[Federal Register Volume 75, Number 131 (Friday, July 9, 2010)]
[Notices]
[Pages 39610-39611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-16685]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62429; File No. SR-FINRA-2010-031]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Amending Financial Industry Regulatory Authority,
Inc. Online Form NMA
July 1, 2010.
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 June 24, 2010, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc.
(``NASD'')) filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by FINRA. FINRA has
designated the proposed rule change as ``constituting a stated policy,
practice, or interpretation with respect to the meaning,
administration, or enforcement of an existing rule'' under Section
19(b)(3)(A)(i) of the Act \3\ and Rule 19b-4(f)(1) thereunder,\4\ 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(i).
\4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to amend online Form NMA, the standardized
membership application form applicants must file pursuant to NASD Rule
1013 (New Member Application and Interview) as part of their new
membership application. The proposed change would amend Form NMA's
hyperlink reference to SEC Form D (Notice of Exempt Offering of
Securities) from ``high net worth,'' to ``accredited investor,'' the
term used in SEC Form D.
The proposed rule change does not propose amendments to existing
rule text.
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
Form NMA is the standardized online membership application form
applicants must file pursuant to NASD Rule 1013 (New Member Application
and Interview) as part of their new membership application. Form NMA
assists applicants by identifying the information and supporting
documentation required by Rule 1013. To that end, Form NMA Section I,
Question 8a requires an applicant to identify (by indicating all that
apply) the following types of customers the applicant will service: (1)
Retail excluding high net worth; (2) high net worth; (3) institutional
excluding high net worth; or (4) other (as described by the applicant).
Form NMA does not provide a definition of a ``high net worth'' retail
or institutional customer; rather, the form provides guidance to
applicants responding to the question by providing a hyperlink for the
term ``high net worth'' to SEC Form D (Notice of Exempt Offering of
Securities), which references the term ``accredited investor'' as
defined in Rule 501(a) of the Securities Act of 1933 (``Securities
Act'').\5\
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\5\ 17 CFR 230.501(a). Securities Act Rule 501(a) defines the
term ``accredited investor'' to mean any person who comes within
certain categories, as specified in the definition, at the time of
the sale of the securities to that person. Those categories include,
among others, institutions, such as banks, insurance companies, and
employee benefit plans; trusts with total assets in excess of
$5,000,000; and any natural persons with either an individual income
for the past two years over $200,000 (or joint income over $300,000
if married) or an individual net worth (or joint net worth if
married) exceeding $1,000,000.
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The proposed rule change will replace the hyperlink reference
``high net worth'' with ``accredited investor,'' thereby conforming the
terminology used in Question I, Section 8a to SEC Form D.\6\
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\6\ The proposed rule change also will update the nonworking
hyperlink address to SEC Form D with the current hyperlink address,
http://www.sec.gov/about/forms/formd.pdf.
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The effective date will be the date of filing; FINRA anticipates
implementing the proposed rule change as part of a software release
scheduled for July 31, 2010.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\7\ 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. The proposed rule change is consistent with the
provisions stated above, as it updates a hyperlink reference in online
Form NMA, providing greater clarity to applicants for FINRA membership.
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\7\ 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.
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.
[[Page 39611]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and paragraph (f)(1) of Rule 19b-4
thereunder.\9\ At any time within 60 days of the filing of the proposed
rule change, the Commission may summarily abrogate 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.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(1).
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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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-FINRA-2010-031 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2010-031. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549, on official business days between
the hours of 10 a.m. and 3 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of FINRA.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-FINRA-2010-031
and should be submitted on or before July 30, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Elizabeth M. Murphy,
Secretary.
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\10\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2010-16685 Filed 7-8-10; 8:45 am]
BILLING CODE 8010-01-P