[Federal Register Volume 74, Number 235 (Wednesday, December 9, 2009)]
[Notices]
[Pages 65190-65191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-29389]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61087; File No. SR-FINRA-2009-078]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Update Certain Cross-References Within Certain 
FINRA Rules

December 1, 2009.
    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 13, 2009, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) 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 constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to update cross-references within certain FINRA 
rules to reflect changes adopted in the consolidated FINRA rulebook and 
to make non-substantive technical changes to certain FINRA and NASD 
rules.
    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 new 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 technical changes in the Consolidated FINRA Rulebook.
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    \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).
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    The proposed rule change would update rule cross-references to 
reflect changes adopted in the Consolidated FINRA Rulebook. 
Specifically, the proposed rule change would update FINRA Rule 0150 to 
reflect the incorporation into the Consolidated FINRA Rulebook of NASD 
Rule 3330 (Payment Designed to Influence Market Prices, Other than Paid 
Advertising) as FINRA Rule 5230 (Payments Involving Publications that 
Influence the Market Price of a Security),\5\ NASD Rule 2250 as FINRA 
Rule 2269 (Disclosure of Participation or Interest in Primary or 
Secondary Distribution) \6\ and certain paragraphs of NASD Rule 2330 
(Customers' Securities or Funds) as FINRA Rule 2150 (Improper Use of 
Customers' Securities or Funds; Prohibition Against Guarantees and 
Sharing in Accounts).\7\
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    \5\ See Securities Exchange Act Release No. 60648 (September 10, 
2009), 74 FR 47837 (September 17, 2009) (Order Approving File No. 
SR-FINRA-2008-048).
    \6\ See Securities Exchange Act Release No. 60659 (September 11, 
2009), 74 FR 48117 (September 21, 2009) (Order Approving File No. 
SR-FINRA-2009-044).
    \7\ See Securities Exchange Act Release No. 60701 (September 21, 
2009); 74 FR 49425 (September 28, 2009) (Order Approving File No. 
SR-FINRA-2009-014).
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    Similarly, rule cross-references in FINRA Rule 6635 (FINRA Rules) 
would be updated to reflect the adoption of NASD Rule 2240 as FINRA 
Rule 2262 (Disclosure of Control Relationship with Issuer),\8\ NASD 
Rule 2250 as FINRA 2269 (Disclosure of Participation or Interest in 
Primary or Secondary Distribution),\9\ certain paragraphs of NASD Rule 
2330 (Customers' Securities or Funds) as FINRA Rule 2150 (Improper Use 
of Customers' Securities or Funds; Prohibition Against Guarantees and 
Sharing in Accounts) \10\ and NASD Rule 3340 as FINRA Rule 5260 
(Prohibition on Transactions, Publication of Quotations, or Publication 
of Indications of Interest During Trading Halts).\11\
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    \8\ See note 6.
    \9\ See note 6.
    \10\ See note 7.
    \11\ See note 6.
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    The proposed rule change also would amend FINRA Rules 2357 
(Communications with the Public and Customers Concerning Index 
Warrants, Currency Index Warrants and Currency Warrants) and 9551 
(Failure to Comply with Public Communication Standards) to reflect the 
adoption of NASD Rule 2220 as FINRA Rule 2220 (Options Communications) 
in the Consolidated FINRA Rulebook.\12\ Moreover, the proposed rule 
change would update FINRA Rule 2357 (Communications with the Public and 
Customers Concerning Index Warrants, Currency Index Warrants and 
Currency Warrants) to delete references to NASD Rule 2220(c)(5) and 
(d)(2)(C)(v) as these subparagraphs will not be transferred into the 
Consolidated FINRA Rulebook as part of FINRA Rule 2220. These 
subparagraphs were deleted by SR-FINRA-2008-013, which became effective 
on March 4, 2009.\13\
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    \12\ See Securities Exchange Act Release No. 60534 (August 19, 
2009), 74 FR 44410 (August 28, 2009) (Order Approving File No. SR-
FINRA-2009-036).
    \13\ See Securities Exchange Act Release No. 58738 (October 6, 
2008); 73 FR 60371 (October 10, 2008) (Order Approving File No. SR-
FINRA-2008-013).
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    Additionally, the proposed rule change would make non-substantive 
technical changes to paragraphs (e) and (f) of NASD Rule 2320 (Best 
Execution and Interpositioning) to reflect changes approved by the 
Commission in SR-FINRA-2007-024, which became effective on September 8, 
2009,\14\ and to

[[Page 65191]]

FINRA Rule 5122 (Private Placements of Securities Issued by Members). 
All of the proposed rule changes noted above will become effective on 
December 14, 2009.
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    \14\ See Securities Exchange Act Release No. 60635 (September 8, 
2009); 74 FR 47302 (September 15, 2009) (Order Approving File No. 
SR-FINRA-2007-024).
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    Finally, the proposed rule change would update rule cross-
references in FINRA Rule 9217 (Violations Appropriate for Disposition 
Under Plan Pursuant to SEA Rule 19d-1(c)(2)) to reflect the 
incorporation of NASD Rule 2220 into the Consolidated FINRA Rulebook as 
FINRA Rule 2220 (Options Communications) \15\ and the deletion of NYSE 
Rule 445 (Anti-Money Laundering Compliance Program) \16\ and certain 
paragraphs of NYSE Rule 352 (Guarantees, Sharing in Accounts, and Loan 
Arrangements) \17\ from the FINRA rulebook.
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    \15\ See note 12.
    \16\ See Securities Exchange Act Release No. 60645 (September 
10, 2009), 74 FR 47630 (September 16, 2009) (Order Approving File 
No. SR-FINRA-2009-039).
    \17\ See note 7.
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The implementation date for the proposed rule changes to 
NASD Rule 2320 and FINRA Rules 0150, 2357, 5122, 6635 and 9551 will be 
December 14, 2009.\18\ The implementation date for the proposed rule 
changes to FINRA Rule 9217 will be December 14, 2009, except the 
proposed change that would eliminate the reference to NYSE Rule 445 
from FINRA Rule 9217, which will be implemented on January 1, 2010.\19\
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    \18\ See Regulatory Notice 09-60 (October 2009).
    \19\ See note 18.
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2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\20\ 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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    \20\ 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 foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-
4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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.

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-2009-078 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2009-078. 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 publicly available. All 
submissions should refer to File Number SR-FINRA-2009-078 and should be 
submitted on or before December 30, 2009.
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    \23\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-29389 Filed 12-8-09; 8:45 am]
BILLING CODE 8011-01-P