLING CODE 8011–01–P

                                                     The Exchange does not believe that                     • Use the Commission’s Internet
                                                  the proposed rule change will impose                    comment form (http://www.sec.gov/                         SECURITIES AND EXCHANGE
                                                  any burden on competition not                           rules/sro.shtml); or                                      COMMISSION
                                                  necessary or appropriate in furtherance                   • Send an email to rule-comments@
                                                  of the purposes of the Act. The                         sec.gov. Please include File Number SR–
                                                  Exchange does not believe that the                      BX–2015–074 on the subject line.                          [Release No. 34–76532; File No. SR–FINRA–
                                                  proposal to amend the Market Order                                                                                2015–050]
                                                  Spread Protection rule text to account                  Paper Comments
                                                  [sic] repricing due to trade-through and                  • Send paper comments in triplicate                     Self-Regulatory Organizations;
                                                  locked and crossed market restrictions                  to Secretary, Securities and Exchange                     Financial Industry Regulatory
                                                  creates an undue burden on competition                  Commission, 100 F Street NE.,                             Authority, Inc.; Notice of Filing and
                                                  because it will serve to provide                        Washington, DC 20549–1090.                                Immediate Effectiveness of a Proposed
                                                  Participants with greater information to                                                                          Rule Change To Update Rule Cross-
                                                                                                          All submissions should refer to File
                                                  anticipate the impact of the Market                                                                               References and Make Non-Substantive
                                                                                                          Number SR–BX–2015–074. This file
                                                  Order Spread Protection feature. Today,                                                                           Technical Changes to Certain FINRA
                                                                                                          number should be included on the
                                                  Participants’ orders are repriced due to                                                                          Rules
                                                                                                          subject line if email is used. To help the
                                                  trade-through and locked and crossed                    Commission process and review your                        December 1, 2015.
                                                  market restrictions. The purpose of this                comments more efficiently, please use
                                                  rule change is to protect market orders                 only one method. The Commission will                         Pursuant to Section 19(b)(1) of the
                                                  resting on the Order Book when the                      post all comments on the Commission’s                     Securities Exchange Act of 1934
                                                  market is wide. This feature will be                    Internet Web site (http://www.sec.gov/                    (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
                                                  applied in a similar manner to all                      rules/sro.shtml). Copies of the                           notice is hereby given that on November
                                                  Participants on BX.                                     submission, all subsequent                                24, 2015, Financial Industry Regulatory
                                                                                                          amendments, all written statements                        Authority, Inc. (‘‘FINRA’’) filed with the
                                                  C. Self-Regulatory Organization’s                                                                                 Securities and Exchange Commission
                                                  Statement on Comments on the                            with respect to the proposed rule
                                                                                                          change that are filed with the                            (‘‘SEC’’ or ‘‘Commission’’) the proposed
                                                  Proposed Rule Change Received From                                                                                rule change as described in Items I and
                                                  Members, Participants, or Others                        Commission, and all written
                                                                                                          communications relating to the                            II below, which Items have been
                                                    No written comments were either                       proposed rule change between the                          prepared by FINRA. FINRA has
                                                  solicited or received.                                  Commission and any person, other than                     designated the proposed rule change as
                                                                                                          those that may be withheld from the                       constituting a ‘‘non-controversial’’ rule
                                                  III. Date of Effectiveness of the
                                                                                                          public in accordance with the                             change under paragraph (f)(6) of Rule
                                                  Proposed Rule Change and Timing for
                                                                                                          provisions of 5 U.S.C. 552, will be                       19b–4 under the Act,3 which renders
                                                  Commission Action
                                                                                                          available for Web site viewing and                        the proposal effective upon receipt of
                                                     Because the foregoing proposed rule                                                                            this filing by the Commission. The
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  change does not significantly affect the                  11 15                                                   Commission is publishing this notice to
                                                                                                                   U.S.C. 78s(b)(3)(A).
                                                  protection of investors or the public                     12 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–      solicit comments on the proposed rule
                                                  interest; does not impose any significant               4(f)(6) requires a self-regulatory organization to give   change from interested persons.
                                                  burden on competition; and by its terms                 the Commission written notice of its intent to file
                                                  does not become operative for 30 days                   the proposed rule change at least five business days        13 17
                                                                                                          prior to the date of filing of the proposed rule                  CFR 200.30–3(a)(12).
                                                  from the date on which it was filed, or                 change, or such shorter time as designated by the
                                                                                                                                                                      1 15 U.S.C. 78s(b)(1).
                                                  such shorter time as the Commission                     Commission. The Exchange has satisfied this                 2 17 CFR 240.19b–4.

                                                  may designate, it has become effective                  requirement.                                                3 17 CFR 240.19b–4(f)(6).




                                             VerDate Sep<11>2014   18:36 Dec 04, 2015   Jkt 238001   PO 00000   Frm 00095   Fmt 4703   Sfmt 4703   E:\FR\FM\07DEN1.SGM        07DEN1


                                                  76054                       Federal Register / Vol. 80, No. 234 / Monday, December 7, 2015 / Notices

                                                  I. Self-Regulatory Organization’s                       the adoption of a consolidated equity                 after the date of the filing, so that FINRA
                                                  Statement of the Terms of the Substance                 research conflict of interest rule. On July           can implement the proposed rule
                                                  of the Proposed Rule Change                             16, 2015, the SEC approved a proposed                 change to coincide with effective dates
                                                     FINRA is proposing to update cross-                  rule change to adopt NASD Rule 2711                   of the relevant consolidated FINRA
                                                  references and make other non-                          as FINRA Rule 2241 (Research Analysts                 rules. The implementation date for the
                                                  substantive changes within FINRA                        and Research Reports), with several                   proposed changes to FINRA Rules 1250,
                                                  rules, primarily as the result of approval              modifications. As part of that rule filing,           2210, 5230, 6250, and 9217 and the
                                                  of a new consolidated FINRA rule.                       FINRA also amended FINRA Rule 9610,                   proposed deletion of the NASD Rule
                                                     The text of the proposed rule change                 NASD Rule 1050, and Incorporated                      2400 and 2700 Series headings will be
                                                  is available on FINRA’s Web site at                     NYSE Rules 344 and 472, and deleted                   December 24, 2015. The implementation
                                                  http://www.finra.org, at the principal                  in their entirety the corresponding                   date for the proposed rule change to
                                                  office of FINRA and at the                              Incorporated NYSE Rule 351 and                        FINRA Rule 2272 will be March 30,
                                                  Commission’s Public Reference Room.                     Incorporated NYSE Rule Interpretation                 2016.
                                                                                                          472.5 Rule 2241 will be fully
                                                  II. Self-Regulatory Organization’s                      implemented on December 24, 2015. As                  2. Statutory Basis
                                                  Statement of the Purpose of, and                        such, the proposed rule change would                    FINRA believes that the proposed rule
                                                  Statutory Basis for, the Proposed Rule                  update references to the new rule                     change is consistent with the provisions
                                                  Change                                                  number in FINRA Rules 1250                            of Section 15A(b)(6) of the Act,11 which
                                                     In its filing with the Commission,                   (Continuing Education Requirements),                  requires, among other things, that
                                                  FINRA included statements concerning                    2210 (Communications with the Public),                FINRA rules must be designed to
                                                  the purpose of and basis for the                        5230 (Payments Involving Publications                 prevent fraudulent and manipulative
                                                  proposed rule change and discussed any                  that Influence the Market Price of a                  acts and practices, to promote just and
                                                  comments it received on the proposed                    Security), and 9217 (Violations                       equitable principles of trade, and, in
                                                  rule change. The text of these statements               Appropriate for Disposition Under Plan                general, to protect investors and the
                                                  may be examined at the places specified                 Pursuant to SEA Rule 19d–1(c)(2)).6                   public interest. FINRA believes the
                                                  in Item IV below. FINRA has prepared                      Second, the proposed rule change                    proposed rule change will provide
                                                  summaries, set forth in sections A, B,                  would make technical changes to                       greater clarity to members and the
                                                  and C below, of the most significant                    FINRA Rules 2272 (Sales and Offers of                 public regarding FINRA’s rules.
                                                  aspects of such statements.                             Sales of Securities on Military
                                                                                                          Installations) 7 and 6250 (Quote and                  B. Self-Regulatory Organization’s
                                                  A. Self-Regulatory Organization’s                       Order Access Requirements) 8 to reflect               Statement on Burden on Competition
                                                  Statement of the Purpose of, and                        FINRA Manual style convention                           FINRA does not believe that the
                                                  Statutory Basis for, the Proposed Rule                  changes and correct cross references                  proposed rule change will result in any
                                                  Change                                                  within Rule 6250, respectively.                       burden on competition that is not
                                                  1. Purpose                                                Finally, the proposed rule change                   necessary or appropriate in furtherance
                                                                                                          would also delete from the FINRA                      of the purposes of the Act. The
                                                     FINRA is in the process of developing                Manual the Series heading for NASD                    proposed rule change brings clarity and
                                                  a consolidated rulebook (‘‘Consolidated                 Rules 2400 (Commissions, Mark-ups                     consistency to FINRA rules without
                                                  FINRA Rulebook’’).4 That process                        and Charges) and 2700 (Securities                     adding any burden on firms.
                                                  involves FINRA submitting to the                        Distributions) to reflect that the NASD
                                                  Commission for approval a series of                     Rules 2400 9 and 2700 10 Series have                  C. Self-Regulatory Organization’s
                                                  proposed rule changes over time to                      fully been consolidated into the FINRA                Statement on Comments on the
                                                  adopt rules in the Consolidated FINRA                   rules.                                                Proposed Rule Change Received From
                                                  Rulebook. The phased adoption and                         FINRA has filed the proposed rule                   Members, Participants, or Others
                                                  implementation of those rules                           change for immediate effectiveness and                  Written comments were neither
                                                  necessitates periodic amendments to                     has requested that the SEC waive the                  solicited nor received.
                                                  update rule cross-references and other                  requirement that the proposed rule
                                                  non-substantive changes in the                          change not become operative for 30 days               III. Date of Effectiveness of the
                                                  Consolidated FINRA Rulebook.                                                                                  Proposed Rule Change and Timing for
                                                     The proposed rule change would                          5 See Securities Exchange Act Release No. 75471    Commission Action
                                                  make several such changes, as well as                   (July 16, 2015), 80 FR 43482 (July 22, 2015) (Order
                                                                                                                                                                  Because the foregoing proposed rule
                                                  other non-substantive changes unrelated                 Approving File No. SR–FINRA–2014–047) and
                                                                                                          Regulatory Notice 15–30 (August 2015).                change does not: (i) Significantly affect
                                                  to the adoption of rules in the                            6 The proposed rule change also would delete a     the protection of investors or the public
                                                  Consolidated FINRA Rulebook.                            reference in FINRA Rule 9217 to Incorporated          interest; (ii) impose any significant
                                                     First, the proposed rule change would                NYSE Rule 345.11, which was previously deleted        burden on competition; and (iii) become
                                                  update rule cross-references to reflect                 from the FINRA Manual. See Securities Exchange
                                                                                                                                                                operative for 30 days from the date on
                                                                                                          Act Release No. 73966 (December 30, 2014), 80 FR
                                                    4 The current FINRA rulebook consists of (1)          546 (January 6, 2015) (Order Approving File No.       which it was filed, or such shorter time
                                                  FINRA Rules; (2) NASD Rules; and (3) rules
                                                                                                          SR–FINRA–2014–038).                                   as the Commission may designate, it has
                                                                                                             7 See Securities Exchange Act Release No. 75633
                                                  incorporated from NYSE (‘‘Incorporated NYSE                                                                   become effective pursuant to Section
                                                                                                          (August 6, 2015), 80 FR 48376 (August 12, 2015)
                                                  Rules’’) (together, the NASD Rules and Incorporated
                                                                                                          (Order Approving File No. SR–FINRA–2015–009)
                                                                                                                                                                19(b)(3)(A)(iii) of the Act 12 and
                                                  NYSE Rules are referred to as the ‘‘Transitional                                                              subparagraph (f)(6) of Rule 19b–4
                                                  Rulebook’’). While the NASD Rules generally apply       and Regulatory Notice 15–34 (October 2015).
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  to all FINRA members, the Incorporated NYSE
                                                                                                             8 See Securities Exchange Act Release No. 71467    thereunder.13
                                                  Rules apply only to those members of FINRA that         (February 3, 2014), 79 FR 7485 (February 7, 2014)       A proposed rule change filed under
                                                  are also members of the NYSE (‘‘Dual Members’’).        (Order Approving File No. SR–FINRA–2013–053).         Rule 19b–4(f)(6) normally does not
                                                                                                             9 See Securities Exchange Act Release No. 73954
                                                  The FINRA Rules apply to all FINRA members,                                                                   become operative before 30 days from
                                                  unless such rules have a more limited application       (December 30, 2014), 80 FR 553 (January 6, 2015)
                                                  by their terms. For more information about the          (Order Approving File No. SR–FINRA–2014–037).
                                                                                                             10 See Securities Exchange Act Release No. 75471     11 15 U.S.C. 78o–3(b)(6).
                                                  rulebook consolidation process, see Information
                                                                                                                                                                  12 15 U.S.C. 78s(b)(3)(A)(iii).
                                                  Notice, March 12, 2008 (Rulebook Consolidation          (July 16, 2015), 80 FR 43482 (July 22, 2015) (Order
                                                  Process).                                               Approving File No. SR–FINRA–2014–047).                  13 17 CFR 240.19b–4(f)(6).




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                                                                              Federal Register / Vol. 80, No. 234 / Monday, December 7, 2015 / Notices                                             76055

                                                  the date of the filing. However, pursuant               post all comments on the Commission’s                  of information to the Office of
                                                  to Rule 19b–4(f)(6)(iii),14 the                         Internet Web site (http://www.sec.gov/                 Management and Budget (‘‘OMB’’) for
                                                  Commission may designate a shorter                      rules/sro.shtml). Copies of the                        extension and approval.
                                                  time if such action is consistent with the              submission, all subsequent
                                                                                                                                                                 i. Standards for Clearing Agencies
                                                  protection of investors and the public                  amendments, all written statements
                                                  interest.                                               with respect to the proposed rule                      a. Measurement and Management of
                                                     FINRA has asked the Commission to                    change that are filed with the                         Credit Exposures
                                                  waive the 30-day operative delay. The                   Commission, and all written                               Rule 17Ad–22(b)(1) would require a
                                                  Commission believes that waiving the                    communications relating to the
                                                  30-day operative delay is consistent                                                                           clearing agency that provides CCP
                                                                                                          proposed rule change between the                       services to establish, implement,
                                                  with the protection of investors and the                Commission and any person, other than
                                                  public interest. Such waiver will allow                                                                        maintain and enforce written policies
                                                                                                          those that may be withheld from the                    and procedures reasonably designed to
                                                  FINRA to implement the proposed rule                    public in accordance with the
                                                  change to coincide with the effective                                                                          measure its credit exposures to its
                                                                                                          provisions of 5 U.S.C. 552, will be                    participants at least once each day, and
                                                  dates of the relevant consolidated                      available for Web site viewing and
                                                  FINRA rules. Therefore, the                                                                                    limit its exposures to potential losses
                                                                                                          printing in the Commission’s Public                    from defaults by its participants in
                                                  Commission hereby waives the 30-day                     Reference Room, 100 F Street NE.,
                                                  operative delay and designates the                                                                             normal market conditions so that the
                                                                                                          Washington, DC 20549 on official                       operations of the clearing agency would
                                                  proposed rule change to be operative                    business days between the hours of
                                                  upon filing with the Commission.15                                                                             not be disrupted and non-defaulting
                                                                                                          10:00 a.m. and 3:00 p.m. Copies of such                participants would not be exposed to
                                                     At any time within 60 days of the                    filing also will be available for
                                                  filing of the proposed rule change, the                                                                        losses that they cannot anticipate or
                                                                                                          inspection and copying at the principal                control. The purpose of the collection of
                                                  Commission summarily may                                offices of FINRA. All comments
                                                  temporarily suspend such rule change if                                                                        information is to enable the clearing
                                                                                                          received will be posted without change;                agency to monitor and limit its
                                                  it appears to the Commission that such                  the Commission does not edit personal
                                                  action is: (i) Necessary or appropriate in                                                                     exposures to its participants.
                                                                                                          identifying information from
                                                  the public interest; (ii) for the protection            submissions. You should submit only                    b. Margin Requirements
                                                  of investors; or (iii) otherwise in                     information that you wish to make
                                                  furtherance of the purposes of the Act.                                                                           Rule 17Ad–22(b)(2) would require a
                                                                                                          available publicly. All submissions                    clearing agency that provides CCP
                                                  If the Commission takes such action, the                should refer to File Number SR–FINRA–
                                                  Commission shall institute proceedings                                                                         services to establish, implement,
                                                                                                          2015–050, and should be submitted on                   maintain and enforce written policies
                                                  to determine whether the proposed rule                  or before December 28, 2015.
                                                  should be approved or disapproved.                                                                             and procedures reasonably designed to:
                                                                                                            For the Commission, by the Division of               (i) Use margin requirements to limit its
                                                  IV. Solicitation of Comments                            Trading and Markets, pursuant to delegated             credit exposures to participants in
                                                                                                          authority.16                                           normal market conditions; (ii) use risk-
                                                    Interested persons are invited to
                                                  submit written data, views, and                         Robert W. Errett,                                      based models and parameters to set
                                                  arguments concerning the foregoing,                     Deputy Secretary.                                      margin requirements; and (iii) review
                                                  including whether the proposed rule                     [FR Doc. 2015–30721 Filed 12–4–15; 8:45 am]            the models and parameters at least
                                                  change is consistent with the Act.                      BILLING CODE 8011–01–P                                 monthly. The purpose of the collection
                                                  Comments may be submitted by any of                                                                            of information is to enable the clearing
                                                  the following methods:                                                                                         agency to maintain sufficient collateral
                                                                                                          SECURITIES AND EXCHANGE                                or margin.
                                                  Electronic Comments                                     COMMISSION
                                                                                                                                                                 c. Financial Resources
                                                    • Use the Commission’s Internet
                                                  comment form (http://www.sec.gov/                       Proposed Collection; Comment                              Rule 17Ad–22(b)(3) would require a
                                                  rules/sro.shtml); or                                    Request                                                clearing agency that provides CCP
                                                    • Send an email to rule-comments@                                                                            services to establish, implement,
                                                  sec.gov. Please include File Number SR–                 Upon Written Request, Copies Available                 maintain and enforce written policies
                                                  FINRA–2015–050 on the subject line.                      From: Securities and Exchange                         and procedures reasonably designed to
                                                                                                           Commission, Office of FOIA Services,                  maintain sufficient financial resources
                                                  Paper Comments                                           100 F Street NE., Washington, DC                      to withstand, at a minimum, a default
                                                    • Send paper comments in triplicate                    20549–2736.                                           by the participant family to which it has
                                                  to Secretary, Securities and Exchange                   Extension:                                             the largest exposure in extreme but
                                                  Commission, 100 F Street NE.,                             Rules 17Ad–22—Clearing Agency                        plausible market conditions, provided
                                                  Washington, DC 20549–1090.                                  Standards and Governance, SEC File No.             that a registered clearing agency acting
                                                  All submissions should refer to File                        270–646, OMB Control No. 3235–0695.                as a central counterparty for security-
                                                  Number SR–FINRA–2015–050. This file                        Notice is hereby given that pursuant                based swaps shall maintain additional
                                                  number should be included on the                        to the Paperwork Reduction Act of 1995                 financial resources sufficient to
                                                  subject line if email is used. To help the              (‘‘PRA’’)(44 U.S.C. 3501 et seq.), the                 withstand, at a minimum, a default by
                                                  Commission process and review your                      Securities and Exchange Commission                     the two participant families to which it
mstockstill on DSK4VPTVN1PROD with NOTICES




                                                  comments more efficiently, please use                   (‘‘Commission’’) is soliciting comments                has the largest exposures in extreme but
                                                  only one method. The Commission will                    on the existing collection of information              plausible market conditions, in its
                                                                                                          provided for in Rules 17Ad–22 under                    capacity as a central counterparty for
                                                    14 17 CFR 240.19b–4(f)(6)(iii).                       the Securities Exchange Act of 1934 (15                security-based swaps. The purpose of
                                                    15 For purposes only of waiving the operative         U.S.C. 78a et seq.). The Commission                    the collection of information is to enable
                                                  delay for this proposal, the Commission has
                                                  considered the proposed rule’s impact on                plans to submit this existing collection               the clearing agency to satisfy all of its
                                                  efficiency, competition, and capital formation. See                                                            settlement obligations in the event of a
                                                  15 U.S.C. 78c(f).                                         16 17   CFR 200.30–3(a)(12).                         participant default.


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Document Created: 2015-12-14 13:31:06
Document Modified: 2015-12-14 13:31:06
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 76053 

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