[Federal Register Volume 76, Number 90 (Tuesday, May 10, 2011)]
[Notices]
[Pages 27123-27125]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11325]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64397; File No. SR-FINRA-2011-019]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Rename the OTC Bulletin Board in the FINRA
Rulebook
May 4, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on April 25, 2011, Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by FINRA. FINRA
has designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under
the Exchange 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 amend FINRA Rule 6500 Series and Rules 7700,
7720 and 7740 to replace references to ``OTC Bulletin Board'' and
``OTCBB'' with ``Non-NMS Quotation Service'' and ``NNQS.''
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, at the
Commission's Public Reference Room, and on the Commission's Web site at
http://www.sec.gov.
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,
[[Page 27124]]
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
As initially announced by FINRA in September 2009, FINRA currently
is seeking to divest itself of the OTCBB trademark, related domain
name, and all informational content from the http://www.OTCBB.com Web
site that is not otherwise required to be retained by FINRA for
regulatory purposes (``OTCBB assets''). FINRA reached agreement with an
entity for the sale of the OTCBB assets in the third quarter of
2010.\4\ In connection with this effort, and to remove certain current
impediments to the completion of such a transaction, FINRA is filing
the proposed rule change to rename the OTC Bulletin Board (``OTCBB'')
as the Non-NMS Quotation Service (``NNQS'').
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\4\ See Rodman & Renshaw Capital Group, Inc., Press Release
September 14, 2010 (``Rodman and FINRA Reach Preliminary Agreement
on Terms for Rodman Acquisition of OTCBB Assets'').
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The OTCBB assets do not include the technology comprising the
interdealer quotation system operated by FINRA, which is currently
known as ``OTCBB.'' Thus, the renaming of OTCBB as NNQS, as proposed
here, enables FINRA to proceed with the sale of the OTCBB assets by
removing references to OTCBB from the current FINRA Rulebook, while
continuing to permit FINRA to operate its interdealer quotation system
under the new name without change or interruption to the availability
of this service by FINRA. The FINRA Rule 6500 Series will govern the
operation of the NNQS as it currently does for OTCBB, and the
functionality of the NNQS will be identical to that of the current
OTCBB.
While FINRA has filed the proposed rule change for immediate
effectiveness, the renaming, transitioning of the related domain name,
and consummation of the sale transaction will be implemented at a later
date to be announced by FINRA (the ``implementation date'').\5\
However, the implementation date will be no sooner than 120 days
following the date of filing of the proposed rule change. Until such
implementation date, FINRA will continue to operate the http://www.OTCBB.com Web site and the OTCBB interdealer quotation system in
the same manner as it currently does. Thus, the operation of the OTCBB
facilities as an inter-dealer quotation system by FINRA and support of
the http://www.OTCBB.com Web site will not change in any respect until
the actual implementation date, which is anticipated to be before the
end of 2011, but in no event will be sooner than 120 days following the
date of this filing. Subsequent to the implementation date, FINRA will
continue to operate the NNQS in the same manner it currently operates
the OTCBB, consistent with FINRA's statutory obligations under Section
15A \6\ of the Exchange Act.\7\
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\5\ Upon implementation of the proposed rule change, FINRA's
interdealer quotation system will be known as NNQS, and FINRA no
longer will own the http://www.OTCBB.com Web site.
\6\ 15 U.S.C. 78o-3(b)(11).
\7\ On August 7, 2009, FINRA filed with the Commission a
proposed rule change to restructure quotation collection and
dissemination for OTC Equity Securities that is currently pending
with the Commission. See Securities Exchange Act Release No. 60999
(November 13, 2009), 74 FR 61183 (November 23, 2009) (``QCF
Proposal''). The instant proposed rule change does not alter FINRA's
current quotation transparency activities in the over-the-counter
market through the operation of an interdealer quotation system
unless the QCF Proposal is approved by the Commission and takes
effect. Thus, unless and until the SEC approves the QCF and it takes
effect, FINRA intends to operate the NNQS after the implementation
date.
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Upon the implementation of the proposed rule change, FINRA will
offer data on or through the FINRA Web site that is substantially
equivalent to the type of quotation and last sale data for OTC equity
securities currently available on http://www.OTCBB.com. In addition,
FINRA will undertake a concerted communications campaign to ensure that
the public (including retail investors) is well-informed with respect
to the pending changes. This campaign will include outreach to OTCBB-
quoted issuers regarding the status of their continued eligibility to
quote on the NNQS upon the implementation date.
FINRA has filed the proposed rule change for immediate
effectiveness. FINRA will announce the implementation date no later
than 270 days following the date of filing of the proposed rule change,
but in no event will be sooner than 120 days following the date of
filing of the proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Exchange Act,\8\ 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. Section 15A(b)(11) of the Exchange Act \9\
requires that FINRA rules include provisions governing the form and
content of quotations relating to securities sold otherwise than on a
national securities exchange which may be distributed or published by
any member or person associated with a member, and the persons to whom
such quotations may be supplied. In addition, Section 15A(b)(11) of the
Exchange Act \10\ requires that such rules be designed to produce fair
and informative quotations, to prevent fictitious or misleading
quotations, and to promote orderly procedures for collecting,
distributing, and publishing quotations.
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\8\ 15 U.S.C. 78o-3(b)(6).
\9\ 15 U.S.C. 78o-3(b)(11).
\10\ Id.
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FINRA believes the proposed rule change is consistent with Section
15A(b)(6) and (11) of the Exchange Act in that it facilitates FINRA's
continued ability to operate an interdealer quotation system for use by
market makers in OTC equity securities that is functionally identical
to the service provided under the current name, thereby supporting the
availability of quotation information in the over-the-counter equity
securities market.
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 Exchange 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, if
consistent with the protection of investors and the public interest, it
has become effective pursuant to Section 19(b)(3)(A) of the Act \11\
and Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to submit to the
Commission 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 date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. FINRA has satisfied this requirement.
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[[Page 27125]]
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.
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-2011-019 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-2011-019. 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 Web site
viewing and printing in the Commission's Public Reference Room 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 the Exchange. 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-2011-019 and should be submitted on or before May
31, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Elizabeth M. Murphy,
Secretary.
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\13\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2011-11325 Filed 5-9-11; 8:45 am]
BILLING CODE 8011-01-P