Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change To Amend the Hearing Location Rules of the Codes of Arbitration Procedure for Customer and Industry Disputes December 22, 2009., 69184-69185 [E9-30913]

Download as PDF 69184 Federal Register / Vol. 74, No. 249 / Wednesday, December 30, 2009 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61217; File No. SR–FINRA– 2009–073] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change To Amend the Hearing Location Rules of the Codes of Arbitration Procedure for Customer and Industry Disputes December 22, 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 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’’) on October 28, 2009, the proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by FINRA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA Dispute Resolution is proposing to amend Rules 12213(a) and 13313(a) of the Code of Arbitration Procedure for Customer Disputes (‘‘Customer Code’’) and the Code of Arbitration Procedure for Industry Disputes (‘‘Industry Code’’), respectively, to expand the criteria for selecting a hearing location for an arbitration proceeding. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. mstockstill on DSKH9S0YB1PROD with 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. U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 19:01 Dec 29, 2009 1. Purpose Hearing Location Selection under the Customer Code: Currently, Rule 12213(a) of the Customer Code states that generally, the Director of FINRA Dispute Resolution (‘‘Director’’) will select the hearing location closest to the customer’s residence at the time of the events giving rise to the dispute. FINRA has determined that its policy concerning selection of a hearing location under the Customer Code may be broader than the rule describes. Under the current rule in the Customer Code, for example, if a customer in an arbitration proceeding lives in Hoboken, New Jersey, the Director will select the New York City hearing location, because this hearing location is closer to the customer’s residence, Hoboken,3 than FINRA’s Newark, New Jersey hearing location. There have been instances, however, in which the Director has granted customers’ requests to select a hearing location in their state of residence at the time of the events giving rise to the dispute, even though the in-state hearing location may not be the closest hearing location. Thus, in the example above, if the customer requests the Newark, New Jersey hearing location, the Director generally will grant the request, even though the closest hearing location is the New York City location. The Director typically attempts to honor such requests as a convenience to public customers. FINRA is proposing, therefore, to amend Rule 12213(a) of the Customer Code to add this criterion for selecting a hearing location. The proposed amendment to the rule would state that the Director will select the hearing location closest to the customer’s residence at the time of the events giving rise to the dispute, unless the hearing location closest to the customer’s residence is in a different state. In that case, the customer may request a hearing location in the customer’s state of residence at the time of the events giving rise to the dispute. Under the proposal, the Director would continue to select the hearing location closest to the customer’s residence at the time of the events giving rise to the dispute. However, the Director would honor a customer’s 3 Hoboken, New Jersey is less than a mile by ferry across the Hudson River from FINRA’s New York City hearing location. 1 15 VerDate Nov<24>2008 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Jkt 220001 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 request for a different hearing location in the customer’s state of residence.4 FINRA believes the proposal is customer-friendly because it gives customers more control over the arbitration process, by providing them with a choice of hearing locations. Hearing Location Selection under the Industry Code: Rule 13213(a) of the Industry Code states, in relevant part, that in cases involving an associated person, the Director will generally select the hearing location closest to where the associated person was employed at the time of the events giving rise to the dispute. FINRA has not received requests from associated persons for different hearing locations, other than the closest hearing location under the current rule. However, FINRA believes that associated persons also should have the option to select a hearing location in their state of employment at the time of the events giving rise to the dispute, if the closest hearing location to their employment is in a different state. Thus, FINRA is proposing to amend Rule 13213(a) of the Industry Code in two ways. First, FINRA would broaden the criteria for selecting the appropriate hearing location by referring to the time of the events giving rise to the dispute. FINRA notes that this amendment clarifies current practice and makes the rule language under the Industry Code consistent with the comparable rule under the Customer Code. The second change to Rule 13213(a) would allow an associated person to request a different hearing location, other than the closest hearing location. Specifically, the proposal would state that the Director will select the hearing location closest to where the associated person was employed at the time of the events giving rise to the dispute, unless the hearing location closest to the associated person’s employment is in a different state. In that case, the associated person may request a hearing location in his or her state of employment at the time of the events giving rise to the dispute. Under the proposal, the Director would continue to select the hearing location closest to where the associated person was employed at the time of the 4 If the customer requests a different hearing location other than the location closest to the customer’s residence at the time of the events giving rise to the dispute and makes the request before the arbitrator or arbitrators are selected, the Director will grant the request. If the customer requests a different hearing location other than the location closest to the customer’s residence at the time of the events giving rise to the dispute and makes the request after the arbitrator or arbitrators are selected, the customer must submit the request to the arbitrator or panel. E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 74, No. 249 / Wednesday, December 30, 2009 / Notices events giving rise to the dispute. However, the Director would honor an associated person’s request for a different hearing location in the associated person’s state of employment.5 FINRA believes the proposal would benefit associated persons by providing them with a choice of hearing locations. organization 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. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,6 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 is consistent with FINRA’s statutory obligations under the Act to protect investors and the public interest because the proposal would assist in the efficient administration of the arbitration process by giving customers and associated persons more control over where the arbitration would be held. 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. The Commission in particular requests comment on the effect of allowing customers or associated persons to request a different hearing location after the arbitrator or arbitrators have been selected. Comments may be submitted by any of the following methods: 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, as amended. 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 by FINRA. mstockstill on DSKH9S0YB1PROD with NOTICES 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 reasons for so finding or (ii) as to which the self-regulatory 5 If the associated person requests a different hearing location other than the location closest to where the associated person was employed at the time of the of the events giving rise to dispute and makes the request before the arbitrator or arbitrators are selected, the Director will grant the request. If the associated person requests a different hearing location other than the location closest to where the associated person was employed at the time of the of the events giving rise to dispute and makes the request after the arbitrator or arbitrators are selected, the associated person must submit the request to the arbitrator or panel. 6 15 U.S.C. 78o–3(b)(6). VerDate Nov<24>2008 19:01 Dec 29, 2009 Jkt 220001 IV. Solicitation of Comments 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–FINRA–2009–073 on the subject line. 69185 All submissions should refer to the File Number SR–FINRA–2009–073 and should be submitted on or before January 20, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–30913 Filed 12–29–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61207; File No. SR–Phlx– 2009–84] Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend Rules Relating to Conduct of Business on the Exchange December 18, 2009. On October 29, 2009, NASDAQ OMX PHLX, Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Securities and Exchange Paper Comments Commission (‘‘Commission’’), pursuant • Send paper comments in triplicate to Section 19(b)(1) of the Securities to Elizabeth M. Murphy, Secretary, Exchange Act of 1934 (‘‘Act’’) 1 and Rule Securities and Exchange Commission, 19b–4 thereunder,2 a proposed rule 100 F Street, NE., Washington, DC change that would: (i) Create an 20549–1090. expedited hearing process for members All submissions should refer to File posing an immediate threat to the safety Number SR–FINRA–2009–073. This file of persons or property, seriously number should be included on the disrupting Exchange operations, or who subject line if e-mail is used. To help the are in possession of a firearm on the Commission process and review your Exchange trading floor; (ii) increase the comments more efficiently, please use time period a member may be only one method. The Commission will physically excluded from the trading post all comments on the Commission’s floor; (iii) increase the maximum Internet Web site (https://www.sec.gov/ amount a member may be fined rules/sro.shtml). Copies of the pursuant to Rule 60; (iv) amend submission, all subsequent language applicable to contesting amendments, all written statements citations and create a forum fee of $100 with respect to the proposed rule for contesting citations; (v) add language change that are filed with the to explicitly prohibit alcohol and illegal Commission, and all written controlled substances on the trading communications relating to the floor; (vi) increase fines for various proposed rule change between the regulations; (vii) require non-member Commission and any person, other than visitors who are performing contract those that may be withheld from the work at the Exchange on behalf of public in accordance with the members to provide a certificate of provisions of 5 U.S.C. 552, will be insurance and add fines for failure to available for inspection and copying in provide proof of insurance; (viii) add a the Commission’s Public Reference rule to limit exchange liability and Room, 100 F Street, NE., Washington DC require reimbursement of certain 20549–1090. All comments received expenses; (ix) amend the disciplinary will be posted without change; the rules to allow Enforcement Staff to Commission does not edit personal request a hearing; and (x) increase the identifying information from submissions. You should submit only 7 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). information that you wish to make 2 17 CFR 240.19b–4. available publicly. PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

Agencies

[Federal Register Volume 74, Number 249 (Wednesday, December 30, 2009)]
[Notices]
[Pages 69184-69185]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-30913]



[[Page 69184]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61217; File No. SR-FINRA-2009-073]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of Proposed Rule Change To Amend the 
Hearing Location Rules of the Codes of Arbitration Procedure for 
Customer and Industry Disputes December 22, 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 
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'') on 
October 28, 2009, the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by FINRA. 
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.
---------------------------------------------------------------------------

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

    FINRA Dispute Resolution is proposing to amend Rules 12213(a) and 
13313(a) of the Code of Arbitration Procedure for Customer Disputes 
(``Customer Code'') and the Code of Arbitration Procedure for Industry 
Disputes (``Industry Code''), respectively, to expand the criteria for 
selecting a hearing location for an arbitration proceeding.
    The text of the proposed rule change is available on FINRA's Web 
site at https://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
    Hearing Location Selection under the Customer Code:
    Currently, Rule 12213(a) of the Customer Code states that 
generally, the Director of FINRA Dispute Resolution (``Director'') will 
select the hearing location closest to the customer's residence at the 
time of the events giving rise to the dispute. FINRA has determined 
that its policy concerning selection of a hearing location under the 
Customer Code may be broader than the rule describes.
    Under the current rule in the Customer Code, for example, if a 
customer in an arbitration proceeding lives in Hoboken, New Jersey, the 
Director will select the New York City hearing location, because this 
hearing location is closer to the customer's residence, Hoboken,\3\ 
than FINRA's Newark, New Jersey hearing location.
---------------------------------------------------------------------------

    \3\ Hoboken, New Jersey is less than a mile by ferry across the 
Hudson River from FINRA's New York City hearing location.
---------------------------------------------------------------------------

    There have been instances, however, in which the Director has 
granted customers' requests to select a hearing location in their state 
of residence at the time of the events giving rise to the dispute, even 
though the in-state hearing location may not be the closest hearing 
location. Thus, in the example above, if the customer requests the 
Newark, New Jersey hearing location, the Director generally will grant 
the request, even though the closest hearing location is the New York 
City location. The Director typically attempts to honor such requests 
as a convenience to public customers.
    FINRA is proposing, therefore, to amend Rule 12213(a) of the 
Customer Code to add this criterion for selecting a hearing location. 
The proposed amendment to the rule would state that the Director will 
select the hearing location closest to the customer's residence at the 
time of the events giving rise to the dispute, unless the hearing 
location closest to the customer's residence is in a different state. 
In that case, the customer may request a hearing location in the 
customer's state of residence at the time of the events giving rise to 
the dispute.
    Under the proposal, the Director would continue to select the 
hearing location closest to the customer's residence at the time of the 
events giving rise to the dispute. However, the Director would honor a 
customer's request for a different hearing location in the customer's 
state of residence.\4\ FINRA believes the proposal is customer-friendly 
because it gives customers more control over the arbitration process, 
by providing them with a choice of hearing locations.
---------------------------------------------------------------------------

    \4\ If the customer requests a different hearing location other 
than the location closest to the customer's residence at the time of 
the events giving rise to the dispute and makes the request before 
the arbitrator or arbitrators are selected, the Director will grant 
the request. If the customer requests a different hearing location 
other than the location closest to the customer's residence at the 
time of the events giving rise to the dispute and makes the request 
after the arbitrator or arbitrators are selected, the customer must 
submit the request to the arbitrator or panel.
---------------------------------------------------------------------------

    Hearing Location Selection under the Industry Code:
    Rule 13213(a) of the Industry Code states, in relevant part, that 
in cases involving an associated person, the Director will generally 
select the hearing location closest to where the associated person was 
employed at the time of the events giving rise to the dispute. FINRA 
has not received requests from associated persons for different hearing 
locations, other than the closest hearing location under the current 
rule. However, FINRA believes that associated persons also should have 
the option to select a hearing location in their state of employment at 
the time of the events giving rise to the dispute, if the closest 
hearing location to their employment is in a different state.
    Thus, FINRA is proposing to amend Rule 13213(a) of the Industry 
Code in two ways. First, FINRA would broaden the criteria for selecting 
the appropriate hearing location by referring to the time of the events 
giving rise to the dispute. FINRA notes that this amendment clarifies 
current practice and makes the rule language under the Industry Code 
consistent with the comparable rule under the Customer Code. The second 
change to Rule 13213(a) would allow an associated person to request a 
different hearing location, other than the closest hearing location. 
Specifically, the proposal would state that the Director will select 
the hearing location closest to where the associated person was 
employed at the time of the events giving rise to the dispute, unless 
the hearing location closest to the associated person's employment is 
in a different state. In that case, the associated person may request a 
hearing location in his or her state of employment at the time of the 
events giving rise to the dispute.
    Under the proposal, the Director would continue to select the 
hearing location closest to where the associated person was employed at 
the time of the

[[Page 69185]]

events giving rise to the dispute. However, the Director would honor an 
associated person's request for a different hearing location in the 
associated person's state of employment.\5\ FINRA believes the proposal 
would benefit associated persons by providing them with a choice of 
hearing locations.
---------------------------------------------------------------------------

    \5\ If the associated person requests a different hearing 
location other than the location closest to where the associated 
person was employed at the time of the of the events giving rise to 
dispute and makes the request before the arbitrator or arbitrators 
are selected, the Director will grant the request. If the associated 
person requests a different hearing location other than the location 
closest to where the associated person was employed at the time of 
the of the events giving rise to dispute and makes the request after 
the arbitrator or arbitrators are selected, the associated person 
must submit the request to the arbitrator or panel.
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\6\ 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 is consistent with FINRA's 
statutory obligations under the Act to protect investors and the public 
interest because the proposal would assist in the efficient 
administration of the arbitration process by giving customers and 
associated persons more control over where the arbitration would be 
held.
---------------------------------------------------------------------------

    \6\ 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, as amended.

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 by FINRA.

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 reasons for so finding or (ii) as to 
which the self-regulatory organization 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. The Commission in particular 
requests comment on the effect of allowing customers or associated 
persons to request a different hearing location after the arbitrator or 
arbitrators have been selected. 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-2009-073 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-2009-073. 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 20549-1090. 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 the File Number SR-FINRA-2009-073 
and should be submitted on or before January 20, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30913 Filed 12-29-09; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.