[Federal Register Volume 73, Number 246 (Monday, December 22, 2008)]
[Notices]
[Pages 78412-78414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30319]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59097; File No. SR-FINRA-2008-057]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change to Update Rule Cross-References and Make Other 
Various Non-Substantive Technical Changes to FINRA Rules00

December 12, 2008.
    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 December 3, 2008, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by FINRA. FINRA designated the 
proposed rule change as ``non-controversial'' under Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders the proposal effective upon filing with 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to update rule cross-references and make other 
various non-substantive technical changes to FINRA rules that have been 
adopted in the consolidated FINRA rulebook but not yet implemented.
    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 process of developing a new consolidated rulebook 
(``Consolidated FINRA Rulebook'').\5\ 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 technical changes in the Consolidated FINRA Rulebook. The 
proposed rule change would effectuate those amendments in certain rules 
that have been approved by the Commission but not yet implemented in 
the Consolidated FINRA Rulebook.
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    \5\ The current FINRA rulebook includes, in addition to FINRA 
Rules, (1) NASD Rules and (2) 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''). For more 
information about the rulebook consolidation process, see FINRA 
Information Notice, March 12, 2008 (Rulebook Consolidation Process).
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    During the months of August and September 2008, the Commission 
approved nine FINRA proposed rule changes (``Phase 1 Rules'').\6\ Those 
rules

[[Page 78413]]

will be implemented on December 15, 2008.\7\ The proposed rule change 
generally would make several types of changes to those approved rules. 
First, it would update rule cross-references. For example, references 
to NASD rules would be changed to reference the new corresponding FINRA 
rules. In addition, the proposed rule change would update FINRA Rule 
7410(g) to reference New York Stock Exchange Rule 132B, rather than 
Rule 80A, pursuant to a previously approved New York Stock Exchange 
rule filing.\8\
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    \6\ See Securities Exchange Act Release No. 58421 (August 25, 
2008), 73 FR 51032 (August 29, 2008) (Order Approving File No. SR-
FINRA-2008-025); Securities Exchange Act Release No. 58461 
(September 4, 2008), 73 FR 52710 (September 10, 2008) (Order 
Approving File No. SR-FINRA-2008-033); Securities Exchange Act 
Release No. 58514 (September 11, 2008), 73 FR 54190 (September 18, 
2008) (Order Approving File No. SR-FINRA-2008-039); Securities 
Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174 
(October 1, 2008) (Order Approving File Nos. SR-FINRA-2008-021; SR-
FINRA-2008-022; SR-FINRA-2008-026; SR-FINRA-2008-028 and SR-FINRA-
2008-029); Securities Exchange Act Release No. 58660 (September 26, 
2008), 73 FR 57393 (October 2, 2008) (Order Approving File No. SR-
FINRA-2008-027); Securities Exchange Act Release No. 58661 
(September 26, 2008), 73 FR 57395 (October 2, 2008) (Order Approving 
File No. SR-FINRA-2008-030).
    \7\ See FINRA Regulatory Notice 08-57 (October 2008) (FINRA 
Announces SEC Approval and Effective Date for New Consolidated FINRA 
Rules).
    \8\ See Securities Exchange Act Release No. 56726 (October 31, 
2007), 72 FR 62719 (November 6, 2007) (Notice of Filing and 
Immediate Effectiveness of File No. SR-NYSE-2007-96).
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    Second, the proposed rule change would adopt into the Consolidated 
FINRA Rulebook without material change new NASD rules that were 
approved after the Phase 1 Rules were submitted to the Commission: NASD 
Rules 12905 and 13905.\9\ It would also update the Consolidated FINRA 
Rulebook to account for amendments to NASD and Incorporated NYSE Rules 
that were approved after the Phase I Rules were submitted to the 
Commission. Those affected rules are FINRA Rules 6220, 6275, 6540, 6560 
(since deleted), 6622, 6730 and 9217.\10\
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    \9\ See Securities Exchange Act Release No. 58739 (October 6, 
2008), 73 FR 60738 (October 14, 2008) (Order Approving File No. SR-
FINRA-2008-005).
    \10\ See Securities Exchange Act Release No. 55351 (February 26, 
2007), 72 FR 9810 (March 5, 2007) (Order Approving File No. SR-NASD-
2005-146); Securities Exchange Act Release No. 58532 (September 12, 
2008), 73 FR 54649 (September 22, 2008) (Order Approving File No. 
SR-NASD-2007-041); Securities Exchange Act Release No. 58331 (August 
8, 2008), 73 FR 47990 (August 15, 2008) (Order Approving File No. 
SR-FINRA-2008-016); Securities Exchange Act Release No. 58514 
(September 11, 2008), 73 FR 54190 (September 18, 2008) (Order 
Approving File No. SR-FINRA-2008-039); Securities Exchange Act 
Release No. 58533 (September 12, 2008), 73 FR 54652 (September 22, 
2008) (Order Approving File No. SR-FINRA-2008-036); Securities 
Exchange Act Release No. 58520 (September 11, 2008), 73 FR 54193 
(September 18, 2008) (Order Approving File No. SR-FINRA-2008-040).
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    Third, the proposed rule change would delete a reference in FINRA 
Rule 5110 to ``SEC Regulation B'', which previously was rescinded.\11\ 
In that same FINRA rule, the proposed rule change would add language 
that inadvertently was left out of the existing NASD rule when that 
NASD rule was adopted without material change into the Consolidated 
FINRA Rulebook.\12\ The proposed rule change also would delete in FINRA 
Rule 6440 references to certain subparagraphs of SEA Rule 15c2-11 that 
no longer exist.
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    \11\ See Securities Exchange Act Release No. 37262 (May 31, 
1996), 61 FR 30397 (June 14, 1996) (File No. S7-6-96).
    \12\ See Securities Exchange Act Release No. 58514 (September 
11, 2008), 73 FR 54190 (September 18, 2008) (Order Approving File 
No. SR-FINRA-2008-039, which failed to include language adopted in 
SR-NASD-2001-046).
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    Fourth, the proposed rule change would replace references to the 
SEC's Electronic Data Gathering and Retrieval (``EDGAR'') System with 
its new name, the Interactive Data Electronic Applications (``IDEA'') 
System. Finally, the proposed rule change would update FINRA Rules 4560 
and 5110 to reflect a change in FINRA style convention when referencing 
SEC rules and regulations.
    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, such that FINRA can implement the proposed rule 
change on December 15, 2008, the date on which the previously approved 
rule changes will also be implemented.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\13\ 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.
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    \13\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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 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 after the date of filing, or such shorter time as the Commission 
may designate if consistent with the protection of investors and the 
public interest, the proposed rule change has become effective pursuant 
to Section 19(b)(3)(A) of the Act \14\ and subparagraph (f)(6) of Rule 
19b-4 thereunder.\15\ As required under Rule 19b-4(f)(6)(iii),\16\ 
FINRA provided the Commission with written notice of its intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the 
filing of the proposed rule change.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to the 30th day after the date of 
filing.\17\ However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. FINRA requested that 
the Commission waive the 30-day operative delay and designate the 
proposed rule change to become operative upon filing so that FINRA can 
implement the proposed rule change on December 15, 2008, the same date 
on which the previously approved rule changes relating the Consolidated 
FINRA Rulebook will be implemented. The Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest. In particular, the Commission does 
not believe that the proposed rule change presents any novel issues. 
The proposed rule change makes non-substantive changes to update FINRA 
rules in the Consolidated FINRA Rulebook to reflect changes to FINRA 
rules previously published for comment by the Commission. Accordingly, 
the Commission designates the proposed rule change to be operative upon 
filing with the Commission.\19\
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    \17\ See id.
    \18\ Id.
    \19\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors,

[[Page 78414]]

or otherwise in furtherance of the purposes of the Act.

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 e-mail to [email protected]. Please include 
File Number SR-FINRA-2008-057 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-2008-057. This 
file number should be included on the subject line if e-mail 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 inspection 
and copying in the Commission's Public Reference Room, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of FINRA. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2008-057 and should be 
submitted on or before January 12, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-30319 Filed 12-19-08; 8:45 am]
BILLING CODE 8011-01-P