Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto, To Adopt the FINRA Rule 0100 Series (General Standards) in the Consolidated FINRA Rulebook, 46106-46108 [E8-18152]
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46106
Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices
provisions to those rules that are
currently included in the ‘‘Frequently
Asked Questions’’ regarding portfolio
margin requirements published by the
New York Stock Exchange.5
Specifically, the Exchange proposes to
amend Rule 12.4(i)(5) to specify that a
portfolio margin account has three days
to meet a requisite margin call incurred
as a result of a day trade. The Exchange
proposes to amend Rule 15.8A(c) to
specify that a member organization shall
monitor the credit exposure resulting
from concentrated positions within both
individual portfolio margin accounts
and across all portfolio margin
accounts.6 The effective date of the
proposed rule change shall be August 1,
2008.
19(b)(3)(A) of the Act 9 and paragraph
(f)(1) of Rule 19b–4 thereunder.10
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.
2. Statutory Basis
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
Number SR–CBOE–2008–74 on the
subject line.
Because the proposed rule change
codifies previously issued SRO
guidance regarding portfolio margining,
the Exchange believes the proposed rule
change is consistent with Section 6(b) of
the Exchange,7 in general, and furthers
the objectives of Section 6(b)(5) of the
Act 8 in particular, in that it is designed
to perfect the mechanism of a free and
open market and to protect investors
and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose 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
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
sroberts on PROD1PC70 with NOTICES
Because the foregoing proposed rule
change constitutes a stated policy,
practice or interpretation with respect to
the meaning, administration, or
enforcement of an existing rule, it has
become effective pursuant to Section
5 This document is located at https://
www.nyse.com/pdfs/PortfolioMargin_101707.pdf.
6 The Exchange understands that FINRA
proposed similar rule changes that, if approved,
would continue to provide a uniform approach with
respect to portfolio margining. See (SR–FINRA–
2008–042).
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
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16:49 Aug 06, 2008
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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:
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–CBOE–2008–74. 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 CBOE. 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–CBOE–2008–74 and should
be submitted on or before August 28,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–18074 Filed 8–6–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58245; File No. SR–FINRA–
2008–026]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a
Proposed Rule Change and
Amendment No. 1 Thereto, To Adopt
the FINRA Rule 0100 Series (General
Standards) in the Consolidated FINRA
Rulebook
July 29, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 notice is hereby given that
on June 16, 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’’ or ‘‘SEC’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. On July 16, 2008,
FINRA filed Amendment No. 1 to the
proposed rule change. The Commission
is publishing this notice to solicit
comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA proposes to adopt the NASD
Rule 0100 Series as FINRA rules in the
consolidated FINRA rulebook. The
proposed rule change would renumber
the NASD Rule 0100 Series as the
FINRA Rule 0100 Series in the
consolidated FINRA rulebook. The text
of the proposed rule change is available
at FINRA, the Commission’s Public
Reference Room, and www.finra.org.
11 17
9 15
U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(1).
PO 00000
Frm 00170
Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices
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
sroberts on PROD1PC70 with NOTICES
Background
As part of the process of developing
the new consolidated rulebook
(‘‘Consolidated FINRA Rulebook’’),3
FINRA is proposing to adopt the NASD
Rule 0100 Series (General Provisions) as
FINRA rules in the Consolidated FINRA
Rulebook, with the exception of NASD
Rule 0120, which will be addressed at
a later date in a separate filing. The
NASD Rule 0100 Series governs the
adoption, application and interpretation
of NASD rules and sets forth certain
definitions not contained in the FINRA
By-Laws. Additionally, these rules
address FINRA’s delegation of certain
responsibilities to its subsidiaries, and
its authority and access with respect to
its subsidiaries. FINRA is proposing to
transfer this rule series as the FINRA
Rule 0100 Series, renamed as ‘‘General
Standards,’’ to the Consolidated FINRA
Rulebook, with only minor changes, as
described below. The proposed rule
change would not impose any new
requirements on FINRA members, but
would clarify and streamline these rules
for inclusion in the Consolidated FINRA
Rulebook. FINRA notes that,
notwithstanding their transfer to the
Consolidated FINRA Rulebook, these
rules of general applicability would
apply equally to both the Transitional
Rulebook and the Consolidated FINRA
Rulebook.4
3 The current FINRA rulebook consists of two sets
of rules: (1) NASD Rules and (2) rules incorporated
from NYSE (‘‘Incorporated NYSE Rules’’) (together
referred to as the ‘‘Transitional Rulebook’’). The
Incorporated NYSE Rules apply only to those
members of FINRA that are also members of the
NYSE (‘‘Dual Members’’). Dual Members also must
comply with NASD Rules. For more information
about the rulebook consolidation process, see the
FINRA Information Notice, March 12, 2008
(Rulebook Consolidation Process).
4 See SR–FINRA–2008–021 (Proposed Rule
Change Relating to the Adoption of NASD Rules
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16:49 Aug 06, 2008
Jkt 214001
Proposal
NASD Rule 0111 (Adoption of Rules)
provides that the provisions of the
rulebook are adopted pursuant to
Article VII, Section 1, of the By-Laws.
This section of the By-Laws grants the
FINRA Board of Governors (‘‘Board’’)
authority to, among other things, adopt
such FINRA rules, and changes or
additions thereto, as it deems necessary
or appropriate, provided, however, that
the Board may at its option submit to
the membership any such adoption,
change or addition to such rules. FINRA
is proposing that this rule be transferred
into the Consolidated FINRA Rulebook
with only minor, non-substantive
changes (e.g. , replacing references to
NASD with FINRA and certain
renumbering to reflect the new
organizational structure of the
Consolidated FINRA Rulebook).
NASD Rule 0112 (Effective Date)
states that the rules shall become
effective as provided in Article XI,
Section 1, of the By-Laws. This section
of the By-Laws provides that, if rules, or
amendments to such, are approved by
the Commission, they will become
effective as of such date as the Board
may prescribe. Historically, it has been
FINRA’s general practice to state the
effective date for a rule change in a
Regulatory Notice following approval by
the Commission, and FINRA intends to
continue this practice. Accordingly,
FINRA is proposing that this rule be
transferred into the Consolidated FINRA
Rulebook with only minor, nonsubstantive changes.
NASD Rule 0113 (Interpretation)
states that the rules shall be interpreted
in such manner as will aid in
effectuating the purposes and business
of NASD, and so as to require that all
practices in connection with the
investment banking and securities
business shall be just, reasonable and
not unfairly discriminatory. FINRA
proposes to eliminate the express
reference to ‘‘practices in connection
with the investment banking and
securities business’’ in the rule to reflect
that certain FINRA rules, such as the
requirement to adhere to just and
equitable principles of trade, are not
limited in scope to such activities. The
proposal would further provide that
FINRA rules shall be interpreted in light
of the purposes sought to be achieved by
the rules and to further FINRA’s
regulatory programs. FINRA is
proposing this rule change to better
reflect that FINRA will continue to
4000 through 10000 Series and the 12000 through
14000 Series as FINRA Rules in the New
Consolidated FINRA Rulebook), discussing ‘‘Rules
of General Applicability.’’
PO 00000
Frm 00171
Fmt 4703
Sfmt 4703
46107
interpret its rules in a manner that
promotes the purpose of the rules and
FINRA’s regulatory programs.
NASD Rule 0114 (Effect on
Transactions in Municipal Securities)
provides, in part, that the rules shall not
be construed to apply to transactions in
municipal securities. NASD Rule 0116
(Application of Rules of the Association
to Exempted Securities) states that the
terms ‘‘exempted securities’’ and
‘‘municipal securities’’ shall have the
meanings specified in Exchange Act
Sections 3(a)(12) and 3(a)(29),
respectively, and includes a list of
NASD rules applicable to transactions
and business activities relating to
exempted securities, except municipal
securities. FINRA is proposing to
incorporate the statement in Rule 0114
that the FINRA rules are not applicable
to transactions in municipal securities
into Rule 0116, and transfer Rule 0116,
as amended, to the Consolidated FINRA
Rulebook.
The remainder of Rule 0114 states
that the rules shall not be construed to
apply to contracts made prior to the
effective date of the rules. FINRA is
proposing to eliminate this provision in
Rule 0114 as unnecessary because the
rules by their own terms determine their
applicability.
NASD Rule 0115 (Applicability)
provides that the rules shall apply to all
members and persons associated with a
member and that persons associated
with a member shall have the same
duties and obligations as a member.
Rule 0115 goes on to prescribe the loss
of membership and registration
privileges for members or persons
associated with a member who have
been expelled, suspended, cancelled or
revoked from membership or
registration. FINRA is proposing that
this rule be transferred into the
Consolidated FINRA Rulebook with
only minor, non-substantive changes.
NASD Rule 0121 (Definitions in
NASD By-Laws) states that, unless the
context otherwise requires, or unless
otherwise defined in these rules, terms
used in the rules and interpretive
material, if defined in the By-Laws,
shall have the meaning as defined in the
By-Laws. FINRA is proposing nonsubstantive changes to Rule 0121 to
simplify the rule language.
NASD Rule 0130 (Delegation,
Authority and Access) delegates
authority to certain NASD subsidiaries
to act on behalf of NASD as set forth in
a Plan of Allocation and Delegation
adopted by the Board of Governors and
approved by the SEC. Further, the rule
provides that, notwithstanding any
delegation of authority under the rule,
the staff, books, records and premises of
E:\FR\FM\07AUN1.SGM
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46108
Federal Register / Vol. 73, No. 153 / Thursday, August 7, 2008 / Notices
the subsidiaries are that of NASD,
subject to oversight pursuant to the
Exchange Act, and all officers, directors,
employees and agents of the
subsidiaries are that of NASD for
purposes of the Exchange Act. FINRA is
proposing that this rule be transferred
into the Consolidated FINRA Rulebook
with only minor, non-substantive
changes.
FINRA will announce the
implementation date of the proposed
rule change in a Regulatory Notice to be
published no later than 60 days
following Commission approval.
A. By order approve such proposed rule
change; or
2. Statutory Basis
• 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
Number SR–FINRA–2008–026 on the
subject line.
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,5 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 that the
proposed rule change will clarify and
streamline the General Provisions rules
for adoption as FINRA rules in the new
Consolidated FINRA Rulebook.
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
sroberts on PROD1PC70 with NOTICES
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reason for so finding or (ii)
as to which FINRA consents, the
Commission will:
5 15
U.S.C. 78o–3(b)(6).
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16:49 Aug 06, 2008
Jkt 214001
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–18152 Filed 8–6–08; 8:45 am]
BILLING CODE 8010–01–P
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
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58283; File No. SR–FINRA–
2008–040]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Proposed Rule Change To Eliminate
the Requirement To Report Yield to
TRACE and for FINRA To Calculate
Yield That Will Be Disseminated by
TRACE
August 1, 2008.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate
notice is hereby given that on July 17,
to Secretary, Securities and Exchange
2008, the Financial Industry Regulatory
Commission, 100 F Street, NE.,
Authority, Inc. (‘‘FINRA’’) (f/k/a
Washington, DC 20549–1090.
National Association of Securities
All submissions should refer to File
Number SR–FINRA–2008–026. This file Dealers, Inc. (‘‘NASD’’)) filed with the
Securities and Exchange Commission
number should be included on the
subject line if e-mail is used. To help the (‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
Commission process and review your
and III below, which Items have been
comments more efficiently, please use
only one method. The Commission will prepared by FINRA. The Commission is
post all comments on the Commission’s publishing this notice to solicit
comments on the proposed rule change
Internet Web site (https://www.sec.gov/
from interested persons.
rules/sro.shtml). Copies of the
Paper Comments
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 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–
2008–026 and should be submitted on
or before August 28, 2008.
PO 00000
Frm 00172
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to: (a) Amend
NASD Rule 6230(c) 3 to eliminate the
requirement to report yield to the Trade
Reporting and Compliance Engine
(‘‘TRACE’’) system (‘‘TRACE System’’)
when a member reports a transaction in
a TRACE-eligible security 4 and (b)
implement a policy to disseminate yield
6 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 On May 23, 2008, FINRA filed with the
Commission a proposed rule change (SR–FINRA–
2008–021) in which FINRA proposed, among other
things, to adopt without material change NASD
Rule 6200 Series and NASD Rule 6230 as,
respectively, FINRA Rule 6700 Series and FINRA
Rule 6730. If the Commission approves this
proposed rule change prior to approving SR–
FINRA–2008–021, FINRA will amend SR–FINRA–
2008–021 as necessary to reflect such approval. If
the Commission approves SR–FINRA–2008–021
prior to approving this proposed rule change,
FINRA will amend this proposed rule change as
necessary to reflect such approval.
4 The term ‘‘TRACE-eligible security’’ is defined
in NASD Rule 6210(a).
1 15
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]]>Agencies
[Federal Register Volume 73, Number 153 (Thursday, August 7, 2008)]
[Notices]
[Pages 46106-46108]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18152]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58245; File No. SR-FINRA-2008-026]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change and
Amendment No. 1 Thereto, To Adopt the FINRA Rule 0100 Series (General
Standards) in the Consolidated FINRA Rulebook
July 29, 2008.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on June 16, 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'' or ``SEC'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by FINRA. On July 16, 2008, FINRA filed Amendment No. 1 to the proposed
rule change. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA proposes to adopt the NASD Rule 0100 Series as FINRA rules in
the consolidated FINRA rulebook. The proposed rule change would
renumber the NASD Rule 0100 Series as the FINRA Rule 0100 Series in the
consolidated FINRA rulebook. The text of the proposed rule change is
available at FINRA, the Commission's Public Reference Room, and
www.finra.org.
[[Page 46107]]
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
Background
As part of the process of developing the new consolidated rulebook
(``Consolidated FINRA Rulebook''),\3\ FINRA is proposing to adopt the
NASD Rule 0100 Series (General Provisions) as FINRA rules in the
Consolidated FINRA Rulebook, with the exception of NASD Rule 0120,
which will be addressed at a later date in a separate filing. The NASD
Rule 0100 Series governs the adoption, application and interpretation
of NASD rules and sets forth certain definitions not contained in the
FINRA By-Laws. Additionally, these rules address FINRA's delegation of
certain responsibilities to its subsidiaries, and its authority and
access with respect to its subsidiaries. FINRA is proposing to transfer
this rule series as the FINRA Rule 0100 Series, renamed as ``General
Standards,'' to the Consolidated FINRA Rulebook, with only minor
changes, as described below. The proposed rule change would not impose
any new requirements on FINRA members, but would clarify and streamline
these rules for inclusion in the Consolidated FINRA Rulebook. FINRA
notes that, notwithstanding their transfer to the Consolidated FINRA
Rulebook, these rules of general applicability would apply equally to
both the Transitional Rulebook and the Consolidated FINRA Rulebook.\4\
---------------------------------------------------------------------------
\3\ The current FINRA rulebook consists of two sets of rules:
(1) NASD Rules and (2) rules incorporated from NYSE (``Incorporated
NYSE Rules'') (together referred to as the ``Transitional
Rulebook''). The Incorporated NYSE Rules apply only to those members
of FINRA that are also members of the NYSE (``Dual Members''). Dual
Members also must comply with NASD Rules. For more information about
the rulebook consolidation process, see the FINRA Information
Notice, March 12, 2008 (Rulebook Consolidation Process).
\4\ See SR-FINRA-2008-021 (Proposed Rule Change Relating to the
Adoption of NASD Rules 4000 through 10000 Series and the 12000
through 14000 Series as FINRA Rules in the New Consolidated FINRA
Rulebook), discussing ``Rules of General Applicability.''
---------------------------------------------------------------------------
Proposal
NASD Rule 0111 (Adoption of Rules) provides that the provisions of
the rulebook are adopted pursuant to Article VII, Section 1, of the By-
Laws. This section of the By-Laws grants the FINRA Board of Governors
(``Board'') authority to, among other things, adopt such FINRA rules,
and changes or additions thereto, as it deems necessary or appropriate,
provided, however, that the Board may at its option submit to the
membership any such adoption, change or addition to such rules. FINRA
is proposing that this rule be transferred into the Consolidated FINRA
Rulebook with only minor, non-substantive changes (e.g. , replacing
references to NASD with FINRA and certain renumbering to reflect the
new organizational structure of the Consolidated FINRA Rulebook).
NASD Rule 0112 (Effective Date) states that the rules shall become
effective as provided in Article XI, Section 1, of the By-Laws. This
section of the By-Laws provides that, if rules, or amendments to such,
are approved by the Commission, they will become effective as of such
date as the Board may prescribe. Historically, it has been FINRA's
general practice to state the effective date for a rule change in a
Regulatory Notice following approval by the Commission, and FINRA
intends to continue this practice. Accordingly, FINRA is proposing that
this rule be transferred into the Consolidated FINRA Rulebook with only
minor, non-substantive changes.
NASD Rule 0113 (Interpretation) states that the rules shall be
interpreted in such manner as will aid in effectuating the purposes and
business of NASD, and so as to require that all practices in connection
with the investment banking and securities business shall be just,
reasonable and not unfairly discriminatory. FINRA proposes to eliminate
the express reference to ``practices in connection with the investment
banking and securities business'' in the rule to reflect that certain
FINRA rules, such as the requirement to adhere to just and equitable
principles of trade, are not limited in scope to such activities. The
proposal would further provide that FINRA rules shall be interpreted in
light of the purposes sought to be achieved by the rules and to further
FINRA's regulatory programs. FINRA is proposing this rule change to
better reflect that FINRA will continue to interpret its rules in a
manner that promotes the purpose of the rules and FINRA's regulatory
programs.
NASD Rule 0114 (Effect on Transactions in Municipal Securities)
provides, in part, that the rules shall not be construed to apply to
transactions in municipal securities. NASD Rule 0116 (Application of
Rules of the Association to Exempted Securities) states that the terms
``exempted securities'' and ``municipal securities'' shall have the
meanings specified in Exchange Act Sections 3(a)(12) and 3(a)(29),
respectively, and includes a list of NASD rules applicable to
transactions and business activities relating to exempted securities,
except municipal securities. FINRA is proposing to incorporate the
statement in Rule 0114 that the FINRA rules are not applicable to
transactions in municipal securities into Rule 0116, and transfer Rule
0116, as amended, to the Consolidated FINRA Rulebook.
The remainder of Rule 0114 states that the rules shall not be
construed to apply to contracts made prior to the effective date of the
rules. FINRA is proposing to eliminate this provision in Rule 0114 as
unnecessary because the rules by their own terms determine their
applicability.
NASD Rule 0115 (Applicability) provides that the rules shall apply
to all members and persons associated with a member and that persons
associated with a member shall have the same duties and obligations as
a member. Rule 0115 goes on to prescribe the loss of membership and
registration privileges for members or persons associated with a member
who have been expelled, suspended, cancelled or revoked from membership
or registration. FINRA is proposing that this rule be transferred into
the Consolidated FINRA Rulebook with only minor, non-substantive
changes.
NASD Rule 0121 (Definitions in NASD By-Laws) states that, unless
the context otherwise requires, or unless otherwise defined in these
rules, terms used in the rules and interpretive material, if defined in
the By-Laws, shall have the meaning as defined in the By-Laws. FINRA is
proposing non-substantive changes to Rule 0121 to simplify the rule
language.
NASD Rule 0130 (Delegation, Authority and Access) delegates
authority to certain NASD subsidiaries to act on behalf of NASD as set
forth in a Plan of Allocation and Delegation adopted by the Board of
Governors and approved by the SEC. Further, the rule provides that,
notwithstanding any delegation of authority under the rule, the staff,
books, records and premises of
[[Page 46108]]
the subsidiaries are that of NASD, subject to oversight pursuant to the
Exchange Act, and all officers, directors, employees and agents of the
subsidiaries are that of NASD for purposes of the Exchange Act. FINRA
is proposing that this rule be transferred into the Consolidated FINRA
Rulebook with only minor, non-substantive changes.
FINRA will announce the implementation date of the proposed rule
change in a Regulatory Notice to be published no later than 60 days
following Commission approval.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\5\ 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 that the proposed rule change will
clarify and streamline the General Provisions rules for adoption as
FINRA rules in the new Consolidated FINRA Rulebook.
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\5\ 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reason for so finding or (ii) as to
which FINRA consents, the Commission will:
A. By order approve such proposed rule change; or
B. institute proceedings to determine whether the proposed rule change
should be disapproved.
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 Number SR-FINRA-2008-026 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-2008-026. 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 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-2008-026 and should be
submitted on or before August 28, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-18152 Filed 8-6-08; 8:45 am]
BILLING CODE 8010-01-P
