Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps), 2924-2926 [2014-00706]

Download as PDF 2924 Federal Register / Vol. 79, No. 11 / Thursday, January 16, 2014 / Notices 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 the 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–BX–2013–065 and should be submitted on or before February 6, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–00691 Filed 1–15–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71282; File No. SR–FINRA– 2013–046] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change Relating to TRACE Reporting and Dissemination of Transactions in Additional Asset-Backed Securities transactions in additional asset-backed securities. The proposed rule change was published for comment in the Federal Register on November 26, 2013.3 The Commission received one comment on the proposal.4 Section 19(b)(2) of the Act 5 provides that, within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day for this filing is January 10, 2014. The Commission is extending this 45-day time period. The Commission finds that it is appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change and the comment received. The proposed rule change would, among other things, provide for posttrade transparency of transactions in certain asset-backed securities. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,6 designates February 24, 2014, as the date by which the Commission should either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule change. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–00687 Filed 1–15–14; 8:45 am] BILLING CODE 8011–01–P ehiers on DSK2VPTVN1PROD with NOTICES January 10, 2014. On November 13, 2013, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change relating to TRACE reporting and dissemination of 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<15>2010 14:55 Jan 15, 2014 Jkt 232001 3 See Securities Exchange Act Release No. 70906 (November 20, 2013), 78 FR 70602 (‘‘Notice’’). 4 See letter from Chris Killian, Managing Director, Securitization, SIFMA to Elizabeth M. Murphy, Secretary, Commission, dated December 17, 2013. 5 15 U.S.C. 78s(b)(2). 6 15 U.S.C. 78s(b)(2). 7 17 CFR 200.30–3(a)(31). PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71287; File No. SR–FINRA– 2014–001] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Expiration Date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) January 10, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 8, 2014, 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. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 11, 2015. FINRA Rule 0180 temporarily limits, with certain exceptions, the application of FINRA rules with respect to securitybased swaps. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 E:\FR\FM\16JAN1.SGM 16JAN1 Federal Register / Vol. 79, No. 11 / Thursday, January 16, 2014 / Notices summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On July 1, 2011, the SEC issued an Order granting temporary exemptive relief (the ‘‘Temporary Exemptions’’) from compliance with certain provisions of the Exchange Act in connection with the revision, pursuant to Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ‘‘Dodd-Frank Act’’),4 of the Exchange Act definition of ‘‘security’’ to encompass security-based swaps.5 Consistent with the Commission’s action, on July 8, 2011, FINRA filed for immediate effectiveness FINRA Rule 0180,6 which, with certain exceptions, is intended to temporarily limit the application of FINRA rules 7 with respect to security-based swaps, thereby 4 Public Law 111–203, 124 Stat. 1376 (2010). Securities Exchange Act Release No. 64795 (July 1, 2011), 76 FR 39927 (July 7, 2011) (Order Granting Temporary Exemptions Under the Securities Exchange Act of 1934 in Connection With the Pending Revision of the Definition of ‘‘Security’’ To Encompass Security-Based Swaps, and Request for Comment) (the ‘‘Exemptive Release’’). The term ‘‘security-based swap’’ is defined in Section 761 of the Dodd-Frank Act. See also Securities Exchange Act Release No. 67453 (July 18, 2012), 77 FR 48208 (August 13, 2012) (Further Definition of ‘‘Swap,’’ ‘‘Security-Based Swap,’’ and ‘‘Security-Based Swap Agreement’’; Mixed Swaps; Security-Based Swap Agreement Recordkeeping). 6 See Securities Exchange Act Release No. 64884 (July 14, 2011), 76 FR 42755 (July 19, 2011) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change; File No. SR–FINRA–2011–033) (‘‘FINRA Rule 0180 Notice of Filing’’). See also Securities Exchange Act Release No. 66156 (January 13, 2012), 77 FR 3027 (January 20, 2012) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change; File No. SR–FINRA–2012–004) (extending the expiration date of FINRA Rule 0180 to January 17, 2013); Securities Exchange Act Release No. 68471 (December 19, 2012), 77 FR 76113 (December 26, 2012) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change; File No. SR–FINRA–2012–056) (extending the expiration date of FINRA Rule 0180 to July 17, 2013); Securities Exchange Act Release No. 69262 (April 1, 2013), 78 FR 20708 (April 5, 2013) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change; File No. SR–FINRA–2013–019) (extending the expiration date of FINRA Rule 0180 to February 11, 2014). 7 The current FINRA rulebook consists of: (1) FINRA Rules; (2) NASD Rules; and (3) rules incorporated from NYSE (‘‘Incorporated NYSE Rules’’). While the NASD Rules generally apply to all FINRA members, the Incorporated NYSE Rules apply only to those members of FINRA that are also members of the NYSE. The FINRA Rules apply to all FINRA members, unless such rules have a more limited application by their terms. For more information about the rulebook consolidation process, see Information Notice, March 12, 2008 (Rulebook Consolidation Process). ehiers on DSK2VPTVN1PROD with NOTICES 5 See VerDate Mar<15>2010 14:55 Jan 15, 2014 Jkt 232001 helping to avoid undue market disruptions resulting from the change to the definition of ‘‘security’’ under the Act.8 The Commission, noting the need to avoid a potential unnecessary disruption to the security-based swap market in the absence of an extension of the Temporary Exemptions, and the need for additional time to consider the potential impact of the revision of the Exchange Act definition of ‘‘security’’ in light of recent Commission rulemaking efforts under Title VII of the Dodd-Frank Act, issued an Order extending the expiration date of the Temporary Exemptions until February 11, 2014.9 The Commission noted that extending the Temporary Exemptions would facilitate a coordinated consideration of these issues with the relief provided pursuant to FINRA Rule 0180. In conjunction with the Commission’s action, on March 18, 2013, FINRA filed for immediate effectiveness a proposed rule change to extend the expiration date of FINRA Rule 0180 to February 11, 2014.10 In establishing Rule 0180, and in extending the rule’s expiration date,11 FINRA noted its intent, pending the implementation of any SEC rules and guidance that would provide greater regulatory clarity in relation to security8 In its Exemptive Release, the Commission noted that the relief is targeted and does not include, for instance, relief from the Act’s antifraud and antimanipulation provisions. FINRA has noted that FINRA Rule 0180 is similarly targeted. For instance, paragraph (a) of FINRA Rule 0180 provides that FINRA rules shall not apply to members’ activities and positions with respect to security-based swaps, except for FINRA Rules 2010 (Standards of Commercial Honor and Principles of Trade), 2020 (Use of Manipulative, Deceptive or Other Fraudulent Devices), 3310 (Anti-Money Laundering Compliance Program) and 4240 (Margin Requirements for Credit Default Swaps). See also paragraphs (b) and (c) of FINRA Rule 0180 (addressing the applicability of additional rules) and FINRA Rule 0180 Notice of Filing. 9 See Securities Exchange Act Release No. 68864 (February 7, 2013), 78 FR 10218 (February 13, 2013) (Order Extending Temporary Exemptions Under the Securities Exchange Act of 1934 in Connection With the Revision of the Definition of ‘‘Security’’ to Encompass Security-Based Swaps, and Request for Comment) (‘‘Temporary Exemptions Extension Release’’). See also Securities Exchange Act Release No. 68753 (January 29, 2013), 78 FR 7654 (February 4, 2013) (Extension of Exemptions for SecurityBased Swaps) (extending the expiration dates in interim final rules that provide exemptions under the Securities Act of 1933 (the ‘‘Securities Act’’), the Exchange Act, and the Trust Indenture Act of 1939 for those security-based swaps that prior to July 16, 2011 were security-based swap agreements and are defined as ‘‘securities’’ under the Securities Act and the Exchange Act as of July 16, 2011 due solely to the provisions of Title VII of the DoddFrank Act). 10 See Securities Exchange Act Release No. 69262 (April 1, 2013), 78 FR 20708 (April 5, 2013) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change; File No. SR–FINRA–2013–019). 11 See FINRA Rule 0180 Notice of Filing. See also footnote 10. PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 2925 based swap activities, to align the expiration date of FINRA Rule 0180 with the termination of relevant provisions of the Temporary Exemptions. The Commission’s rulemaking and development of guidance in relation to security-based swap activities is ongoing. As such, FINRA believes it is appropriate and in the public interest, in light of the Commission’s goals as set forth in the Exemptive Release and the Temporary Exemptions Extension Release, to extend FINRA Rule 0180 for a limited period, to February 11, 2015, so as to avoid undue market disruptions resulting from the change to the definition of ‘‘security’’ under the Act. As noted in the FINRA Rule 0180 Notice of Filing, FINRA will amend the expiration date of Rule 0180 in subsequent filings as necessary such that the expiration date will be coterminous with the termination of relevant provisions of the Temporary Exemptions. FINRA has filed the proposed rule change for immediate effectiveness. FINRA is proposing that the implementation date of the proposed rule change will be February 11, 2014. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,12 which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. FINRA believes that the proposed rule change would further the purposes of the Act because, consistent with the goals set forth by the Commission in the Exemptive Release and in the Temporary Exemptions Extension Release, the proposed rule change will help to avoid undue market disruption that could result if FINRA Rule 0180 expires before the implementation of any SEC rules and guidance that would provide greater regulatory clarity in relation to securitybased swap activities. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. FINRA believes that the proposed rule change would prevent undue market disruption that would otherwise result if security12 15 E:\FR\FM\16JAN1.SGM U.S.C. 78o–3(b)(6). 16JAN1 2926 Federal Register / Vol. 79, No. 11 / Thursday, January 16, 2014 / Notices based swaps were, by virtue of the expansion of the Act’s definition of ‘‘security’’ to encompass security-based swaps, subject to the application of all FINRA rules before the implementation of any SEC rules and guidance that would provide greater regulatory clarity in relation to security-based swap activities. FINRA believes that, by extending the expiration of FINRA Rule 0180, the proposed rule change will serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 13 and Rule 19b– 4(f)(6) thereunder.14 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 • Send an email to rule-comments@ sec.gov. Please include File Number SR– FINRA–2014–001 on the subject line. DEPARTMENT OF STATE Paper Comments Determination Under the Foreign Missions Act • 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–2014–001. 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–2014–001 and should be submitted on or before February 6, 2014. ehiers on DSK2VPTVN1PROD 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Kevin M. O’Neill, Deputy Secretary. Electronic Comments BILLING CODE 8011–01–P [FR Doc. 2014–00706 Filed 1–15–14; 8:45 am] • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or 13 15 14 17 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). VerDate Mar<15>2010 14:55 Jan 15, 2014 15 17 Jkt 232001 PO 00000 CFR 200.30–3(a)(12). Frm 00114 Fmt 4703 Sfmt 4703 [Public Notice 8596; No. FMA–2014–2] Section 209(a) of the Foreign Missions Act (22 U.S.C. 4309(a)) (hereinafter ‘‘the Act’’) authorizes the Secretary of State to make any provision of the Act applicable with respect to international organizations to the same extent that it is applicable with respect to foreign missions when he determines that such application is necessary to carry out the policy set forth in section 201(b) of the Act (22 U.S.C. 4301(b)) and to further the objectives set forth in section 204(b) of the Act (22 U.S.C. 4304(b)). Section 209(b) of the Act (22 U.S.C. 4309(b)) defines ‘‘international organization’’ as (1) a public international organization designated as such pursuant to the International Organizations Immunities Act (22 U.S.C. § 288 et seq.) or a public international organization created pursuant to a treaty or other international agreement as an instrument through or by which two or more foreign governments engage in some aspect of their conduct of international affairs; and (2) an official mission (other than a U.S. mission) to such a public international organization, including any real property of such an organization or mission and including the personnel of such an organization or mission. Pursuant to the authority vested in the Secretary of State by the Act, and delegated by the Secretary of State to me as the Under Secretary of State for Management in Delegation of Authority No. 198, dated September 16, 1992, I hereby determine that the application of all provisions of the FMA to international organizations, as that term is defined in section 209(b), is necessary to facilitate the secure and efficient operation of public international organizations and the official missions to such organizations, to assist in obtaining benefits, privileges and immunities for these organizations, and to require their observance of corresponding obligations in accordance with international law. It will also further the objectives set forth in section 204(b) of the Act as it will assist in protecting the interests of the United States. Furthermore, I determine that the principal offices of an international organization used for diplomatic or related purposes, and annexes to such offices (including ancillary offices and support facilities), and the site and any E:\FR\FM\16JAN1.SGM 16JAN1

Agencies

[Federal Register Volume 79, Number 11 (Thursday, January 16, 2014)]
[Notices]
[Pages 2924-2926]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-00706]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71287; File No. SR-FINRA-2014-001]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Extend the Expiration Date of FINRA Rule 0180 
(Application of Rules to Security-Based Swaps)

January 10, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on January 8, 2014, 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. 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 to extend the expiration date of FINRA Rule 0180 
(Application of Rules to Security-Based Swaps) to February 11, 2015. 
FINRA Rule 0180 temporarily limits, with certain exceptions, the 
application of FINRA rules with respect to security-based swaps.
    The text of the proposed rule change is available on FINRA's Web 
site at https://www.finra.org, at the principal office of FINRA and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. FINRA has prepared

[[Page 2925]]

summaries, set forth in sections A, B, and C below, of the most 
significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On July 1, 2011, the SEC issued an Order granting temporary 
exemptive relief (the ``Temporary Exemptions'') from compliance with 
certain provisions of the Exchange Act in connection with the revision, 
pursuant to Title VII of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (the ``Dodd-Frank Act''),\4\ of the Exchange Act 
definition of ``security'' to encompass security-based swaps.\5\ 
Consistent with the Commission's action, on July 8, 2011, FINRA filed 
for immediate effectiveness FINRA Rule 0180,\6\ which, with certain 
exceptions, is intended to temporarily limit the application of FINRA 
rules \7\ with respect to security-based swaps, thereby helping to 
avoid undue market disruptions resulting from the change to the 
definition of ``security'' under the Act.\8\
---------------------------------------------------------------------------

    \4\ Public Law 111-203, 124 Stat. 1376 (2010).
    \5\ See Securities Exchange Act Release No. 64795 (July 1, 
2011), 76 FR 39927 (July 7, 2011) (Order Granting Temporary 
Exemptions Under the Securities Exchange Act of 1934 in Connection 
With the Pending Revision of the Definition of ``Security'' To 
Encompass Security-Based Swaps, and Request for Comment) (the 
``Exemptive Release''). The term ``security-based swap'' is defined 
in Section 761 of the Dodd-Frank Act. See also Securities Exchange 
Act Release No. 67453 (July 18, 2012), 77 FR 48208 (August 13, 2012) 
(Further Definition of ``Swap,'' ``Security-Based Swap,'' and 
``Security-Based Swap Agreement''; Mixed Swaps; Security-Based Swap 
Agreement Recordkeeping).
    \6\ See Securities Exchange Act Release No. 64884 (July 14, 
2011), 76 FR 42755 (July 19, 2011) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change; File No. SR-FINRA-2011-033) 
(``FINRA Rule 0180 Notice of Filing''). See also Securities Exchange 
Act Release No. 66156 (January 13, 2012), 77 FR 3027 (January 20, 
2012) (Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change; File No. SR-FINRA-2012-004) (extending the expiration date 
of FINRA Rule 0180 to January 17, 2013); Securities Exchange Act 
Release No. 68471 (December 19, 2012), 77 FR 76113 (December 26, 
2012) (Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change; File No. SR-FINRA-2012-056) (extending the expiration date 
of FINRA Rule 0180 to July 17, 2013); Securities Exchange Act 
Release No. 69262 (April 1, 2013), 78 FR 20708 (April 5, 2013) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change; File No. SR-FINRA-2013-019) (extending the expiration date 
of FINRA Rule 0180 to February 11, 2014).
    \7\ The current FINRA rulebook consists of: (1) FINRA Rules; (2) 
NASD Rules; and (3) rules incorporated from NYSE (``Incorporated 
NYSE Rules''). While the NASD Rules generally apply to all FINRA 
members, the Incorporated NYSE Rules apply only to those members of 
FINRA that are also members of the NYSE. The FINRA Rules apply to 
all FINRA members, unless such rules have a more limited application 
by their terms. For more information about the rulebook 
consolidation process, see Information Notice, March 12, 2008 
(Rulebook Consolidation Process).
    \8\ In its Exemptive Release, the Commission noted that the 
relief is targeted and does not include, for instance, relief from 
the Act's antifraud and anti-manipulation provisions. FINRA has 
noted that FINRA Rule 0180 is similarly targeted. For instance, 
paragraph (a) of FINRA Rule 0180 provides that FINRA rules shall not 
apply to members' activities and positions with respect to security-
based swaps, except for FINRA Rules 2010 (Standards of Commercial 
Honor and Principles of Trade), 2020 (Use of Manipulative, Deceptive 
or Other Fraudulent Devices), 3310 (Anti-Money Laundering Compliance 
Program) and 4240 (Margin Requirements for Credit Default Swaps). 
See also paragraphs (b) and (c) of FINRA Rule 0180 (addressing the 
applicability of additional rules) and FINRA Rule 0180 Notice of 
Filing.
---------------------------------------------------------------------------

    The Commission, noting the need to avoid a potential unnecessary 
disruption to the security-based swap market in the absence of an 
extension of the Temporary Exemptions, and the need for additional time 
to consider the potential impact of the revision of the Exchange Act 
definition of ``security'' in light of recent Commission rulemaking 
efforts under Title VII of the Dodd-Frank Act, issued an Order 
extending the expiration date of the Temporary Exemptions until 
February 11, 2014.\9\ The Commission noted that extending the Temporary 
Exemptions would facilitate a coordinated consideration of these issues 
with the relief provided pursuant to FINRA Rule 0180. In conjunction 
with the Commission's action, on March 18, 2013, FINRA filed for 
immediate effectiveness a proposed rule change to extend the expiration 
date of FINRA Rule 0180 to February 11, 2014.\10\ In establishing Rule 
0180, and in extending the rule's expiration date,\11\ FINRA noted its 
intent, pending the implementation of any SEC rules and guidance that 
would provide greater regulatory clarity in relation to security-based 
swap activities, to align the expiration date of FINRA Rule 0180 with 
the termination of relevant provisions of the Temporary Exemptions.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 68864 (February 7, 
2013), 78 FR 10218 (February 13, 2013) (Order Extending Temporary 
Exemptions Under the Securities Exchange Act of 1934 in Connection 
With the Revision of the Definition of ``Security'' to Encompass 
Security-Based Swaps, and Request for Comment) (``Temporary 
Exemptions Extension Release''). See also Securities Exchange Act 
Release No. 68753 (January 29, 2013), 78 FR 7654 (February 4, 2013) 
(Extension of Exemptions for Security-Based Swaps) (extending the 
expiration dates in interim final rules that provide exemptions 
under the Securities Act of 1933 (the ``Securities Act''), the 
Exchange Act, and the Trust Indenture Act of 1939 for those 
security-based swaps that prior to July 16, 2011 were security-based 
swap agreements and are defined as ``securities'' under the 
Securities Act and the Exchange Act as of July 16, 2011 due solely 
to the provisions of Title VII of the Dodd-Frank Act).
    \10\ See Securities Exchange Act Release No. 69262 (April 1, 
2013), 78 FR 20708 (April 5, 2013) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change; File No. SR-FINRA-2013-019).
    \11\ See FINRA Rule 0180 Notice of Filing. See also footnote 10.
---------------------------------------------------------------------------

    The Commission's rulemaking and development of guidance in relation 
to security-based swap activities is ongoing. As such, FINRA believes 
it is appropriate and in the public interest, in light of the 
Commission's goals as set forth in the Exemptive Release and the 
Temporary Exemptions Extension Release, to extend FINRA Rule 0180 for a 
limited period, to February 11, 2015, so as to avoid undue market 
disruptions resulting from the change to the definition of ``security'' 
under the Act. As noted in the FINRA Rule 0180 Notice of Filing, FINRA 
will amend the expiration date of Rule 0180 in subsequent filings as 
necessary such that the expiration date will be coterminous with the 
termination of relevant provisions of the Temporary Exemptions.
    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA is proposing that the implementation date of the 
proposed rule change will be February 11, 2014.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\12\ which requires, among 
other things, that FINRA rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest. FINRA believes that the proposed rule change would 
further the purposes of the Act because, consistent with the goals set 
forth by the Commission in the Exemptive Release and in the Temporary 
Exemptions Extension Release, the proposed rule change will help to 
avoid undue market disruption that could result if FINRA Rule 0180 
expires before the implementation of any SEC rules and guidance that 
would provide greater regulatory clarity in relation to security-based 
swap activities.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. FINRA believes that the 
proposed rule change would prevent undue market disruption that would 
otherwise result if security-

[[Page 2926]]

based swaps were, by virtue of the expansion of the Act's definition of 
``security'' to encompass security-based swaps, subject to the 
application of all FINRA rules before the implementation of any SEC 
rules and guidance that would provide greater regulatory clarity in 
relation to security-based swap activities. FINRA believes that, by 
extending the expiration of FINRA Rule 0180, the proposed rule change 
will serve to promote regulatory clarity and consistency, thereby 
reducing burdens on the marketplace and facilitating investor 
protection.

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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2014-001 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-2014-001. 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-2014-001 
and should be submitted on or before February 6, 2014.
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    \15\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-00706 Filed 1-15-14; 8:45 am]
BILLING CODE 8011-01-P
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