Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Technical Revisions and One Minor Correction to the Supplemental Statement of Income Required To Be Filed Pursuant to FINRA Rule 4524 (Supplemental FOCUS Information), 66828-66830 [2018-28005]

Download as PDF 66828 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 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)(iii) of the Act 18 and subparagraph (f)(6) of Rule 19b–4 thereunder.19 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 20 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 21 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. ISE has requested that the Commission waive the 30-day operative delay contained in Rule 19b– 4(f)(6)(iii). The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. The proposal raises no novel issues. As the Exchange notes, other options markets require their market makers to a 25% restriction for trading in non-appointed classes. Further, pursuant to the proposal, PMMs’ obligation to their appointed classes would remain unchanged. Accordingly, the Commission waives the operative delay and designates the proposed rule change operative upon filing.22 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, 18 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 20 17 CFR 240.19b–4(f)(6). 21 17 CFR 240.19b–4(f)(6)(iii). 22 For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). khammond on DSK30JT082PROD with NOTICES 19 17 VerDate Sep<11>2014 17:14 Dec 26, 2018 Jkt 247001 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– ISE–2018–98 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–ISE–2018–98. 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 the Exchange. 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–ISE–2018–98 and should be submitted on or before January 17, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Brent J. Fields, Secretary. [FR Doc. 2018–28003 Filed 12–26–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84855; File No. SR–FINRA– 2018–041] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Technical Revisions and One Minor Correction to the Supplemental Statement of Income Required To Be Filed Pursuant to FINRA Rule 4524 (Supplemental FOCUS Information) December 19, 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 December 12, 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 a rule change to make technical revisions and one minor correction to the Supplemental Statement of Income (‘‘SSOI’’) required to be filed pursuant to FINRA Rule 4524 (Supplemental FOCUS Information). The technical revisions would conform the SSOI with amendments to SEC Form X–17A–5 (the ‘‘FOCUS Report’’) that the SEC has adopted. 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. 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 23 17 PO 00000 CFR 200.30–3(a)(12). Frm 00158 Fmt 4703 Sfmt 4703 E:\FR\FM\27DEN1.SGM 27DEN1 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices 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 khammond on DSK30JT082PROD with NOTICES 1. Purpose FINRA Rule 4524 (Supplemental FOCUS Information) requires each member, as FINRA shall designate, to file such additional financial or operational schedules or reports as FINRA may deem necessary or appropriate for the protection of investors or in the public interest as a supplement to filing FOCUS reports. FINRA implemented the SSOI pursuant to Rule 4524 in 2012.4 On August 17, 2018, the SEC adopted amendments that simplify and update, among other rules and forms, certain of the FOCUS reporting requirements for brokers and dealers and make changes to the annual audit requirements.5 The SEC’s amendments update Parts II, IIA, and IIB of the FOCUS Report to reflect updated U.S. Generally Accepted Accounting Principles (‘‘U.S. GAAP’’) requirements.6 More specifically, the amendments revise the Statement of 4 See Regulatory Notice 12–11 (Supplemental FOCUS Information) (February 2012) (announcing the SEC’s approval of Rule 4524 and the SSOI). See also Securities Exchange Act Release No. 66364 (February 9, 2012), 77 FR 8938 (February 15, 2012) (Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, Adopting FINRA Rule 4524 (Supplemental FOCUS Information) and Proposed Supplementary Schedule to the Statement of Income (Loss) Page of FOCUS Reports; File No. SR–FINRA–2011–064) and Securities Exchange Act Release No. 67257 (June 26, 2012), 77 FR 39313 (July 2, 2012) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make Non-Substantive Technical Changes to the Supplemental Statement of Income Required To Be Filed Pursuant to FINRA Rule 4524 (Supplemental FOCUS Information); File No. SR– FINRA–2012–033). 5 See Securities Exchange Act Release No. 83875 (August 17, 2018), 83 FR 50148 (October 4, 2018) (Final Rule: Disclosure Update and Simplification) (the SEC’s Adopting Release). To facilitate members in their financial reporting obligations, FINRA issued Regulatory Notice 18–38 to announce updates to the FINRA eFOCUS System designed to correspond with the new FOCUS requirements and to inform members of the effective date of the new requirements pursuant to specified relief granted by the staff of the SEC Division of Trading and Markets. See Regulatory Notice 18–38 (Financial Reporting Requirements) (November 2018); see also letter from Michael A. Macchiaroli, Associate Director, Division of Trading and Markets, SEC, to Ann Duguid, Senior Director, FINRA, dated (October 29, 2018). 6 See, for example, the SEC’s Adopting Release at 83 FR 50179, 50182 and 50183. VerDate Sep<11>2014 17:14 Dec 26, 2018 Jkt 247001 Financial Condition and the Statement of Income in the FOCUS Reports to include new line items added for the reporting of comprehensive income or loss, including other comprehensive income and accumulated other comprehensive income or loss. The amendments update line items to eliminate references to extraordinary gains or losses and the cumulative effect of changes in accounting principles. FINRA is proposing technical revisions that would conform the SSOI with the SEC’s amendments to the FOCUS Report. FINRA believes that conforming the SSOI with the FOCUS Report is consistent with the Commission’s goal of eliminating redundant, duplicative, overlapping, outdated, or superseded requirements,7 without significantly altering the information available to regulators. Because the SSOI is intended to provide more detailed information about a member’s revenues and expenses reported on the FOCUS Report, making the two forms consistent would enable members to file the same information on both forms with respect to comprehensive income, extraordinary items, and the effect of changes in accounting principles. As such, the proposed revisions should create clarity and reduce burdens for members, thereby assisting members in their financial reporting obligations and facilitating investor protection. Specifically, FINRA proposes to make the following changes to the SSOI: 8 • Delete SSOI line 14224 (‘‘Extraordinary gains (losses)’’) and SSOI line 14225 (‘‘Cumulative effect of changes in accounting principles’’) to conform with the elimination of references to extraordinary gains or losses and to the cumulative effect of changes in accounting principles in the FOCUS Report; • delete the phrase ‘‘and extraordinary item’’ from SSOI line 14230 (‘‘Net income (loss) after Federal income taxes and extraordinary item’’), again to conform with the elimination of references to extraordinary gains or losses in the FOCUS Report; • add new SSOI line 14226 (‘‘Other comprehensive income (loss)’’) and new SSOI line 14228 (‘‘Comprehensive income (loss)’’) to conform with the addition of correspondingly titled new lines in the FOCUS Report; 7 See the SEC’s Adopting Release at 83 FR 50150. See also Section 72002 of the Fixing America’s Surface Transportation Act, Public Law 114–94, 29 Stat. 1312 (2015) (mandating that the SEC revise Regulation S–K to eliminate provisions that are duplicative, overlapping, outdated, or unnecessary). 8 The SSOI as amended pursuant to the proposed rule change is included as Exhibit 3 to this filing. PO 00000 Frm 00159 Fmt 4703 Sfmt 4703 66829 • amend the title of Section 19 of the SSOI, and the associated header that precedes Section 19, to read ‘‘Net Income/Comprehensive Income’’ to conform with and correspond to the reporting of comprehensive income in the FOCUS Report; and • amend the General Instructions and the Specific Instructions to the SSOI to conform with the above deletions, additions and amendments, as appropriate, with respect to SSOI lines 14224, 14225, 14226, 14228 and 14230, and the header to and title of Section 19. In addition, FINRA proposes to make a minor correction to Section 3 (Revenue from Sale of Insurance Based Products) under the Specific Instructions to the SSOI.9 FINRA has filed the proposed rule change for immediate effectiveness. FINRA is proposing that the implementation date of the proposed rule change will be March 31, 2019, for SSOI filings that report on the period January 1 through March 31, 2019, and are due by April 26, 2019. Thus, all SSOIs filed on or after March 31, 2019 would reflect 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,10 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, as discussed in Section II.A.1. of this filing, consistent with the Commission’s goal of eliminating redundant, duplicative, overlapping, outdated, or superseded requirements, without significantly altering the information available to regulators, the proposed rule change, by conforming the SSOI with the FOCUS Report, would create clarity and reduce burdens for members, thereby assisting members in their financial reporting obligations and facilitating investor protection. 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 9 Specifically, FINRA proposes to delete the extra period that appears at the end of the instructions to Line 11022 (Aggregate amount if less than the greater of $5,000 or 5% of Total Revenue). 10 15 U.S.C. 78o–3(b)(6). E:\FR\FM\27DEN1.SGM 27DEN1 66830 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Notices believes that, by conforming the SSOI with the FOCUS Report, the proposed rule change is consistent with the Commission’s goal of eliminating redundant, duplicative, overlapping, outdated, or superseded requirements and does not significantly alter the information available to regulators. As such, FINRA believes the proposed rule change will create clarity and reduce burdens for members, thereby reducing burdens on the marketplace and facilitating investor protection. khammond on DSK30JT082PROD with 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 11 and Rule 19b– 4(f)(6) thereunder.12 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 13 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 14 permits the Commission to 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 FINRA may implement the proposed rule change to more closely coincide with the effective date of the Commission’s amendments to the FOCUS Report. The Commission does not believe that the proposed change presents any new or novel issues, and that making the SSOI consistent with the FOCUS Report will reduce burdens for FINRA members by enabling them to file the same information on both forms with respect to comprehensive income, extraordinary items, and the effect of changes in accounting principles, thereby assisting members in their financial reporting obligations and facilitating investor protection. Accordingly, waiver of the operative delay is consistent with the U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 13 17 CFR 240.19b–4(f)(6). 14 17 CFR 240.19b–4(f)(6)(iii). 12 17 17:14 Dec 26, 2018 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–2018–041 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2018–041. 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 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). 11 15 VerDate Sep<11>2014 protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal 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. Jkt 247001 PO 00000 Frm 00160 Fmt 4703 Sfmt 4703 Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change. 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– 2018–041 and should be submitted on or before January 17, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Brent J. Fields, Secretary. [FR Doc. 2018–28005 Filed 12–26–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84866; File No. SR–CHX– 2018–08] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Article 14 of the Rules of the Exchange Related to Arbitration Proceedings December 19, 2018. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19bd–4 thereunder,3 notice is hereby given that, on December 7, 2018, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Article 14 of the rules of the Exchange (‘‘Rules’’) to adopt arbitration provisions that are substantively similar to Rule 12 of the rules of NYSE National, Inc. (‘‘NYSE National’’), a national securities 16 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\27DEN1.SGM 27DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Notices]
[Pages 66828-66830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28005]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84855; File No. SR-FINRA-2018-041]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Make Technical Revisions and One Minor 
Correction to the Supplemental Statement of Income Required To Be Filed 
Pursuant to FINRA Rule 4524 (Supplemental FOCUS Information)

December 19, 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 December 12, 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 a rule change to make technical revisions and 
one minor correction to the Supplemental Statement of Income (``SSOI'') 
required to be filed pursuant to FINRA Rule 4524 (Supplemental FOCUS 
Information). The technical revisions would conform the SSOI with 
amendments to SEC Form X-17A-5 (the ``FOCUS Report'') that the SEC has 
adopted.
    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.

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

[[Page 66829]]

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
    FINRA Rule 4524 (Supplemental FOCUS Information) requires each 
member, as FINRA shall designate, to file such additional financial or 
operational schedules or reports as FINRA may deem necessary or 
appropriate for the protection of investors or in the public interest 
as a supplement to filing FOCUS reports. FINRA implemented the SSOI 
pursuant to Rule 4524 in 2012.\4\
---------------------------------------------------------------------------

    \4\ See Regulatory Notice 12-11 (Supplemental FOCUS Information) 
(February 2012) (announcing the SEC's approval of Rule 4524 and the 
SSOI). See also Securities Exchange Act Release No. 66364 (February 
9, 2012), 77 FR 8938 (February 15, 2012) (Notice of Filing of 
Amendment No. 2 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 2, Adopting FINRA 
Rule 4524 (Supplemental FOCUS Information) and Proposed 
Supplementary Schedule to the Statement of Income (Loss) Page of 
FOCUS Reports; File No. SR-FINRA-2011-064) and Securities Exchange 
Act Release No. 67257 (June 26, 2012), 77 FR 39313 (July 2, 2012) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change To Make Non-Substantive Technical Changes to the Supplemental 
Statement of Income Required To Be Filed Pursuant to FINRA Rule 4524 
(Supplemental FOCUS Information); File No. SR-FINRA-2012-033).
---------------------------------------------------------------------------

    On August 17, 2018, the SEC adopted amendments that simplify and 
update, among other rules and forms, certain of the FOCUS reporting 
requirements for brokers and dealers and make changes to the annual 
audit requirements.\5\ The SEC's amendments update Parts II, IIA, and 
IIB of the FOCUS Report to reflect updated U.S. Generally Accepted 
Accounting Principles (``U.S. GAAP'') requirements.\6\ More 
specifically, the amendments revise the Statement of Financial 
Condition and the Statement of Income in the FOCUS Reports to include 
new line items added for the reporting of comprehensive income or loss, 
including other comprehensive income and accumulated other 
comprehensive income or loss. The amendments update line items to 
eliminate references to extraordinary gains or losses and the 
cumulative effect of changes in accounting principles.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 83875 (August 17, 
2018), 83 FR 50148 (October 4, 2018) (Final Rule: Disclosure Update 
and Simplification) (the SEC's Adopting Release). To facilitate 
members in their financial reporting obligations, FINRA issued 
Regulatory Notice 18-38 to announce updates to the FINRA eFOCUS 
System designed to correspond with the new FOCUS requirements and to 
inform members of the effective date of the new requirements 
pursuant to specified relief granted by the staff of the SEC 
Division of Trading and Markets. See Regulatory Notice 18-38 
(Financial Reporting Requirements) (November 2018); see also letter 
from Michael A. Macchiaroli, Associate Director, Division of Trading 
and Markets, SEC, to Ann Duguid, Senior Director, FINRA, dated 
(October 29, 2018).
    \6\ See, for example, the SEC's Adopting Release at 83 FR 50179, 
50182 and 50183.
---------------------------------------------------------------------------

    FINRA is proposing technical revisions that would conform the SSOI 
with the SEC's amendments to the FOCUS Report. FINRA believes that 
conforming the SSOI with the FOCUS Report is consistent with the 
Commission's goal of eliminating redundant, duplicative, overlapping, 
outdated, or superseded requirements,\7\ without significantly altering 
the information available to regulators. Because the SSOI is intended 
to provide more detailed information about a member's revenues and 
expenses reported on the FOCUS Report, making the two forms consistent 
would enable members to file the same information on both forms with 
respect to comprehensive income, extraordinary items, and the effect of 
changes in accounting principles. As such, the proposed revisions 
should create clarity and reduce burdens for members, thereby assisting 
members in their financial reporting obligations and facilitating 
investor protection. Specifically, FINRA proposes to make the following 
changes to the SSOI: \8\
---------------------------------------------------------------------------

    \7\ See the SEC's Adopting Release at 83 FR 50150. See also 
Section 72002 of the Fixing America's Surface Transportation Act, 
Public Law 114-94, 29 Stat. 1312 (2015) (mandating that the SEC 
revise Regulation S-K to eliminate provisions that are duplicative, 
overlapping, outdated, or unnecessary).
    \8\ The SSOI as amended pursuant to the proposed rule change is 
included as Exhibit 3 to this filing.
---------------------------------------------------------------------------

     Delete SSOI line 14224 (``Extraordinary gains (losses)'') 
and SSOI line 14225 (``Cumulative effect of changes in accounting 
principles'') to conform with the elimination of references to 
extraordinary gains or losses and to the cumulative effect of changes 
in accounting principles in the FOCUS Report;
     delete the phrase ``and extraordinary item'' from SSOI 
line 14230 (``Net income (loss) after Federal income taxes and 
extraordinary item''), again to conform with the elimination of 
references to extraordinary gains or losses in the FOCUS Report;
     add new SSOI line 14226 (``Other comprehensive income 
(loss)'') and new SSOI line 14228 (``Comprehensive income (loss)'') to 
conform with the addition of correspondingly titled new lines in the 
FOCUS Report;
     amend the title of Section 19 of the SSOI, and the 
associated header that precedes Section 19, to read ``Net Income/
Comprehensive Income'' to conform with and correspond to the reporting 
of comprehensive income in the FOCUS Report; and
     amend the General Instructions and the Specific 
Instructions to the SSOI to conform with the above deletions, additions 
and amendments, as appropriate, with respect to SSOI lines 14224, 
14225, 14226, 14228 and 14230, and the header to and title of Section 
19.
    In addition, FINRA proposes to make a minor correction to Section 3 
(Revenue from Sale of Insurance Based Products) under the Specific 
Instructions to the SSOI.\9\
---------------------------------------------------------------------------

    \9\ Specifically, FINRA proposes to delete the extra period that 
appears at the end of the instructions to Line 11022 (Aggregate 
amount if less than the greater of $5,000 or 5% of Total Revenue).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness. FINRA is proposing that the implementation date of the 
proposed rule change will be March 31, 2019, for SSOI filings that 
report on the period January 1 through March 31, 2019, and are due by 
April 26, 2019. Thus, all SSOIs filed on or after March 31, 2019 would 
reflect 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,\10\ 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, as discussed in Section 
II.A.1. of this filing, consistent with the Commission's goal of 
eliminating redundant, duplicative, overlapping, outdated, or 
superseded requirements, without significantly altering the information 
available to regulators, the proposed rule change, by conforming the 
SSOI with the FOCUS Report, would create clarity and reduce burdens for 
members, thereby assisting members in their financial reporting 
obligations and facilitating investor protection.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

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

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. FINRA

[[Page 66830]]

believes that, by conforming the SSOI with the FOCUS Report, the 
proposed rule change is consistent with the Commission's goal of 
eliminating redundant, duplicative, overlapping, outdated, or 
superseded requirements and does not significantly alter the 
information available to regulators. As such, FINRA believes the 
proposed rule change will create clarity and reduce burdens for 
members, 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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \14\ permits the 
Commission to 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 FINRA 
may implement the proposed rule change to more closely coincide with 
the effective date of the Commission's amendments to the FOCUS Report. 
The Commission does not believe that the proposed change presents any 
new or novel issues, and that making the SSOI consistent with the FOCUS 
Report will reduce burdens for FINRA members by enabling them to file 
the same information on both forms with respect to comprehensive 
income, extraordinary items, and the effect of changes in accounting 
principles, thereby assisting members in their financial reporting 
obligations and facilitating investor protection. Accordingly, waiver 
of the operative delay is consistent with the protection of investors 
and the public interest. Therefore, the Commission hereby waives the 
operative delay and designates the proposal operative upon filing.\15\
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \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).
---------------------------------------------------------------------------

    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-2018-041 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-FINRA-2018-041. 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 a.m. and 3 
p.m. Copies of such filing also will be available for inspection and 
copying at the principal office of FINRA. All comments received will be 
posted without change. 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-2018-041 and should be submitted on or before January 17, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2018-28005 Filed 12-26-18; 8:45 am]
BILLING CODE 8011-01-P

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