Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Partial Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Partial Amendment No. 1, To Adopt FINRA Rule 5123 (Private Placements of Securities) in the Consolidated FINRA Rulebook, 4065-4068 [2012-1581]
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Federal Register / Vol. 77, No. 17 / Thursday, January 26, 2012 / Notices
the ODD. These respondents file
approximately 3 amendments per year.
The staff calculates that the preparation
and filing of amendments should take
no more than eight hours per options
market. Thus, the total compliance
burden for options markets per year is
216 hours (9 options markets × 8 hours
per amendment × 3 amendments). The
estimated cost for an in-house attorney
is $354 per hour,1 resulting in a total
cost of compliance for these
respondents of $76,464 per year (216
hours at $354 per hour).
In addition, approximately 1,500
broker-dealers must comply with Rule
9b–1. Each of these respondents will
process an average of 3 new customers
for options each week and, therefore,
will have to furnish approximately 156
ODDs per year. The postal mailing or
electronic delivery of the ODD takes
respondents no more than 30 seconds to
complete for an annual compliance
burden for each of these respondents of
78 minutes or 1.3 hours. Thus, the total
compliance burden per year is 1,950
hours (1,500 broker-dealers × 1.3 hours).
The estimated cost for a general clerk of
a broker-dealer is $50 per hour,2
resulting in a total cost of compliance
for these respondents of $97,500 per
year (1,950 hours at $50 per hour).
The total compliance burden for all
respondents under this rule (both
options markets and broker-dealers) is
2,166 hours per year (216 + 1,950), and
the total compliance cost is $173,964
($76,464 + $97,500).
The Commission may not conduct or
sponsor a collection of information
unless it displays a currently valid
control number. No person shall be
subject to any penalty for failing to
comply with a collection of information
subject to the PRA that does not display
a valid Office of Management and
Budget (OMB) control number.
Background documentation for this
information collection may be viewed at
the following Web site: https://
www.reginfo.gov. Comments should be
directed to (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503
or by sending an email to:
Shagufta_Ahmed@omb.eop.gov; and (ii)
Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way,
Alexandria, VA 22312 or send an email
to: PRA_Mailbox@sec.gov. Comments
must be submitted within 30 days of
this notice.
Dated: January 20, 2012.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–1585 Filed 1–25–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66203; File No. SR–FINRA–
2011–057]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Partial Amendment No. 1 and Order
Instituting Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change, as Modified by
Partial Amendment No. 1, To Adopt
FINRA Rule 5123 (Private Placements
of Securities) in the Consolidated
FINRA Rulebook
January 20, 2012.
I. Introduction
On October 5, 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’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to adopt FINRA Rule 5123. The
proposed rule change was published for
comment in the Federal Register on
October 24, 2011.3 The Commission
received 16 comment letters in response
to the proposed rule change.4 On
1 15
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1 The
$354 per hour figure for an Attorney is from
SIFMA’s Management & Professional Earnings in
the Securities Industry 2010, modified by
Commission staff to account for an 1800-hour workyear and multiplied by 5.35 to account for bonuses,
firm size, employee benefits and overhead.
2 The $50 per hour figure for a General Clerk is
from SIFMA’s Office Salaries in the Securities
Industry 2010, modified by Commission staff to
account for an 1800-hour work-year and multiplied
by 2.93 to account for bonuses, firm size, employee
benefits and overhead. The staff believes that the
ODD would be mailed or electronically delivered to
customers by a general clerk of the broker-dealer or
some other equivalent position.
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Jkt 226001
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Act Release No. 65585 (Oct. 18,
2011), 76 FR 65758 (Oct. 24, 2011) (Notice of Filing
of Proposed Rule Change to Adopt New FINRA
Rule 5123 (Private Placements of Securities), SR–
FINRA–2011–057) (‘‘Notice of Filing’’). The
comment period closed on November 18, 2011.
4 See Letters from Ryan Adams, Christine Lazaro,
Esq., and Lisa Catalano, Esq., St. John’s School of
Law Securities Arbitration Clinic, dated November
10, 2011 (‘‘St. John’s’’); Ryan K. Bakhtiari,
President, Public Investors Arbitration Bar
Association, dated November 14, 2011 (‘‘PIABA’’);
David T. Bellaire, Esq., Financial Services Institute,
Inc., dated November 14, 2011 (‘‘FSI’’); Robert E.
2 17
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Fmt 4703
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4065
November 17, 2011, FINRA extended
the time period in which the
Commission must approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to approve or
disapprove the proposed rule change, to
January 20, 2012. On January 19, 2012,
FINRA filed Partial Amendment No. 1
to the proposed rule change and a letter
responding to comments.5 The
Commission is publishing this notice
and order to solicit comments on Partial
Amendment No. 1 to the proposed rule
change from interested persons and to
institute proceedings pursuant to
Section 19(b)(2)(B) of the Exchange Act
to determine whether to approve or
disapprove the proposed rule change, as
modified by Partial Amendment No. 1.
Institution of these proceedings does
not indicate that the Commission has
reached any conclusions with respect to
the proposed rule change, nor does it
mean that the Commission will
ultimately approve or disapprove the
proposed rule change. Rather, as
discussed below, the Commission seeks
additional input from interested parties
on the issues presented by the proposed
rule change, as modified by Partial
Amendment No. 1, and on FINRA’s
Response Letter.
Buckholz, Chair, Committee on Securities
Regulation, New York City Bar Association, dated
November 9, 2011 (‘‘NYC Bar’’); Richard B. Chess,
President, Real Estate Investment Securities
Association, dated November 14, 2011 (‘‘REISA’’);
Alicia M. Cooney, Managing Director, Monument
Group (‘‘Monument Group’’), dated January 12,
2012 (Monument Group); Martel Day, Chairman,
Investment Program Association, dated November
14, 2011 (‘‘IPA’’); Jack E. Herstein, President, North
American Securities Administrators Association,
Inc., dated November 17, 2011 (‘‘NASAA’’); Joan
Hinchman, Executive Director, National Society of
Compliance Professionals, dated November 14,
2011 (‘‘NSCP’’); William A. Jacobson, Associate
Clinical Professor, and Carolyn L. Nguyen, Cornell
Law School, dated November 14, 2011 (‘‘Cornell’’);
Stuart J. Kaswell, Executive Vice President,
Managed Funds Association, dated November 14,
2011 (‘‘MFA’’); William H. Navin, Senior Vice
President, The Options Clearing Corporation, dated
November 9, 2011 (‘‘OCC’’); Jeffrey W. Rubin, Chair,
Federal Regulation of Securities Committee,
American Bar Association, dated November 14,
2011 (‘‘ABA’’); Sullivan & Cromwell LLP, dated
November 10, 2011 (‘‘S&C’’); Osamu Watanabe,
Deputy General Counsel, Moelis & Co., dated
November 28, 2011 (‘‘Moelis’’); and Donald S.
Weiss, K&L Gates LLP, dated November 14, 2011
(‘‘K&L Gates’’) . Comment letters are available at
www.sec.gov.
5 See Letter from Stan Macel, FINRA, to Elizabeth
Murphy, Secretary, SEC, dated January 19, 2012
(‘‘Response Letter’’). The text of proposed Partial
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 www.sec.gov.
E:\FR\FM\26JAN1.SGM
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Federal Register / Vol. 77, No. 17 / Thursday, January 26, 2012 / Notices
II. Description of the Proposed Rule
Change and Summary of Comments
FINRA is proposing to adopt FINRA
Rule 5123, which, prior to Partial
Amendment No. 1, would have required
that members and associated persons
that offer or sell any applicable private
placement (as described in the proposed
rule change), or participate in the
preparation of a private placement
memorandum (‘‘PPM’’), term sheet or
other disclosure documents in
connection with any such private
placement, provide relevant disclosures
to each investor prior to sale describing
the anticipated use of offering proceeds,
and the amount and type of offering
expenses and offering compensation. If
any issuer’s disclosure documents did
not contain the requisite information
about the offering expenses and use of
proceeds, the proposed rule change
would have required the member to
create and provide to any potential
investor a separate disclosure document
containing this information. FINRA
Rule 5123 also would have required that
each participating member file the PPM,
term sheet or other disclosure
document, and any exhibits thereto,
with FINRA no later than 15 calendar
days after the date of the first sale, and
any material amendments to such
document, or any amendments to any
disclosures mandated by the proposed
rule change, also were required to be
filed no later than 15 calendar days after
the date such document was provided to
any investor or prospective investor, as
discussed further below.
While some commenters expressed
support for the goals of the proposed
rule change,6 the remaining commenters
expressed a broad range of concerns,
such as: its scope, as derived from the
definition of private placement; the
broker-dealer disclosure requirements;
the filing requirements; the exemptions;
and whether the proposed rule change
is consistent with FINRA’s regulatory
oversight and authority. In particular:
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• Several commenters argued that
definition of private placement 7 in the
proposed rule change is overbroad and could
be interpreted to apply to any offer or sale
of securities for which an exemption from
registration is claimed under the Securities
Act of 1933 (‘‘Securities Act’’), including
public offerings and secondary market
6 Cornell; FSI; NASAA; PIABA; St. John’s. Two of
these commenters suggested FINRA members
provide additional disclosure: NASAA
recommended that the rule require members to
provide additional risk disclosures to investors;
Cornell urged FINRA to adopt a provision in the
Proposed Rule to require a member to disclose any
affiliation between the issuer and the member.
7 See proposed FINRA Rule 5123(a).
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trading.8 For example, commenters stated
that, due to the fact that it is not expressly
limited to ‘‘non-public’’ offerings, the
proposed definition is broader than the
definition of ‘‘private placement’’ in FINRA
Rule 5122 (Private Placements of Securities
Issued by Members), which applies to
member private offerings.9 The ABA, NYC
Bar, and S&C suggested narrowing the scope
of FINRA Rule 5123 to specific types of
‘‘non-public’’ offerings, or referring back to
the definition of ‘‘private placement’’ in
FINRA Rule 5122.
• Several commenters suggested that the
requirement that each member provide
applicable disclosure documentation to each
investor in a private placement prior to a sale
could be interpreted to require a FINRA
member to have primary responsibility for
preparing disclosure documents in the event
that an issuer does not prepare them.10 Two
commenters suggested that in some cases
members may not have access to all
necessary information from issuers 11 and
one of these two also stated that it may be
impractical and inefficient for members to be
charged with gathering and providing the
required information.12 One commenter
suggested that the production of a disclosure
document by a FINRA member would
increase the liability of the FINRA member
in the offering.13 Another commenter
suggested, as an alternative, that the
proposed rule change prohibit a member
from participating in a private placement if
the issuer does not provide the mandated
disclosures.14
• Two commenters argued that by
requiring members to provide disclosures
regarding private placements, the proposed
rule change would be contrary to the intent
of Congress and/or the federal securities
laws, which do not otherwise prescribe these
disclosures for many types of private
placements.15
• Three commenters stated that the
proposed rule change could significantly
affect the ability of many issuers to raise
capital.16 The ABA and MFA also stated that
they believe that the proposed rule change is
inconsistent with the Exchange Act.
• Commenters expressed concerns
regarding exemptions, in most cases
8 ABA; NYC Bar; S&C. See also NASAA (seeking
clarification as to the application of the Proposed
Rule to secondary transactions of private
placements). The ABA stated that the concept of a
‘‘non-public offering’’ is well understood to mean
a primary offering of securities that is exempt from
registration under the Securities Act by reason of
Section 4(2) thereof and the rules of the
Commission thereunder (including Rule 506 of
Regulation D). The NYC Bar stated that exemptions
pursuant to Sections 3(b), 4(2) and 4(5) of the
Securities Act are traditionally viewed as being
‘‘private placement exemptions.’’
9 FINRA Rule 5122(a)(4) defines ‘‘private
placement’’ as a ‘‘non-public offering of securities
conducted in reliance on an available exemption
from registration under the Securities Act’’
(emphasis added).
10 ABA; NSCP; NYC Bar; REISA.
11 ABA; NYC Bar.
12 ABA.
13 REISA.
14 NYC Bar.
15 ABA; MFA.
16 ABA; MFA; REISA.
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Frm 00069
Fmt 4703
Sfmt 4703
advocating to broaden proposed exemptions
or to add new exemptions. Two commenters
urged FINRA to adopt an explicit exemption
for merger and acquisition transactions.17
The ABA suggested that FINRA exempt
employees ‘‘of the issuer or its affiliates’’ and
define affiliates to have the same meaning as
in FINRA Rule 5121(f)(1). Cornell urged more
clarity regarding the term ‘‘affiliate,’’ noting
that different definitions of the term exist in
the federal securities laws.18 A few
commenters urged FINRA to adopt additional
exemptions for ‘‘knowledgeable employees’’
of a private fund, as defined in Rule 3c–5 of
the Investment Company Act of 1940.19 MFA
asked that other ‘‘sophisticated investors’’
that are purchasers of private funds be
exempt from the requirements of the
proposed rule change. In addition, Moelis
suggested an exemption for ‘‘employees of
the broker dealer or its affiliates, who are
accredited investors.’’ Monument Group
asked for an exemption either for ‘‘all offers
of private funds by registered independent
placement agents,’’ or alternatively for all
‘‘offers to accredited investors.’’ 20 Monument
Group also stated that, as proposed, the
inclusion of a single purchaser who proved
to be a ‘‘mere accredited investor’’ of an
offering would cause the loss of the
exemption for private placement offerings
offered solely to ‘‘institutional accounts, as
defined in NASD Rule 3110(c)(4),’’ as well as
to ‘‘qualified purchasers, as defined in
Section 2(a)(51)(A)’’ of the Investment
Company Act of 1940.
• Several commenters stated that a single
filing for each offering, rather than by each
member, would be sufficient for the
regulatory purposes of the proposed rule
change and that the firm making the filing
could be tasked with disclosing the other
members of the selling group in offerings in
which more than one firm participated.21
FINRA responded to the comments in
its Response Letter and filed Partial
Amendment 1.22
III. Description of Partial Amendment
No. 1
FINRA’s proposed changes in
response to comments, as set forth in
Partial Amendment No. 1, are
summarized below.
First, FINRA is proposing to amend
proposed FINRA Rule 5123 to clarify
that the term ‘‘private placement’’ in the
proposed rule change would mean a
non-public offering of securities
conducted in reliance on an available
exemption from registration under the
Securities Act. Accordingly, the
proposed rule’s private placement
definition would be consistent with
17 ABA;
NYC Bar.
Cornell (noting the differing definitions of
‘‘affiliate’’ in Securities Act Rule 144 and Exchange
Act Rule 12b–2).
19 ABA; K&L Gates; see also MFA.
20 Monument Group.
18 See
21 ABA;
22 See
E:\FR\FM\26JAN1.SGM
FSI; IPA; NYC Bar; REISA; S&C.
supra, note 5.
26JAN1
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Federal Register / Vol. 77, No. 17 / Thursday, January 26, 2012 / Notices
FINRA Rule 5122 and would not apply
to securities offered pursuant to the
following provisions:
• Securities Act Sections 4(1), 4(3)
and 4(4) (which generally exempt
secondary transactions);
• Securities Act Sections 3(a)(2)
(offerings by banks), 3(a)(9) (exchange
transactions with an existing holder,
where no one is paid to solicit the
exchange), 3(a)(10) (securities subject to
a fairness hearing), or 3(a)(12) (securities
issued by a bank or bank holding
company pursuant to reorganization or
similar transactions); or
• Section 1145 of the Bankruptcy
Code (securities issued in a courtapproved reorganization plan that are
not otherwise entitled to the exemption
from registration afforded by Securities
Act Section 3(a)(10)).23
Second, FINRA is proposing to amend
the filing and disclosure requirements of
the proposed rule change for those
private placements for which a
disclosure document includes a
description of the anticipated use of
offering proceeds, the amount and type
of offering expenses, and the amount
and type of compensation provided or
to be provided to sponsors, finders,
consultants, and members and their
associated persons in connection with
the offering. Members would be
required to provide, prior to any sale,
the disclosure document to each
investor other than those investors in a
private placement that would be subject
to an exemption, as provided by the
proposed rule change, as amended. Each
member participating in the offering or
a member designated to make the filing
on behalf of all members identified in
the filing would also be required to file
such document with FINRA no later
than 15 calendar days after the date of
first sale.
Third, FINRA is proposing to amend
the filing and disclosure requirements of
the proposed rule change for those
private placements for which there is no
disclosure document. If no disclosure
document is used, the participating
member (or a designated member acting
on behalf of the member) would,
however, be required to make a notice
filing, identifying the private placement
and the participating members and
stating that no disclosure document was
used, with FINRA no later than 15
calendar days after the date of first sale.
The proposed rule change as amended
would not prohibit a member from
participating in such private
placements. The proposed rule change
23 See NYC Bar; S&C (advocating that the
proposed rule not apply to these categories of
securities).
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17:14 Jan 25, 2012
Jkt 226001
would not require the member to make
any additional disclosure to investors in
such offerings.
Fourth, FINRA is proposing to add
supplementary material to the proposed
rule change that would clarify that the
rule would not require delivery of
multiple copies of a disclosure
document to a single customer.
Specifically, the proposed rule change
would require an affected member to
deliver disclosure documents only to
persons to whom it sells shares in the
private placement.
IV. Proceedings To Determine Whether
To Approve or Disapprove SR–FINRA–
2011–057 and Grounds for Disapproval
Under Consideration
In view of the issues raised by the
proposed rule change, the Commission
has determined to institute proceedings
pursuant to Section 19(b)(2) of the
Exchange Act to determine whether to
approve or disapprove FINRA’s
proposed rule change.24 Institution of
such proceedings appears appropriate at
this time in view of the legal and policy
issues raised by the proposed rule
change. As noted above, institution of
proceedings does not indicate that the
Commission has reached any
conclusions with respect to any of the
issues involved. Rather, the Commission
seeks and encourages interested persons
to comment on the proposed rule
change and provide the Commission
with arguments to support the
Commission’s analysis as to whether to
approve or disapprove the proposed
rule change.
The Commission is asking that
commenters address the changes that
FINRA proposes in Partial Amendment
No. 1, the comments received on the
Notice of Filing, and FINRA’s Response
Letter, in addition to any other
comments they may wish to submit
about the proposed rule change. The
Commission requests comment, in
particular, on the following aspects of
the proposed rule change, as modified
by Partial Amendment No. 1:
(1) the categories of offerings that would be
subject to the proposed rule change under the
proposed definition of ‘‘private placement;’’
(2) the potential impact on investors
purchasing private placement securities
24 15 U.S.C. 78s(b)(2). Section 19(b)(2)(B) of the
Exchange Act provides that proceedings to
determine whether to disapprove a proposed rule
change must be concluded within 180 days of the
date of publication of notice of the filing of the
proposed rule change. The time for conclusion of
the proceedings may be extended for up to an
additional 60 days if the Commission finds good
cause for such extension and publishes its reasons
for so finding or if the self-regulatory organization
consents to the extension.
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Sfmt 4703
4067
through a broker-dealer subject to the
proposed rule change;
(3) the potential impact on members of
having to comply with the proposed rule
change, including any burdens associated
with implementing the obligations of the
proposed rule change; and
(4) the potential impact on competition
and capital formation, including: (a) Whether
members would continue to participate in
private placements subject to the proposed
rule change; (b) whether the proposed rule
change would encourage issuers to utilize
unregistered firms to effect their covered
offerings; and (c) whether the proposed rule
change would affect access to capital, the
costs of capital raising or the cost of capital
for issuers.
Pursuant to Section 19(b)(2)(B) of the
Exchange Act,25 the Commission is
providing notice of the grounds for
disapproval under consideration. In
particular, Section 15A(b)(6) of the
Exchange Act 26 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 Commission believes FINRA’s
proposed rule change, as amended,
raises questions as to whether it is
consistent with the requirements of
Section 15A(b)(6) of the Exchange Act,
including whether FINRA’s proposed
rule change, as amended, would prevent
fraudulent and manipulative acts,
promote just and equitable principles of
trade, and protect investors and the
public interest and also whether the
proposed rule change is not designed to
permit unfair discrimination between
customers, issuers, brokers, or dealers,
to fix minimum profits, to impose any
schedule or fix rates of commissions,
allowances, discounts, or other fees to
be charged by its members, or to
regulate any matters not related to the
purposes of the Exchange Act or the
administration of FINRA.
The Commission also believes
FINRA’s proposed rule change, as
amended, raises questions as to whether
it is consistent with the findings that the
Commission must make as set forth in
Section 3(f) of the Exchange Act,
including whether FINRA’s proposed
rule change, as amended, would
promote efficiency, competition, and
capital formation.
V. Request for Written Comments
The Commission requests that
interested persons provide written
submissions of their views, data, and
arguments with respect to the issues
25 15
26 15
E:\FR\FM\26JAN1.SGM
U.S.C. 78s(b)(2)(B).
U.S.C. 78o–3(b)(6).
26JAN1
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Federal Register / Vol. 77, No. 17 / Thursday, January 26, 2012 / Notices
identified above, as well as any others
they may have identified with the
proposed rule change, as amended. In
particular, the Commission invites the
written views of interested persons
concerning whether the proposed rule
change, as modified by Partial
Amendment No. 1, is inconsistent with
Section 15A(b)(6) or any other provision
of the Exchange Act, or the rules and
regulations thereunder.
Although there do not appear to be
any issues relevant to approval or
disapproval which would be facilitated
by an oral presentation of views, data,
and arguments, the Commission will
consider, pursuant to Rule 19b–4, any
request for an opportunity to make an
oral presentation.27
Interested persons are invited to
submit written data, views, and
arguments by [insert date 30 days from
publication in the Federal Register]
concerning Partial Amendment No. 1
and regarding whether the proposed
rule change, as modified by Partial
Amendment No. 1, should be approved
or disapproved. Any person who wishes
to file a rebuttal to any other person’s
submission must file that rebuttal by
March 12, 2012. 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–2011–057 on the
subject line.
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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–2011–057. 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/
27 Section 19(b)(2) of the Exchange Act, as
amended by the Securities Acts Amendments of
1975, Public Law 94–29, 89 Stat. 97 (1975), grants
the Commission flexibility to determine what type
of proceeding—either oral or notice and
opportunity for written comments—is appropriate
for consideration of a particular proposal by a selfregulatory organization. See Securities Acts
Amendments of 1975, Report of the Senate
Committee on Banking, Housing and Urban Affairs
to Accompany S. 249, S. Rep. No. 75, 94th Cong.,
1st Sess. 30 (1975).
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17:14 Jan 25, 2012
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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 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 publicly available.
All submissions should refer to File
Number SR–FINRA–2011–057 and
should be submitted on or before
February 27, 2012. Rebuttal comments
should be submitted by March 12, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Kevin M. O’Neil,
Deputy Secretary.
[FR Doc. 2012–1581 Filed 1–25–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66209; File No. SR–Phlx–
2012–02]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Reformatting
the Fee Schedule
January 20, 2012.
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 January 9,
2012, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) 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 the Exchange. The
Commission is publishing this notice to
28 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
3(a)(57).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
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 relocate
various fees within the Fee Schedule
and provide more detail in the Table of
Contents in order to group fees with
other similar types of fees.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/Filings/, at the
principal office of the Exchange 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, the
Exchange 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
Exchange 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 the proposed rule
change is to relocate various fees within
the Fee Schedule and add more detail
to the Table of Contents to group fees so
that those fees may be easily located
within the Fee Schedule. The Exchange
is not proposing any substantive
amendments, but rather proposes to
merely rearrange text within the Fee
Schedule and add detail to the Table of
Contents.
Specifically, the Exchange is
proposing revisions to the Table of
Contents, Section IV, entitled ‘‘PIXL
Pricing’’, Section VI, entitled ‘‘Access
Service, Cancellation, Membership,
Regulatory and other Fees’’, and Section
VIII, entitled, ‘‘Other Member Fees,’’ as
specified below.
Table of Contents
The Exchange proposes to amend the
title of Section IV ‘‘PIXL Pricing’’ to
‘‘Other Transaction Fees’’ and also add
three subsections: (1) A. PIXL Pricing;
(2) B. Cancellation Fee; and (3) C.
Options Regulatory Fee. The Exchange
E:\FR\FM\26JAN1.SGM
26JAN1
]]>Agencies
[Federal Register Volume 77, Number 17 (Thursday, January 26, 2012)]
[Notices]
[Pages 4065-4068]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1581]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66203; File No. SR-FINRA-2011-057]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Partial Amendment No. 1 and Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change, as Modified by Partial Amendment No. 1, To Adopt
FINRA Rule 5123 (Private Placements of Securities) in the Consolidated
FINRA Rulebook
January 20, 2012.
I. Introduction
On October 5, 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'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to adopt FINRA Rule 5123. The
proposed rule change was published for comment in the Federal Register
on October 24, 2011.\3\ The Commission received 16 comment letters in
response to the proposed rule change.\4\ On November 17, 2011, FINRA
extended the time period in which the Commission must approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to approve or disapprove the proposed
rule change, to January 20, 2012. On January 19, 2012, FINRA filed
Partial Amendment No. 1 to the proposed rule change and a letter
responding to comments.\5\ The Commission is publishing this notice and
order to solicit comments on Partial Amendment No. 1 to the proposed
rule change from interested persons and to institute proceedings
pursuant to Section 19(b)(2)(B) of the Exchange Act to determine
whether to approve or disapprove the proposed rule change, as modified
by Partial Amendment No. 1.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Exchange Act Release No. 65585 (Oct. 18, 2011), 76 FR
65758 (Oct. 24, 2011) (Notice of Filing of Proposed Rule Change to
Adopt New FINRA Rule 5123 (Private Placements of Securities), SR-
FINRA-2011-057) (``Notice of Filing''). The comment period closed on
November 18, 2011.
\4\ See Letters from Ryan Adams, Christine Lazaro, Esq., and
Lisa Catalano, Esq., St. John's School of Law Securities Arbitration
Clinic, dated November 10, 2011 (``St. John's''); Ryan K. Bakhtiari,
President, Public Investors Arbitration Bar Association, dated
November 14, 2011 (``PIABA''); David T. Bellaire, Esq., Financial
Services Institute, Inc., dated November 14, 2011 (``FSI''); Robert
E. Buckholz, Chair, Committee on Securities Regulation, New York
City Bar Association, dated November 9, 2011 (``NYC Bar''); Richard
B. Chess, President, Real Estate Investment Securities Association,
dated November 14, 2011 (``REISA''); Alicia M. Cooney, Managing
Director, Monument Group (``Monument Group''), dated January 12,
2012 (Monument Group); Martel Day, Chairman, Investment Program
Association, dated November 14, 2011 (``IPA''); Jack E. Herstein,
President, North American Securities Administrators Association,
Inc., dated November 17, 2011 (``NASAA''); Joan Hinchman, Executive
Director, National Society of Compliance Professionals, dated
November 14, 2011 (``NSCP''); William A. Jacobson, Associate
Clinical Professor, and Carolyn L. Nguyen, Cornell Law School, dated
November 14, 2011 (``Cornell''); Stuart J. Kaswell, Executive Vice
President, Managed Funds Association, dated November 14, 2011
(``MFA''); William H. Navin, Senior Vice President, The Options
Clearing Corporation, dated November 9, 2011 (``OCC''); Jeffrey W.
Rubin, Chair, Federal Regulation of Securities Committee, American
Bar Association, dated November 14, 2011 (``ABA''); Sullivan &
Cromwell LLP, dated November 10, 2011 (``S&C''); Osamu Watanabe,
Deputy General Counsel, Moelis & Co., dated November 28, 2011
(``Moelis''); and Donald S. Weiss, K&L Gates LLP, dated November 14,
2011 (``K&L Gates'') . Comment letters are available at www.sec.gov.
\5\ See Letter from Stan Macel, FINRA, to Elizabeth Murphy,
Secretary, SEC, dated January 19, 2012 (``Response Letter''). The
text of proposed Partial 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 www.sec.gov.
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Institution of these proceedings does not indicate that the
Commission has reached any conclusions with respect to the proposed
rule change, nor does it mean that the Commission will ultimately
approve or disapprove the proposed rule change. Rather, as discussed
below, the Commission seeks additional input from interested parties on
the issues presented by the proposed rule change, as modified by
Partial Amendment No. 1, and on FINRA's Response Letter.
[[Page 4066]]
II. Description of the Proposed Rule Change and Summary of Comments
FINRA is proposing to adopt FINRA Rule 5123, which, prior to
Partial Amendment No. 1, would have required that members and
associated persons that offer or sell any applicable private placement
(as described in the proposed rule change), or participate in the
preparation of a private placement memorandum (``PPM''), term sheet or
other disclosure documents in connection with any such private
placement, provide relevant disclosures to each investor prior to sale
describing the anticipated use of offering proceeds, and the amount and
type of offering expenses and offering compensation. If any issuer's
disclosure documents did not contain the requisite information about
the offering expenses and use of proceeds, the proposed rule change
would have required the member to create and provide to any potential
investor a separate disclosure document containing this information.
FINRA Rule 5123 also would have required that each participating member
file the PPM, term sheet or other disclosure document, and any exhibits
thereto, with FINRA no later than 15 calendar days after the date of
the first sale, and any material amendments to such document, or any
amendments to any disclosures mandated by the proposed rule change,
also were required to be filed no later than 15 calendar days after the
date such document was provided to any investor or prospective
investor, as discussed further below.
While some commenters expressed support for the goals of the
proposed rule change,\6\ the remaining commenters expressed a broad
range of concerns, such as: its scope, as derived from the definition
of private placement; the broker-dealer disclosure requirements; the
filing requirements; the exemptions; and whether the proposed rule
change is consistent with FINRA's regulatory oversight and authority.
In particular:
\6\ Cornell; FSI; NASAA; PIABA; St. John's. Two of these
commenters suggested FINRA members provide additional disclosure:
NASAA recommended that the rule require members to provide
additional risk disclosures to investors; Cornell urged FINRA to
adopt a provision in the Proposed Rule to require a member to
disclose any affiliation between the issuer and the member.
---------------------------------------------------------------------------
Several commenters argued that definition of private
placement \7\ in the proposed rule change is overbroad and could be
interpreted to apply to any offer or sale of securities for which an
exemption from registration is claimed under the Securities Act of
1933 (``Securities Act''), including public offerings and secondary
market trading.\8\ For example, commenters stated that, due to the
fact that it is not expressly limited to ``non-public'' offerings,
the proposed definition is broader than the definition of ``private
placement'' in FINRA Rule 5122 (Private Placements of Securities
Issued by Members), which applies to member private offerings.\9\
The ABA, NYC Bar, and S&C suggested narrowing the scope of FINRA
Rule 5123 to specific types of ``non-public'' offerings, or
referring back to the definition of ``private placement'' in FINRA
Rule 5122.
---------------------------------------------------------------------------
\7\ See proposed FINRA Rule 5123(a).
\8\ ABA; NYC Bar; S&C. See also NASAA (seeking clarification as
to the application of the Proposed Rule to secondary transactions of
private placements). The ABA stated that the concept of a ``non-
public offering'' is well understood to mean a primary offering of
securities that is exempt from registration under the Securities Act
by reason of Section 4(2) thereof and the rules of the Commission
thereunder (including Rule 506 of Regulation D). The NYC Bar stated
that exemptions pursuant to Sections 3(b), 4(2) and 4(5) of the
Securities Act are traditionally viewed as being ``private placement
exemptions.''
\9\ FINRA Rule 5122(a)(4) defines ``private placement'' as a
``non-public offering of securities conducted in reliance on an
available exemption from registration under the Securities Act''
(emphasis added).
---------------------------------------------------------------------------
Several commenters suggested that the requirement that
each member provide applicable disclosure documentation to each
investor in a private placement prior to a sale could be interpreted
to require a FINRA member to have primary responsibility for
preparing disclosure documents in the event that an issuer does not
prepare them.\10\ Two commenters suggested that in some cases
members may not have access to all necessary information from
issuers \11\ and one of these two also stated that it may be
impractical and inefficient for members to be charged with gathering
and providing the required information.\12\ One commenter suggested
that the production of a disclosure document by a FINRA member would
increase the liability of the FINRA member in the offering.\13\
Another commenter suggested, as an alternative, that the proposed
rule change prohibit a member from participating in a private
placement if the issuer does not provide the mandated
disclosures.\14\
---------------------------------------------------------------------------
\10\ ABA; NSCP; NYC Bar; REISA.
\11\ ABA; NYC Bar.
\12\ ABA.
\13\ REISA.
\14\ NYC Bar.
---------------------------------------------------------------------------
Two commenters argued that by requiring members to
provide disclosures regarding private placements, the proposed rule
change would be contrary to the intent of Congress and/or the
federal securities laws, which do not otherwise prescribe these
disclosures for many types of private placements.\15\
---------------------------------------------------------------------------
\15\ ABA; MFA.
---------------------------------------------------------------------------
Three commenters stated that the proposed rule change
could significantly affect the ability of many issuers to raise
capital.\16\ The ABA and MFA also stated that they believe that the
proposed rule change is inconsistent with the Exchange Act.
---------------------------------------------------------------------------
\16\ ABA; MFA; REISA.
---------------------------------------------------------------------------
Commenters expressed concerns regarding exemptions, in
most cases advocating to broaden proposed exemptions or to add new
exemptions. Two commenters urged FINRA to adopt an explicit
exemption for merger and acquisition transactions.\17\ The ABA
suggested that FINRA exempt employees ``of the issuer or its
affiliates'' and define affiliates to have the same meaning as in
FINRA Rule 5121(f)(1). Cornell urged more clarity regarding the term
``affiliate,'' noting that different definitions of the term exist
in the federal securities laws.\18\ A few commenters urged FINRA to
adopt additional exemptions for ``knowledgeable employees'' of a
private fund, as defined in Rule 3c-5 of the Investment Company Act
of 1940.\19\ MFA asked that other ``sophisticated investors'' that
are purchasers of private funds be exempt from the requirements of
the proposed rule change. In addition, Moelis suggested an exemption
for ``employees of the broker dealer or its affiliates, who are
accredited investors.'' Monument Group asked for an exemption either
for ``all offers of private funds by registered independent
placement agents,'' or alternatively for all ``offers to accredited
investors.'' \20\ Monument Group also stated that, as proposed, the
inclusion of a single purchaser who proved to be a ``mere accredited
investor'' of an offering would cause the loss of the exemption for
private placement offerings offered solely to ``institutional
accounts, as defined in NASD Rule 3110(c)(4),'' as well as to
``qualified purchasers, as defined in Section 2(a)(51)(A)'' of the
Investment Company Act of 1940.
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\17\ ABA; NYC Bar.
\18\ See Cornell (noting the differing definitions of
``affiliate'' in Securities Act Rule 144 and Exchange Act Rule 12b-
2).
\19\ ABA; K&L Gates; see also MFA.
\20\ Monument Group.
---------------------------------------------------------------------------
Several commenters stated that a single filing for each
offering, rather than by each member, would be sufficient for the
regulatory purposes of the proposed rule change and that the firm
making the filing could be tasked with disclosing the other members
of the selling group in offerings in which more than one firm
participated.\21\
\21\ ABA; FSI; IPA; NYC Bar; REISA; S&C.
FINRA responded to the comments in its Response Letter and filed
Partial Amendment 1.\22\
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\22\ See supra, note 5.
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III. Description of Partial Amendment No. 1
FINRA's proposed changes in response to comments, as set forth in
Partial Amendment No. 1, are summarized below.
First, FINRA is proposing to amend proposed FINRA Rule 5123 to
clarify that the term ``private placement'' in the proposed rule change
would mean a non-public offering of securities conducted in reliance on
an available exemption from registration under the Securities Act.
Accordingly, the proposed rule's private placement definition would be
consistent with
[[Page 4067]]
FINRA Rule 5122 and would not apply to securities offered pursuant to
the following provisions:
Securities Act Sections 4(1), 4(3) and 4(4) (which
generally exempt secondary transactions);
Securities Act Sections 3(a)(2) (offerings by banks),
3(a)(9) (exchange transactions with an existing holder, where no one is
paid to solicit the exchange), 3(a)(10) (securities subject to a
fairness hearing), or 3(a)(12) (securities issued by a bank or bank
holding company pursuant to reorganization or similar transactions); or
Section 1145 of the Bankruptcy Code (securities issued in
a court-approved reorganization plan that are not otherwise entitled to
the exemption from registration afforded by Securities Act Section
3(a)(10)).\23\
---------------------------------------------------------------------------
\23\ See NYC Bar; S&C (advocating that the proposed rule not
apply to these categories of securities).
---------------------------------------------------------------------------
Second, FINRA is proposing to amend the filing and disclosure
requirements of the proposed rule change for those private placements
for which a disclosure document includes a description of the
anticipated use of offering proceeds, the amount and type of offering
expenses, and the amount and type of compensation provided or to be
provided to sponsors, finders, consultants, and members and their
associated persons in connection with the offering. Members would be
required to provide, prior to any sale, the disclosure document to each
investor other than those investors in a private placement that would
be subject to an exemption, as provided by the proposed rule change, as
amended. Each member participating in the offering or a member
designated to make the filing on behalf of all members identified in
the filing would also be required to file such document with FINRA no
later than 15 calendar days after the date of first sale.
Third, FINRA is proposing to amend the filing and disclosure
requirements of the proposed rule change for those private placements
for which there is no disclosure document. If no disclosure document is
used, the participating member (or a designated member acting on behalf
of the member) would, however, be required to make a notice filing,
identifying the private placement and the participating members and
stating that no disclosure document was used, with FINRA no later than
15 calendar days after the date of first sale. The proposed rule change
as amended would not prohibit a member from participating in such
private placements. The proposed rule change would not require the
member to make any additional disclosure to investors in such
offerings.
Fourth, FINRA is proposing to add supplementary material to the
proposed rule change that would clarify that the rule would not require
delivery of multiple copies of a disclosure document to a single
customer. Specifically, the proposed rule change would require an
affected member to deliver disclosure documents only to persons to whom
it sells shares in the private placement.
IV. Proceedings To Determine Whether To Approve or Disapprove SR-FINRA-
2011-057 and Grounds for Disapproval Under Consideration
In view of the issues raised by the proposed rule change, the
Commission has determined to institute proceedings pursuant to Section
19(b)(2) of the Exchange Act to determine whether to approve or
disapprove FINRA's proposed rule change.\24\ Institution of such
proceedings appears appropriate at this time in view of the legal and
policy issues raised by the proposed rule change. As noted above,
institution of proceedings does not indicate that the Commission has
reached any conclusions with respect to any of the issues involved.
Rather, the Commission seeks and encourages interested persons to
comment on the proposed rule change and provide the Commission with
arguments to support the Commission's analysis as to whether to approve
or disapprove the proposed rule change.
---------------------------------------------------------------------------
\24\ 15 U.S.C. 78s(b)(2). Section 19(b)(2)(B) of the Exchange
Act provides that proceedings to determine whether to disapprove a
proposed rule change must be concluded within 180 days of the date
of publication of notice of the filing of the proposed rule change.
The time for conclusion of the proceedings may be extended for up to
an additional 60 days if the Commission finds good cause for such
extension and publishes its reasons for so finding or if the self-
regulatory organization consents to the extension.
---------------------------------------------------------------------------
The Commission is asking that commenters address the changes that
FINRA proposes in Partial Amendment No. 1, the comments received on the
Notice of Filing, and FINRA's Response Letter, in addition to any other
comments they may wish to submit about the proposed rule change. The
Commission requests comment, in particular, on the following aspects of
the proposed rule change, as modified by Partial Amendment No. 1:
(1) the categories of offerings that would be subject to the
proposed rule change under the proposed definition of ``private
placement;''
(2) the potential impact on investors purchasing private
placement securities through a broker-dealer subject to the proposed
rule change;
(3) the potential impact on members of having to comply with the
proposed rule change, including any burdens associated with
implementing the obligations of the proposed rule change; and
(4) the potential impact on competition and capital formation,
including: (a) Whether members would continue to participate in
private placements subject to the proposed rule change; (b) whether
the proposed rule change would encourage issuers to utilize
unregistered firms to effect their covered offerings; and (c)
whether the proposed rule change would affect access to capital, the
costs of capital raising or the cost of capital for issuers.
Pursuant to Section 19(b)(2)(B) of the Exchange Act,\25\ the
Commission is providing notice of the grounds for disapproval under
consideration. In particular, Section 15A(b)(6) of the Exchange Act
\26\ 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.
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78s(b)(2)(B).
\26\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
The Commission believes FINRA's proposed rule change, as amended,
raises questions as to whether it is consistent with the requirements
of Section 15A(b)(6) of the Exchange Act, including whether FINRA's
proposed rule change, as amended, would prevent fraudulent and
manipulative acts, promote just and equitable principles of trade, and
protect investors and the public interest and also whether the proposed
rule change is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers, to fix minimum profits, to
impose any schedule or fix rates of commissions, allowances, discounts,
or other fees to be charged by its members, or to regulate any matters
not related to the purposes of the Exchange Act or the administration
of FINRA.
The Commission also believes FINRA's proposed rule change, as
amended, raises questions as to whether it is consistent with the
findings that the Commission must make as set forth in Section 3(f) of
the Exchange Act, including whether FINRA's proposed rule change, as
amended, would promote efficiency, competition, and capital formation.
V. Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues
[[Page 4068]]
identified above, as well as any others they may have identified with
the proposed rule change, as amended. In particular, the Commission
invites the written views of interested persons concerning whether the
proposed rule change, as modified by Partial Amendment No. 1, is
inconsistent with Section 15A(b)(6) or any other provision of the
Exchange Act, or the rules and regulations thereunder.
Although there do not appear to be any issues relevant to approval
or disapproval which would be facilitated by an oral presentation of
views, data, and arguments, the Commission will consider, pursuant to
Rule 19b-4, any request for an opportunity to make an oral
presentation.\27\
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\27\ Section 19(b)(2) of the Exchange Act, as amended by the
Securities Acts Amendments of 1975, Public Law 94-29, 89 Stat. 97
(1975), grants the Commission flexibility to determine what type of
proceeding--either oral or notice and opportunity for written
comments--is appropriate for consideration of a particular proposal
by a self-regulatory organization. See Securities Acts Amendments of
1975, Report of the Senate Committee on Banking, Housing and Urban
Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess.
30 (1975).
---------------------------------------------------------------------------
Interested persons are invited to submit written data, views, and
arguments by [insert date 30 days from publication in the Federal
Register] concerning Partial Amendment No. 1 and regarding whether the
proposed rule change, as modified by Partial Amendment No. 1, should be
approved or disapproved. Any person who wishes to file a rebuttal to
any other person's submission must file that rebuttal by March 12,
2012. 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-2011-057 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-2011-057. 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 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 publicly available.
All submissions should refer to File Number SR-FINRA-2011-057 and
should be submitted on or before February 27, 2012. Rebuttal comments
should be submitted by March 12, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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Kevin M. O'Neil,
Deputy Secretary.
[FR Doc. 2012-1581 Filed 1-25-12; 8:45 am]
BILLING CODE 8011-01-P
