Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps), 76113-76116 [2012-30980]
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Federal Register / Vol. 77, No. 247 / Wednesday, December 26, 2012 / Notices
qualification examinations addressing
security futures, FINRA intends to
continue to require eligible registrants to
complete the mandated firm-element
continuing education requirement
before engaging in any security futures
business. The proposed rule change
amends NASD Rule 1022 and NASD
Rule 1032 to extend the deadline by
which eligible registrants must complete
the firm-element continuing education
requirement to engage in a security
futures business from December 31,
2012 to December 31, 2015, or one
business day prior to the date a revised
examination that includes security
futures products is offered.
FINRA has filed the proposed rule
change for immediate effectiveness. The
implementation date will be December
31, 2012.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,6 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. The proposed rule
change is necessary to continue to allow
eligible registrants to complete a firmelement continuing education program
that will qualify them to engage in a
security futures business.
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. FINRA
believes that the proposed rule change
is necessary to continue to allow eligible
registrants to complete a firm-element
continuing education program that will
qualify them to engage in a security
futures business.
tkelley on DSK3SPTVN1PROD with
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
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
6 15
U.S.C. 78o–3(b)(6).
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burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act7 and Rule 19b4(f)(6) thereunder.8
FINRA has requested that the
Commission waive the 30-day operative
delay to permit the proposed rule
change to become operative on
December 31, 2012. The Commission
finds that waiver of the operative delay
is consistent with the protection of
investors and the public interest
because the waiver will keep in place
the ability of registered persons to
qualify to sell security futures by
completing a firm-element continuing
education program in lieu of an exam.
Therefore, the Commission designates
the proposal operative on December 31,
2012.9
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or 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 email to rulecomments@sec.gov. Please include File
Number SR–FINRA–2012–055 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–2012–055. This file
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b-4(f)(6).
9 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
8 17
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76113
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 20549–1090, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the FINRA’s
principal office. 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–
2012–055, and should be submitted on
or before January 16, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–31012 Filed 12–21–12; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68471; File No. SR–FINRA–
2012–056]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Expiration
Date of FINRA Rule 0180 (Application
of Rules to Security-Based Swaps)
December 19, 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 December
12, 2012, Financial Industry Regulatory
10 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. 77, No. 247 / Wednesday, December 26, 2012 / Notices
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. 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 extend the
expiration date of FINRA Rule 0180
(Application of Rules to Security-Based
Swaps) to July 17, 2013. FINRA Rule
0180 temporarily limits, with certain
exceptions, the application of FINRA
rules with respect to security-based
swaps.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
tkelley on DSK3SPTVN1PROD with
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On July 21, 2010, President Obama
signed into law the Dodd-Frank Wall
Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’),4 Title VII
of which established a comprehensive
new regulatory framework for swaps
and security-based swaps. The
legislation was intended among other
things to enhance the authority of
regulators to implement new rules
designed to reduce risk, increase
transparency, and promote market
3 17
CFR 240.19b–4(f)(6).
Law 111–203, 124 Stat. 1376 (2010).
4 Public
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integrity with respect to such products.
In general, the Dodd-Frank Act provides
that the Commodity Futures Trading
Commission (‘‘CFTC’’) will regulate
‘‘swaps’’ and the SEC will regulate
‘‘security-based swaps.’’ 5 The DoddFrank Act contemplates certain selfregulatory organization responsibilities
in this area as well.6
Title VII of the Dodd-Frank Act
became effective on July 16, 2011 (360
days after the enactment of the DoddFrank Act, i.e. the ‘‘Effective Date’’),
unless a provision requires a
rulemaking.7 The SEC has taken a
number of actions in connection with
Title VII, including providing certain
temporary exemptions 8 to address the
expansion, pursuant to Title VII, of the
Act’s definition of ‘‘security’’ to
expressly encompass security-based
swaps 9 and requesting public comment
on the anticipated sequencing of the
compliance dates of final rules to be
adopted by the SEC pursuant to Title
VII.10
In its Exemptive Release, the SEC
noted that the expansion of the Act’s
definition of ‘‘security’’ raises certain
complex issues of interpretation,
including issues as to the application of
those provisions to registered brokerdealers. The SEC determined that it was
appropriate to provide market
participants with additional time to
consider the potential impact on their
businesses and the interpretive
questions raised, and to provide the SEC
with any related requests for guidance
or relief, along with the underlying
analysis. Further, in the Policy
5 The terms ‘‘swap’’ and ‘‘security-based swap’’
are defined in Sections 721 and 761 of the DoddFrank Act. See also Securities Exchange Act Release
No. 67453 (July 18, 2012), 77 FR 48208 (August 13,
2012) (Further Definition of ‘‘Swap,’’ ‘‘SecurityBased Swap,’’ and ‘‘Security-Based Swap
Agreement’’; Mixed Swaps; Security-Based Swap
Agreement Record-Keeping).
6 See, e.g., Sections 712 and 763 of the DoddFrank Act.
7 The Dodd-Frank Act provides that if a Title VII
provision requires a rulemaking, the provision will
go into effect ‘‘not less than’’ 60 days after
publication of the related final rule or on July 16,
2011, whichever is later. See Sections 754 and 774
of the Dodd-Frank Act.
8 See Securities Exchange Act Release No. 64795
(July 1, 2011), 76 FR 39927 (July 7, 2011) (Order
Granting Temporary Exemptions Under the
Securities Exchange Act of 1934 in Connection
With the Pending Revision of the Definition of
‘‘Security’’ To Encompass Security-Based Swaps)
(the ‘‘Exemptive Release’’).
9 See SEA Section 3(a)(10) (15 U.S.C. 78c(a)(10)),
as revised by Section 761 of the Dodd-Frank Act.
10 See Securities Exchange Act Release No. 67177
(June 11, 2012), 77 FR 35625 (June 14, 2012)
(Statement of General Policy on the Sequencing of
the Compliance Dates for Final Rules Applicable to
Security-Based Swaps Adopted Pursuant to the
Securities Exchange Act of 1934 and the DoddFrank Wall Street Reform and Consumer Protection
Act) (the ‘‘Policy Statement’’).
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Statement, the SEC noted that it has
been considering how to implement the
new requirements that will be
applicable to security-based swaps
pursuant to the final rules to be adopted
by the SEC pursuant to Title VII in a
practical and efficient manner that
avoids unnecessary disruption to the
security-based swaps market.
Because the Act’s expanded definition
of ‘‘security’’ has implications for
numerous provisions under FINRA
rules 11 similar to those noted by the
SEC in the Exemptive Release, and in
the interest of avoiding unnecessary
market disruption, on July 8, 2011,
FINRA filed for immediate effectiveness
FINRA Rule 0180,12 which, with certain
exceptions, is intended to temporarily
limit the application of FINRA rules
with respect to security-based swaps.13
The CFTC’s and the Commission’s
rulemaking with respect to swaps and
security-based swaps pursuant to Title
VII is ongoing. FINRA believes it is
appropriate and in the public interest to
extend FINRA Rule 0180 for a limited
period, to July 17, 2013, pending the
implementation of new rules and
guidance that would provide greater
regulatory clarity in relation to securitybased swap activities, so as to provide
relief from certain FINRA requirements
and thereby help avoid undue market
disruptions resulting from the change to
11 The current FINRA rulebook consists of: (1)
FINRA Rules; (2) NASD Rules; and (3) rules
incorporated from NYSE (‘‘Incorporated NYSE
Rules’’). 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. 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).
12 See Securities Exchange Act Release No. 64884
(July 14, 2011), 76 FR 42755 (July 19, 2011) (Notice
of Filing and Immediate Effectiveness of Proposed
Rule Change; File No. SR–FINRA–2011–033)
(‘‘FINRA Rule 0180 Notice of Filing’’). On January
13, 2012, FINRA filed for immediate effectiveness
a rule change to extend the implementation of
FINRA Rule 0180 to January 17, 2013. See
Securities Exchange Act Release No. 66156 (January
13, 2012), 77 FR 3027 (January 20, 2012) (Notice of
Filing and Immediate Effectiveness of Proposed
Rule Change; File No. SR–FINRA–2012–004).
13 In its Exemptive Release, the Commission
noted that the relief is targeted and does not
include, for instance, relief from the Act’s antifraud
and anti-manipulation provisions. FINRA has noted
that FINRA Rule 0180 is similarly targeted. For
instance, paragraph (a) of FINRA Rule 0180
provides that FINRA rules shall not apply to
members’ activities and positions with respect to
security-based swaps, except for FINRA Rules 2010
(Standards of Commercial Honor and Principles of
Trade), 2020 (Use of Manipulative, Deceptive or
Other Fraudulent Devices), 3310 (Anti-Money
Laundering Compliance Program) and 4240 (Margin
Requirements for Credit Default Swaps). See also
paragraphs (b) and (c) of FINRA Rule 0180
(addressing the applicability of additional rules)
and FINRA Rule 0180 Notice of Filing.
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Federal Register / Vol. 77, No. 247 / Wednesday, December 26, 2012 / Notices
the definition of ‘‘security’’ under the
Act. FINRA will amend the expiration
date of Rule 0180 in subsequent filings
as necessary such that the expiration
date will coincide with the
implementation of such rules and
guidance.
FINRA has filed the proposed rule
change for immediate effectiveness and
has requested that the SEC waive the
requirement that the proposed rule
change not become operative for 30 days
after the date of the filing, such that
FINRA can implement the proposed
rule change immediately and prevent
FINRA Rule 0180 from lapsing.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,14 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. FINRA believes that the
proposed rule change would further the
purposes of the Act because, consistent
with the goals set forth by the
Commission in the Exemptive Release
and the Policy Statement, the proposed
rule change will help to avoid undue
market disruption resulting from the
expiration of FINRA Rule 0180 before
the implementation of new rules and
guidance that would provide greater
regulatory clarity in relation to securitybased swap activities.
tkelley on DSK3SPTVN1PROD with
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. FINRA
believes that the proposed rule change
would prevent undue market disruption
that would otherwise result if securitybased swaps were, by virtue of the
expansion of the Act’s definition of
‘‘security’’ to encompass security-based
swaps, subject to the application of all
FINRA rules before the implementation
of new rules and guidance that would
provide greater regulatory clarity in
relation to security-based swap
activities. FINRA believes that, by
extending the expiration of FINRA Rule
0180, the proposed rule change will
serve to promote regulatory clarity and
consistency, thereby reducing burdens
on the marketplace and facilitating
investor protection.
14 15
U.S.C. 78o–3(b)(6).
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06:31 Dec 22, 2012
Jkt 229001
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
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 15 and Rule 19b–
4(f)(6) thereunder.16
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),17 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest.
FINRA has requested that the
Commission waive both the 5-day
advance filing requirement 18 and the
30-day operative delay requirement so
that the proposal may become operative
upon filing. The Commission hereby
grants both of those requests. The
proposed rule is consistent with the
goals set forth by the Commission when
it issued the Exemptive Release and the
Policy Statement and will help avoid
undue market interruption resulting
from the change to the definition of
‘‘security’’ under the Act. Therefore, the
Commission believes it is consistent
with the protection of investors and the
public interest to waive both the
requirement that the proposed rule be
filed at least five (5) days in advance
and the 30-day operative delay
requirement. Therefore the Commission
designates the proposal as operative
upon filing.19
15 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6)(iii)
requires a self-regulatory organization to provide
the Commission with written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission.
19 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition and capital formation. See
15 U.S.C. 78c(f).
16 17
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76115
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or 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 email to rulecomments@sec.gov. Please include File
Number SR–FINRA–2012–056 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–2012–056. 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
10:00 a.m. and 3:00 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
E:\FR\FM\26DEN1.SGM
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76116
Federal Register / Vol. 77, No. 247 / Wednesday, December 26, 2012 / Notices
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–2012–056
and should be submitted on or before
January 16, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–30980 Filed 12–21–12; 4:15 pm]
BILLING CODE 8011–01–P
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,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68470; File No. SR–NYSE–
2012–68]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Sections 902.02 and 902.03 of the New
York Stock Exchange LLC Listed
Company Manual To Introduce an
Initial Application Fee
December 19, 2012.
tkelley on DSK3SPTVN1PROD with
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
6, 2012, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III 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 amend
Sections 902.02 and 902.03 of its Listed
Company Manual to introduce an Initial
Application Fee. The Exchange
proposes to immediately reflect the
proposed changes in the Listed
Company Manual, but not to implement
the proposed changes until January 1,
2013. The text of the proposed rule
change is available on the Exchange’s
Web site at www.nyse.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
20 17
1 15
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
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06:31 Dec 22, 2012
Jkt 229001
The Exchange proposes to amend
Sections 902.02 and 902.03 of its Listed
Company Manual to introduce an Initial
Application Fee. The Exchange
proposes to immediately reflect the
proposed changes in the Listed
Company Manual, but not to implement
the proposed changes until January 1,
2013.3
The Exchange proposes to introduce
an Initial Application Fee of $25,000
within Section 902.03 of the Listed
Company Manual, which would be
effective January 1, 2013.4 An issuer
would be required to pay an Initial
Application Fee if it applied to list an
equity security on the Exchange, except
that an issuer:
(i) Applying to list within 36 months
following emergence from bankruptcy
and that has not had a security listed on
a national securities exchange during
such period;
(ii) relisting a class of stock that is
registered under the Securities
Exchange Act of 1934 (the ‘‘Act’’) that
was delisted from a national securities
exchange and only if such delisting was:
3 The Exchange has proposed changes to the
Listed Company Manual, as reflected in the Exhibit
5 attached hereto, in a manner that would permit
readers of the Listed Company Manual to identify
the changes that would be implemented on January
1, 2013. The Commission notes that the Exhibit 5
referenced in the previous sentence is attached to
the filing, not to this Notice.
4 The Exchange also proposes to include
references to the Initial Application Fee in Section
902.02, where necessary and appropriate.
Additionally, the Exchange proposes to amend
certain text of Section 902.03 to account for the
proposed inclusion of the Initial Application Fee
therein. The Exchange also proposes to amend the
text describing the implementation of Section
902.03 to reflect that the reference to the proposed
rule change that implemented the text therein
added the original text, not the text in its current
form.
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Sfmt 4703
(a) Within the previous 12 calendar
months; and
(b) due to the issuer’s failure to file a
required periodic financial report with
the Commission or other appropriate
regulatory authority; or
(iii) transferring the listing of any
class of equity securities from any other
national securities exchange
would not be required to pay an Initial
Application Fee in connection with its
application for listing such equity
security.
Accordingly, issuers for whom the
Initial Application Fee waivers would
be applicable would generally be the
same as the issuers for whom Listing
Fees would be waived, as provided in
Section 902.02 of the Listed Company
Manual.5
As with the Listing Fee waivers, none
of the Initial Application Fee waivers
would be applicable to the listing of any
class of securities if the issuer’s primary
class of common stock remains listed on
another national securities exchange.
The Initial Application Fee would be
non-refundable.
An issuer applying to list an equity
security on the Exchange is subject to a
preliminary confidential review by
NYSE Regulation, Inc. (‘‘NYSER’’) in
which NYSER determines the issuer’s
qualification for listing. As set forth in
Section 702.02 of the Listed Company
Manual, if NYSER determines in
connection with this preliminary
confidential review that the issuer is
qualified for listing, the issuer is
informed that it has been cleared as
eligible to list and that the Exchange
will accept a formal Original Listing
Application from the Issuer. It is the
Exchange’s practice to notify the issuer
of its eligibility clearance and the
conditions to its listing by means of a
letter (the ‘‘pre-clearance’’ letter).
For an issuer subject to the Initial
Application Fee, its payment would be
a prior condition to eligibility clearance
being granted. As a practical matter, the
Exchange anticipates that an issuer
would pay the Initial Application Fee
after NYSER has completed its
preliminary confidential review and has
determined that the issuer is eligible to
submit a formal Original Listing
Application, but before the ‘‘preclearance’’ letter has been issued.
Typically, the Exchange is in contact
with an issuer prior to the issuance of
a ‘‘pre-clearance’’ letter and provides
oral confirmation of the issuer’s
5 See Securities Exchange Act Release No. 68017
(October 9, 2012), 77 FR 63404 (October 16, 2012)
(SR–NYSE–2012–47). The Initial Application fee
would only apply with respect to the listing of
equity securities. Listing Fees are not limited in this
respect.
E:\FR\FM\26DEN1.SGM
26DEN1
]]>Agencies
[Federal Register Volume 77, Number 247 (Wednesday, December 26, 2012)]
[Notices]
[Pages 76113-76116]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-30980]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68471; File No. SR-FINRA-2012-056]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the Expiration Date of FINRA Rule 0180
(Application of Rules to Security-Based Swaps)
December 19, 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 December 12, 2012, Financial Industry Regulatory
[[Page 76114]]
Authority, Inc. (``FINRA'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
FINRA. FINRA has designated the proposed rule change as constituting a
``non-controversial'' rule change under paragraph (f)(6) of Rule 19b-4
under the Act,\3\ which renders the proposal effective upon receipt of
this filing by the Commission. The Commission is publishing this notice
to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to extend the expiration date of FINRA Rule 0180
(Application of Rules to Security-Based Swaps) to July 17, 2013. FINRA
Rule 0180 temporarily limits, with certain exceptions, the application
of FINRA rules with respect to security-based swaps.
The text of the proposed rule change is available on FINRA's Web
site at https://www.finra.org, at the principal office of FINRA and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On July 21, 2010, President Obama signed into law the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank
Act''),\4\ Title VII of which established a comprehensive new
regulatory framework for swaps and security-based swaps. The
legislation was intended among other things to enhance the authority of
regulators to implement new rules designed to reduce risk, increase
transparency, and promote market integrity with respect to such
products. In general, the Dodd-Frank Act provides that the Commodity
Futures Trading Commission (``CFTC'') will regulate ``swaps'' and the
SEC will regulate ``security-based swaps.'' \5\ The Dodd-Frank Act
contemplates certain self-regulatory organization responsibilities in
this area as well.\6\
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\4\ Public Law 111-203, 124 Stat. 1376 (2010).
\5\ The terms ``swap'' and ``security-based swap'' are defined
in Sections 721 and 761 of the Dodd-Frank Act. See also Securities
Exchange Act Release No. 67453 (July 18, 2012), 77 FR 48208 (August
13, 2012) (Further Definition of ``Swap,'' ``Security-Based Swap,''
and ``Security-Based Swap Agreement''; Mixed Swaps; Security-Based
Swap Agreement Record-Keeping).
\6\ See, e.g., Sections 712 and 763 of the Dodd-Frank Act.
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Title VII of the Dodd-Frank Act became effective on July 16, 2011
(360 days after the enactment of the Dodd-Frank Act, i.e. the
``Effective Date''), unless a provision requires a rulemaking.\7\ The
SEC has taken a number of actions in connection with Title VII,
including providing certain temporary exemptions \8\ to address the
expansion, pursuant to Title VII, of the Act's definition of
``security'' to expressly encompass security-based swaps \9\ and
requesting public comment on the anticipated sequencing of the
compliance dates of final rules to be adopted by the SEC pursuant to
Title VII.\10\
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\7\ The Dodd-Frank Act provides that if a Title VII provision
requires a rulemaking, the provision will go into effect ``not less
than'' 60 days after publication of the related final rule or on
July 16, 2011, whichever is later. See Sections 754 and 774 of the
Dodd-Frank Act.
\8\ See Securities Exchange Act Release No. 64795 (July 1,
2011), 76 FR 39927 (July 7, 2011) (Order Granting Temporary
Exemptions Under the Securities Exchange Act of 1934 in Connection
With the Pending Revision of the Definition of ``Security'' To
Encompass Security-Based Swaps) (the ``Exemptive Release'').
\9\ See SEA Section 3(a)(10) (15 U.S.C. 78c(a)(10)), as revised
by Section 761 of the Dodd-Frank Act.
\10\ See Securities Exchange Act Release No. 67177 (June 11,
2012), 77 FR 35625 (June 14, 2012) (Statement of General Policy on
the Sequencing of the Compliance Dates for Final Rules Applicable to
Security-Based Swaps Adopted Pursuant to the Securities Exchange Act
of 1934 and the Dodd-Frank Wall Street Reform and Consumer
Protection Act) (the ``Policy Statement'').
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In its Exemptive Release, the SEC noted that the expansion of the
Act's definition of ``security'' raises certain complex issues of
interpretation, including issues as to the application of those
provisions to registered broker-dealers. The SEC determined that it was
appropriate to provide market participants with additional time to
consider the potential impact on their businesses and the interpretive
questions raised, and to provide the SEC with any related requests for
guidance or relief, along with the underlying analysis. Further, in the
Policy Statement, the SEC noted that it has been considering how to
implement the new requirements that will be applicable to security-
based swaps pursuant to the final rules to be adopted by the SEC
pursuant to Title VII in a practical and efficient manner that avoids
unnecessary disruption to the security-based swaps market.
Because the Act's expanded definition of ``security'' has
implications for numerous provisions under FINRA rules \11\ similar to
those noted by the SEC in the Exemptive Release, and in the interest of
avoiding unnecessary market disruption, on July 8, 2011, FINRA filed
for immediate effectiveness FINRA Rule 0180,\12\ which, with certain
exceptions, is intended to temporarily limit the application of FINRA
rules with respect to security-based swaps.\13\
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\11\ The current FINRA rulebook consists of: (1) FINRA Rules;
(2) NASD Rules; and (3) rules incorporated from NYSE (``Incorporated
NYSE Rules''). 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. 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).
\12\ See Securities Exchange Act Release No. 64884 (July 14,
2011), 76 FR 42755 (July 19, 2011) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change; File No. SR-FINRA-2011-033)
(``FINRA Rule 0180 Notice of Filing''). On January 13, 2012, FINRA
filed for immediate effectiveness a rule change to extend the
implementation of FINRA Rule 0180 to January 17, 2013. See
Securities Exchange Act Release No. 66156 (January 13, 2012), 77 FR
3027 (January 20, 2012) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change; File No. SR-FINRA-2012-004).
\13\ In its Exemptive Release, the Commission noted that the
relief is targeted and does not include, for instance, relief from
the Act's antifraud and anti-manipulation provisions. FINRA has
noted that FINRA Rule 0180 is similarly targeted. For instance,
paragraph (a) of FINRA Rule 0180 provides that FINRA rules shall not
apply to members' activities and positions with respect to security-
based swaps, except for FINRA Rules 2010 (Standards of Commercial
Honor and Principles of Trade), 2020 (Use of Manipulative, Deceptive
or Other Fraudulent Devices), 3310 (Anti-Money Laundering Compliance
Program) and 4240 (Margin Requirements for Credit Default Swaps).
See also paragraphs (b) and (c) of FINRA Rule 0180 (addressing the
applicability of additional rules) and FINRA Rule 0180 Notice of
Filing.
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The CFTC's and the Commission's rulemaking with respect to swaps
and security-based swaps pursuant to Title VII is ongoing. FINRA
believes it is appropriate and in the public interest to extend FINRA
Rule 0180 for a limited period, to July 17, 2013, pending the
implementation of new rules and guidance that would provide greater
regulatory clarity in relation to security-based swap activities, so as
to provide relief from certain FINRA requirements and thereby help
avoid undue market disruptions resulting from the change to
[[Page 76115]]
the definition of ``security'' under the Act. FINRA will amend the
expiration date of Rule 0180 in subsequent filings as necessary such
that the expiration date will coincide with the implementation of such
rules and guidance.
FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the SEC waive the requirement that
the proposed rule change not become operative for 30 days after the
date of the filing, such that FINRA can implement the proposed rule
change immediately and prevent FINRA Rule 0180 from lapsing.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\14\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change would
further the purposes of the Act because, consistent with the goals set
forth by the Commission in the Exemptive Release and the Policy
Statement, the proposed rule change will help to avoid undue market
disruption resulting from the expiration of FINRA Rule 0180 before the
implementation of new rules and guidance that would provide greater
regulatory clarity in relation to security-based swap activities.
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\14\ 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. FINRA believes that the
proposed rule change would prevent undue market disruption that would
otherwise result if security-based swaps were, by virtue of the
expansion of the Act's definition of ``security'' to encompass
security-based swaps, subject to the application of all FINRA rules
before the implementation of new rules and guidance that would provide
greater regulatory clarity in relation to security-based swap
activities. FINRA believes that, by extending the expiration of FINRA
Rule 0180, the proposed rule change will serve to promote regulatory
clarity and consistency, thereby reducing burdens on the marketplace
and facilitating investor protection.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\17\ 17 CFR 240.19b-4(f)(6)(iii).
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FINRA has requested that the Commission waive both the 5-day
advance filing requirement \18\ and the 30-day operative delay
requirement so that the proposal may become operative upon filing. The
Commission hereby grants both of those requests. The proposed rule is
consistent with the goals set forth by the Commission when it issued
the Exemptive Release and the Policy Statement and will help avoid
undue market interruption resulting from the change to the definition
of ``security'' under the Act. Therefore, the Commission believes it is
consistent with the protection of investors and the public interest to
waive both the requirement that the proposed rule be filed at least
five (5) days in advance and the 30-day operative delay requirement.
Therefore the Commission designates the proposal as operative upon
filing.\19\
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\18\ 17 CFR 240.19b-4(f)(6). Rule 19b-4(f)(6)(iii) requires a
self-regulatory organization to provide the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
\19\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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 email to rule-comments@sec.gov. Please include
File Number SR-FINRA-2012-056 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-2012-056. 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
10:00 a.m. and 3:00 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
[[Page 76116]]
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-2012-056
and should be submitted on or before January 16, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-30980 Filed 12-21-12; 4:15 pm]
BILLING CODE 8011-01-P
