Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Proposed Rule Change To Adopt FINRA Rule 2261 (Disclosure of Financial Condition) in the Consolidated FINRA Rulebook, 475-477 [E9-31333]
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Federal Register / Vol. 75, No. 2 / Tuesday, January 5, 2010 / Notices
The following areas have been
determined to be adversely affected by
the disaster:
3.625 Primary Counties: Atlantic, Cape May,
Ocean
The Interest Rates are:
Percent
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations without Credit Available Elsewhere .....................................
3.000
Percent
3.000
The number assigned to this disaster
for physical damage is 119888 and for
economic injury is 119898.
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
Roger B. Garland,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. E9–31259 Filed 1–4–10; 8:45 am]
BILLING CODE 8025–01–P
For Physical Damage:
Non-Profit Organizations with
Credit Available Elsewhere ...
Non-Profit Organizations without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations without Credit Available Elsewhere .....................................
3.625
3.000
[Disaster Declaration #11990 and #11991]
New Jersey Disaster #NJ–00012
The number assigned to this disaster
for physical damage is 11990B and for
economic injury is 11991B.
srobinson on DSKHWCL6B1PROD with PROPOSALS
SECURITIES AND EXCHANGE
COMMISSION
SUMMARY: This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of New Jersey (FEMA–1867–
DR), dated 12/22/2009.
Incident: Severe Storms and Flooding
Associated with Tropical Depression Ida
and a Nor’easter.
Incident Period: 11/11/2009 through
11/15/2009.
Effective Date: 12/22/2009.
Physical Loan Application Deadline
Date: 02/22/2010.
Economic Injury (EIDL) Loan
Application Deadline Date: 09/22/2010.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street, SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
12/22/2009, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
VerDate Nov<24>2008
16:41 Jan 04, 2010
Jkt 220001
Roger B. Garland,
Acting Associate Administrator for Disaster
Assistance.
[FR Doc. E9–31258 Filed 1–4–10; 8:45 am]
BILLING CODE 8025–01–P
AGENCY: U.S. Small Business
Administration.
ACTION: Notice
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Thursday, January 7, 2010 at 2 p.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(5), (7), 9(B) and (10) and
17 CFR 200.402(a)(5), (7), 9(ii) and (10),
permit consideration of the scheduled
matters at the Closed Meeting.
Commissioner Walter, as duty officer,
voted to consider the items listed for the
Closed Meeting in a closed session.
The subject matter of the Closed
Meeting scheduled for Thursday,
January 7, 2010 will be:
Institution and settlement of injunctive
actions;
Institution and settlement of
administrative proceedings;
A litigation matter; and
Other matters relating to enforcement
proceedings.
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At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact: The Office of the Secretary at
(202) 551–5400.
Dated: December 31, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–31429 Filed 12–31–09; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
3.000 COMMISSION
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
SMALL BUSINESS ADMINISTRATION
475
[Release No. 34–61253; File No. SR–FINRA–
2009–081]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Proposed Rule Change To Adopt
FINRA Rule 2261 (Disclosure of
Financial Condition) in the
Consolidated FINRA Rulebook
December 29, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
18, 2009, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) (f/k/a
National Association of Securities
Dealers, Inc. (‘‘NASD’’)) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. 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 is proposing to adopt NASD
Rule 2270 (Disclosure of Financial
Condition to Customers) and NASD
Rule 2910 (Disclosure of Financial
Condition to Other Members) as a
FINRA rule in the consolidated FINRA
rulebook. The proposed rule change
would combine NASD Rule 2270 and
NASD Rule 2910, subject to certain
amendments, into FINRA Rule 2261
(Disclosure of Financial Condition) in
the consolidated FINRA rulebook.
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.
1 15
2 17
E:\FR\FM\05JAN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
05JAN1
476
Federal Register / Vol. 75, No. 2 / Tuesday, January 5, 2010 / 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
srobinson on DSKHWCL6B1PROD with PROPOSALS
As part of the process of developing
a new consolidated rulebook
(‘‘Consolidated FINRA Rulebook’’),3
FINRA is proposing to adopt NASD
Rule 2270 (Disclosure of Financial
Condition to Customers) and NASD
Rule 2910 (Disclosure of Financial
Condition to Other Members), subject to
certain amendments, as FINRA Rule
2261 in the Consolidated FINRA
Rulebook.
NASD Rule 2270 requires members to
make available for inspection, upon the
request of any bona fide regular
customer,4 the information relative to
such member’s financial condition as
disclosed in its most recent balance
sheet prepared either in accordance
with such member’s usual practice or as
required by any state or federal
securities laws, or any rule or regulation
thereunder.
FINRA is proposing to amend the
requirements of NASD Rule 2270 to
provide an alternative means of
satisfying the requirement that members
make balance sheet information
available to bona fide regular customers.
Currently, the rule requires that
members ‘‘make available to inspection
3 The current FINRA rulebook consists of (1)
FINRA Rules; (2) NASD Rules; and (3) rules
incorporated from NYSE (‘‘Incorporated NYSE
Rules’’) (together, the NASD Rules and Incorporated
NYSE Rules are referred to as the ‘‘Transitional
Rulebook’’). While the NASD Rules generally apply
to all FINRA members, the Incorporated NYSE
Rules apply only to those members of FINRA that
are also members of the NYSE (‘‘Dual Members’’).
The FINRA Rules apply to all FINRA members,
unless such rules have a more limited application
by their terms. For more information about the
rulebook consolidation process, see Information
Notice, March 12, 2008 (Rulebook Consolidation
Process).
4 For purposes of the rule, ‘‘customer’’ means any
person who, in the regular course of such member’s
business, has cash or securities in the possession of
such member.
VerDate Nov<24>2008
16:41 Jan 04, 2010
Jkt 220001
by any bona fide regular customer, upon
request, the information relative to such
member’s financial condition as
disclosed in its most recent balance
sheet . * * *’’ FINRA is proposing to
provide members with the option of
delivering their balance sheet, in paper
or electronic form, to customers who
request it. With respect to electronic
delivery, the requesting customer must
consent to receive the balance sheet in
electronic form to ensure that such
information is accessible to the
customer. FINRA is not proposing to
require members to deliver their balance
sheet to all customers (instead of
making them available to inspection or
delivering them upon request) because
SEA Rule 17a–5(c) generally requires a
broker-dealer that carries customer
accounts to send its full balance sheet
and certain other financial information
to each of its customers twice a year.5
NASD Rule 2270 provides customers
with additional access to their broker’s
balance sheet information by requiring
that members permit customers to
inspect or obtain a copy of a member’s
most recent balance sheet at any time
upon request.
NASD Rule 2910 requires any
member that is a party to an open
transaction or who has on deposit cash
or securities of another member to
furnish, upon the written request of the
other member, a statement of its
financial condition as disclosed in its
most recently prepared balance sheet.
FINRA is proposing to amend the
provisions of NASD Rule 2910 to
require, consistent with NASD Rule
2270, that members provide to other
members the balance sheet that was
‘‘prepared either in accordance with
such member’s usual practice or as
required by any state or federal
securities laws, or any rule or regulation
thereunder.’’ In addition, FINRA is
proposing that members be permitted to
provide their balance sheet to other
members in paper or electronic form.
However, unlike the proposed
amendments to NASD Rule 2270,
FINRA is not proposing to require
members to obtain the consent of other
members to electronically deliver the
balance sheet. FINRA believes that other
5 SEC Rule 17a–5(c)(5) contains a conditional
exemption from the requirement that broker-dealers
semi-annually send customers a full balance sheet.
Under the exemption, a broker-dealer can semiannually send its customers summary information
regarding its net capital, as long as it also provides
customers with a toll-free number to call for a free
copy of its full balance sheet, makes its full balance
sheet available to customers on its website, and
meets other specified requirements. See Securities
Exchange Act Release No. 48272 (August 1, 2003),
68 FR 46446 (August 6, 2003).
PO 00000
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Fmt 4703
Sfmt 4703
members, unlike all customers, will be
equipped to receive electronic delivery.
FINRA believes that the requirements
of NASD Rule 2270 and NASD Rule
2910 continue to provide access to
important information by allowing
customers and other members to have
access to a copy of a member’s most
recent balance sheet at any time upon
request and should be transferred, as
amended, to the Consolidated FINRA
Rulebook as FINRA Rule 2261.
FINRA will announce the
implementation date of the proposed
rule change in a Regulatory Notice to be
published no later than 90 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,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. FINRA believes that
adopting the proposed rules as part of
the Consolidated FINRA Rulebook will
continue to serve important objectives
by ensuring that basic, current
information regarding the financial
condition of members with which
customers and other members conduct
business is available upon request.
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 reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
6 15
E:\FR\FM\05JAN1.SGM
U.S.C. 78o–3(b)(6).
05JAN1
Federal Register / Vol. 75, No. 2 / Tuesday, January 5, 2010 / Notices
(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:
srobinson on DSKHWCL6B1PROD with PROPOSALS
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–2009–081 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–2009–081. 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–2009–081 and
should be submitted on or before
January 26, 2010.
VerDate Nov<24>2008
16:41 Jan 04, 2010
Jkt 220001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–31333 Filed 1–4–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61250; File No. SR–
NYSEAmex–2009–92]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Amex LLC Extending the Operative
Date of Rule 92(c)(3) From December
31, 2009 to July 31, 2010
December 29, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on December
23, 2009, NYSE Amex LLC (the
‘‘Exchange’’ or ‘‘NYSE Amex’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. 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
The Exchange proposes to extend the
operative date of Rule 92(c)(3) from
December 31, 2009 to July 31, 2010. The
text of the proposed rule change is
available at the Exchange, on the
Commission’s Web site at https://
www.sec.gov, the Commission’s Public
Reference Room, and https://
www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
7 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00142
Fmt 4703
Sfmt 4703
477
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to extend
the delayed operative date of Rule
92(c)(3) from December 31, 2009 to July
31, 2010. The Exchange believes that
this extension will provide the time
necessary for the Exchange, the New
York Stock Exchange LLC (‘‘NYSE’’),
and the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) to harmonize
their respective rules concerning
customer order protection to achieve a
standardized industry practice.4
Background
On July 5, 2007, the Commission
approved amendments to NYSE Rule 92
to permit riskless principal trading at
the NYSE.5 These amendments were
filed in part to begin the harmonization
process between NYSE Rule 92 and
FINRA’s Manning Rule.6 In connection
with those amendments, the NYSE
implemented for an operative date of
January 16, 2008, NYSE Rule 92(c)(3),
which permits NYSE member
organizations to submit riskless
principal orders to the NYSE, but
requires them to submit to a designated
NYSE database a report of the execution
of the facilitated order. That rule also
requires members to submit to that same
database sufficient information to
provide an electronic link of the
execution of the facilitated order to all
of the underlying orders.
For purposes of NYSE Rule 92(c)(3),
the NYSE informed member
organizations that when executing
riskless principal transactions, firms
must submit order execution reports to
the NYSE’s Front End Systemic Capture
(‘‘FESC’’) database linking the execution
of the riskless principal order on the
NYSE to the specific underlying orders.
The information provided must be
sufficient for both member firms and the
NYSE to reconstruct in a timesequenced manner all orders, including
allocations to the underlying orders,
with respect to which a member
organization is claiming the riskless
principal exception.
4 NYSE has filed a companion rule filing to
conform its Rules to the changes proposed in this
filing. See SR–NYSE–2009–129, formally submitted
December 23, 2009.
5 See Securities Exchange Act Release No. 56017
(Jul. 5, 2007), 72 FR 38110 (Jul. 12, 2007) (SR–
NYSE–2007–21).
6 See NASD Rule 2111 and IM–2110–2.
E:\FR\FM\05JAN1.SGM
05JAN1
]]>Agencies
[Federal Register Volume 75, Number 2 (Tuesday, January 5, 2010)]
[Notices]
[Pages 475-477]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-31333]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61253; File No. SR-FINRA-2009-081]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Proposed Rule Change To Adopt
FINRA Rule 2261 (Disclosure of Financial Condition) in the Consolidated
FINRA Rulebook
December 29, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 18, 2009, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc.
(``NASD'')) filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I,
II, and III below, which Items have been prepared by FINRA. 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 is proposing to adopt NASD Rule 2270 (Disclosure of Financial
Condition to Customers) and NASD Rule 2910 (Disclosure of Financial
Condition to Other Members) as a FINRA rule in the consolidated FINRA
rulebook. The proposed rule change would combine NASD Rule 2270 and
NASD Rule 2910, subject to certain amendments, into FINRA Rule 2261
(Disclosure of Financial Condition) in the consolidated FINRA rulebook.
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.
[[Page 476]]
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
As part of the process of developing a new consolidated rulebook
(``Consolidated FINRA Rulebook''),\3\ FINRA is proposing to adopt NASD
Rule 2270 (Disclosure of Financial Condition to Customers) and NASD
Rule 2910 (Disclosure of Financial Condition to Other Members), subject
to certain amendments, as FINRA Rule 2261 in the Consolidated FINRA
Rulebook.
---------------------------------------------------------------------------
\3\ The current FINRA rulebook consists of (1) FINRA Rules; (2)
NASD Rules; and (3) rules incorporated from NYSE (``Incorporated
NYSE Rules'') (together, the NASD Rules and Incorporated NYSE Rules
are referred to as the ``Transitional Rulebook''). While the NASD
Rules generally apply to all FINRA members, the Incorporated NYSE
Rules apply only to those members of FINRA that are also members of
the NYSE (``Dual Members''). The FINRA Rules apply to all FINRA
members, unless such rules have a more limited application by their
terms. For more information about the rulebook consolidation
process, see Information Notice, March 12, 2008 (Rulebook
Consolidation Process).
---------------------------------------------------------------------------
NASD Rule 2270 requires members to make available for inspection,
upon the request of any bona fide regular customer,\4\ the information
relative to such member's financial condition as disclosed in its most
recent balance sheet prepared either in accordance with such member's
usual practice or as required by any state or federal securities laws,
or any rule or regulation thereunder.
---------------------------------------------------------------------------
\4\ For purposes of the rule, ``customer'' means any person who,
in the regular course of such member's business, has cash or
securities in the possession of such member.
---------------------------------------------------------------------------
FINRA is proposing to amend the requirements of NASD Rule 2270 to
provide an alternative means of satisfying the requirement that members
make balance sheet information available to bona fide regular
customers. Currently, the rule requires that members ``make available
to inspection by any bona fide regular customer, upon request, the
information relative to such member's financial condition as disclosed
in its most recent balance sheet . * * *'' FINRA is proposing to
provide members with the option of delivering their balance sheet, in
paper or electronic form, to customers who request it. With respect to
electronic delivery, the requesting customer must consent to receive
the balance sheet in electronic form to ensure that such information is
accessible to the customer. FINRA is not proposing to require members
to deliver their balance sheet to all customers (instead of making them
available to inspection or delivering them upon request) because SEA
Rule 17a-5(c) generally requires a broker-dealer that carries customer
accounts to send its full balance sheet and certain other financial
information to each of its customers twice a year.\5\ NASD Rule 2270
provides customers with additional access to their broker's balance
sheet information by requiring that members permit customers to inspect
or obtain a copy of a member's most recent balance sheet at any time
upon request.
---------------------------------------------------------------------------
\5\ SEC Rule 17a-5(c)(5) contains a conditional exemption from
the requirement that broker-dealers semi-annually send customers a
full balance sheet. Under the exemption, a broker-dealer can semi-
annually send its customers summary information regarding its net
capital, as long as it also provides customers with a toll-free
number to call for a free copy of its full balance sheet, makes its
full balance sheet available to customers on its website, and meets
other specified requirements. See Securities Exchange Act Release
No. 48272 (August 1, 2003), 68 FR 46446 (August 6, 2003).
---------------------------------------------------------------------------
NASD Rule 2910 requires any member that is a party to an open
transaction or who has on deposit cash or securities of another member
to furnish, upon the written request of the other member, a statement
of its financial condition as disclosed in its most recently prepared
balance sheet. FINRA is proposing to amend the provisions of NASD Rule
2910 to require, consistent with NASD Rule 2270, that members provide
to other members the balance sheet that was ``prepared either in
accordance with such member's usual practice or as required by any
state or federal securities laws, or any rule or regulation
thereunder.'' In addition, FINRA is proposing that members be permitted
to provide their balance sheet to other members in paper or electronic
form. However, unlike the proposed amendments to NASD Rule 2270, FINRA
is not proposing to require members to obtain the consent of other
members to electronically deliver the balance sheet. FINRA believes
that other members, unlike all customers, will be equipped to receive
electronic delivery.
FINRA believes that the requirements of NASD Rule 2270 and NASD
Rule 2910 continue to provide access to important information by
allowing customers and other members to have access to a copy of a
member's most recent balance sheet at any time upon request and should
be transferred, as amended, to the Consolidated FINRA Rulebook as FINRA
Rule 2261.
FINRA will announce the implementation date of the proposed rule
change in a Regulatory Notice to be published no later than 90 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,\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. FINRA believes that adopting the proposed rules as
part of the Consolidated FINRA Rulebook will continue to serve
important objectives by ensuring that basic, current information
regarding the financial condition of members with which customers and
other members conduct business is available upon request.
---------------------------------------------------------------------------
\6\ 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 reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
[[Page 477]]
(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-2009-081 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-2009-081. 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-2009-081 and should be
submitted on or before January 26, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-31333 Filed 1-4-10; 8:45 am]
BILLING CODE 8011-01-P
