Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1013 (New Member Application and Interview) and the Manner in Which Membership Applicants Submit Their Applications to FINRA, 14519-14520 [E8-5418]

Download as PDF Federal Register / Vol. 73, No. 53 / Tuesday, March 18, 2008 / Notices IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,16 that the proposed rule change (SR–FINRA– 2008–001), be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–5355 Filed 3–17–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57480; File No. SR–FINRA– 2008–008] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1013 (New Member Application and Interview) and the Manner in Which Membership Applicants Submit Their Applications to FINRA March 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 February 29, 2008, the 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, II, and III below, which Items have been substantially prepared by FINRA. FINRA has designated this proposal as constituting a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule under Section 19(b)(3)(A)(i) of the Act 3 and Rule 19b–4(f)(1) 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. mstockstill on PROD1PC66 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA proposes to amend NASD Rule 1013 (New Member Application and 16 15 U.S.C. 78s(b)(2). 17 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(i). 4 17 CFR 240.19b–4(f)(1). VerDate Aug<31>2005 17:39 Mar 17, 2008 Interview) to change the manner in which membership applicants submit their applications to FINRA. FINRA also proposes changes to online Form NMA to make it a more interactive, userfriendly document that applicants can use to submit application information. The text of the proposed rule change is available at https://www.finra.org, FINRA, and 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 In an effort to streamline the membership application process and make it more efficient, FINRA recently required membership applicants to complete and submit electronically via the Electronic Filing System (‘‘EFS’’) FINRA’s standardized membership application form, the Form NMA. NASD Rule 1013 requires that the Form NMA and other required application materials be filed with the Department of Member Regulation (‘‘Department’’) at the district office in the district in which the applicant intends to have its principal place of business. Although the Form NMA can be forwarded electronically to the district offices, applicants must submit certain required application materials, such as the Form BD, fingerprint cards of associated persons, the new member assessment report, CRD entitlement forms, and the membership application fee via first class mail, overnight courier, or hand delivery.5 The instant proposed rule change would amend NASD Rule 1013 to require that an application be filed directly with the Department. Pursuant 5 See NASD Rule 1012(a)(2) (requiring an applicant to file application documents and information by first class mail, overnight courier, or hand delivery where FINRA has not otherwise prescribed an electronic or alternative filing process). Jkt 214001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 14519 to the proposed rule change, FINRA will require applicants to send all hard copy application materials to a central location within the Department, and EFS automatically will route the Form NMA to the same location within the Department. The proposed rule change also would amend NASD Rule 1013 to eliminate the requirement that applicants submit the membership application fee by physical check. Instead, FINRA will require applicants to pay the fees electronically. Further, FINRA proposes to change the Form NMA from a static electronic document to an interactive, userfriendly document that will provide a more tailored application experience. The revised Form NMA automatically will retrieve certain information (e.g., identification information, proposed business lines, etc.) from the applicants’ Forms U4 and the Form BD, which FINRA will require applicants to submit prior to completion of the Form NMA.6 The revised form also will have applicants provide a greater level of detail regarding the required application information. FINRA anticipates that these changes to the Form NMA will result in a more complete and accurate application that, in turn, will allow FINRA staff to conduct a more timely evaluation and make fewer information requests during the course of the review. The proposed rule change would alter the manner in which FINRA receives a membership application and revise the online Form NMA to make it more interactive; it would not change the information applicants must submit pursuant to NASD Rule 1013 during the application process or the standards set forth in NASD Rule 1014 for granting an applicant’s membership application. Additionally, the proposed changes are consistent with the FINRA By-Laws, which allow FINRA to require that new member applications be made ‘‘via electronic process or such other process as the Corporation may prescribe.’’ 7 Finally, the proposed rule change would amend the NASD Rule Series 1010 (Membership Proceedings) to reflect FINRA’s change in corporate name or to otherwise delete references to ‘‘the Association.’’ Prior to the proposed rule change becoming operative, FINRA will outline in a Regulatory Notice the details regarding the changes to the electronic 6 Although applicants submit their Form BD in hard copy, the revised Form NMA will be able to retrieve the information via an electronic database that FINRA staff currently populates with Form BD information. Applicants already submit Forms U4 in an electronic format accessible to the revised form. 7 FINRA By-Laws, Art. IV, Sec. 1(a). E:\FR\FM\18MRN1.SGM 18MRN1 14520 Federal Register / Vol. 73, No. 53 / Tuesday, March 18, 2008 / Notices application process and how to complete the revised Form NMA.8 FINRA has filed the proposed rule change for immediate effectiveness. The effective date will be the date of filing, February 29, 2008. FINRA will announce the implementation date in a Regulatory Notice to be published no later than 30 days following the effective date. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,9 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. The proposed rule change amends NASD Rule 1013 to require that an applicant file a membership application directly with the Department instead of with a particular district office and revises the online Form NMA to make it more interactive. The proposed rule change does not propose any new or additional content requirements for member applications. The proposed rule change also eliminates the requirement to pay the membership application fee with a physical check. FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) as it will ensure a more streamlined and efficient membership application process. 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. mstockstill on PROD1PC66 with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing proposed rule change has become effective pursuant to Section 19(b)(3)(A)(i) of the Act 10 and 8 FINRA will also provide advance notice through the Regulatory Notice process (or similar guidance) of any systems changes to the electronic application process that would alter the manner in which applicants interact with the electronic filing system. 9 15 U.S.C. 78o–3(b)(6). 10 15 U.S.C. 78s(b)(3)(A)(i). VerDate Aug<31>2005 17:39 Mar 17, 2008 Jkt 214001 Rule 19b–4(f)(1) 11 thereunder, because it constitutes a stated policy, practice, or interpretation with respect to the meaning, administration, or enforcement of an existing rule. At any time within 60 days of the filing of such 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: 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–2008–008 and should be submitted on or before April 8, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–5418 Filed 3–17–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File No. SR–FINRA–2008–008 on the subject line. [Release No. 34–57468; File No. SR–ISE– 2008–09] Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2008–008. 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 (https://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 March 11, 2008. 1117 PO 00000 CFR 240.19b–4(f)(1). Frm 00092 Fmt 4703 Sfmt 4703 Self-Regulatory Organizations; International Securities Exchange, LLC; Order Approving Proposed Rule Change To Amend Exchange Rules Related to the Imposition of Fines for Minor Rule Violations On January 18, 2008, the International Securities Exchange, LLC (‘‘ISE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend ISE Rule 1614, ‘‘Imposition of Fines for Minor Rule Violations,’’ to add summary fines for violations of ISE Rule 1100, ‘‘Exercise of Options Contracts.’’ The proposed rule change was published for comment in the Federal Register on February 5, 2008.3 The Commission received no comments regarding the proposal. This order approves the proposed rule change. The Exchange proposes to add a summary fine schedule pursuant to its Minor Rule Violation Plan (‘‘MRVP’’) that will apply to any member who fails to submit to the Exchange in a timely manner pursuant to ISE Rule 1100 (or a regulatory information circular issued pursuant to ISE Rule 1100) an ‘‘Advice Cancel’’ or exercise instruction relating to the exercise or nonexercise of a noncash-settled equity option. The Exchange believes that imposing the 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 57229 (January 29, 2008), 73 FR 6753. 1 15 E:\FR\FM\18MRN1.SGM 18MRN1

Agencies

[Federal Register Volume 73, Number 53 (Tuesday, March 18, 2008)]
[Notices]
[Pages 14519-14520]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-5418]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57480; File No. SR-FINRA-2008-008]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of 
Proposed Rule Change To Amend Rule 1013 (New Member Application and 
Interview) and the Manner in Which Membership Applicants Submit Their 
Applications to FINRA

March 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 February 29, 2008, the 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, II, 
and III below, which Items have been substantially prepared by FINRA. 
FINRA has designated this proposal as constituting a stated policy, 
practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule under Section 
19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

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

    FINRA proposes to amend NASD Rule 1013 (New Member Application and 
Interview) to change the manner in which membership applicants submit 
their applications to FINRA. FINRA also proposes changes to online Form 
NMA to make it a more interactive, user-friendly document that 
applicants can use to submit application information. The text of the 
proposed rule change is available at https://www.finra.org, FINRA, and 
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
    In an effort to streamline the membership application process and 
make it more efficient, FINRA recently required membership applicants 
to complete and submit electronically via the Electronic Filing System 
(``EFS'') FINRA's standardized membership application form, the Form 
NMA. NASD Rule 1013 requires that the Form NMA and other required 
application materials be filed with the Department of Member Regulation 
(``Department'') at the district office in the district in which the 
applicant intends to have its principal place of business. Although the 
Form NMA can be forwarded electronically to the district offices, 
applicants must submit certain required application materials, such as 
the Form BD, fingerprint cards of associated persons, the new member 
assessment report, CRD entitlement forms, and the membership 
application fee via first class mail, overnight courier, or hand 
delivery.\5\
---------------------------------------------------------------------------

    \5\ See NASD Rule 1012(a)(2) (requiring an applicant to file 
application documents and information by first class mail, overnight 
courier, or hand delivery where FINRA has not otherwise prescribed 
an electronic or alternative filing process).
---------------------------------------------------------------------------

    The instant proposed rule change would amend NASD Rule 1013 to 
require that an application be filed directly with the Department. 
Pursuant to the proposed rule change, FINRA will require applicants to 
send all hard copy application materials to a central location within 
the Department, and EFS automatically will route the Form NMA to the 
same location within the Department. The proposed rule change also 
would amend NASD Rule 1013 to eliminate the requirement that applicants 
submit the membership application fee by physical check. Instead, FINRA 
will require applicants to pay the fees electronically.
    Further, FINRA proposes to change the Form NMA from a static 
electronic document to an interactive, user-friendly document that will 
provide a more tailored application experience. The revised Form NMA 
automatically will retrieve certain information (e.g., identification 
information, proposed business lines, etc.) from the applicants' Forms 
U4 and the Form BD, which FINRA will require applicants to submit prior 
to completion of the Form NMA.\6\ The revised form also will have 
applicants provide a greater level of detail regarding the required 
application information. FINRA anticipates that these changes to the 
Form NMA will result in a more complete and accurate application that, 
in turn, will allow FINRA staff to conduct a more timely evaluation and 
make fewer information requests during the course of the review.
---------------------------------------------------------------------------

    \6\ Although applicants submit their Form BD in hard copy, the 
revised Form NMA will be able to retrieve the information via an 
electronic database that FINRA staff currently populates with Form 
BD information. Applicants already submit Forms U4 in an electronic 
format accessible to the revised form.
---------------------------------------------------------------------------

    The proposed rule change would alter the manner in which FINRA 
receives a membership application and revise the online Form NMA to 
make it more interactive; it would not change the information 
applicants must submit pursuant to NASD Rule 1013 during the 
application process or the standards set forth in NASD Rule 1014 for 
granting an applicant's membership application. Additionally, the 
proposed changes are consistent with the FINRA By-Laws, which allow 
FINRA to require that new member applications be made ``via electronic 
process or such other process as the Corporation may prescribe.'' \7\
---------------------------------------------------------------------------

    \7\ FINRA By-Laws, Art. IV, Sec. 1(a).
---------------------------------------------------------------------------

    Finally, the proposed rule change would amend the NASD Rule Series 
1010 (Membership Proceedings) to reflect FINRA's change in corporate 
name or to otherwise delete references to ``the Association.''
    Prior to the proposed rule change becoming operative, FINRA will 
outline in a Regulatory Notice the details regarding the changes to the 
electronic

[[Page 14520]]

application process and how to complete the revised Form NMA.\8\
---------------------------------------------------------------------------

    \8\ FINRA will also provide advance notice through the 
Regulatory Notice process (or similar guidance) of any systems 
changes to the electronic application process that would alter the 
manner in which applicants interact with the electronic filing 
system.
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness. The effective date will be the date of filing, February 
29, 2008. FINRA will announce the implementation date in a Regulatory 
Notice to be published no later than 30 days following the effective 
date.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\9\ 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. The proposed rule change amends NASD Rule 1013 to 
require that an applicant file a membership application directly with 
the Department instead of with a particular district office and revises 
the online Form NMA to make it more interactive. The proposed rule 
change does not propose any new or additional content requirements for 
member applications. The proposed rule change also eliminates the 
requirement to pay the membership application fee with a physical 
check. FINRA believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(6) as it will ensure a more 
streamlined and efficient membership application process.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

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

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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A)(i) of the Act \10\ and Rule 19b-4(f)(1) \11\ 
thereunder, because it constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File No. SR-FINRA-2008-008 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2008-008. 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 (https://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-2008-008 and should be 
submitted on or before April 8, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5418 Filed 3-17-08; 8:45 am]
BILLING CODE 8011-01-P
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