82_FR_47469 82 FR 47274 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Review Charges for Communications Filed With or Submitted to FINRA

82 FR 47274 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Review Charges for Communications Filed With or Submitted to FINRA

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 195 (October 11, 2017)

Page Range47274-47276
FR Document2017-21846

Federal Register, Volume 82 Issue 195 (Wednesday, October 11, 2017)
[Federal Register Volume 82, Number 195 (Wednesday, October 11, 2017)]
[Notices]
[Pages 47274-47276]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-21846]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81801; File No. SR-FINRA-2017-030]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the Review Charges for Communications 
Filed With or Submitted to FINRA

October 3, 2017.
    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 September 26, 2017, 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, 
II, and III below, which Items have been prepared by FINRA. FINRA has 
designated the proposed rule change as ``establishing or changing a 
due, fee or other charge'' under Section 19(b)(3)(A)(ii) of the Act \3\ 
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon receipt of this filing by the Commission. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend Section 13 of Schedule A to the FINRA 
By-Laws (``Section 13'') governing the review charges for 
communications filed with or submitted to FINRA's Advertising 
Regulation Department (the ``Department'') to account for upcoming 
technological changes that will allow Web sites to be filed in native 
format.
    Below is the text of the proposed rule change. Proposed new 
language is in italics; proposed deletions are in brackets.
* * * * *

Schedule A to the By-Laws of the Corporation

* * * * *
Section 13--Review Charge for Communications Filed or Submitted
    There shall be a review charge for each and every communication, 
whether in printed, video or other form, filed with or submitted to 
FINRA, except for items that are filed or submitted in response to a 
written request from FINRA's Advertising Regulation Department (``the 
Department'') issued pursuant to the spot check procedures set forth in 
FINRA rules, as follows: (1) For printed or Web site material reviewed, 
$125.00, plus $10.00 for each printed page or Web page reviewed in 
excess of 10 pages; and (2) for video or audio media, $125.00, plus 
$10.00 per minute for each minute of tape reviewed in excess of 10 
minutes.
    Where a member requests expedited review of material submitted to 
the Department there shall be a review charge of $600.00 per item plus 
$50.00 for each printed page or Web page reviewed in excess of 10 
pages. Expedited review shall be completed within three business days, 
not including the date the item is received by the Department, unless a 
shorter or longer period is agreed to by the Department. The Department 
may, in its sole discretion, refuse requests for expedited review.
* * * * *

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

[[Page 47275]]

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
Background
    In April 2014, FINRA launched a retrospective review of its 
communications with the public rules to assess their effectiveness and 
efficiency. In December 2014, FINRA published a report on the 
assessment phase of the review.\5\ The report concluded that, while the 
rules have largely been effective in meeting their intended investor 
protection objectives, the rules and FINRA's administration of them 
could benefit from some updating to better align the investor 
protection benefits and the economic impacts.
---------------------------------------------------------------------------

    \5\ See Retrospective Rule Review Report, Communications with 
the Public (December 2014), http://www.finra.org/sites/default/files/p602011.pdf.
---------------------------------------------------------------------------

    To this end, the report recommended a combination of rule 
proposals, guidance and administrative measures, including systems 
upgrades, to enhance the effectiveness and efficiency of the rules with 
no reduction in investor protection. Pursuant to these recommendations, 
efforts have been underway to upgrade FINRA's Advertising Regulation 
Electronic Files (``AREF'') System, a web-based application accessed 
through the FINRA Firm Gateway that enables member firms to 
electronically submit communications with the public for review by 
FINRA's Advertising Regulation Department (``Department'').\6\ 
Currently, the AREF System accepts such submissions in a variety of 
file formats for print (e.g., .doc, .rtf, .txt), video (e.g., .mov, 
.mp4, .wmv), audio (e.g., .aif, .mp3, .wav) or other form (e.g., .pdf), 
but not for Web site or Web page communications in their native format 
(e.g., .html). Consequently, firms submitting Web site or Web page 
communications through the AREF System must convert them from native 
format to a format such as Portable Document Format (.pdf). This 
conversion process can be burdensome, sometimes resulting in voluminous 
.pdf pages. The impending upgrades to the AREF System will make the 
submission of Web site or Web page communications more efficient by 
including the capability to accept such communications in their native 
format.\7\ Each web address, a Uniform Resource Locator or URL, would 
be packaged within a compressed file format and submitted through the 
AREF System, then reviewed by the Department in an offline state. FINRA 
anticipates this upgraded AREF System capability to be operational by 
the fourth quarter of 2017.
---------------------------------------------------------------------------

    \6\ FINRA Firm Gateway is an online compliance tool that 
provides consolidated access to FINRA applications and allows 
members to submit required filings electronically to meet their 
compliance and regulatory obligations.
    \7\ The upgrades to the AREF System would not impact the way in 
which mobile applications are currently submitted in video format.
---------------------------------------------------------------------------

Proposed Rule Change
    FINRA Rule 2210 (Communications with the Public) requires members 
to file with the Department specified retail communications either 10 
business days prior to use or within 10 business days of first use, as 
applicable. For example, new members, for a period of one year 
beginning on the date their FINRA membership becomes effective, 
generally must file with the Department at least 10 business days prior 
to first use, any retail communication that is published or used in any 
electronic or other public media, including any generally accessible 
Web site.\8\ As another example, all members generally must file within 
10 business days of first use any retail communication, including a Web 
site communication that promotes or recommends a specific registered 
investment company or family of registered investment companies.\9\ The 
Department evaluates these and other communications subject to filing 
requirements or filed voluntarily by firms for compliance with 
applicable rules of FINRA, the SEC, the Municipal Securities Rulemaking 
Board and the Securities Investors Protection Corporation. Pursuant to 
the content standards of Rule 2210, the Department helps to ensure that 
all member firms' communications are based on principles of fair 
dealing and good faith, are fair and balanced, and provide a sound 
basis for evaluating the facts in regard to any particular security or 
type of security, industry or service. Among other things, FINRA rules 
prohibit member communications from including false, exaggerated, 
unwarranted, or misleading statements or claims.
---------------------------------------------------------------------------

    \8\ See FINRA Rule 2210(c)(1).
    \9\ See FINRA Rule 2210(c)(3).
---------------------------------------------------------------------------

    Currently, Section 13 imposes a review charge for each 
communication filed with or submitted to FINRA (except for items that 
are filed or submitted in response to a written request from the 
Department issued pursuant to the spot check procedures set forth in 
Rules 2210(c)(6) and 2220(c)(3)). The rates charged are based on the 
number of pages for printed material or the length of video or audio 
media. In addition, there are surcharges for expedited review. The 
proposed rule change would establish charges for submission of Web 
sites and Web pages in native format, in anticipation of the upgraded 
AREF System capabilities. It would establish rates of $125, plus $10 
for each Web page reviewed in excess of 10 pages. The charges for 
expedited reviews would be $600 per item plus $50 for each Web page 
reviewed in excess of 10 pages. For the purposes of the charging 
schedule, each distinct URL would be treated as a Web page. The 
proposed rates mirror the current rates for printed material, which 
would remain unchanged. Thus, the proposed rule change maintains parity 
in charging, irrespective of the form of filing or submission. FINRA 
notes that firms will not be obligated to file or submit Web site 
communications in native format. They may continue to convert those 
communications to a printed format and submit them at the unchanged 
printed page rate if they find that method more efficient or 
economical.
    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA will announce the implementation date of the 
proposed rule change in a Regulatory Notice.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(5) of the Act,\10\ which requires, among 
other things, that FINRA rules provide for the equitable allocation of 
reasonable dues, fees and other charges among members and issuers and 
other persons using any facility or system that FINRA operates or 
controls. FINRA believes that the proposed rule change is consistent 
with Section 15A(b)(5) of the Act in that it will establish a 
reasonable fee in conjunction with a technology upgrade that will 
permit more efficient filing and submission of electronic 
communications. Submission of communications in native format will be 
voluntary, and the proposed fee is consistent with current charges for 
communications submitted in other formats. Moreover, the proposed fee 
is equitably allocated among all members

[[Page 47276]]

that file or submit communications to the Department for review.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78o-3(b)(5).
---------------------------------------------------------------------------

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 would 
not impose any additional reporting requirements or costs on firms. 
Members will not be obligated to submit communications in native format 
and therefore may choose to continue to file or submit communications 
as they do today, with the same attendant charges.
    To the extent that the conversion of Web site or Web page 
communications from native format to another format were viewed as 
burdensome among market participants, those participants will have the 
option to submit such communications in native format, which would 
permit members to mitigate any direct or indirect costs associated with 
such conversion.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and paragraph (f)(2) of Rule 19b-4 
thereunder.\12\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act. If 
the Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule should be approved 
or disapproved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

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-2017-030 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-2017-030. 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 the filing also will be available 
for inspection and copying at the principal office of FINRA. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2017-030, and should 
be submitted on or before November 1, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-21846 Filed 10-10-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                    47274                      Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices

                                                    and any principal underwriter for the                    exemption is consistent with the public               I. Self-Regulatory Organization’s
                                                    Funds, and/or any broker or dealer                       interest and the protection of investors.             Statement of the Terms of Substance of
                                                    registered under the Exchange Act, to                    Section 17(b) of the Act authorizes the               the Proposed Rule Change
                                                    sell shares to Funds of Funds beyond                     Commission to grant an order                             FINRA is proposing to amend Section
                                                    the limits of section 12(d)(1)(B) of the                 permitting a transaction otherwise                    13 of Schedule A to the FINRA By-Laws
                                                    Act. The application’s terms and                         prohibited by section 17(a) if it finds               (‘‘Section 13’’) governing the review
                                                    conditions are designed to, among other                  that (a) the terms of the proposed                    charges for communications filed with
                                                    things, help prevent any potential (i)                   transaction are fair and reasonable and               or submitted to FINRA’s Advertising
                                                    undue influence over a Fund through                      do not involve overreaching on the part               Regulation Department (the
                                                    control or voting power, or in                                                                                 ‘‘Department’’) to account for upcoming
                                                                                                             of any person concerned; (b) the
                                                    connection with certain services,                                                                              technological changes that will allow
                                                                                                             proposed transaction is consistent with
                                                    transactions, and underwritings, (ii)
                                                                                                             the policies of each registered                       Web sites to be filed in native format.
                                                    excessive layering of fees, and (iii)                                                                             Below is the text of the proposed rule
                                                    overly complex fund structures, which                    investment company involved; and (c)
                                                                                                             the proposed transaction is consistent                change. Proposed new language is in
                                                    are the concerns underlying the limits                                                                         italics; proposed deletions are in
                                                    in sections 12(d)(1)(A) and (B) of the                   with the general purposes of the Act.
                                                                                                                                                                   brackets.
                                                    Act.                                                       For the Commission, by the Division of
                                                       8. Applicants request an exemption                    Investment Management, under delegated
                                                                                                                                                                   *     *     *     *     *
                                                    from sections 17(a)(1) and 17(a)(2) of the               authority.                                            Schedule A to the By-Laws of the
                                                    Act to permit persons that are Affiliated                Eduardo A. Aleman,                                    Corporation
                                                    Persons, or Second-Tier Affiliates, of the
                                                                                                             Assistant Secretary.                                  *        *   *    *   *
                                                    Funds, solely by virtue of certain
                                                    ownership interests, to effectuate                       [FR Doc. 2017–21811 Filed 10–10–17; 8:45 am]
                                                                                                                                                                   Section 13—Review Charge for
                                                    purchases and redemptions in-kind. The                   BILLING CODE 8011–01–P
                                                                                                                                                                   Communications Filed or Submitted
                                                    deposit procedures for in-kind
                                                                                                                                                                      There shall be a review charge for
                                                    purchases of Creation Units and the
                                                    redemption procedures for in-kind                        SECURITIES AND EXCHANGE                               each and every communication,
                                                    redemptions of Creation Units will be                    COMMISSION                                            whether in printed, video or other form,
                                                    the same for all purchases and                                                                                 filed with or submitted to FINRA,
                                                    redemptions and Deposit Instruments                                                                            except for items that are filed or
                                                                                                             [Release No. 34–81801; File No. SR–FINRA–
                                                    and Redemption Instruments will be                                                                             submitted in response to a written
                                                                                                             2017–030]
                                                    valued in the same manner as those                                                                             request from FINRA’s Advertising
                                                    investment positions currently held by                   Self-Regulatory Organizations;                        Regulation Department (‘‘the
                                                    the Funds. Applicants also seek relief                   Financial Industry Regulatory                         Department’’) issued pursuant to the
                                                    from the prohibitions on affiliated                                                                            spot check procedures set forth in
                                                                                                             Authority, Inc.; Notice of Filing and
                                                    transactions in section 17(a) to permit a                                                                      FINRA rules, as follows: (1) For printed
                                                                                                             Immediate Effectiveness of a Proposed
                                                    Fund to sell its shares to and redeem its                                                                      or Web site material reviewed, $125.00,
                                                                                                             Rule Change Relating to the Review
                                                    shares from a Fund of Funds, and to                                                                            plus $10.00 for each printed page or
                                                                                                             Charges for Communications Filed                      Web page reviewed in excess of 10
                                                    engage in the accompanying in-kind                       With or Submitted to FINRA
                                                    transactions with the Fund of Funds.3                                                                          pages; and (2) for video or audio media,
                                                    The purchase of Creation Units by a                      October 3, 2017.                                      $125.00, plus $10.00 per minute for
                                                    Fund of Funds directly from a Fund will                                                                        each minute of tape reviewed in excess
                                                                                                                Pursuant to Section 19(b)(1) of the                of 10 minutes.
                                                    be accomplished in accordance with the
                                                                                                             Securities Exchange Act of 1934                          Where a member requests expedited
                                                    policies of the Fund of Funds and will
                                                                                                             (‘‘Act’’) 1 and Rule 19b–4 thereunder,2               review of material submitted to the
                                                    be based on the NAVs of the Funds.
                                                       9. Section 6(c) of the Act permits the                notice is hereby given that on                        Department there shall be a review
                                                    Commission to exempt any persons or                      September 26, 2017, Financial Industry                charge of $600.00 per item plus $50.00
                                                    transactions from any provision of the                   Regulatory Authority, Inc. (‘‘FINRA’’)                for each printed page or Web page
                                                    Act if such exemption is necessary or                    filed with the Securities and Exchange                reviewed in excess of 10 pages.
                                                    appropriate in the public interest and                   Commission (‘‘SEC’’ or ‘‘Commission’’)                Expedited review shall be completed
                                                    consistent with the protection of                        the proposed rule change as described                 within three business days, not
                                                    investors and the purposes fairly                        in Items I, II, and III below, which Items            including the date the item is received
                                                    intended by the policy and provisions of                 have been prepared by FINRA. FINRA                    by the Department, unless a shorter or
                                                    the Act. Section 12(d)(1)(J) of the Act                  has designated the proposed rule change               longer period is agreed to by the
                                                    provides that the Commission may                         as ‘‘establishing or changing a due, fee              Department. The Department may, in its
                                                    exempt any person, security, or                          or other charge’’ under Section                       sole discretion, refuse requests for
                                                    transaction, or any class or classes of                  19(b)(3)(A)(ii) of the Act 3 and Rule 19b–            expedited review.
                                                    persons, securities, or transactions, from               4(f)(2) thereunder,4 which renders the                *     *     *     *    *
                                                    any provision of section 12(d)(1) if the                 proposal effective upon receipt of this               II. Self-Regulatory Organization’s
                                                                                                             filing by the Commission. The                         Statement of the Purpose of, and
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                      3 The requested relief would apply to direct sales
                                                    of shares in Creation Units by a Fund to a Fund of
                                                                                                             Commission is publishing this notice to               Statutory Basis for, the Proposed Rule
                                                    Funds and redemptions of those shares. Applicants        solicit comments on the proposed rule                 Change
                                                    are not seeking relief from section 17(a) for, and the   change from interested persons.
                                                    requested relief will not apply to, transactions                                                                  In its filing with the Commission,
                                                    where a Fund could be deemed an Affiliated                                                                     FINRA included statements concerning
                                                    Person, or a Second-Tier Affiliate, of a Fund of           1 15 U.S.C. 78s(b)(1).                              the purpose of and basis for the
                                                    Funds because an Adviser or an entity controlling,
                                                    controlled by or under common control with an
                                                                                                               2 17 CFR 240.19b–4.                                 proposed rule change and discussed any
                                                    Adviser provides investment advisory services to
                                                                                                               3 15 U.S.C. 78s(b)(3)(A)(ii).                       comments it received on the proposed
                                                    that Fund of Funds.                                        4 17 CFR 240.19b–4(f)(2).                           rule change. The text of these statements


                                               VerDate Sep<11>2014    17:58 Oct 10, 2017   Jkt 244001   PO 00000   Frm 00104   Fmt 4703   Sfmt 4703   E:\FR\FM\11OCN1.SGM   11OCN1


                                                                              Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices                                           47275

                                                    may be examined at the places specified                 AREF System will make the submission                  submitted in response to a written
                                                    in Item IV below. FINRA has prepared                    of Web site or Web page                               request from the Department issued
                                                    summaries, set forth in sections A, B,                  communications more efficient by                      pursuant to the spot check procedures
                                                    and C below, of the most significant                    including the capability to accept such               set forth in Rules 2210(c)(6) and
                                                    aspects of such statements.                             communications in their native format.7               2220(c)(3)). The rates charged are based
                                                                                                            Each web address, a Uniform Resource                  on the number of pages for printed
                                                    A. Self-Regulatory Organization’s
                                                                                                            Locator or URL, would be packaged                     material or the length of video or audio
                                                    Statement of the Purpose of, and
                                                                                                            within a compressed file format and                   media. In addition, there are surcharges
                                                    Statutory Basis for, the Proposed Rule
                                                                                                            submitted through the AREF System,                    for expedited review. The proposed rule
                                                    Change
                                                                                                            then reviewed by the Department in an                 change would establish charges for
                                                    1. Purpose                                              offline state. FINRA anticipates this                 submission of Web sites and Web pages
                                                    Background                                              upgraded AREF System capability to be                 in native format, in anticipation of the
                                                                                                            operational by the fourth quarter of                  upgraded AREF System capabilities. It
                                                       In April 2014, FINRA launched a                      2017.                                                 would establish rates of $125, plus $10
                                                    retrospective review of its                                                                                   for each Web page reviewed in excess of
                                                    communications with the public rules                    Proposed Rule Change
                                                                                                                                                                  10 pages. The charges for expedited
                                                    to assess their effectiveness and                          FINRA Rule 2210 (Communications                    reviews would be $600 per item plus
                                                    efficiency. In December 2014, FINRA                     with the Public) requires members to                  $50 for each Web page reviewed in
                                                    published a report on the assessment                    file with the Department specified retail             excess of 10 pages. For the purposes of
                                                    phase of the review.5 The report                        communications either 10 business days                the charging schedule, each distinct
                                                    concluded that, while the rules have                    prior to use or within 10 business days               URL would be treated as a Web page.
                                                    largely been effective in meeting their                 of first use, as applicable. For example,             The proposed rates mirror the current
                                                    intended investor protection objectives,                new members, for a period of one year                 rates for printed material, which would
                                                    the rules and FINRA’s administration of                 beginning on the date their FINRA                     remain unchanged. Thus, the proposed
                                                    them could benefit from some updating                   membership becomes effective,                         rule change maintains parity in
                                                    to better align the investor protection                 generally must file with the Department               charging, irrespective of the form of
                                                    benefits and the economic impacts.                      at least 10 business days prior to first              filing or submission. FINRA notes that
                                                       To this end, the report recommended                  use, any retail communication that is                 firms will not be obligated to file or
                                                    a combination of rule proposals,                        published or used in any electronic or                submit Web site communications in
                                                    guidance and administrative measures,                   other public media, including any                     native format. They may continue to
                                                    including systems upgrades, to enhance                  generally accessible Web site.8 As                    convert those communications to a
                                                    the effectiveness and efficiency of the                 another example, all members generally                printed format and submit them at the
                                                    rules with no reduction in investor                     must file within 10 business days of first            unchanged printed page rate if they find
                                                    protection. Pursuant to these                           use any retail communication, including               that method more efficient or
                                                    recommendations, efforts have been                      a Web site communication that                         economical.
                                                    underway to upgrade FINRA’s                             promotes or recommends a specific
                                                    Advertising Regulation Electronic Files                 registered investment company or                         FINRA has filed the proposed rule
                                                    (‘‘AREF’’) System, a web-based                          family of registered investment                       change for immediate effectiveness.
                                                    application accessed through the FINRA                  companies.9 The Department evaluates                  FINRA will announce the
                                                    Firm Gateway that enables member                        these and other communications subject                implementation date of the proposed
                                                    firms to electronically submit                          to filing requirements or filed                       rule change in a Regulatory Notice.
                                                    communications with the public for                      voluntarily by firms for compliance                   2. Statutory Basis
                                                    review by FINRA’s Advertising                           with applicable rules of FINRA, the
                                                    Regulation Department                                   SEC, the Municipal Securities                            FINRA believes that the proposed rule
                                                    (‘‘Department’’).6 Currently, the AREF                  Rulemaking Board and the Securities                   change is consistent with the provisions
                                                    System accepts such submissions in a                    Investors Protection Corporation.                     of Section 15A(b)(5) of the Act,10 which
                                                    variety of file formats for print (e.g.,                Pursuant to the content standards of                  requires, among other things, that
                                                    .doc, .rtf, .txt), video (e.g., .mov, .mp4,             Rule 2210, the Department helps to                    FINRA rules provide for the equitable
                                                    .wmv), audio (e.g., .aif, .mp3, .wav) or                ensure that all member firms’                         allocation of reasonable dues, fees and
                                                    other form (e.g., .pdf), but not for Web                communications are based on principles                other charges among members and
                                                    site or Web page communications in                      of fair dealing and good faith, are fair              issuers and other persons using any
                                                    their native format (e.g., .html).                      and balanced, and provide a sound basis               facility or system that FINRA operates
                                                    Consequently, firms submitting Web site                 for evaluating the facts in regard to any             or controls. FINRA believes that the
                                                    or Web page communications through                      particular security or type of security,              proposed rule change is consistent with
                                                    the AREF System must convert them                       industry or service. Among other things,              Section 15A(b)(5) of the Act in that it
                                                    from native format to a format such as                  FINRA rules prohibit member                           will establish a reasonable fee in
                                                    Portable Document Format (.pdf). This                   communications from including false,                  conjunction with a technology upgrade
                                                    conversion process can be burdensome,                   exaggerated, unwarranted, or misleading               that will permit more efficient filing and
                                                    sometimes resulting in voluminous .pdf                  statements or claims.                                 submission of electronic
                                                    pages. The impending upgrades to the                       Currently, Section 13 imposes a                    communications. Submission of
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                                                                            review charge for each communication                  communications in native format will
                                                      5 See Retrospective Rule Review Report,
                                                                                                            filed with or submitted to FINRA                      be voluntary, and the proposed fee is
                                                    Communications with the Public (December 2014),
                                                    http://www.finra.org/sites/default/files/
                                                                                                            (except for items that are filed or                   consistent with current charges for
                                                    p602011.pdf.                                                                                                  communications submitted in other
                                                                                                              7 The upgrades to the AREF System would not
                                                      6 FINRA Firm Gateway is an online compliance
                                                                                                                                                                  formats. Moreover, the proposed fee is
                                                    tool that provides consolidated access to FINRA         impact the way in which mobile applications are
                                                                                                            currently submitted in video format.                  equitably allocated among all members
                                                    applications and allows members to submit
                                                                                                              8 See FINRA Rule 2210(c)(1).
                                                    required filings electronically to meet their
                                                    compliance and regulatory obligations.                    9 See FINRA Rule 2210(c)(3).                          10 15   U.S.C. 78o–3(b)(5).



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                                                    47276                       Federal Register / Vol. 82, No. 195 / Wednesday, October 11, 2017 / Notices

                                                    that file or submit communications to                     Electronic Comments                                   SECURITIES AND EXCHANGE
                                                    the Department for review.                                                                                      COMMISSION
                                                                                                                • Use the Commission’s Internet
                                                    B. Self-Regulatory Organization’s                         comment form (http://www.sec.gov/                     Proposed Collection; Comment
                                                    Statement on Burden on Competition                        rules/sro.shtml); or                                  Request
                                                       FINRA does not believe that the                          • Send an email to rule-comments@                   Upon Written Request, Copies Available
                                                    proposed rule change will result in any                   sec.gov. Please include File Number SR–                From: Securities and Exchange
                                                    burden on competition that is not                         FINRA–2017–030 on the subject line.                    Commission, Office of FOIA Services,
                                                    necessary or appropriate in furtherance                                                                          100 F Street NE., Washington, DC
                                                    of the purposes of the Act. The                           Paper Comments
                                                                                                                                                                     20549–2736
                                                    proposed rule change would not impose                       • Send paper comments in triplicate                 Extension:
                                                    any additional reporting requirements                     to Secretary, Securities and Exchange                   Rule 18f–3, SEC File No. 270–385, OMB
                                                    or costs on firms. Members will not be                    Commission, 100 F Street NE.,                             Control No. 3235–0441
                                                    obligated to submit communications in                     Washington, DC 20549–1090.                               Notice is hereby given that, pursuant
                                                    native format and therefore may choose
                                                                                                                                                                    to the Paperwork Reduction Act of 1995
                                                    to continue to file or submit                             All submissions should refer to File
                                                                                                                                                                    (44 U.S.C. 3501 et seq.) (‘‘Paperwork
                                                    communications as they do today, with                     Number SR–FINRA–2017–030. This file
                                                                                                                                                                    Reduction Act’’), the Securities and
                                                    the same attendant charges.                               number should be included on the                      Exchange Commission (the
                                                       To the extent that the conversion of                   subject line if email is used. To help the            ‘‘Commission’’) is soliciting comments
                                                    Web site or Web page communications                       Commission process and review your                    on the collection of information
                                                    from native format to another format                      comments more efficiently, please use                 summarized below. The Commission
                                                    were viewed as burdensome among                           only one method. The Commission will                  plans to submit this existing collection
                                                    market participants, those participants                   post all comments on the Commission’s                 of information to the Office of
                                                    will have the option to submit such                       Internet Web site (http://www.sec.gov/                Management and Budget (‘‘OMB’’) for
                                                    communications in native format,                          rules/sro.shtml). Copies of the                       extension and approval.
                                                    which would permit members to                             submission, all subsequent                               Rule 18f–3 (17 CFR 270.18f–3) under
                                                    mitigate any direct or indirect costs                     amendments, all written statements                    the Investment Company Act of 1940
                                                    associated with such conversion.                          with respect to the proposed rule                     (15 U.S.C. 80a–1 et seq.) exempts from
                                                                                                              change that are filed with the                        section 18(f)(1) a fund that issues
                                                    C. Self-Regulatory Organization’s                                                                               multiple classes of shares representing
                                                    Statement on Comments on the                              Commission, and all written
                                                                                                              communications relating to the                        interests in the same portfolio of
                                                    Proposed Rule Change Received From                                                                              securities (a ‘‘multiple class fund’’) if
                                                    Members, Participants, or Others                          proposed rule change between the
                                                                                                              Commission and any person, other than                 the fund satisfies the conditions of the
                                                      Written comments were neither                           those that may be withheld from the                   rule. In general, each class must differ
                                                    solicited nor received.                                                                                         in its arrangement for shareholder
                                                                                                              public in accordance with the
                                                                                                                                                                    services or distribution or both, and
                                                    III. Date of Effectiveness of the                         provisions of 5 U.S.C. 552, will be
                                                                                                                                                                    must pay the related expenses of that
                                                    Proposed Rule Change and Timing for                       available for Web site viewing and                    different arrangement. The rule includes
                                                    Commission Action                                         printing in the Commission’s Public                   one requirement for the collection of
                                                                                                              Reference Room, 100 F Street NE.,                     information. A multiple class fund must
                                                       The foregoing rule change has become                   Washington, DC 20549 on official                      prepare, and fund directors must
                                                    effective pursuant to Section 19(b)(3)(A)                 business days between the hours of                    approve, a written plan setting forth the
                                                    of the Act 11 and paragraph (f)(2) of Rule                10:00 a.m. and 3:00 p.m. Copies of the                separate arrangement and expense
                                                    19b–4 thereunder.12 At any time within                    filing also will be available for                     allocation of each class, and any related
                                                    60 days of the filing of the proposed rule                inspection and copying at the principal               conversion features or exchange
                                                    change, the Commission summarily may                      office of FINRA. All comments received                privileges (‘‘rule 18f–3 plan’’). Approval
                                                    temporarily suspend such rule change if                   will be posted without change; the                    of the plan must occur before the fund
                                                    it appears to the Commission that such                    Commission does not edit personal                     issues any shares of multiple classes
                                                    action is necessary or appropriate in the                                                                       and whenever the fund materially
                                                                                                              identifying information from
                                                    public interest, for the protection of                                                                          amends the plan. In approving the plan,
                                                                                                              submissions. You should submit only
                                                    investors, or otherwise in furtherance of                                                                       the fund board, including a majority of
                                                                                                              information that you wish to make
                                                    the purposes of the Act. If the                                                                                 the independent directors, must
                                                    Commission takes such action, the                         available publicly. All submissions
                                                                                                              should refer to File Number SR–FINRA–                 determine that the plan is in the best
                                                    Commission shall institute proceedings                                                                          interests of each class and the fund as
                                                    to determine whether the proposed rule                    2017–030, and should be submitted on
                                                                                                              or before November 1, 2017.                           a whole.
                                                    should be approved or disapproved.                                                                                 The requirement that the fund prepare
                                                                                                                For the Commission, by the Division of              and directors approve a written rule
                                                    IV. Solicitation of Comments
                                                                                                              Trading and Markets, pursuant to delegated            18f–3 plan is intended to ensure that the
                                                      Interested persons are invited to                       authority.13                                          fund compiles information relevant to
asabaliauskas on DSKBBXCHB2PROD with NOTICES




                                                    submit written data, views, and                           Robert W. Errett,                                     the fairness of the separate arrangement
                                                    arguments concerning the foregoing,                       Deputy Secretary.                                     and expense allocation for each class,
                                                    including whether the proposed rule                       [FR Doc. 2017–21846 Filed 10–10–17; 8:45 am]          and that directors review and approve
                                                    change is consistent with the Act.                        BILLING CODE 8011–01–P
                                                                                                                                                                    the information. Without a blueprint
                                                    Comments may be submitted by any of                                                                             that highlights material differences
                                                    the following methods:                                                                                          among classes, directors might not
                                                                                                                                                                    perceive potential conflicts of interests
                                                      11 15   U.S.C. 78s(b)(3)(A).                                                                                  when they determine whether the plan
                                                      12 17   CFR 240.19b–4(f)(2).                              13 17   CFR 200.30–3(a)(12).                        is in the best interests of each class and


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Document Created: 2018-10-25 09:58:00
Document Modified: 2018-10-25 09:58:00
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 Citation82 FR 47274 

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