Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend the Uniform Branch Office Registration Form (Form BR), 75954-75958 [2013-29739]

Download as PDF 75954 Federal Register / Vol. 78, No. 240 / Friday, December 13, 2013 / Notices requirements. In addition, because the vast majority of listed companies have to comply with the proposed continued listing standard, the Exchange should have sufficient experience monitoring for compliance with the proposed standard. As noted above, the Exchange also found, based on a review of data of companies below compliance under the NYSE’s financial standards from 2006 to 2012, that all of the securities that were delisted under the current applicable standard would have been delisted under the proposed standard, or the other applicable minimum listing criteria.20 Based on the Exchange’s review and experience in administering the proposed standard, the Exchange concluded that the proposed continued listing standard, in combination with the other minimum continued listing criteria, is a rigorous measure to ensure companies and their securities remain suitable for listing.21 Based on the above, the Commission believes that that proposal is consistent with the requirements of the Act. We, however, would expect the Exchange to monitor its continued listing standards to ensure that they remain adequate and make adjustments to its rules where necessary. Finally, in approving the proposal, we recognize that some of the current continued listing standards have substantially higher market capitalization requirements than under the new standard.22 We understand some of the rationale for the higher standards was related to the higher market capitalization requirements in the initial listing standards. For the reasons, however, noted above, ehiers on DSK2VPTVN1PROD with NOTICES 20 See Notice at supra note 3 and note 18, supra. The Exchange further noted that the minority of companies that would not have fallen below the proposed standard or other minimum continued listing standards, have all regained compliance with the quantitative continued listing standards. 21 As to companies listed under the Affiliated Company Test, the Commission notes that although the current quantitative market capitalization and stockholder equity continued listing standards applicable to such listings are higher than the proposed standards, these standards only applied if the parent or affiliated company ceased control of the listed company or the parent or affiliate also fell below continued listing standards. Under the new standards, however, companies listed under the Affiliated Company Test will be subject to the new continued listing requirement irrespective of whether the parent or affiliated company ceases to control the listed company or the parent or affiliate falls below continued listing standards, which arguably may be a stronger standard despite the lower numerical criteria. 22 For example, under the current Pure Valuation/ Revenue Test, companies would need to meet average global market capitalization over a consecutive 30 trading-day period of $100,000,000. The Commission notes, however, that the proposed standard includes an additional requirement on stockholders equity. VerDate Mar<15>2010 13:32 Dec 12, 2013 Jkt 232001 including the Exchange’s representation that the proposed standard, along with the additional minimum standards, should adequately ensure the quality of companies that continue to list on the exchange based on its experience with monitoring companies for compliance, and the fact that the proposed standard had previously been approved as one of several continued financial listing standards, and thus already applies to a large majority of currently listed companies, we are approving the proposal.23 We also note that the adoption of the proposed continued listing standard does not appear to set a new low when comparing the continued listing standards of other named markets under Section 18 of the Securities Act of 1933, both currently and at the time Section 18 was adopted in 1996.24 Taken as a whole, the Exchange’s continued listing standards appear to be as high as NYSE MKT’s continued listing standards for common stock of operating companies.25 IV. Conclusion For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and, in particular, with Section 6(b)(5) of the Act.26 It is therefore ordered, pursuant the Section 19(b)(2) of the Act, that the proposed rule change (SR–NYSE–2013– 67), is hereby approved. 23 The Commission notes that the Exchange rules give it the flexibility to commence delisting proceedings should any event or condition makes further dealings or listing of the securities on the Exchange inadvisable or unwarranted. Accordingly, we would expect the Exchange to continue to monitor a listed company that has lost a significant percentage of its market capitalization when compared to the original standard it was listed under, especially if the substantial loss in value indicates issues with the company that would raise whether further dealings on the Exchange are warranted. See Section 802.01D of the Manual. 24 15 U.S.C. 77r (Section 102 of the National Securities Markets Improvement Act (‘‘NSMIA’’) of 1996 amended Section 18 of the Securities Act of 1933). 25 See email from Patrick Troy, Chief Counsel, NYSE, to Steve L. Kuan, Special Counsel, Division of Trading and Markets, Commission, on November 25, 2013. The Commission notes that the a direct comparison of NYSE MKT’s continued listing standards with the proposed NYSE continued listing standards is not possible, since some of the standards use different criteria. For example, NYSE MKT uses a public stockholder requirement, while NYSE uses a total stockholders requirement. Taken as a whole, however, the Commission believes that the proposed NYSE standards appear to be as high as NYSE MKT’s standards. 26 15 U.S.C. 78f(b)(5). PO 00000 Frm 00045 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–29741 Filed 12–12–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71027; File No. SR–FINRA– 2013–051] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend the Uniform Branch Office Registration Form (Form BR) December 9, 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 November 25, 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, II, and III below, which Items have been prepared by FINRA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend the Uniform Branch Office Registration Form (‘‘Form BR’’) to (1) eliminate Section 6 (NYSE Branch Information), which is currently applicable only to NYSE-registered firms; (2) add questions relating to space sharing arrangements and the location of books and records that are currently only in Section 6 and make them applicable to all members; (3) modify existing questions and instructions to provide more detailed selections for describing the types of activities conducted at the branch office; (4) add an optional question to identify a branch office as an ‘‘Office of Municipal Supervisory Jurisdiction,’’ as defined under the rules of the Municipal Securities Rulemaking Board (MSRB); and (5) make other technical changes to adopt uniform terminology and clarify questions and instructions (collectively, the proposed amendments to Form BR are hereinafter referred to as the ‘‘Updated Form BR’’). 27 See 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\13DEN1.SGM 13DEN1 Federal Register / Vol. 78, No. 240 / Friday, December 13, 2013 / Notices 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 ehiers on DSK2VPTVN1PROD with NOTICES 1. Purpose The purpose of the proposed rule change is to amend Form BR, which is used by firms to register their branch offices with FINRA, the New York Stock Exchange (‘‘NYSE’’), and participating states via the Central Registration Depository (‘‘CRD®’’). Form BR enables a firm to register a branch office 3 (either by notice filing or approval) as required by the relevant jurisdiction or selfregulatory organization (‘‘SRO’’), amend a registration, close or terminate a registration, or withdraw a filing in the appropriate participating jurisdiction and SRO. In concert with a committee of regulatory and industry representatives, FINRA recently undertook a review of Form BR. As a result of this review, FINRA is proposing to amend Form BR to (1) eliminate Section 6 (NYSE Branch Information), which is currently applicable only to NYSE-registered firms; (2) add questions relating to space sharing arrangements and the location of books and records that are currently only in Section 6 and make them applicable to all members; (3) modify existing questions and instructions to provide more detailed selections for describing the types of activities conducted at the branch office; (4) add an optional question to identify a branch office as an ‘‘Office of Municipal Supervisory Jurisdiction,’’ as defined 3 See NASD Rule 3010(g)(2) for a definition of the term ‘‘branch office.’’ Certain states participating in the use of Form BR via CRD have adopted a similar definition. See also Securities Exchange Act Release No. 69902 (July 1, 2013), 78 FR 40792 (July 8, 2013) (Notice of Filing File No. SR–FINRA–2013–025). VerDate Mar<15>2010 13:32 Dec 12, 2013 Jkt 232001 under MSRB rules; and (5) make other technical changes to adopt uniform terminology and clarify questions and instructions. FINRA believes the proposed Updated Form BR will provide a more comprehensive profile of each firm’s registered branch offices, which will allow regulators and firms to better understand the activities occurring at each registered branch office. This understanding should enable firms to strengthen their own compliance and regulators to conduct more focused and effective examinations. FINRA further believes that the proposal will have a minimal impact on firms based principally upon FINRA’s experience with Form BR, discussions with industry representatives who participated in the working group that developed the proposed amendments, and the approach to implementation that FINRA is proposing for the Updated Form BR. In that regard, and as discussed in more detail below, firms with existing registered branch offices will not be required to complete the proposed new information items on the Updated Form BR by a date certain after implementation, but rather when the firm is otherwise required, in the ordinary course, to amend the form to update existing information items that have become inaccurate or incomplete.4 FINRA believes that this more flexible approach accomplishes the important regulatory objective of collecting the proposed new information items from those members that have not previously reported it,5 while limiting the associated burden on firms. Background Form BR was developed jointly in 2005 by a working group consisting of representatives of FINRA (then the National Association of Securities Dealers, Inc. (‘‘NASD’’)), the NYSE, the North American Securities Administrators Association (‘‘NASAA’’) and states to establish a uniform electronic process via the CRD system for registering branch offices with various jurisdictions. Form BR replaced 4 Member firms have a continuing obligation to promptly update Form BR whenever the information becomes inaccurate or incomplete. Amendments require updating only the appropriate section of Form BR. FINRA and most participating jurisdictions require that an amendment be filed not later than 30 days after the firm learns of facts and circumstances giving rise to the amendment. 5 FINRA notes that members that also are registered with the NYSE currently report information related to space sharing arrangements and the location of books and records for each registered branch office on Section 6 (NYSE Branch Information) on Form BR. PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 75955 Schedule E of the SEC’s Form BD (Broker-Dealer Registration Form), the NYSE Branch Office Application Form and state branch office forms, and enabled firms to register branch offices electronically with FINRA, the NYSE and participating states via a single filing through the CRD system.6 Form BR enables firms to file, for notice or approval, Form BR as required by the applicable jurisdiction or SRO. Since its implementation in 2005, Form BR has not been substantively updated.7 Based on a recent review of the form and experience with the form to date, FINRA and a committee of representatives from industry, NASAA and participating states (the ‘‘Form BR Working Group’’) believe that the proposed changes are appropriate and will result in efficiencies for firms and regulators. In particular, FINRA believes the proposed amendments to Form BR will make the branch office registration process more efficient by eliminating duplicative provisions, eliciting certain information items from all filers, and clarifying existing questions so that regulators and firms can better understand the activities of each registered branch office. Proposed Amendments Current Form BR consists of the following nine sections: (1) General Information; (2) Registration/Notice Filing/Type of Office; (3) Types of Activities/Other Business Names/Web sites; (4) Branch Office Arrangements; (5) Associated Individuals; (6) NYSE Branch Information; (7) Branch Closing; (8) Branch Withdrawal (Pending Application); and (9) Signature. FINRA is proposing to amend Form BR to consist of eight sections with the following section titles: (1) General Information; (2) Registration/Notice Filing/Type of Office/Activities; (3) Other Business Activities/Names/Web sites; (4) Branch Office Arrangements; (5) Associated Individuals; (6) Branch Office Closing; (7) Branch Office Withdrawal (Pending Application); and (8) Signature. In addition to this reorganization of sections, FINRA is proposing the amendments to Form BR described below. Delete Section 6 (NYSE Branch Information). Currently only NYSEregistered firms can view Section 6 6 Currently, 24 states utilize Form BR; of those, 16 states have a notice-filing requirement and eight have a pre-approval process. 7 In 2007, Form BR was amended to change references of ‘‘NASD’’ to ‘‘FINRA’’ and to make other technical amendments. See Securities Exchange Act Release No. 57033 (December 21, 2007), 72 FR 74382 (December 31, 2007) (Notice of Filing File No. SR–FINRA–2007–036). E:\FR\FM\13DEN1.SGM 13DEN1 75956 Federal Register / Vol. 78, No. 240 / Friday, December 13, 2013 / Notices ehiers on DSK2VPTVN1PROD with NOTICES (NYSE Branch Information) on the CRD system and only NYSE-registered firms are required to complete and update Section 6. Section 6 of Form BR allowed NYSE to administer a pre-approval process for registration of certain branch offices that was in place at the time Form BR was implemented.8 However, following the NASD/NYSE regulatory consolidation, the NYSE amended NYSE Rule 342 to change its branch office registration requirement from a pre-approval process to a notice-filing requirement in an effort to eliminate disparate regulatory standards.9 As a result, FINRA and the Form BR Working Group believe this separate NYSEregistered firm section of Form BR is no longer necessary and should be deleted in the Updated Form BR. The proposed revisions also will remove references to the NYSE-specific terms from the form such as ‘‘regular branch’’ and ‘‘small branch.’’ FINRA believes the proposed changes will create efficiencies for firms that are members of both FINRA and the NYSE by eliminating nine questions from the current Form BR and for regulators by eliminating those questions deemed redundant or of limited regulatory value. In addition, FINRA believes that all members will benefit from having one, uniform form. Add Questions on Space Sharing Arrangements and Location of Books and Records. As described above, FINRA is proposing to eliminate Section 6 (NYSE Branch Information) from the current Form BR because pre-approval of certain branch offices of NYSEregistered firms is no longer required. However, FINRA is proposing to retain questions from that section relating to space sharing arrangements and the location of books and records and add them to proposed Section 4 (Branch Office Arrangements) of the Updated Form BR. FINRA and the Form BR Working Group determined to retain these questions because they provide valuable regulatory information and also will allow continued monitoring for compliance with Incorporated NYSE Rule 343.10 8 In 2005 when Form BR was initially launched, NYSE Rule 342 (Offices—Approval, Supervision and Control) required approval of new branch office registrations, and NYSE Rule 343 (Offices—Sole Tenancy, Hours, Display of Membership Certificates) required approval of space sharing arrangements, before the branch office was able to conduct business. 9 See Securities Exchange Act Release No. 56143 (July 26, 2007), 72 FR 42453 (August 2, 2007) (Notice of Filing and Immediate Effectiveness of File No. SR–NYSE–2007–59). 10 Incorporated NYSE Rule 343 (Supervision) is still in effect and applicable to NYSE-registered firms. As part of the effort to develop the consolidated FINRA rulebook, FINRA is proposing to adopt FINRA Rule 3110 (Supervision) and delete VerDate Mar<15>2010 13:32 Dec 12, 2013 Jkt 232001 Specifically, FINRA is proposing to add a new question to proposed Section 4 (Branch Office Arrangements) of the Updated Form BR that will ask members to disclose if the branch office occupies, shares space with or jointly markets with any other investment-related entity, and if the answer is yes, to provide the name of such entity.11 FINRA believes applying the space sharing arrangement question to all members will allow regulators to better understand the specific activities occurring at each registered branch office and monitor that such arrangements are structured in a manner that allow [sic] public customers to identify the entity with which they are conducting business. FINRA also is proposing to add a question to proposed Section 4 (Branch Office Arrangements) that will ask members if books and records pertaining to the registered branch office are maintained at any location other than that branch office, the main office or office of supervisory jurisdiction (OSJ) (if applicable). If the answer is yes, a member will need to provide the address of such location and the name and telephone number of a contact person. FINRA believes many firms elect to keep books and records in a centralized office rather than at the branch office; therefore, eliciting whether books and records are maintained offsite will enable regulators to conduct more effective and efficient branch office examinations. Modify Existing Question on ‘‘Types of Activities’’. FINRA is proposing to relocate questions relating to ‘‘Types of Activities’’ occurring at the branch office from Section 3 (Other Business/ Names/Web sites) to proposed Section 2 (Registration/Notice Filing/Type of Office/Activities) of the Updated Form BR and to expand the list of activity types that may be selected to (1) include Retail and Institutional (as types of Sales Activity), Public Finance, and NYSE Rule 343. In 2007, the NYSE amended its branch office registration process from a prior consent requirement to a notice requirement (but retained the approval standard for space sharing arrangements). Under NYSE Rule 343, space sharing arrangements must be evaluated by the NYSE and FINRA (who has assumed by contract regulatory responsibility to review for NYSE member firm compliance). See SR–NYSE–2007–59 and NYSE Information Memo 07–81 (August 1, 2007). See also Securities Exchange Act Release No. 69902 (July 1, 2013), 78 FR 40792 (July 8, 2013) (Notice of Filing File No. SR–FINRA–2013–025). 11 The term ‘‘investment-related’’ is defined in Form BR as ‘‘[p]ertains to securities, commodities, banking, insurance, or real estate (including, but not limited to, acting as or being associated with a Broker-Dealer, issuer, investment company, Investment Adviser, futures sponsor, bank, or savings association).’’ PO 00000 Frm 00047 Fmt 4703 Sfmt 4703 Other; (2) add ‘‘Trading’’ to the existing Market Making activity; and (3) combine Investment Banking and Underwriting, which are now listed separately. FINRA and the Form BR Working Group believe that clarifying and expanding the list of activity types will enhance regulators’ understanding of the types of activities that occur at each registered branch office and assist regulators and members in conducting risk-based branch office reviews. For example, a member that selects ‘‘Sales’’ can then identify if that activity relates to ‘‘Retail’’ or ‘‘Institutional’’ customers. In addition, based on feedback from firms, FINRA is proposing to add ‘‘Public Finance’’ as an option to enable members and regulators to identify via the Form BR office locations that require a principal to be registered as a Series 53 (Municipal Securities Principal). Modify Supervisor/Person-in-Charge Details. FINRA is proposing to expand the supervisor and person-in-charge details provided by firms in Section 2 (Registration/Notice Filing/Type of Office/Activities) of the Updated Form BR, to enable firms (at their option) to provide the ‘‘type of activity’’ associated with each on-site supervisor or personin-charge listed. FINRA is proposing to add this option based on feedback from firms to date. Firms have requested the ability to link each supervisor or personin-charge listed for a registered branch office to identified lines of business to better reflect their supervisory structures. Add Optional MSRB Branch Office of Municipal Supervisory Jurisdiction Question. The MSRB regulates brokers, dealers and municipal securities dealers that engage in municipal securities activities. Under MSRB rules, certain of these participants are required to identify whether a branch is designated as an Office of Municipal Supervisory Jurisdiction (‘‘OMSJ’’), as defined under MSRB rules.12 To assist those participants that use Form BR in complying with that MSRB requirement, FINRA is proposing to add an optional question to Section 2 (Registration/ Notice Filing/Type of Office/Activities) to the Updated Form BR to provide FINRA members that also are registered with the MSRB a means to track their OMSJs through a standard CRD report that FINRA expects to develop following the deployment of the Updated Form BR. Technical and Clarifying Changes. Based on feedback from the Form BR Working Group, FINRA is proposing technical and clarifying changes to General and Specific Instructions, 12 See E:\FR\FM\13DEN1.SGM MSRB Rule G–27 (Supervision). 13DEN1 Federal Register / Vol. 78, No. 240 / Friday, December 13, 2013 / Notices ehiers on DSK2VPTVN1PROD with NOTICES Explanation of Terms and Sections of the Updated Form BR. These include global changes to adopt uniform terminology for terms such as ‘‘CRD number’’ and ‘‘branch office,’’ to capitalize ‘‘Broker-Dealer’’ and ‘‘Investment Adviser,’’ and to replace ‘‘person’’ with ‘‘individual’’ when referring to associated individuals. The use of the word ‘‘individual’’ is intended to make the terminology in the Updated Form BR consistent with terminology currently used in Section 5 of the Form BR, which elicits information with respect to all registered individuals who are associated with the branch office. In addition, the Instructions of the Updated Form BR will be amended to clarify that checking the ‘‘Private Residence Check Box’’ when providing the address of the branch office does not act to prevent public disclosure of the branch address.13 FINRA will continue to disclose the full address of registered branch offices through BrokerCheck even if the registered branch is a private residence, consistent with its existing policy.14 No Requirement to Submit Amended Forms BR by a Date Certain. Members with existing registered branch offices will not be required to file an Updated Form BR for such existing offices immediately upon deployment of the amended form, but will be required to provide the proposed new information items on the Updated Form BR when the member is otherwise required, in the ordinary course, to amend the form to update existing information items that have become inaccurate or incomplete.15 FINRA expects to evaluate the number of registered branch offices of FINRA members for which an Updated Form BR has not been filed (and, therefore, for which FINRA and other regulators do not have the proposed new information items) one year after deployment of the Form. Based on that evaluation, FINRA may consider imposing a future deadline for providing that proposed new information items [sic] in the Updated Form BR if a significant number of registered branch offices have not filed 13 Some states elect to withhold disclosing to the public, in whole or in part, the address for a branch office of an investment adviser if the branch office also is a private residence. 14 FINRA believes that disclosure of the full address is appropriate where a member has registered the home office as a registered branch office and not relied on the primary residence exemption from branch office registration. 15 Member firms have a continuing obligation to promptly update Form BR whenever the information becomes inaccurate or incomplete. See supra note 4. VerDate Mar<15>2010 13:32 Dec 12, 2013 Jkt 232001 the information through an amendment in the ordinary course. FINRA will announce the effective date of the proposed rule change in a Regulatory Notice to be published no later than 60 days following Commission approval. The effective date will be no later than 90 days following publication of the Regulatory Notice announcing Commission approval. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,16 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 the Updated Form BR is necessary at this time to ensure that the form remains current and accurate by reflecting changes to applicable rules and regulations of the relevant participating jurisdictions, including specifically the regulatory consolidation of the NYSE and NASD (e.g., deletion of current Section 6 (NYSE Branch Information)). Further, the Updated Form BR will provide a more comprehensive profile of each firm’s registered branch offices and thereby allow regulators to better prioritize and plan examinations. (B) Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed changes to Form BR will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. FINRA is proposing to amend Form BR to reflect changes to applicable rules and regulations of the relevant participating jurisdictions, including specifically the regulatory consolidation of the NYSE and NASD, making the form more current and accurate. FINRA believes the operational burden associated with completion of the proposed Updated Form BR will be minimal for NYSE-registered firms because such firms already report space sharing arrangements and the location of books and records for each registered branch office on Form BR.17 FINRA 16 15 U.S.C. 78o–3(b)(6). the extent possible, FINRA will identify information relating to space sharing arrangements and the location of books and records previously reported by NYSE-registered firms on Form BR that will be responsive to the questions being retained on the Updated Form BR (i.e., in proposed new Section 4—Branch Office Arrangements) and will transfer that information to the appropriate data 17 To PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 75957 believes all other firms should have this information readily available, as the questions are consistent with the types of information that members typically track for purposes of conducting their supervisory reviews and inspections of branch offices. Further, FINRA believes the proposed Updated Form BR will provide a more comprehensive profile of each firm’s registered branch offices, which will create efficiencies by allowing regulators and firms to better understand the activities occurring at each registered branch office and conduct more focused and effective examinations. In addition, FINRA believes that the proposed rule change presents a modest burden upon firms because the proposed Updated Form BR does not impose an affirmative duty for members to immediately submit the amended form upon deployment, but only requires members to provide the proposed new information items on the Updated Form BR at the time the member otherwise is required, in the ordinary course, to update existing information items that have become inaccurate or incomplete on the Form BR. Therefore, FINRA believes the incremental compliance costs of providing the proposed new information items on the Updated Form BR should not impose a burden on competition not necessary or appropriate in furtherance of the Act and in light of the benefits described above. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove such proposed rule change, or fields. However, firms will be required to verify the accuracy of the information that has been transferred to the Updated Form BR. E:\FR\FM\13DEN1.SGM 13DEN1 75958 Federal Register / Vol. 78, No. 240 / Friday, December 13, 2013 / Notices (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: • 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–2013–051 on the subject line. Paper Comments ehiers on DSK2VPTVN1PROD with NOTICES • 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–2013–051. 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 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– 2013–051 and should be submitted on or before January 3, 2014. 13:32 Dec 12, 2013 [FR Doc. 2013–29739 Filed 12–12–13; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Surface Transportation Board [Docket No. AB 55 (Sub-No. 729X)] Electronic Comments VerDate Mar<15>2010 For the Commission by the Division of Trading and Markets, pursuant to delegated authority.18 Kevin M. O’Neill, Deputy Secretary. Jkt 232001 CSX Transportation, Inc.— Abandonment Exemption—in Washington County, Md CSX Transportation, Inc. (CSXT) has filed a verified notice of exemption under 49 CFR part 1152 subpart F— Exempt Abandonments to abandon approximately 0.90 miles of rail line on its Northern Region, Baltimore Division, Lurgan Subdivision, between milepost BBT 3.9 at the connection to CSXT’s main line and the end of track at milepost BBT 3.0 at Alternate Route US 40, south of Eastern Boulevard South in Hagerstown, in Washington County, Md. The line traverses United States Postal Service Zip Code 21740. CSXT has certified that: (1) No local traffic has moved over the line for at least two years; (2) any overhead traffic on the line can be, and has been rerouted; (3) no formal complaint filed by a user of rail service on the line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the line either is pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of complainant within the two-year period; and (4) the requirements at 49 CFR 1105.7(c) (environmental report), 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met. As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under Oregon Short Line Railroad— Abandonment Portion Goshen Branch Between Firth & Ammon, in Bingham & Bonneville Counties, Idaho, 360 I.C.C. 91 (1979). To address whether this condition adequately protects affected employees, a petition for partial revocation under 49 U.S.C. 10502(d) must be filed. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this 18 17 PO 00000 CFR 200.30–3(a)(12). Frm 00049 Fmt 4703 Sfmt 4703 exemption will be effective on January 14, 2014, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues,1 formal expressions of intent to file an OFA under 49 CFR 1152.27(c)(2),2 and trail use/rail banking requests under 49 CFR 1152.29 must be filed by December 23, 2013. Petitions to reopen or requests for public use conditions under 49 CFR 1152.28 must be filed by January 2, 2014, with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001. A copy of any petition filed with the Board should be sent to CSXT’s representative: Louis E. Gitomer, 600 Baltimore Avenue, Suite 301, Towson, MD 21204. If the verified notice contains false or misleading information, the exemption is void ab initio. CSXT has filed a combined environmental and historic report that addresses the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by December 20, 2013. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423–0001) or by calling OEA at (202) 245–0305. Assistance for the hearing impaired is available through the Federal Information Relay Service at (800) 877–8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public. Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision. Pursuant to the provisions of 49 CFR 1152.29(e)(2), CSXT shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the line. If consummation has not been effected by CSXT’s filing of a notice of consummation by December 13, 2014, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. 1 The Board will grant a stay if an informed decision on environmental issues (whether raised by a party or by the Board’s Office of Environmental Analysis (OEA) in its independent investigation) cannot be made before the exemption’s effective date. See Exemption of Out-of-Serv. Rail Lines, 5 I.C.C. 2d 377 (1989). Any request for a stay should be filed as soon as possible so that the Board may take appropriate action before the exemption’s effective date. 2 Each OFA must be accompanied by the filing fee, which is currently set at $1,600. See 49 CFR 1002.2(f)(25). E:\FR\FM\13DEN1.SGM 13DEN1

Agencies

[Federal Register Volume 78, Number 240 (Friday, December 13, 2013)]
[Notices]
[Pages 75954-75958]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29739]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71027; File No. SR-FINRA-2013-051]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend 
the Uniform Branch Office Registration Form (Form BR)

December 9, 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 November 25, 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, 
II, and III below, which Items have been prepared by FINRA. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend the Uniform Branch Office Registration 
Form (``Form BR'') to (1) eliminate Section 6 (NYSE Branch 
Information), which is currently applicable only to NYSE-registered 
firms; (2) add questions relating to space sharing arrangements and the 
location of books and records that are currently only in Section 6 and 
make them applicable to all members; (3) modify existing questions and 
instructions to provide more detailed selections for describing the 
types of activities conducted at the branch office; (4) add an optional 
question to identify a branch office as an ``Office of Municipal 
Supervisory Jurisdiction,'' as defined under the rules of the Municipal 
Securities Rulemaking Board (MSRB); and (5) make other technical 
changes to adopt uniform terminology and clarify questions and 
instructions (collectively, the proposed amendments to Form BR are 
hereinafter referred to as the ``Updated Form BR'').

[[Page 75955]]

    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
    The purpose of the proposed rule change is to amend Form BR, which 
is used by firms to register their branch offices with FINRA, the New 
York Stock Exchange (``NYSE''), and participating states via the 
Central Registration Depository (``CRD[supreg]''). Form BR enables a 
firm to register a branch office \3\ (either by notice filing or 
approval) as required by the relevant jurisdiction or self-regulatory 
organization (``SRO''), amend a registration, close or terminate a 
registration, or withdraw a filing in the appropriate participating 
jurisdiction and SRO.
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    \3\ See NASD Rule 3010(g)(2) for a definition of the term 
``branch office.'' Certain states participating in the use of Form 
BR via CRD have adopted a similar definition. See also Securities 
Exchange Act Release No. 69902 (July 1, 2013), 78 FR 40792 (July 8, 
2013) (Notice of Filing File No. SR-FINRA-2013-025).
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    In concert with a committee of regulatory and industry 
representatives, FINRA recently undertook a review of Form BR. As a 
result of this review, FINRA is proposing to amend Form BR to (1) 
eliminate Section 6 (NYSE Branch Information), which is currently 
applicable only to NYSE-registered firms; (2) add questions relating to 
space sharing arrangements and the location of books and records that 
are currently only in Section 6 and make them applicable to all 
members; (3) modify existing questions and instructions to provide more 
detailed selections for describing the types of activities conducted at 
the branch office; (4) add an optional question to identify a branch 
office as an ``Office of Municipal Supervisory Jurisdiction,'' as 
defined under MSRB rules; and (5) make other technical changes to adopt 
uniform terminology and clarify questions and instructions.
    FINRA believes the proposed Updated Form BR will provide a more 
comprehensive profile of each firm's registered branch offices, which 
will allow regulators and firms to better understand the activities 
occurring at each registered branch office. This understanding should 
enable firms to strengthen their own compliance and regulators to 
conduct more focused and effective examinations.
    FINRA further believes that the proposal will have a minimal impact 
on firms based principally upon FINRA's experience with Form BR, 
discussions with industry representatives who participated in the 
working group that developed the proposed amendments, and the approach 
to implementation that FINRA is proposing for the Updated Form BR.
    In that regard, and as discussed in more detail below, firms with 
existing registered branch offices will not be required to complete the 
proposed new information items on the Updated Form BR by a date certain 
after implementation, but rather when the firm is otherwise required, 
in the ordinary course, to amend the form to update existing 
information items that have become inaccurate or incomplete.\4\ FINRA 
believes that this more flexible approach accomplishes the important 
regulatory objective of collecting the proposed new information items 
from those members that have not previously reported it,\5\ while 
limiting the associated burden on firms.
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    \4\ Member firms have a continuing obligation to promptly update 
Form BR whenever the information becomes inaccurate or incomplete. 
Amendments require updating only the appropriate section of Form BR. 
FINRA and most participating jurisdictions require that an amendment 
be filed not later than 30 days after the firm learns of facts and 
circumstances giving rise to the amendment.
    \5\ FINRA notes that members that also are registered with the 
NYSE currently report information related to space sharing 
arrangements and the location of books and records for each 
registered branch office on Section 6 (NYSE Branch Information) on 
Form BR.
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Background
    Form BR was developed jointly in 2005 by a working group consisting 
of representatives of FINRA (then the National Association of 
Securities Dealers, Inc. (``NASD'')), the NYSE, the North American 
Securities Administrators Association (``NASAA'') and states to 
establish a uniform electronic process via the CRD system for 
registering branch offices with various jurisdictions. Form BR replaced 
Schedule E of the SEC's Form BD (Broker-Dealer Registration Form), the 
NYSE Branch Office Application Form and state branch office forms, and 
enabled firms to register branch offices electronically with FINRA, the 
NYSE and participating states via a single filing through the CRD 
system.\6\ Form BR enables firms to file, for notice or approval, Form 
BR as required by the applicable jurisdiction or SRO.
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    \6\ Currently, 24 states utilize Form BR; of those, 16 states 
have a notice-filing requirement and eight have a pre-approval 
process.
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    Since its implementation in 2005, Form BR has not been 
substantively updated.\7\ Based on a recent review of the form and 
experience with the form to date, FINRA and a committee of 
representatives from industry, NASAA and participating states (the 
``Form BR Working Group'') believe that the proposed changes are 
appropriate and will result in efficiencies for firms and regulators. 
In particular, FINRA believes the proposed amendments to Form BR will 
make the branch office registration process more efficient by 
eliminating duplicative provisions, eliciting certain information items 
from all filers, and clarifying existing questions so that regulators 
and firms can better understand the activities of each registered 
branch office.
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    \7\ In 2007, Form BR was amended to change references of 
``NASD'' to ``FINRA'' and to make other technical amendments. See 
Securities Exchange Act Release No. 57033 (December 21, 2007), 72 FR 
74382 (December 31, 2007) (Notice of Filing File No. SR-FINRA-2007-
036).
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Proposed Amendments
    Current Form BR consists of the following nine sections: (1) 
General Information; (2) Registration/Notice Filing/Type of Office; (3) 
Types of Activities/Other Business Names/Web sites; (4) Branch Office 
Arrangements; (5) Associated Individuals; (6) NYSE Branch Information; 
(7) Branch Closing; (8) Branch Withdrawal (Pending Application); and 
(9) Signature.
    FINRA is proposing to amend Form BR to consist of eight sections 
with the following section titles: (1) General Information; (2) 
Registration/Notice Filing/Type of Office/Activities; (3) Other 
Business Activities/Names/Web sites; (4) Branch Office Arrangements; 
(5) Associated Individuals; (6) Branch Office Closing; (7) Branch 
Office Withdrawal (Pending Application); and (8) Signature. In addition 
to this reorganization of sections, FINRA is proposing the amendments 
to Form BR described below.
    Delete Section 6 (NYSE Branch Information). Currently only NYSE-
registered firms can view Section 6

[[Page 75956]]

(NYSE Branch Information) on the CRD system and only NYSE-registered 
firms are required to complete and update Section 6. Section 6 of Form 
BR allowed NYSE to administer a pre-approval process for registration 
of certain branch offices that was in place at the time Form BR was 
implemented.\8\ However, following the NASD/NYSE regulatory 
consolidation, the NYSE amended NYSE Rule 342 to change its branch 
office registration requirement from a pre-approval process to a 
notice-filing requirement in an effort to eliminate disparate 
regulatory standards.\9\ As a result, FINRA and the Form BR Working 
Group believe this separate NYSE-registered firm section of Form BR is 
no longer necessary and should be deleted in the Updated Form BR. The 
proposed revisions also will remove references to the NYSE-specific 
terms from the form such as ``regular branch'' and ``small branch.'' 
FINRA believes the proposed changes will create efficiencies for firms 
that are members of both FINRA and the NYSE by eliminating nine 
questions from the current Form BR and for regulators by eliminating 
those questions deemed redundant or of limited regulatory value. In 
addition, FINRA believes that all members will benefit from having one, 
uniform form.
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    \8\ In 2005 when Form BR was initially launched, NYSE Rule 342 
(Offices--Approval, Supervision and Control) required approval of 
new branch office registrations, and NYSE Rule 343 (Offices--Sole 
Tenancy, Hours, Display of Membership Certificates) required 
approval of space sharing arrangements, before the branch office was 
able to conduct business.
    \9\ See Securities Exchange Act Release No. 56143 (July 26, 
2007), 72 FR 42453 (August 2, 2007) (Notice of Filing and Immediate 
Effectiveness of File No. SR-NYSE-2007-59).
---------------------------------------------------------------------------

    Add Questions on Space Sharing Arrangements and Location of Books 
and Records. As described above, FINRA is proposing to eliminate 
Section 6 (NYSE Branch Information) from the current Form BR because 
pre-approval of certain branch offices of NYSE-registered firms is no 
longer required. However, FINRA is proposing to retain questions from 
that section relating to space sharing arrangements and the location of 
books and records and add them to proposed Section 4 (Branch Office 
Arrangements) of the Updated Form BR. FINRA and the Form BR Working 
Group determined to retain these questions because they provide 
valuable regulatory information and also will allow continued 
monitoring for compliance with Incorporated NYSE Rule 343.\10\
---------------------------------------------------------------------------

    \10\ Incorporated NYSE Rule 343 (Supervision) is still in effect 
and applicable to NYSE-registered firms. As part of the effort to 
develop the consolidated FINRA rulebook, FINRA is proposing to adopt 
FINRA Rule 3110 (Supervision) and delete NYSE Rule 343. In 2007, the 
NYSE amended its branch office registration process from a prior 
consent requirement to a notice requirement (but retained the 
approval standard for space sharing arrangements). Under NYSE Rule 
343, space sharing arrangements must be evaluated by the NYSE and 
FINRA (who has assumed by contract regulatory responsibility to 
review for NYSE member firm compliance). See SR-NYSE-2007-59 and 
NYSE Information Memo 07-81 (August 1, 2007). See also Securities 
Exchange Act Release No. 69902 (July 1, 2013), 78 FR 40792 (July 8, 
2013) (Notice of Filing File No. SR-FINRA-2013-025).
---------------------------------------------------------------------------

    Specifically, FINRA is proposing to add a new question to proposed 
Section 4 (Branch Office Arrangements) of the Updated Form BR that will 
ask members to disclose if the branch office occupies, shares space 
with or jointly markets with any other investment-related entity, and 
if the answer is yes, to provide the name of such entity.\11\ FINRA 
believes applying the space sharing arrangement question to all members 
will allow regulators to better understand the specific activities 
occurring at each registered branch office and monitor that such 
arrangements are structured in a manner that allow [sic] public 
customers to identify the entity with which they are conducting 
business.
---------------------------------------------------------------------------

    \11\ The term ``investment-related'' is defined in Form BR as 
``[p]ertains to securities, commodities, banking, insurance, or real 
estate (including, but not limited to, acting as or being associated 
with a Broker-Dealer, issuer, investment company, Investment 
Adviser, futures sponsor, bank, or savings association).''
---------------------------------------------------------------------------

    FINRA also is proposing to add a question to proposed Section 4 
(Branch Office Arrangements) that will ask members if books and records 
pertaining to the registered branch office are maintained at any 
location other than that branch office, the main office or office of 
supervisory jurisdiction (OSJ) (if applicable). If the answer is yes, a 
member will need to provide the address of such location and the name 
and telephone number of a contact person. FINRA believes many firms 
elect to keep books and records in a centralized office rather than at 
the branch office; therefore, eliciting whether books and records are 
maintained offsite will enable regulators to conduct more effective and 
efficient branch office examinations.
    Modify Existing Question on ``Types of Activities''. FINRA is 
proposing to relocate questions relating to ``Types of Activities'' 
occurring at the branch office from Section 3 (Other Business/Names/Web 
sites) to proposed Section 2 (Registration/Notice Filing/Type of 
Office/Activities) of the Updated Form BR and to expand the list of 
activity types that may be selected to (1) include Retail and 
Institutional (as types of Sales Activity), Public Finance, and Other; 
(2) add ``Trading'' to the existing Market Making activity; and (3) 
combine Investment Banking and Underwriting, which are now listed 
separately. FINRA and the Form BR Working Group believe that clarifying 
and expanding the list of activity types will enhance regulators' 
understanding of the types of activities that occur at each registered 
branch office and assist regulators and members in conducting risk-
based branch office reviews. For example, a member that selects 
``Sales'' can then identify if that activity relates to ``Retail'' or 
``Institutional'' customers. In addition, based on feedback from firms, 
FINRA is proposing to add ``Public Finance'' as an option to enable 
members and regulators to identify via the Form BR office locations 
that require a principal to be registered as a Series 53 (Municipal 
Securities Principal).
    Modify Supervisor/Person-in-Charge Details. FINRA is proposing to 
expand the supervisor and person-in-charge details provided by firms in 
Section 2 (Registration/Notice Filing/Type of Office/Activities) of the 
Updated Form BR, to enable firms (at their option) to provide the 
``type of activity'' associated with each on-site supervisor or person-
in-charge listed. FINRA is proposing to add this option based on 
feedback from firms to date. Firms have requested the ability to link 
each supervisor or person-in-charge listed for a registered branch 
office to identified lines of business to better reflect their 
supervisory structures.
    Add Optional MSRB Branch Office of Municipal Supervisory 
Jurisdiction Question. The MSRB regulates brokers, dealers and 
municipal securities dealers that engage in municipal securities 
activities. Under MSRB rules, certain of these participants are 
required to identify whether a branch is designated as an Office of 
Municipal Supervisory Jurisdiction (``OMSJ''), as defined under MSRB 
rules.\12\ To assist those participants that use Form BR in complying 
with that MSRB requirement, FINRA is proposing to add an optional 
question to Section 2 (Registration/Notice Filing/Type of Office/
Activities) to the Updated Form BR to provide FINRA members that also 
are registered with the MSRB a means to track their OMSJs through a 
standard CRD report that FINRA expects to develop following the 
deployment of the Updated Form BR.
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    \12\ See MSRB Rule G-27 (Supervision).
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    Technical and Clarifying Changes. Based on feedback from the Form 
BR Working Group, FINRA is proposing technical and clarifying changes 
to General and Specific Instructions,

[[Page 75957]]

Explanation of Terms and Sections of the Updated Form BR. These include 
global changes to adopt uniform terminology for terms such as ``CRD 
number'' and ``branch office,'' to capitalize ``Broker-Dealer'' and 
``Investment Adviser,'' and to replace ``person'' with ``individual'' 
when referring to associated individuals. The use of the word 
``individual'' is intended to make the terminology in the Updated Form 
BR consistent with terminology currently used in Section 5 of the Form 
BR, which elicits information with respect to all registered 
individuals who are associated with the branch office. In addition, the 
Instructions of the Updated Form BR will be amended to clarify that 
checking the ``Private Residence Check Box'' when providing the address 
of the branch office does not act to prevent public disclosure of the 
branch address.\13\ FINRA will continue to disclose the full address of 
registered branch offices through BrokerCheck even if the registered 
branch is a private residence, consistent with its existing policy.\14\
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    \13\ Some states elect to withhold disclosing to the public, in 
whole or in part, the address for a branch office of an investment 
adviser if the branch office also is a private residence.
    \14\ FINRA believes that disclosure of the full address is 
appropriate where a member has registered the home office as a 
registered branch office and not relied on the primary residence 
exemption from branch office registration.
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    No Requirement to Submit Amended Forms BR by a Date Certain. 
Members with existing registered branch offices will not be required to 
file an Updated Form BR for such existing offices immediately upon 
deployment of the amended form, but will be required to provide the 
proposed new information items on the Updated Form BR when the member 
is otherwise required, in the ordinary course, to amend the form to 
update existing information items that have become inaccurate or 
incomplete.\15\ FINRA expects to evaluate the number of registered 
branch offices of FINRA members for which an Updated Form BR has not 
been filed (and, therefore, for which FINRA and other regulators do not 
have the proposed new information items) one year after deployment of 
the Form. Based on that evaluation, FINRA may consider imposing a 
future deadline for providing that proposed new information items [sic] 
in the Updated Form BR if a significant number of registered branch 
offices have not filed the information through an amendment in the 
ordinary course.
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    \15\ Member firms have a continuing obligation to promptly 
update Form BR whenever the information becomes inaccurate or 
incomplete. See supra note 4.
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    FINRA will announce the effective date of the proposed rule change 
in a Regulatory Notice to be published no later than 60 days following 
Commission approval. The effective date will be no later than 90 days 
following publication of the Regulatory Notice announcing Commission 
approval.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\16\ 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 the Updated Form BR is necessary at 
this time to ensure that the form remains current and accurate by 
reflecting changes to applicable rules and regulations of the relevant 
participating jurisdictions, including specifically the regulatory 
consolidation of the NYSE and NASD (e.g., deletion of current Section 6 
(NYSE Branch Information)). Further, the Updated Form BR will provide a 
more comprehensive profile of each firm's registered branch offices and 
thereby allow regulators to better prioritize and plan examinations.
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    \16\ 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 changes to Form BR will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. FINRA is 
proposing to amend Form BR to reflect changes to applicable rules and 
regulations of the relevant participating jurisdictions, including 
specifically the regulatory consolidation of the NYSE and NASD, making 
the form more current and accurate. FINRA believes the operational 
burden associated with completion of the proposed Updated Form BR will 
be minimal for NYSE-registered firms because such firms already report 
space sharing arrangements and the location of books and records for 
each registered branch office on Form BR.\17\ FINRA believes all other 
firms should have this information readily available, as the questions 
are consistent with the types of information that members typically 
track for purposes of conducting their supervisory reviews and 
inspections of branch offices.
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    \17\ To the extent possible, FINRA will identify information 
relating to space sharing arrangements and the location of books and 
records previously reported by NYSE-registered firms on Form BR that 
will be responsive to the questions being retained on the Updated 
Form BR (i.e., in proposed new Section 4--Branch Office 
Arrangements) and will transfer that information to the appropriate 
data fields. However, firms will be required to verify the accuracy 
of the information that has been transferred to the Updated Form BR.
---------------------------------------------------------------------------

    Further, FINRA believes the proposed Updated Form BR will provide a 
more comprehensive profile of each firm's registered branch offices, 
which will create efficiencies by allowing regulators and firms to 
better understand the activities occurring at each registered branch 
office and conduct more focused and effective examinations.
    In addition, FINRA believes that the proposed rule change presents 
a modest burden upon firms because the proposed Updated Form BR does 
not impose an affirmative duty for members to immediately submit the 
amended form upon deployment, but only requires members to provide the 
proposed new information items on the Updated Form BR at the time the 
member otherwise is required, in the ordinary course, to update 
existing information items that have become inaccurate or incomplete on 
the Form BR.
    Therefore, FINRA believes the incremental compliance costs of 
providing the proposed new information items on the Updated Form BR 
should not impose a burden on competition not necessary or appropriate 
in furtherance of the Act and in light of the benefits described above.

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove such proposed rule change, or

[[Page 75958]]

    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml) or
    Send an email to rule-comments@sec.gov. Please include File Number 
SR-FINRA-2013-051 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-2013-051. 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 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-2013-051 and should be 
submitted on or before January 3, 2014.

    For the Commission by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29739 Filed 12-12-13; 8:45 am]
BILLING CODE 8011-01-P
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