Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Members' Filing Obligations Under FINRA Rule 5123 (Private Placements of Securities), 39367-39369 [2013-15629]

Download as PDF Federal Register / Vol. 78, No. 126 / Monday, July 1, 2013 / Notices Commission notes that, because the filing was submitted for immediate effectiveness on June 21, 2013, the fact that the current rule provision does not expire until July 18, 2013 will afford interested parties the opportunity to comment on the proposal before the Exchange requires it to become operative. For this reason, the Commission designates the proposed rule change to be operative on July 18, 2013.11 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. 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, on official business days between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. 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–BOX– 2013–33 and should be submitted on or before July 22, 2013. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary . 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–BOX–2013–33 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES 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–BOX–2013–33. 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 11 For purposes only of waiving the operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Mar<15>2010 21:38 Jun 28, 2013 Jkt 229001 [FR Doc. 2013–15622 Filed 6–28–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69843; File No. SR–FINRA– 2013–026] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Members’ Filing Obligations Under FINRA Rule 5123 (Private Placements of Securities) June 25, 2013. 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 June 20, 2013, Financial Industry Regulatory 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 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 1 15 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 39367 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 rule changes related to members’ filing obligations under Rule 5123 (Private Placements of Securities). 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 June 7, 2012, the Commission approved FINRA Rule 5123 (‘‘Private Placements of Securities’’ or the ‘‘Rule’’),4 which requires that members file with FINRA any private placement memorandum, term sheet or such other offering document as exists in connection with a specified private placement in which the member participates. Specifically, the Rule provides that each member that sells a security in a non-public offering in reliance on an available exemption from registration under the Securities Act of 1933 (i.e., a private placement) must: (1) Submit to FINRA, or have submitted on its behalf by a designated member, a copy of any private placement memorandum, term sheet or other offering document, including any materially amended versions thereof, used in connection with such sale within 15 calendar days of the date of first sale; or (2) indicate to FINRA that no such offering documents were used. To facilitate the transmission of the required information from members to 4 See Securities Exchange Act Release No. 67157 (June 7, 2012), 77 FR 35457 (June 13, 2012) (Notice of Filing of Amendments No. 2 and No. 3 and Order Granting Accelerated Approval of File No. SR– FINRA–2011–057). E:\FR\FM\01JYN1.SGM 01JYN1 39368 Federal Register / Vol. 78, No. 126 / Monday, July 1, 2013 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES FINRA, FINRA has developed an electronic form for the processing of specified private placement filings (‘‘Private Placement Form’’ or ‘‘Form’’), which must be filed through FINRA Firm Gateway.5 As announced in Regulatory Notice 12–40, the Form, an abbreviated version of which has been in use since the Rule became effective on December 3, 2012, provides an efficient way for firms to submit the filings electronically in searchable Portable Document Format (PDF) to FINRA.6 FINRA is filing the proposed rule change to codify the requirement that members file the Private Placement Form via FINRA Firm Gateway in connection with their compliance with Rule 5123, as set forth in Regulatory Notice 12–40. The existing Private Placement Form requests identifying and contact information for the member and the issuer, whether there is an affiliate relationship between the member and the issuer or sponsor, and basic information about the nature of the offering (e.g., the type of offering, the expected commencement date and whether a Form D has been filed with the SEC). FINRA also is proposing that the Form request, to the extent known by the member, certain other due diligence-related information concerning the offering, the issuer and its management,7 but would permit members to respond ‘‘unknown’’ to such questions. Therefore, this Form does not impose any obligation on broker-dealers to seek out information that they do not already have. Specifically, the Form would include questions, to the extent known, regarding: —Whether the offering is a contingency offering; —whether independently audited financial statements are available for the issuer’s most recently completed fiscal year; —whether the issuer is able to use offering proceeds to make or repay loans to, or purchase assets from, any officer, director or executive management of the issuer, sponsor, general partner, manager, advisor or any of the issuer’s affiliates; —whether the issuer has a board of directors comprised of a majority of 5 FINRA Firm Gateway is an online compliance tool that provides consolidated access to FINRA applications and allows firms to submit required filings electronically to meet their compliance and regulatory obligations. 6 See Regulatory Notice 12–40 (September 2012). 7 FINRA provided guidance on the scope of a firm’s responsibilities to conduct a reasonable investigation of private placement issuers in Regulatory Notice 10–22 (April 2010). VerDate Mar<15>2010 21:38 Jun 28, 2013 Jkt 229001 independent directors or a general partner that is unaffiliated with the firm; —whether the issuer has engaged, or does the member anticipate that the issuer will engage, in a general solicitation in connection with the offering or sale of the securities; and —whether the issuer, any officer, director or executive management of the issuer, sponsor, general partner, manager, advisor or any of the issuer’s affiliates has been the subject of SEC, FINRA or state disciplinary actions or proceedings or criminal complaints within the last 10 years. FINRA also proposes to ask members to select an industry category for the specified private placement offering when completing the Form. The revised Form will assist FINRA in fulfilling its regulatory responsibilities by providing critical information regarding the nature of the offering, involved parties and the member’s role in offering the securities. 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, so FINRA can implement the proposed rule change immediately. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,8 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, in that it will assist in FINRA’s efforts to detect and prevent fraud in connection with specified private placements. In addition, the proposed rule change will assist FINRA in evaluating the specified private placement activities of member firms and assess whether members are conducting a reasonable investigation for specified private placement offerings in which they participate. 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 notes that all members that participate in specified private placements will have to file electronically (or have another 8 15 PO 00000 U.S.C. 78o–3(b)(6). Frm 00118 Fmt 4703 Sfmt 4703 member that is participating in the specified private placement file on its behalf) a Private Placement Form in connection with Rule 5123. In addition, outside of very basic information about the member, the issuer (i.e., identity of the issuer and its contact information) and the nature of the offering (e.g., whether a Form D has been filed with the SEC), the Form will permit members to respond ‘‘unknown’’ to virtually all due diligence-related questions. Because the new questions to be added to the Form in connection with this proposed rule change do not impose an affirmative duty on members to obtain answers, but only requires the member to provide the information on the Form if known, FINRA believes that the proposed rule change presents a very modest filing burden upon members. In light of the role of Rule 5123 and the Form in assisting FINRA in its efforts to detect and prevent fraudulent and manipulative acts and practices and enhance the protection of investors, FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action FINRA has filed the proposed rule change pursuant to Section 19(b)(3)(A) 9 of the Act and Rule 19b–4(f)(6) thereunder.10 Because the 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 and Rule 19b– 4(f)(6) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 11 normally does not become operative for 30 days after the 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires FINRA 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. FINRA has satisfied this requirement. 11 17 CFR 240.19b–4(f)(6). 10 17 E:\FR\FM\01JYN1.SGM 01JYN1 Federal Register / Vol. 78, No. 126 / Monday, July 1, 2013 / Notices date of filing. However, pursuant to Rule 19b–4(f)(6)(iii) 12 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. FINRA has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, as it will assist in FINRA’s efforts to detect and prevent fraud in connection with specified private placements. As noted by FINRA, the burden on members will be minimal because electronic filing of an abbreviated version of the Form accompanying specified private placement filings has been operative since the Rule became effective and the proposed rule change does not impose an affirmative duty on members to obtain any additional information not already known to them. Therefore, implementation time is not necessary as members already file through FINRA Firm Gateway. For these reasons, the Commission designates the proposed rule change to be operative upon filing.13 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 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–2013–026. 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 available publicly. All submissions should refer to File Number SR–FINRA–2013–026 and should be submitted on or before July 22, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. Electronic Comments mstockstill on DSK4VPTVN1PROD with NOTICES 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: BILLING CODE 8011–01–P [FR Doc. 2013–15629 Filed 6–28–13; 8:45 am] • 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–2013–026 on the subject line. 12 17 CFR 240.19b–4(f)(6)(iii). purposes 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). 13 For VerDate Mar<15>2010 21:38 Jun 28, 2013 Jkt 229001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69849; File No. SR– NYSEMKT–2013–50] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change Relating to a Corporate Transaction in which Its Indirect Parent, NYSE Euronext, Will Become a Wholly Owned Subsidiary of IntercontinentalExchange Group, Inc. June 25, 2013. Pursuant to Section 19(b)(1)1 of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’ or the ‘‘Act’’)2 and Rule 19b-4 thereunder,3 notice is hereby given that, on June 14, 2013, NYSE MKT LLC (‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change A. Overview of the Proposed Merger NYSE MKT, a New York limited liability company, registered national securities exchange and self-regulatory organization, is submitting this rule filing (the ‘‘Proposed Rule Change’’) to the U.S. Securities and Exchange Commission in connection with the proposed business combination (the ‘‘Merger’’) of NYSE Euronext (‘‘NYSE Euronext’’) and IntercontinentalExchange, Inc. (‘‘ICE’’), both Delaware corporations. NYSE Euronext has entered into an Agreement and Plan of Merger, dated as of December 20, 2012, as amended and restated as of March 19, 2013, by and among NYSE Euronext, ICE, IntercontinentalExchange Group, Inc. (‘‘ICE Group’’), Braves Merger Sub, Inc. (‘‘ICE Merger Sub’’) and Baseball Merger Sub, LLC (‘‘NYSE Euronext Merger Sub’’) (as it may be further amended from time to time, the ‘‘Merger Agreement’’), whereby NYSE Euronext and ICE would each become subsidiaries of ICE Group. NYSE Euronext owns 100% of the equity interest of NYSE Group, Inc., a Delaware corporation (‘‘NYSE Group’’), which in turn directly or indirectly owns (1) 100% of the equity interest of 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b-4. 2 15 14 17 PO 00000 CFR 200.30–3(a)(12). Frm 00119 Fmt 4703 Sfmt 4703 39369 E:\FR\FM\01JYN1.SGM 01JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 78, Number 126 (Monday, July 1, 2013)]
[Notices]
[Pages 39367-39369]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-15629]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69843; File No. SR-FINRA-2013-026]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to Members' Filing Obligations Under 
FINRA Rule 5123 (Private Placements of Securities)

June 25, 2013.
    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 June 20, 2013, Financial Industry Regulatory 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    FINRA is proposing rule changes related to members' filing 
obligations under Rule 5123 (Private Placements of Securities).
    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 June 7, 2012, the Commission approved FINRA Rule 5123 (``Private 
Placements of Securities'' or the ``Rule''),\4\ which requires that 
members file with FINRA any private placement memorandum, term sheet or 
such other offering document as exists in connection with a specified 
private placement in which the member participates. Specifically, the 
Rule provides that each member that sells a security in a non-public 
offering in reliance on an available exemption from registration under 
the Securities Act of 1933 (i.e., a private placement) must: (1) Submit 
to FINRA, or have submitted on its behalf by a designated member, a 
copy of any private placement memorandum, term sheet or other offering 
document, including any materially amended versions thereof, used in 
connection with such sale within 15 calendar days of the date of first 
sale; or (2) indicate to FINRA that no such offering documents were 
used.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 67157 (June 7, 
2012), 77 FR 35457 (June 13, 2012) (Notice of Filing of Amendments 
No. 2 and No. 3 and Order Granting Accelerated Approval of File No. 
SR-FINRA-2011-057).
---------------------------------------------------------------------------

    To facilitate the transmission of the required information from 
members to

[[Page 39368]]

FINRA, FINRA has developed an electronic form for the processing of 
specified private placement filings (``Private Placement Form'' or 
``Form''), which must be filed through FINRA Firm Gateway.\5\ As 
announced in Regulatory Notice 12-40, the Form, an abbreviated version 
of which has been in use since the Rule became effective on December 3, 
2012, provides an efficient way for firms to submit the filings 
electronically in searchable Portable Document Format (PDF) to 
FINRA.\6\
---------------------------------------------------------------------------

    \5\ FINRA Firm Gateway is an online compliance tool that 
provides consolidated access to FINRA applications and allows firms 
to submit required filings electronically to meet their compliance 
and regulatory obligations.
    \6\ See Regulatory Notice 12-40 (September 2012).
---------------------------------------------------------------------------

    FINRA is filing the proposed rule change to codify the requirement 
that members file the Private Placement Form via FINRA Firm Gateway in 
connection with their compliance with Rule 5123, as set forth in 
Regulatory Notice 12-40. The existing Private Placement Form requests 
identifying and contact information for the member and the issuer, 
whether there is an affiliate relationship between the member and the 
issuer or sponsor, and basic information about the nature of the 
offering (e.g., the type of offering, the expected commencement date 
and whether a Form D has been filed with the SEC). FINRA also is 
proposing that the Form request, to the extent known by the member, 
certain other due diligence-related information concerning the 
offering, the issuer and its management,\7\ but would permit members to 
respond ``unknown'' to such questions. Therefore, this Form does not 
impose any obligation on broker-dealers to seek out information that 
they do not already have. Specifically, the Form would include 
questions, to the extent known, regarding:
---------------------------------------------------------------------------

    \7\ FINRA provided guidance on the scope of a firm's 
responsibilities to conduct a reasonable investigation of private 
placement issuers in Regulatory Notice 10-22 (April 2010).

--Whether the offering is a contingency offering;
--whether independently audited financial statements are available for 
the issuer's most recently completed fiscal year;
--whether the issuer is able to use offering proceeds to make or repay 
loans to, or purchase assets from, any officer, director or executive 
management of the issuer, sponsor, general partner, manager, advisor or 
any of the issuer's affiliates;
--whether the issuer has a board of directors comprised of a majority 
of independent directors or a general partner that is unaffiliated with 
the firm;
--whether the issuer has engaged, or does the member anticipate that 
the issuer will engage, in a general solicitation in connection with 
the offering or sale of the securities; and
--whether the issuer, any officer, director or executive management of 
the issuer, sponsor, general partner, manager, advisor or any of the 
issuer's affiliates has been the subject of SEC, FINRA or state 
disciplinary actions or proceedings or criminal complaints within the 
last 10 years.

    FINRA also proposes to ask members to select an industry category 
for the specified private placement offering when completing the Form.
    The revised Form will assist FINRA in fulfilling its regulatory 
responsibilities by providing critical information regarding the nature 
of the offering, involved parties and the member's role in offering the 
securities.
    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, so FINRA can implement the proposed rule change 
immediately.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ 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, in that it will assist in FINRA's efforts to detect 
and prevent fraud in connection with specified private placements. In 
addition, the proposed rule change will assist FINRA in evaluating the 
specified private placement activities of member firms and assess 
whether members are conducting a reasonable investigation for specified 
private placement offerings in which they participate.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. FINRA notes that all members 
that participate in specified private placements will have to file 
electronically (or have another member that is participating in the 
specified private placement file on its behalf) a Private Placement 
Form in connection with Rule 5123. In addition, outside of very basic 
information about the member, the issuer (i.e., identity of the issuer 
and its contact information) and the nature of the offering (e.g., 
whether a Form D has been filed with the SEC), the Form will permit 
members to respond ``unknown'' to virtually all due diligence-related 
questions.
    Because the new questions to be added to the Form in connection 
with this proposed rule change do not impose an affirmative duty on 
members to obtain answers, but only requires the member to provide the 
information on the Form if known, FINRA believes that the proposed rule 
change presents a very modest filing burden upon members. In light of 
the role of Rule 5123 and the Form in assisting FINRA in its efforts to 
detect and prevent fraudulent and manipulative acts and practices and 
enhance the protection of investors, FINRA does not believe that the 
proposed rule change will result in any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    FINRA has filed the proposed rule change pursuant to Section 
19(b)(3)(A) \9\ of the Act and Rule 19b-4(f)(6) thereunder.\10\ Because 
the 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 and Rule 19b-4(f)(6) thereunder.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires FINRA 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. FINRA 
has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative for 30 days after the

[[Page 39369]]

date of filing. However, pursuant to Rule 19b-4(f)(6)(iii) \12\ the 
Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest. FINRA has 
asked the Commission to waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing.
---------------------------------------------------------------------------

    \11\ 17 CFR 240.19b-4(f)(6). 
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
it will assist in FINRA's efforts to detect and prevent fraud in 
connection with specified private placements. As noted by FINRA, the 
burden on members will be minimal because electronic filing of an 
abbreviated version of the Form accompanying specified private 
placement filings has been operative since the Rule became effective 
and the proposed rule change does not impose an affirmative duty on 
members to obtain any additional information not already known to them. 
Therefore, implementation time is not necessary as members already file 
through FINRA Firm Gateway. For these reasons, the Commission 
designates the proposed rule change to be operative upon filing.\13\
---------------------------------------------------------------------------

    \13\ For purposes 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).
---------------------------------------------------------------------------

    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-2013-026 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-2013-026. 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 available publicly. All 
submissions should refer to File Number SR-FINRA-2013-026 and should be 
submitted on or before July 22, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-15629 Filed 6-28-13; 8:45 am]
BILLING CODE 8011-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.