Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Change To Amend FINRA Rule 2231 (Customer Account Statements), 1201-1203 [2022-00157]

Download as PDF Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Notices FOR FURTHER INFORMATION CONTACT: PENSION BENEFIT GUARANTY CORPORATION Christopher C. Meyerson, (202) 268– 7820. Performance Review Board Members Pension Benefit Guaranty Corporation. ACTION: Notice. AGENCY: The Pension Benefit Guaranty Corporation (PBGC) announces the appointment of members of the PBGC Performance Review Board. SUPPLEMENTARY INFORMATION: In accordance with 5 U.S.C. 4314(c)(4), made applicable by PBGC’s Senior Level Performance Management System, PBGC announces the appointment of those individuals who have been selected to serve as members of PBGC’s Performance Review Board. The Performance Review Board is responsible for making recommendations on each senior level (SL) professional’s annual summary rating, performance-based adjustment, and performance award to the appointing authority. The following individuals have been designated as members of PBGC’s 2021 Performance Review Board: SUMMARY: 1. Gordon Hartogensis, Director 2. Kristin Chapman, Chief of Staff 3. David Foley, Chief of Benefits Administration 4. Patricia Kelly, Chief Financial Officer 5. Alice Maroni, Chief Management Officer BILLING CODE 7709–02–P POSTAL SERVICE International Product Change—Priority Mail Express International, Priority Mail International, First-Class Package International Service & Commercial ePacket Agreement Postal ServiceTM. ACTION: Notice. AGENCY: The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a Priority Mail Express International, Priority Mail International, First-Class Package International Service & Commercial ePacket contract to the list of Negotiated Service Agreements in the Competitive Product List in the Mail Classification Schedule. khammond on DSKJM1Z7X2PROD with NOTICES SUMMARY: Date of notice: January 10, 2022. 18:16 Jan 07, 2022 Jkt 256001 [FR Doc. 2022–00210 Filed 1–7–22; 8:45 am] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93897; File No. SR–FINRA– 2021–024] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Change To Amend FINRA Rule 2231 (Customer Account Statements) I. Introduction [FR Doc. 2022–00233 Filed 1–7–22; 8:45 am] VerDate Sep<11>2014 Joshua Hofer, Attorney, Ethics and Legal Compliance. January 4, 2022. Issued in Washington, DC. Gordon Hartogensis, Director, Pension Benefit Guaranty Corporation. DATES: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 15, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express International, Priority Mail International, First-Class Package International Service & Commercial ePacket Contract 11 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2022–31 and CP2022–38. SUPPLEMENTARY INFORMATION: On September 29, 2021, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–FINRA– 2021–024 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 2 thereunder to amend FINRA Rule 2231 (Customer Account Statements) to add new supplementary materials, incorporate specified provisions from dual FINRA–NYSE temporary rules, and delete those temporary rules.3 The proposed rule change was published for public comment in the Federal Register on September 30, 2021.4 On November 9, 2021, FINRA consented to an extension of the time period in which the Commission must approve the proposed rule change, disapprove the proposed rule change, or institute 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Exchange Act Release No. 93215 (September 30, 2021), 86 FR 55641 (October 6, 2021) (File No. SR– FINRA–2021–024) (‘‘Notice’’). 4 See supra note 3. 2 17 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 1201 proceedings to determine whether to approve or disapprove the proposed rule change to January 4, 2022.5 On January 4, 2022, FINRA responded to the comment letters received in response to the Notice and filed an amendment to modify the proposed rule change (‘‘Amendment No. 1’’).6 The Commission is publishing this order pursuant to Section 19(b)(2)(B) of the Exchange Act 7 to solicit comments on the proposed rule change, as modified by Amendment No. 1, from interested persons and to institute proceedings to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1. II. Description of the Proposed Rule Change, as Modified by Amendment No. 1 FINRA is proposing to amend Rule 2231 (Customer Account Statements) to add new supplementary materials, incorporate specified provisions from dual FINRA–NYSE temporary rules, and delete those temporary rules. The proposed rule change would amend Rule 2231 to add new supplementary materials pertaining to compliance with FINRA Rule 4311 (Carrying Agreements), the transmission of customer account statements to other persons or entities, the use of electronic media to satisfy delivery obligations, and compliance with FINRA Rule 3150 (Holding of Customer Mail). Specifically, proposed new Supplementary Material .01 to Rule 2231 would remind firms of their obligations under Rule 4311, including specifically the rights and obligations of carrying firms under Rule 4311(c)(2) that generally require each carrying agreement in which accounts are to be carried on a fully disclosed basis to expressly allocate to the carrying firm the responsibility for the safeguarding of funds and securities for the purposes of Exchange Act Rule 15c3–3 and for preparing and transmitting statements of account to customers. Proposed new Supplementary Material .02 to Rule 2231 would prohibit member firms from sending customer account statements to third parties unless: (1) The customer provided written instructions to the 5 See letter from Sarah Kwak, Associate General Counsel, Office of General Counsel, FINRA, to Daniel Fisher, Branch Chief, Office of Chief Counsel, Division of Trading and Markets, Commission, dated November 9, 2021. 6 See letter from Sarak Kwak, Associate General Counsel, Office of General Counsel, FINRA, to Vanessa Countryman, Secretary, Commission, dated January 4, 2022 (‘‘FINRA Response’’). 7 15 U.S.C. 78s(b)(2)(B). E:\FR\FM\10JAN1.SGM 10JAN1 khammond on DSKJM1Z7X2PROD with NOTICES 1202 Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Notices member to send statements to such third parties; and (2) the member sends duplicate account statements directly to the customer either in paper format or electronically. The proposed Supplementary Material .02 would add that a member firm may cease sending duplicate account statements to a customer where a court of competent jurisdiction has appointed a guardian, conservator, trustee, personal representative or other person with legal authority to act on a customer’s behalf, and such court-appointed fiduciary provides written instructions to the member and furnishes to the member an official copy of the court appointment that establishes authority over the customer’s accounts. Proposed new Supplementary Material .03 to Rule 2231 would allow member firms to satisfy their delivery obligations under the rule by using electronic media, subject to compliance with standards established by the Commission on the use of electronic media for delivery purposes. Proposed new Supplementary Material .04 to Rule 2231 would permit member firms to hold customer mail, including customer account statements or other communications relating to a customer’s account, subject to the requirements of Rule 3150. Proposed new Supplementary Material .05 to Rule 2231 would incorporate without substantive changes NYSE Rule Interpretation 409T(a)/02 by requiring the following information to be clearly and prominently disclosed on the front of a customer account statement: (1) The identity of the introducing and clearing firm, if different, and their respective contact information for customer service (although the proposed rule change would permit the identity of the clearing firm and its contact information to appear on the back of the statement provided such information is in ‘‘bold’’ or ‘‘highlighted’’ letters); (2) that the clearing firm is a member of SIPC; and (3) the opening and closing balances for the account. Proposed new Supplementary Material .06 to Rule 2231 would incorporate without substantive changes NYSE Rule Interpretation 409T(a)/04 which provides that where a customer account statement includes assets the member firm does not carry on behalf of a customer and are not included on the member’s books and records, such assets must be clearly and distinguishably separated on the account statement. The proposed rule change would also require the account statement to: (1) Clearly indicate that such externally held assets are included VerDate Sep<11>2014 18:16 Jan 07, 2022 Jkt 256001 on the statement solely as a courtesy to the customer; (2) disclose that information (including valuation) for such externally held assets included on the statement is derived from the customer or other external source for which the member is not responsible; and (3) identify that such externally held assets may not be covered by SIPC. Proposed new Supplementary Material .07 to Rule 2231 would incorporate without substantive changes NYSE Rule Interpretation 409T(a)/05, which provides that where the logo, trademark or other identification of a person (other than the introducing firm or clearing firm) appears on a customer account statement, then the identity of such person and the relationship to the introducing, clearing, or other firm included on the statement must be provided and may not be used in a manner that is misleading or causes customer confusion. Proposed new Supplementary Material .08 to Rule 2231 would incorporate without substantive changes NYSE Rule Interpretation 409T(a)/06 by establishing a member firm’s obligations where the member holding a customer’s account and another person who separately offers financial related products or services to the same customer jointly provide their respective customer account statements together with a statement summarizing or combining assets held in different accounts. Finally, FINRA is proposing to delete NYSE Rule 409T and NYSE Rule Interpretation 409T in their entirety on the basis that the underlying concepts in these provisions will have been included in Rule 2231, are duplicative of other rules, or are outdated. Amendment No. 1 would modify the proposed rule change by changing the term ‘‘clearing firm’’ to ‘‘carrying firm’’ in the following places: (1) Proposed Rule 2231(a); (2) proposed Rule 2231.05(a) and (b); (3) proposed Rule 2231.07; and (4) proposed Rule 2231.08(d). FINRA stated that changing the term ‘‘clearing firm’’ to ‘‘carrying firm’’ would maintain consistency given the proposed supplementary materials are derived largely from their corresponding NYSE provisions, which use the term ‘‘carrying organization.’’ 8 III. Proceedings To Determine Whether To Approve or Disapprove File No. SR– FINRA–2021–024 and Grounds for Disapproval Under Consideration The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Exchange Act to 8 See PO 00000 FINRA Response. Frm 00097 Fmt 4703 Sfmt 4703 determine whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved.9 Institution of proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to the proposed rule change, as modified by Amendment No. 1. Pursuant to Section 19(b)(2)(B) of the Exchange Act,10 the Commission is providing notice of the grounds for disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis and input concerning whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act and the rules thereunder. IV. Request for Written Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposed rule change, as modified by Amendment No. 1. In particular, the Commission invites the written views of interested persons concerning whether the proposed rule change, as modified by Amendment No. 1, is consistent with the Exchange Act and the rules thereunder. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.11 Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change, as modified by Amendment No. 1, should be approved or disapproved by January 31, 2022. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by February 14, 2022. Comments may be submitted by any of the following methods: 9 15 U.S.C. 78s(b)(2)(B). 10 Id. 11 Section 19(b)(2) of the Exchange Act, as amended by the Securities Acts Amendments of 1975, Public Law 94–29, 89 Stat. 97 (1975), grants the Commission flexibility to determine what type of proceeding—either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a selfregulatory organization. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). E:\FR\FM\10JAN1.SGM 10JAN1 Federal Register / Vol. 87, No. 6 / Monday, January 10, 2022 / Notices 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 No. SR– FINRA–2021–024 on the subject line. Paper Comments khammond on DSKJM1Z7X2PROD with NOTICES • 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 No. SR–FINRA–2021–024. 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 No. SR–FINRA–2021–024 and should be submitted on or before January 31, 2022. If comments are received, any rebuttal comments should be submitted on or before February 14, 2022. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2022–00157 Filed 1–7–22; 8:45 am] BILLING CODE 8011–01–P 12 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 3(a)(57). VerDate Sep<11>2014 18:16 Jan 07, 2022 Jkt 256001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93894; File No. SR– PEARL–2021–58] Self-Regulatory Organizations; MIAX PEARL, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the MIAX Pearl Options Fee Schedule To Increase the Monthly Fees for MIAX Express Network Full Service Port January 4, 2022. 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 21, 2021, MIAX PEARL, LLC (‘‘MIAX Pearl’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a 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 is filing a proposal to amend the MIAX Pearl Options Fee Schedule (the ‘‘Fee Schedule’’) to amend the fees for the Exchange’s MIAX Express Network Full Service (‘‘MEO’’) 3 Ports. The text of the proposed rule change is available on the Exchange’s website at https://www.miaxoptions.com/rulefilings/pearl at MIAX Pearl’s principal office, 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, the Exchange 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. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 ‘‘MEO Interface’’ or ‘‘MEO’’ means a binary order interface for certain order types as set forth in Rule 516 into the MIAX Pearl System. See the Definitions Section of the Fee Schedule and Exchange Rule 100. 2 17 PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 1203 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule to increase the fees for its Full Service MEO Ports, Bulk and Single (the ‘‘Proposed Access Fees’’), which allow Members 4 to submit electronic orders in all products to the Exchange. The Exchange initially filed this proposal on July 1, 2021, with the proposed fee changes being immediately effective (‘‘First Proposed Rule Change’’).5 The First Proposed Rule Change was published for comment in the Federal Register on July 15, 2021.6 The Commission received one comment letter on the First Proposed Rule Change 7 and subsequently suspended the Frist Proposed Rule Change on August 27, 2021.8 The Exchange withdrew First Proposed Rule Change on October 12, 2021 and re-submitted the proposal on November 1, 2021, with the proposed fee changes being immediately effective (‘‘Second Proposed Rule Change’’).9 The Second Proposed Rule Change provided additional justification for the proposed fee changes and addressed certain points raised in the single comment letter that was submitted on the First Proposed Rule Change. The Second Proposed Rule Change was published for comment in the Federal Register on November 17, 2021.10 The Commission received no comment letters on the Second Proposed Rule Change. Nonetheless, the Exchange withdrew the Second Proposed Rule Change on December 20, 2021 and now submits this proposal for immediate effectiveness (‘‘Third Proposed Rule Change’’). This Third Proposed Rule Change meaningfully attempts to provide additional justification and 4 ‘‘Member’’ means an individual or organization that is registered with the Exchange pursuant to Chapter II of Exchange Rules for purposes of trading on the Exchange as an ‘‘Electronic Exchange Member’’ or ‘‘Market Maker.’’ Members are deemed ‘‘members’’ under the Exchange Act. See the Definitions Section of the Fee Schedule and Exchange Rule 100. 5 See Securities Exchange Act Release No. 92365 (July 9, 2021), 86 FR 37347 (July 15, 2021) (SR– PEARL–2021–33). 6 See id. 7 See Letter from Richard J. McDonald, Susquehanna International Group, LLC (‘‘SIG’’), to Vanessa Countryman, Secretary, Commission, dated September 7, 2021 (‘‘SIG Letter’’). 8 See Securities Exchange Act Release No. 92798 (August 27, 2021), 86 FR 49360 (September 2, 2021). 9 See Securities Exchange Act Release No. 93556 (November 10, 2021), 86 FR 64235 (November 17, 2021) (SR–PEARL–2021–53). 10 See id. E:\FR\FM\10JAN1.SGM 10JAN1

Agencies

[Federal Register Volume 87, Number 6 (Monday, January 10, 2022)]
[Notices]
[Pages 1201-1203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00157]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93897; File No. SR-FINRA-2021-024]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of Amendment No. 1 and Order 
Instituting Proceedings To Determine Whether To Approve or Disapprove 
the Proposed Rule Change To Amend FINRA Rule 2231 (Customer Account 
Statements)

January 4, 2022.

I. Introduction

    On September 29, 2021, the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change SR-FINRA-2021-024 pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange 
Act'') \1\ and Rule 19b-4 \2\ thereunder to amend FINRA Rule 2231 
(Customer Account Statements) to add new supplementary materials, 
incorporate specified provisions from dual FINRA-NYSE temporary rules, 
and delete those temporary rules.\3\ The proposed rule change was 
published for public comment in the Federal Register on September 30, 
2021.\4\ On November 9, 2021, FINRA consented to an extension of the 
time period in which the Commission must approve the proposed rule 
change, disapprove the proposed rule change, or institute proceedings 
to determine whether to approve or disapprove the proposed rule change 
to January 4, 2022.\5\ On January 4, 2022, FINRA responded to the 
comment letters received in response to the Notice and filed an 
amendment to modify the proposed rule change (``Amendment No. 1'').\6\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Exchange Act Release No. 93215 (September 30, 2021), 86 FR 
55641 (October 6, 2021) (File No. SR-FINRA-2021-024) (``Notice'').
    \4\ See supra note 3.
    \5\ See letter from Sarah Kwak, Associate General Counsel, 
Office of General Counsel, FINRA, to Daniel Fisher, Branch Chief, 
Office of Chief Counsel, Division of Trading and Markets, 
Commission, dated November 9, 2021.
    \6\ See letter from Sarak Kwak, Associate General Counsel, 
Office of General Counsel, FINRA, to Vanessa Countryman, Secretary, 
Commission, dated January 4, 2022 (``FINRA Response'').
---------------------------------------------------------------------------

    The Commission is publishing this order pursuant to Section 
19(b)(2)(B) of the Exchange Act \7\ to solicit comments on the proposed 
rule change, as modified by Amendment No. 1, from interested persons 
and to institute proceedings to determine whether to approve or 
disapprove the proposed rule change, as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change, as Modified by Amendment 
No. 1

    FINRA is proposing to amend Rule 2231 (Customer Account Statements) 
to add new supplementary materials, incorporate specified provisions 
from dual FINRA-NYSE temporary rules, and delete those temporary rules. 
The proposed rule change would amend Rule 2231 to add new supplementary 
materials pertaining to compliance with FINRA Rule 4311 (Carrying 
Agreements), the transmission of customer account statements to other 
persons or entities, the use of electronic media to satisfy delivery 
obligations, and compliance with FINRA Rule 3150 (Holding of Customer 
Mail).
    Specifically, proposed new Supplementary Material .01 to Rule 2231 
would remind firms of their obligations under Rule 4311, including 
specifically the rights and obligations of carrying firms under Rule 
4311(c)(2) that generally require each carrying agreement in which 
accounts are to be carried on a fully disclosed basis to expressly 
allocate to the carrying firm the responsibility for the safeguarding 
of funds and securities for the purposes of Exchange Act Rule 15c3-3 
and for preparing and transmitting statements of account to customers.
    Proposed new Supplementary Material .02 to Rule 2231 would prohibit 
member firms from sending customer account statements to third parties 
unless: (1) The customer provided written instructions to the

[[Page 1202]]

member to send statements to such third parties; and (2) the member 
sends duplicate account statements directly to the customer either in 
paper format or electronically. The proposed Supplementary Material .02 
would add that a member firm may cease sending duplicate account 
statements to a customer where a court of competent jurisdiction has 
appointed a guardian, conservator, trustee, personal representative or 
other person with legal authority to act on a customer's behalf, and 
such court-appointed fiduciary provides written instructions to the 
member and furnishes to the member an official copy of the court 
appointment that establishes authority over the customer's accounts.
    Proposed new Supplementary Material .03 to Rule 2231 would allow 
member firms to satisfy their delivery obligations under the rule by 
using electronic media, subject to compliance with standards 
established by the Commission on the use of electronic media for 
delivery purposes.
    Proposed new Supplementary Material .04 to Rule 2231 would permit 
member firms to hold customer mail, including customer account 
statements or other communications relating to a customer's account, 
subject to the requirements of Rule 3150.
    Proposed new Supplementary Material .05 to Rule 2231 would 
incorporate without substantive changes NYSE Rule Interpretation 
409T(a)/02 by requiring the following information to be clearly and 
prominently disclosed on the front of a customer account statement: (1) 
The identity of the introducing and clearing firm, if different, and 
their respective contact information for customer service (although the 
proposed rule change would permit the identity of the clearing firm and 
its contact information to appear on the back of the statement provided 
such information is in ``bold'' or ``highlighted'' letters); (2) that 
the clearing firm is a member of SIPC; and (3) the opening and closing 
balances for the account.
    Proposed new Supplementary Material .06 to Rule 2231 would 
incorporate without substantive changes NYSE Rule Interpretation 
409T(a)/04 which provides that where a customer account statement 
includes assets the member firm does not carry on behalf of a customer 
and are not included on the member's books and records, such assets 
must be clearly and distinguishably separated on the account statement. 
The proposed rule change would also require the account statement to: 
(1) Clearly indicate that such externally held assets are included on 
the statement solely as a courtesy to the customer; (2) disclose that 
information (including valuation) for such externally held assets 
included on the statement is derived from the customer or other 
external source for which the member is not responsible; and (3) 
identify that such externally held assets may not be covered by SIPC.
    Proposed new Supplementary Material .07 to Rule 2231 would 
incorporate without substantive changes NYSE Rule Interpretation 
409T(a)/05, which provides that where the logo, trademark or other 
identification of a person (other than the introducing firm or clearing 
firm) appears on a customer account statement, then the identity of 
such person and the relationship to the introducing, clearing, or other 
firm included on the statement must be provided and may not be used in 
a manner that is misleading or causes customer confusion.
    Proposed new Supplementary Material .08 to Rule 2231 would 
incorporate without substantive changes NYSE Rule Interpretation 
409T(a)/06 by establishing a member firm's obligations where the member 
holding a customer's account and another person who separately offers 
financial related products or services to the same customer jointly 
provide their respective customer account statements together with a 
statement summarizing or combining assets held in different accounts.
    Finally, FINRA is proposing to delete NYSE Rule 409T and NYSE Rule 
Interpretation 409T in their entirety on the basis that the underlying 
concepts in these provisions will have been included in Rule 2231, are 
duplicative of other rules, or are outdated.
    Amendment No. 1 would modify the proposed rule change by changing 
the term ``clearing firm'' to ``carrying firm'' in the following 
places: (1) Proposed Rule 2231(a); (2) proposed Rule 2231.05(a) and 
(b); (3) proposed Rule 2231.07; and (4) proposed Rule 2231.08(d). FINRA 
stated that changing the term ``clearing firm'' to ``carrying firm'' 
would maintain consistency given the proposed supplementary materials 
are derived largely from their corresponding NYSE provisions, which use 
the term ``carrying organization.'' \8\
---------------------------------------------------------------------------

    \8\ See FINRA Response.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove File No. 
SR-FINRA-2021-024 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Exchange Act to determine whether the proposed rule 
change, as modified by Amendment No. 1, should be approved or 
disapproved.\9\ Institution of proceedings is appropriate at this time 
in view of the legal and policy issues raised by the proposed rule 
change. Institution of proceedings does not indicate that the 
Commission has reached any conclusions with respect to the proposed 
rule change, as modified by Amendment No. 1.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Exchange Act,\10\ the 
Commission is providing notice of the grounds for disapproval under 
consideration. The Commission is instituting proceedings to allow for 
additional analysis and input concerning whether the proposed rule 
change, as modified by Amendment No. 1, is consistent with the Exchange 
Act and the rules thereunder.
---------------------------------------------------------------------------

    \10\ Id.
---------------------------------------------------------------------------

IV. Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposed rule change, as modified by Amendment No. 1. In 
particular, the Commission invites the written views of interested 
persons concerning whether the proposed rule change, as modified by 
Amendment No. 1, is consistent with the Exchange Act and the rules 
thereunder.
    Although there do not appear to be any issues relevant to approval 
or disapproval that would be facilitated by an oral presentation of 
views, data, and arguments, the Commission will consider, pursuant to 
Rule 19b-4, any request for an opportunity to make an oral 
presentation.\11\
---------------------------------------------------------------------------

    \11\ Section 19(b)(2) of the Exchange Act, as amended by the 
Securities Acts Amendments of 1975, Public Law 94-29, 89 Stat. 97 
(1975), grants the Commission flexibility to determine what type of 
proceeding--either oral or notice and opportunity for written 
comments--is appropriate for consideration of a particular proposal 
by a self-regulatory organization. See Securities Acts Amendments of 
1975, Report of the Senate Committee on Banking, Housing and Urban 
Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 
30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposed rule change, as modified by 
Amendment No. 1, should be approved or disapproved by January 31, 2022. 
Any person who wishes to file a rebuttal to any other person's 
submission must file that rebuttal by February 14, 2022.
    Comments may be submitted by any of the following methods:

[[Page 1203]]

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 No. SR-FINRA-2021-024 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 No. SR-FINRA-2021-024. 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 No. SR-FINRA-2021-024 and 
should be submitted on or before January 31, 2022. If comments are 
received, any rebuttal comments should be submitted on or before 
February 14, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-00157 Filed 1-7-22; 8:45 am]
BILLING CODE 8011-01-P
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