Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Amendment No. 2 to Proposed Rule Change, as Modified by Amendment No. 1, To Adopt FINRA Rules 2210 (Communications With the Public), 2212 (Use of Investment Companies Rankings in Retail Communications), 2213 (Requirements for the Use of Bond Mutual Fund Volatility Ratings), 2214 (Requirements for the Use of Investment Analysis Tools), 2215 (Communications With the Public Regarding Security Futures), and 2216 (Communications With the Public About Collateralized Mortgage Obligations (CMOs)) in the Consolidated FINRA Rulebook, 82014-82016 [2011-33488]
Download as PDF
82014
Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices
Act,6 because it would promote just and
equitable principles of trade, and, in
general, protect investors and the public
interest. At the outset, the Exchange
believes that the proposal is not unfairly
discriminatory due to the fact that
registration as an Exchange Market
Maker, and, in turn, as a CLP, is equally
available to all Members that satisfy the
requirements of Rule 11.8. The
Exchange believes that the CLP Program
will encourage the development of new
financial products, provide a better
trading environment for investors in
Exchange-listed securities, and
generally encourage greater competition
between listing venues.
As proposed, the CLP Program is
designed to enhance the Exchange’s
competitiveness as a listing venue and
to strengthen its market quality for
Exchange-listed securities. The
Exchange is launching its listings
business at a time in which there are
two dominant primary listing venues,
the New York Stock Exchange and
Nasdaq. The Exchange believes that the
proposed change would increase
competition by incenting Exchange
Market Makers to register as CLPs,
which will enhance the quality of
quoting in Exchange-listed securities
and help to reduce imbalances in
Exchange auctions, and will further
assist the Exchange to develop an
alternative to Nasdaq and the New York
Stock Exchange for a company seeking
to list its securities. Accordingly, the
Exchange believes that the proposal will
compliment the Exchange’s program for
listing securities on the Exchange,
which will, in turn, provide companies
with another option for raising capital
in the public markets, thereby
promoting the principles discussed in
Section 6(b)(5) of the Act.7
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change imposes any
burden on competition.
wreier-aviles on DSK3TPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
6 15
U.S.C. 78f(b)(5).
7 15 U.S.C. 78f(b)(5).
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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 or disapprove
the proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–BATS–
2011–51 and should be submitted on or
before January 19, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority. 8
Kevin M. O’Neill,
Deputy Secretary.
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:
[FR Doc. 2011–33377 Filed 12–28–11; 8:45 am]
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–BATS–2011–51 on the
subject line.
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Amendment No. 2 to Proposed Rule
Change, as Modified by Amendment
No. 1, To Adopt FINRA Rules 2210
(Communications With the Public),
2212 (Use of Investment Companies
Rankings in Retail Communications),
2213 (Requirements for the Use of
Bond Mutual Fund Volatility Ratings),
2214 (Requirements for the Use of
Investment Analysis Tools), 2215
(Communications With the Public
Regarding Security Futures), and 2216
(Communications With the Public
About Collateralized Mortgage
Obligations (CMOs)) in the
Consolidated FINRA Rulebook
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–BATS–2011–51. This file
number should be included on the
subject line if email 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 Web site viewing and
printing 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 will
also be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66049; File No. SR–FINRA–
2011–035]
December 23, 2011.
I. Introduction
On July 14, 2011, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to adopt NASD Rules 2210 and
2211 and NASD Interpretive Materials
2210–1 and 2210–3 through 2210–8 as
FINRA Rules 2210 and 2212 through
2216, and to delete paragraphs (a)(1), (i),
(j) and (l) of Incorporated NYSE Rule
472, Incorporated NYSE Rule
Supplementary Material 472.10(1), (3),
(4) and (5) and 472.90, and Incorporated
NYSE Rule Interpretations 472/01 and
472/03 through 472/11. The proposed
rule change was published for comment
8 17
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. 76, No. 250 / Thursday, December 29, 2011 / Notices
wreier-aviles on DSK3TPTVN1PROD with NOTICES
in the Federal Register on August 3,
2011.3 The Commission received nine
comment letters in response to the
proposed rule change.4 On October 31,
2011, FINRA filed Amendment No. 1 to
the proposed rule change and a letter
responding to comments.5 The proposed
Amendment No. 1 was published for
comment along with an order instituting
proceedings pursuant to Section
19(b)(2)(B) of the Act, to determine
whether to approve or disapprove the
proposed rule change, as modified by
Amendment No. 1, in the Federal
Register on November 7, 2011.6 The
comment period closed on December 7,
2011 and FINRA’s rebuttal period
closed on December 22, 2011. The
Commission received seven comment
letters in response to the Notice and
Proceedings Order.7 On December 22,
2011, FINRA filed Amendment No. 2 to
the proposed rule change and a letter
responding to comments.8 The text of
Amendment No. 2 and FINRA’s
Rebuttal Letter are 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.
FINRA’s Rebuttal Letter is also available
on the Commission’s Web site at
https://www.sec.gov.
3 See Securities Exchange Act Release No. 64984
(July 28, 2011), 76 FR 46870 (August 3, 2011).
4 Comment letters are available at www.sec.gov.
5 See letter from Joseph P. Savage, FINRA, to
Elizabeth Murphy, Secretary, SEC, dated October
31, 2011 (‘‘Response Letter’’). The text of proposed
Amendment No. 1 and FINRA’s Response Letter are
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.
FINRA’s Response Letter is also available on the
Commission’s Web site at https://www.sec.gov.
6 See Securities Exchange Act Release No. 65663
(November 1, 2011), 76 FR 68800 (November 7,
2011) (Notice of Filing of Amendment No. 1 and
Order Instituting Proceedings SR–FINRA–2011–
035) (‘‘Notice and Proceedings Order’’). The
comment period closed on December 7, 2011 and
FINRA’s rebuttal period closed on December 22,
2011.
7 See letter from Melissa Callison, Vice President,
Compliance, Charles Schwab & Co., Inc., dated
December 7, 2011 (‘‘Schwab’’); letter from
Alexander C. Gavis, Vice President & Associate
General Counsel, Fidelity Investments, dated
December 7, 2011 (‘‘Fidelity’’); letter from David T.
Bellaire, General Counsel and Director of
Government Affairs, Financial Services Institute,
dated December 7, 2011 (‘‘FSI’’); letter from Dorothy
M. Donohue, Senior Associate Counsel, Investment
Company Institute, dated December 7, 2011 (‘‘ICI’’);
letter from John Polanin and Claire Santaniello, CoChairs, Compliance and Regulatory Policy
Committee of the Securities Industry and Financial
Markets Association (‘‘SIFMA’’); letter from Sandra
J. Burke, Principal, Vanguard, dated December 7,
2011 (‘‘Vanguard’’); and letter from Jeremiah
McGair, Attorney, Wolverine Execution Services,
LLC, dated December 7, 2011 (‘‘Wolverine’’).
Comment letters are available at www.sec.gov.
8 See letter from Joseph P. Savage, FINRA, to
Elizabeth M. Murphy, Secretary, SEC, dated
December 22, 2011 (‘‘Rebuttal Letter’’).
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15:12 Dec 28, 2011
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II. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Amendment
First, FINRA is proposing to amend
proposed FINRA Rule 2210 to exclude
from the definition of ‘‘institutional
communication’’ a member’s internal
communications used to train or
educate registered persons about the
products or services of the member. In
this regard, FINRA proposes to delete
proposed Supplementary Material
2210.01 in its entirety. FINRA also
proposes to revise proposed FINRA Rule
2210(a)(3) as set forth below. Proposed
new language is in italics.
(3) ‘‘Institutional communication’’
means any written (including
electronic) communication that is
distributed or made available only to
institutional investors, but does not
include a member’s internal
communications.
Second, FINRA is proposing to amend
proposed FINRA Rule 2210 to allow a
member that is subject to the new
member pre-use filing requirements to
file a broker-prepared free writing
prospectus within 10 business days of
first use, rather than at least 10 business
days prior to first use. In this regard,
FINRA proposes to replace proposed
FINRA Rule 2210(c)(1)(A) with the
following:
(A) For a period of one year beginning
on the date reflected in the Central
Registration Depository (CRD®) system
as the date that FINRA membership
became effective, the member must file
with the Department at least 10 business
days prior to first use any retail
communication that is published or
used in any electronic or other public
media, including any generally
accessible Web site, newspaper,
magazine or other periodical, radio,
television, telephone or audio recording,
video display, signs or billboards,
motion pictures, or telephone directories
(other than routine listings). To the
extent any retail communication that is
subject to this filing requirement is a
free writing prospectus that has been
filed with the SEC pursuant to Securities
Act Rule 433(d)(1)(ii), the member may
file such retail communication within
10 business days of first use rather than
at least 10 business days prior to first
use.
Third, in response to comments
received by the Commission, FINRA is
proposing to amend proposed FINRA
Rule 2210 to exclude from the filing
requirements retail communications
that are posted on an online interactive
electronic forum. FINRA also is
proposing to amend FINRA Rule 2210 to
exclude from the filing requirements
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82015
press releases issued by closed-end
investment companies that are listed on
the New York Stock Exchange (‘‘NYSE’’)
pursuant to section 202.06 of the NYSE
Listed Company Manual (or any
successor provision). In this regard,
FINRA proposes to insert the following
new sub-paragraphs (M) and (N) at the
end of paragraph (c)(7) of proposed
FINRA Rule 2210:
(M) Retail communications that are
posted on an online interactive
electronic forum.
(N) Press releases issued by closedend investment companies that are
listed on the New York Stock Exchange
(NYSE) pursuant to section 202.06 of
the NYSE Listed Company Manual (or
any successor provision).
III. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the filing as amended
by Amendments 1 and 2 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 email to rulecomments@sec.gov. Please include File
Number SR–FINRA–2011–035 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–FINRA–2011–035. This file
number should be included on the
subject line if email 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 Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
E:\FR\FM\29DEN1.SGM
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82016
Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices
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–2011–035 and
should be submitted on or before
January 18, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–33488 Filed 12–28–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66038; File No. SR–CBOE–
2011–117]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing of a
Proposed Rule Change Relating to Its
Automated Improvement Mechanism
December 22, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
14, 2011, the Chicago Board Options
Exchange, Incorporated (the ‘‘Exchange’’
or ‘‘CBOE’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
wreier-aviles on DSK3TPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange proposes to amend its
rules relating to its Automated
Improvement Mechanism (‘‘AIM’’). The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission.
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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15:12 Dec 28, 2011
Jkt 226001
II. Self-Regulatory Organization’s
Statement of the Purpose of, and the
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 these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization 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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposed rule
change is to amend Rule 6.74A to
permit an Initiating TPH to elect to have
last priority in AIM’s order allocation.
AIM allows a TPH to submit an Agency
Order along with a contra-side second
order (a principal order or a solicited
order for the same size as the Agency
Order) into an Auction where other
participants could compete with the
Initiating TPH’s second order to execute
against the Agency Order, which
guarantees that the Agency Order will
receive an execution.3 Initiating TPHs
must submit the Agency Order at the
better of the NBBO or the Agency
Order’s limit price (if the order is a limit
order).4 Once an Auction commences,
the Initiating TPH cannot cancel it.5
Upon receipt of an Agency Order (and
the Initiating TPH’s second order), the
Exchange will commence the Auction
by issuing an RFR detailing the side and
size of the Agency Order. The RFR
period will last for one (1) second.6 At
the conclusion of an Auction, an
Agency Order will be allocated at the
best price(s) in accordance with the
applicable matching algorithm rules for
that class, subject to the allocation
provisions of Rule 6.74A(b)(3).
Under this proposal, when submitting
an Agency Order to initiate an Auction
against a single-price submission, the
Initiating TPH will have the opportunity
to elect to have last priority in AIM’s
order allocation. If the Initiating TPH
makes this election, the Initiating TPH
would be allocated only the amount of
contracts remaining, if any, after the
3 See
CBOE Rule 6.74A.
CBOE Rule 6.74A(a)(2).
5 See CBOE Rule 6.74A(b)(1)(A).
6 See CBOE Rule 6.74A(b)(1). Several types of
events will cause an Auction to conclude. See
CBOE Rule 6.74A(b)(2).
4 See
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Agency Order is allocated to all other
Auction participants willing to trade
with the Agency Order at the singleprice submission price.7 If it makes this
election, the Initiating TPH may not be
allocated any contracts, or may be
allocated fewer contracts than it would
otherwise receive pursuant to Rule
6.74A(b)(3)(F) (generally 40%).
As an example, suppose an Initiating
TPH submits to an Auction an Agency
Order for 1,000 contracts and makes the
election described above:
• If at the conclusion of the Auction,
other Auction participants are willing to
trade with 800 of these contracts at the
single-price submission price or better
price(s) resulting from the Auction, then
the Initiating TPH will be allocated the
remaining 200 contracts (or 20%) for
execution against its contra-side order at
its specified single price.
• If at the conclusion of the Auction,
other Auction participants are willing to
trade with 600 of these contracts at the
single-price submission price or better
price(s) resulting from the Auction, then
the Initiating TPH will be allocated the
remaining 400 contracts (or 40%) for
execution against its contra-side order at
its specified single price.
• If at the conclusion of the Auction,
other Auction participants are willing to
trade with 400 of these contracts at the
single-price submission price or better
price(s) resulting from the Auction, then
the Initiating TPH will be allocated 600
contracts for execution against its
contra-side order at its specified single
price.
• If at the conclusion of the Auction,
other Auction participants are willing to
trade with the entire Agency Order at
the single-price submission price or
better price(s) resulting from the
Auction, then the Initiating TPH will be
allocated no contracts.
Under this proposal, Agency Orders
submitted to AIM will continue to be
guaranteed execution at a price at least
as good as the NBBO while providing
the opportunity for execution at a price
better than the NBBO.
The Exchange believes this proposal
will incent more TPHs to initiate
Auctions, because the additional
flexibility encourages increased
participation by TPHs willing to trade
with Agency Orders at the NBBO but
7 The Exchange notes that Chapter V, Section
18(f)(v), The Price Improvement Period (‘‘PIP’’), of
the Rules of the Boston Exchange Group, LLC
includes a similar provision that permits an options
participant initiating a PIP auction to designate a
lower amount for which it will retain certain
priority and trade allocation privileges upon the
conclusion of the PIP auction than the 40% of the
PIP order to which the initiating options participant
is otherwise entitled pursuant to PIP’s allocation
order.
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Agencies
[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Notices]
[Pages 82014-82016]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33488]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66049; File No. SR-FINRA-2011-035]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Amendment No. 2 to Proposed Rule
Change, as Modified by Amendment No. 1, To Adopt FINRA Rules 2210
(Communications With the Public), 2212 (Use of Investment Companies
Rankings in Retail Communications), 2213 (Requirements for the Use of
Bond Mutual Fund Volatility Ratings), 2214 (Requirements for the Use of
Investment Analysis Tools), 2215 (Communications With the Public
Regarding Security Futures), and 2216 (Communications With the Public
About Collateralized Mortgage Obligations (CMOs)) in the Consolidated
FINRA Rulebook
December 23, 2011.
I. Introduction
On July 14, 2011, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to adopt NASD Rules 2210 and 2211
and NASD Interpretive Materials 2210-1 and 2210-3 through 2210-8 as
FINRA Rules 2210 and 2212 through 2216, and to delete paragraphs
(a)(1), (i), (j) and (l) of Incorporated NYSE Rule 472, Incorporated
NYSE Rule Supplementary Material 472.10(1), (3), (4) and (5) and
472.90, and Incorporated NYSE Rule Interpretations 472/01 and 472/03
through 472/11. The proposed rule change was published for comment
[[Page 82015]]
in the Federal Register on August 3, 2011.\3\ The Commission received
nine comment letters in response to the proposed rule change.\4\ On
October 31, 2011, FINRA filed Amendment No. 1 to the proposed rule
change and a letter responding to comments.\5\ The proposed Amendment
No. 1 was published for comment along with an order instituting
proceedings pursuant to Section 19(b)(2)(B) of the Act, to determine
whether to approve or disapprove the proposed rule change, as modified
by Amendment No. 1, in the Federal Register on November 7, 2011.\6\ The
comment period closed on December 7, 2011 and FINRA's rebuttal period
closed on December 22, 2011. The Commission received seven comment
letters in response to the Notice and Proceedings Order.\7\ On December
22, 2011, FINRA filed Amendment No. 2 to the proposed rule change and a
letter responding to comments.\8\ The text of Amendment No. 2 and
FINRA's Rebuttal Letter are 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. FINRA's Rebuttal Letter is also available on the
Commission's Web site at https://www.sec.gov.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 64984 (July 28,
2011), 76 FR 46870 (August 3, 2011).
\4\ Comment letters are available at www.sec.gov.
\5\ See letter from Joseph P. Savage, FINRA, to Elizabeth
Murphy, Secretary, SEC, dated October 31, 2011 (``Response
Letter''). The text of proposed Amendment No. 1 and FINRA's Response
Letter are 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. FINRA's Response Letter is also available on the
Commission's Web site at https://www.sec.gov.
\6\ See Securities Exchange Act Release No. 65663 (November 1,
2011), 76 FR 68800 (November 7, 2011) (Notice of Filing of Amendment
No. 1 and Order Instituting Proceedings SR-FINRA-2011-035) (``Notice
and Proceedings Order''). The comment period closed on December 7,
2011 and FINRA's rebuttal period closed on December 22, 2011.
\7\ See letter from Melissa Callison, Vice President,
Compliance, Charles Schwab & Co., Inc., dated December 7, 2011
(``Schwab''); letter from Alexander C. Gavis, Vice President &
Associate General Counsel, Fidelity Investments, dated December 7,
2011 (``Fidelity''); letter from David T. Bellaire, General Counsel
and Director of Government Affairs, Financial Services Institute,
dated December 7, 2011 (``FSI''); letter from Dorothy M. Donohue,
Senior Associate Counsel, Investment Company Institute, dated
December 7, 2011 (``ICI''); letter from John Polanin and Claire
Santaniello, Co-Chairs, Compliance and Regulatory Policy Committee
of the Securities Industry and Financial Markets Association
(``SIFMA''); letter from Sandra J. Burke, Principal, Vanguard, dated
December 7, 2011 (``Vanguard''); and letter from Jeremiah McGair,
Attorney, Wolverine Execution Services, LLC, dated December 7, 2011
(``Wolverine''). Comment letters are available at www.sec.gov.
\8\ See letter from Joseph P. Savage, FINRA, to Elizabeth M.
Murphy, Secretary, SEC, dated December 22, 2011 (``Rebuttal
Letter'').
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Amendment
First, FINRA is proposing to amend proposed FINRA Rule 2210 to
exclude from the definition of ``institutional communication'' a
member's internal communications used to train or educate registered
persons about the products or services of the member. In this regard,
FINRA proposes to delete proposed Supplementary Material 2210.01 in its
entirety. FINRA also proposes to revise proposed FINRA Rule 2210(a)(3)
as set forth below. Proposed new language is in italics.
(3) ``Institutional communication'' means any written (including
electronic) communication that is distributed or made available only to
institutional investors, but does not include a member's internal
communications.
Second, FINRA is proposing to amend proposed FINRA Rule 2210 to
allow a member that is subject to the new member pre-use filing
requirements to file a broker-prepared free writing prospectus within
10 business days of first use, rather than at least 10 business days
prior to first use. In this regard, FINRA proposes to replace proposed
FINRA Rule 2210(c)(1)(A) with the following:
(A) For a period of one year beginning on the date reflected in the
Central Registration Depository (CRD[supreg]) system as the date that
FINRA membership became effective, the member must file with the
Department at least 10 business days prior to first use any retail
communication that is published or used in any electronic or other
public media, including any generally accessible Web site, newspaper,
magazine or other periodical, radio, television, telephone or audio
recording, video display, signs or billboards, motion pictures, or
telephone directories (other than routine listings). To the extent any
retail communication that is subject to this filing requirement is a
free writing prospectus that has been filed with the SEC pursuant to
Securities Act Rule 433(d)(1)(ii), the member may file such retail
communication within 10 business days of first use rather than at least
10 business days prior to first use.
Third, in response to comments received by the Commission, FINRA is
proposing to amend proposed FINRA Rule 2210 to exclude from the filing
requirements retail communications that are posted on an online
interactive electronic forum. FINRA also is proposing to amend FINRA
Rule 2210 to exclude from the filing requirements press releases issued
by closed-end investment companies that are listed on the New York
Stock Exchange (``NYSE'') pursuant to section 202.06 of the NYSE Listed
Company Manual (or any successor provision). In this regard, FINRA
proposes to insert the following new sub-paragraphs (M) and (N) at the
end of paragraph (c)(7) of proposed FINRA Rule 2210:
(M) Retail communications that are posted on an online interactive
electronic forum.
(N) Press releases issued by closed-end investment companies that
are listed on the New York Stock Exchange (NYSE) pursuant to section
202.06 of the NYSE Listed Company Manual (or any successor provision).
III. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the filing as
amended by Amendments 1 and 2 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 email to rule-comments@sec.gov. Please include
File Number SR-FINRA-2011-035 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2011-035. This
file number should be included on the subject line if email 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 Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
[[Page 82016]]
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-2011-035 and should be
submitted on or before January 18, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33488 Filed 12-28-11; 8:45 am]
BILLING CODE 8011-01-P