Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Implementation Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to SR-FINRA-2015-036, 20889-20891 [2018-09695]
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Federal Register / Vol. 83, No. 89 / Tuesday, May 8, 2018 / Notices
as permitted by Section 17A(b)(3)(I) of
the Act.33
FICC does not believe the proposed
rule changes to reduce the complexity of
the GSD Fee Structure and to make
conforming, clarifying, and technical
changes, as discussed above in Items
II.(A)1.(iii) and (vi), respectively, would
impact competition.34 The proposed
rule changes to address the complexity
of the GSD Fee Structure would allow
Members to better understand the GSD
Fee Structure and allow them more ease
in reconciling to it. Making conforming,
clarifying, and technical changes to
ensure the GSD Fee Structure remains
clear and accurate would facilitate
Members’ understanding of the GSD Fee
Structure and their obligations
thereunder. Having transparent,
accessible, clear, and accurate
provisions in the GSD Fee Structure
would improve the readability and
clarity of the GSD Rules regarding the
fees that Members would incur by
participating in GSD. These changes
would apply equally to all Members and
would not affect Members’ rights and
obligations. As such, FICC believes the
proposed rule changes to reduce the
complexity of the GSD Fee Structure
and to make conforming, clarifying, and
technical changes would not have any
impact on competition.
sradovich on DSK3GMQ082PROD with NOTICES
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants, or Others
Written comments relating to this
proposed rule change have not been
solicited or received. FICC will notify
the Commission of any written
comments received by FICC.
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
up to 90 days (i) as the Commission may
designate 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
(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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–09693 Filed 5–7–18; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• 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–
FICC–2018–003 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–FICC–2018–003. 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 website (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 website 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 FICC and on DTCC’s website
(https://dtcc.com/legal/sec-rulefilings.aspx). All comments received
will be posted without change. Persons
submitting comments are cautioned that
we do not redact or edit personal
identifying information from comment
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–FICC–
2018–003 and should be submitted on
or before May 29, 2018.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83155; File No. SR–FINRA–
2018–017]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the
Implementation Date of Certain
Amendments to FINRA Rule 4210
Approved Pursuant to SR–FINRA–
2015–036
May 2, 2018.
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 April 20,
2018, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to extend, to
March 25, 2019, the implementation
date of the amendments to FINRA Rule
4210 (Margin Requirements) pursuant to
SR–FINRA–2015–036, other than the
amendments pursuant to SR–FINRA–
2015–036 that were implemented on
December 15, 2016. The proposed rule
change would not make any changes to
FINRA rules.
The text of the proposed rule change
is available on FINRA’s website at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
35 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
1 15
33 Id.
34 Id.
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Federal Register / Vol. 83, No. 89 / Tuesday, May 8, 2018 / Notices
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
sradovich on DSK3GMQ082PROD with NOTICES
1. Purpose
On October 6, 2015, FINRA filed with
the Commission proposed rule change
SR–FINRA–2015–036, which proposed
to amend FINRA Rule 4210 to establish
margin requirements for (1) To Be
Announced (‘‘TBA’’) transactions,
inclusive of adjustable rate mortgage
(‘‘ARM’’) transactions; (2) Specified
Pool Transactions; and (3) transactions
in Collateralized Mortgage Obligations
(‘‘CMOs’’), issued in conformity with a
program of an agency or GovernmentSponsored Enterprise (‘‘GSE’’), with
forward settlement dates, as defined
more fully in the filing (collectively,
‘‘Covered Agency Transactions’’). The
Commission approved SR–FINRA–
2015–036 on June 15, 2016 (the
‘‘Approval Date’’).4
Pursuant to Partial Amendment No. 3
to SR–FINRA–2015–036, FINRA
announced in Regulatory Notice 16–31
that the rule change would be become
effective on December 15, 2017, 18
months from the Approval Date, except
that the risk limit determination
requirements as set forth in paragraphs
(e)(2)(F), (e)(2)(G) and (e)(2)(H) of Rule
4210 and in new Supplementary
Material .05, each as respectively
amended or established by SR–FINRA–
2015–036 (collectively, the ‘‘risk limit
determination requirements’’), would
become effective on December 15, 2016,
six months from the Approval Date.5
Industry participants sought
clarification regarding the
4 See Securities Exchange Act Release No. 78081
(June 15, 2016), 81 FR 40364 (June 21, 2016) (Notice
of Filing of Amendment No. 3 and Order Granting
Accelerated Approval to a Proposed Rule Change to
Amend FINRA Rule 4210 (Margin Requirements) to
Establish Margin Requirements for the TBA Market,
as Modified by Amendment Nos. 1, 2, and 3; File
No. SR–FINRA–2015–036).
5 See Partial Amendment No. 3 to SR–FINRA–
2015–036 and Regulatory Notice 16–31 (August
2016), both available at: www.finra.org.
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18:41 May 07, 2018
Jkt 244001
implementation of the requirements
pursuant to SR–FINRA–2015–036.
Industry participants also requested
additional time to make system changes
necessary to comply with the
requirements, including time to test the
system changes, and requested
additional time to update or amend
margining agreements and related
documentation. In response, FINRA
made available a set of Frequently
Asked Questions & Guidance 6 and,
pursuant to SR–FINRA–2017–029,7
extended the implementation date of the
requirements of SR–FINRA–2015–036 to
June 25, 2018 (the ‘‘June 25, 2018
implementation date’’), except for the
risk limit determination requirements,
which, as announced in Regulatory
Notice 16–31, became effective on
December 15, 2016.
Industry participants have requested
that FINRA reconsider the potential
impact of certain requirements pursuant
to SR–FINRA–2015–036 on smaller and
medium-sized firms. Industry
participants have also requested that
FINRA extend the June 25, 2018
implementation date pending such
reconsideration to reduce potential
uncertainty in the Covered Agency
Transaction market. FINRA stated in
Partial Amendment No. 3 to SR–
FINRA–2015–036 that FINRA would
monitor the impact of the requirements
pursuant to that rulemaking and, if the
requirements prove overly onerous or
otherwise are shown to negatively
impact the market, FINRA would
consider revisiting such requirements as
may be necessary to mitigate the rule’s
impact.8 FINRA believes, in the interest
of avoiding unnecessary disruption to
the Covered Agency Transaction market,
that it is appropriate to consider
potential revisions to the requirements
pursuant to SR–FINRA–2015–036 and is
proposing to extend the June 25, 2018
implementation date to March 25, 2019
while FINRA considers, in consultation
with industry participants and other
regulators, whether any revisions are
appropriate. FINRA notes that the risk
6 Available at: www.finra.org/industry/guidance.
Further, staff of the SEC’s Division of Trading and
Markets made available a set of Frequently Asked
Questions regarding Exchange Act Rule 15c3–1 and
Rule 15c3–3 in connection with Covered Agency
Transactions under FINRA Rule 4210, also available
at: www.finra.org/industry/guidance.
7 See Securities Exchange Act Release No. 81722
(September 26, 2017), 82 FR 45915 (October 2,
2017) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change to Delay the
Implementation Date of Certain Amendments to
FINRA Rule 4210 Approved Pursuant to SR–
FINRA–2015–036; File No. SR–FINRA–2017–029);
see also Regulatory Notice 17–28 (September 29,
2017).
8 See Partial Amendment No. 3 to SR–FINRA–
2015–036, available at: www.finra.org.
PO 00000
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Fmt 4703
Sfmt 4703
limit determination requirements
pursuant to SR–FINRA–2015–036
became effective on December 15, 2016
and, as such, the implementation of
such requirements is not affected by the
proposed rule change.
FINRA has filed the proposed rule
change for immediate effectiveness and
has requested that the Commission
waive the requirement that the proposed
rule change not become operative for 30
days after the date of the filing. The
operative date will be the date of filing
of the proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,9 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 provides FINRA
additional time to consider whether any
revisions to the requirements pursuant
to SR–FINRA–2015–036 are appropriate
and helps to reduce potential
uncertainty in the Covered Agency
Transaction market while FINRA
considers such revisions. FINRA
believes that providing additional time
is consistent with the Act because this
provides FINRA, in consultation with
industry participants and other
regulators, additional opportunity to
consider whether revisions to the
requirements would improve their
effectiveness and thereby protect
investors and the public interest by
helping to promote stability in the
Covered Agency Transaction market.
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 extending the June 25,
2018 implementation date to March 25,
2019, so as to provide additional time
for FINRA to consider, in consultation
with industry participants and other
regulators, whether any revisions to the
requirements pursuant to SR–FINRA–
2015–036 are appropriate will benefit
all parties.
9 15
U.S.C. 78o–3(b)(6).
E:\FR\FM\08MYN1.SGM
08MYN1
Federal Register / Vol. 83, No. 89 / Tuesday, May 8, 2018 / Notices
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 10 and Rule 19b–
4(f)(6) thereunder.11
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii),13 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
FINRA has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
upon filing. FINRA has stated that the
purpose of the proposed rule change is
to allow FINRA additional time to
consider potential revisions to the
requirements pursuant to SR–FINRA–
2015–036 and to consult with industry
participants and other regulators
whether any revisions are appropriate,
in the interest of avoiding unnecessary
disruption to the Covered Agency
Transaction market. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest because the proposal to extend
the implementation date of certain
amendments to FINRA Rule 4210 does
not raise any new or novel issues and
will help to facilitate the
implementation of the margin
requirements for Covered Agency
Transactions. Furthermore, the
Commission understands that market
participants have expressed support for
the extension of the implementation
date in order to give FINRA time to
sradovich on DSK3GMQ082PROD with NOTICES
10 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires FINRA to give the Commission
written notice of FINRA’s intent to file the proposed
rule change, along with a brief description and text
of the proposed rule change, at least five business
days prior to the filing of the proposed rule change,
or such shorter time as designated by the
Commission. FINRA has satisfied this requirement.
12 17 CFR 240.19b–4(f)(6).
13 17 CFR 240.19b–4(f)(6)(iii).
11 17
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18:41 May 07, 2018
Jkt 244001
determine, in consultation with market
participants and other interested parties,
whether changes to the amendments are
appropriate, and if so, what those
changes should be.14 Therefore, the
Commission hereby waives the 30-day
operative delay requirement and
designates the proposed rule change as
operative upon filing.15
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–2018–017 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–FINRA–2018–017. 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 website (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
14 See, e.g., Letter from Chris Killian, Managing
Director, SIFMA (March 7, 2018), available at:
www.sec.gov.
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
20891
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 website 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. Persons
submitting comments are cautioned that
we do not redact or edit personal
identifying information from comment
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–FINRA–
2018–017 and should be submitted on
or before May 29, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–09695 Filed 5–7–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Extension:
Regulation AC; SEC File No. 270–517,
OMB Control No. 3235–0575
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Regulation Analyst
Certification (‘‘Regulation AC’’) (17 CFR
242.500–505, under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Regulation AC requires that research
reports published, circulated, or
provided by a broker or dealer or
covered person contain a statement
attesting that the views expressed in
each research report accurately reflect
16 17
E:\FR\FM\08MYN1.SGM
CFR 200.30–3(a)(12).
08MYN1
]]>Agencies
[Federal Register Volume 83, Number 89 (Tuesday, May 8, 2018)]
[Notices]
[Pages 20889-20891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-09695]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83155; File No. SR-FINRA-2018-017]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Extend the Implementation Date of Certain
Amendments to FINRA Rule 4210 Approved Pursuant to SR-FINRA-2015-036
May 2, 2018.
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 April 20, 2018, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to extend, to March 25, 2019, the implementation
date of the amendments to FINRA Rule 4210 (Margin Requirements)
pursuant to SR-FINRA-2015-036, other than the amendments pursuant to
SR-FINRA-2015-036 that were implemented on December 15, 2016. The
proposed rule change would not make any changes to FINRA rules.
The text of the proposed rule change is available on FINRA's
website at https://www.finra.org, at the principal office of FINRA and
at the Commission's Public Reference Room.
[[Page 20890]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On October 6, 2015, FINRA filed with the Commission proposed rule
change SR-FINRA-2015-036, which proposed to amend FINRA Rule 4210 to
establish margin requirements for (1) To Be Announced (``TBA'')
transactions, inclusive of adjustable rate mortgage (``ARM'')
transactions; (2) Specified Pool Transactions; and (3) transactions in
Collateralized Mortgage Obligations (``CMOs''), issued in conformity
with a program of an agency or Government-Sponsored Enterprise
(``GSE''), with forward settlement dates, as defined more fully in the
filing (collectively, ``Covered Agency Transactions''). The Commission
approved SR-FINRA-2015-036 on June 15, 2016 (the ``Approval Date'').\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 78081 (June 15,
2016), 81 FR 40364 (June 21, 2016) (Notice of Filing of Amendment
No. 3 and Order Granting Accelerated Approval to a Proposed Rule
Change to Amend FINRA Rule 4210 (Margin Requirements) to Establish
Margin Requirements for the TBA Market, as Modified by Amendment
Nos. 1, 2, and 3; File No. SR-FINRA-2015-036).
---------------------------------------------------------------------------
Pursuant to Partial Amendment No. 3 to SR-FINRA-2015-036, FINRA
announced in Regulatory Notice 16-31 that the rule change would be
become effective on December 15, 2017, 18 months from the Approval
Date, except that the risk limit determination requirements as set
forth in paragraphs (e)(2)(F), (e)(2)(G) and (e)(2)(H) of Rule 4210 and
in new Supplementary Material .05, each as respectively amended or
established by SR-FINRA-2015-036 (collectively, the ``risk limit
determination requirements''), would become effective on December 15,
2016, six months from the Approval Date.\5\
---------------------------------------------------------------------------
\5\ See Partial Amendment No. 3 to SR-FINRA-2015-036 and
Regulatory Notice 16-31 (August 2016), both available at:
www.finra.org.
---------------------------------------------------------------------------
Industry participants sought clarification regarding the
implementation of the requirements pursuant to SR-FINRA-2015-036.
Industry participants also requested additional time to make system
changes necessary to comply with the requirements, including time to
test the system changes, and requested additional time to update or
amend margining agreements and related documentation. In response,
FINRA made available a set of Frequently Asked Questions & Guidance \6\
and, pursuant to SR-FINRA-2017-029,\7\ extended the implementation date
of the requirements of SR-FINRA-2015-036 to June 25, 2018 (the ``June
25, 2018 implementation date''), except for the risk limit
determination requirements, which, as announced in Regulatory Notice
16-31, became effective on December 15, 2016.
---------------------------------------------------------------------------
\6\ Available at: www.finra.org/industry/guidance. Further,
staff of the SEC's Division of Trading and Markets made available a
set of Frequently Asked Questions regarding Exchange Act Rule 15c3-1
and Rule 15c3-3 in connection with Covered Agency Transactions under
FINRA Rule 4210, also available at: www.finra.org/industry/guidance.
\7\ See Securities Exchange Act Release No. 81722 (September 26,
2017), 82 FR 45915 (October 2, 2017) (Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change to Delay the Implementation
Date of Certain Amendments to FINRA Rule 4210 Approved Pursuant to
SR-FINRA-2015-036; File No. SR-FINRA-2017-029); see also Regulatory
Notice 17-28 (September 29, 2017).
---------------------------------------------------------------------------
Industry participants have requested that FINRA reconsider the
potential impact of certain requirements pursuant to SR-FINRA-2015-036
on smaller and medium-sized firms. Industry participants have also
requested that FINRA extend the June 25, 2018 implementation date
pending such reconsideration to reduce potential uncertainty in the
Covered Agency Transaction market. FINRA stated in Partial Amendment
No. 3 to SR-FINRA-2015-036 that FINRA would monitor the impact of the
requirements pursuant to that rulemaking and, if the requirements prove
overly onerous or otherwise are shown to negatively impact the market,
FINRA would consider revisiting such requirements as may be necessary
to mitigate the rule's impact.\8\ FINRA believes, in the interest of
avoiding unnecessary disruption to the Covered Agency Transaction
market, that it is appropriate to consider potential revisions to the
requirements pursuant to SR-FINRA-2015-036 and is proposing to extend
the June 25, 2018 implementation date to March 25, 2019 while FINRA
considers, in consultation with industry participants and other
regulators, whether any revisions are appropriate. FINRA notes that the
risk limit determination requirements pursuant to SR-FINRA-2015-036
became effective on December 15, 2016 and, as such, the implementation
of such requirements is not affected by the proposed rule change.
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\8\ See Partial Amendment No. 3 to SR-FINRA-2015-036, available
at: www.finra.org.
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FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the Commission waive the
requirement that the proposed rule change not become operative for 30
days after the date of the filing. The operative date will be the date
of filing of the proposed rule change.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\9\ 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 provides
FINRA additional time to consider whether any revisions to the
requirements pursuant to SR-FINRA-2015-036 are appropriate and helps to
reduce potential uncertainty in the Covered Agency Transaction market
while FINRA considers such revisions. FINRA believes that providing
additional time is consistent with the Act because this provides FINRA,
in consultation with industry participants and other regulators,
additional opportunity to consider whether revisions to the
requirements would improve their effectiveness and thereby protect
investors and the public interest by helping to promote stability in
the Covered Agency Transaction market.
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\9\ 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 extending
the June 25, 2018 implementation date to March 25, 2019, so as to
provide additional time for FINRA to consider, in consultation with
industry participants and other regulators, whether any revisions to
the requirements pursuant to SR-FINRA-2015-036 are appropriate will
benefit all parties.
[[Page 20891]]
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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires FINRA to give the Commission written notice of FINRA's
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the filing of the proposed rule change, or
such shorter time as designated by the Commission. FINRA has
satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has asked the
Commission to waive the 30-day operative delay so that the proposal may
become operative upon filing. FINRA has stated that the purpose of the
proposed rule change is to allow FINRA additional time to consider
potential revisions to the requirements pursuant to SR-FINRA-2015-036
and to consult with industry participants and other regulators whether
any revisions are appropriate, in the interest of avoiding unnecessary
disruption to the Covered Agency Transaction market. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because the proposal to
extend the implementation date of certain amendments to FINRA Rule 4210
does not raise any new or novel issues and will help to facilitate the
implementation of the margin requirements for Covered Agency
Transactions. Furthermore, the Commission understands that market
participants have expressed support for the extension of the
implementation date in order to give FINRA time to determine, in
consultation with market participants and other interested parties,
whether changes to the amendments are appropriate, and if so, what
those changes should be.\14\ Therefore, the Commission hereby waives
the 30-day operative delay requirement and designates the proposed rule
change as operative upon filing.\15\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ See, e.g., Letter from Chris Killian, Managing Director,
SIFMA (March 7, 2018), available at: www.sec.gov.
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-FINRA-2018-017 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2018-017. 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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-FINRA-2018-017 and should be submitted
on or before May 29, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-09695 Filed 5-7-18; 8:45 am]
BILLING CODE 8011-01-P
