[Federal Register Volume 75, Number 37 (Thursday, February 25, 2010)]
[Notices]
[Pages 8768-8769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-3779]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61542; File No. SR-FINRA-2009-093]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Approving Proposed Rule Change To Repeal NASD
Rule 2450 (Installment or Partial Sales), NASD Interpretive Material
2830-2 (``IM-2830-2'') (Maintaining the Public Offering Price) and
Incorporated NYSE Rule 413 (Uniform Forms) as Part of the Process of
Developing a Consolidated FINRA Rulebook
February 18, 2010.
On December 23, 2009, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') (f/k/a National Association of Securities Dealers,
Inc. (``NASD'')) filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to repeal NASD Rule 2450 (Installment or Partial
Sales), NASD Interpretive Material 2830-2 (``IM-2830-2'') (Maintaining
the Public Offering Price), and Incorporated NYSE Rule 413 (Uniform
Forms), as part of the process of developing a consolidated FINRA
rulebook. The proposed rule change was published for comment in the
Federal Register on January 19, 2010.\3\ The Commission received no
comments on the proposal. This order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 61319 (January 8,
2010), 75 FR 2897 (``Notice'').
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The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities association.\4\ In
particular, the Commission finds that the proposed rule change is
consistent with the provisions of Section 15A(b)(6) of the Act,\5\
which requires, among other things, that FINRA rules 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.
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\4\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition and capital
formation. See 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78o-3(b)(6).
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The Commission believes that the proposed rule change is
appropriate to eliminate confusion and reduce regulatory overlap by
eliminating rules that are outdated, duplicative of other FINRA rules,
or addressed by the Federal rules or regulations. As further described
in the Notice, FINRA stated that NASD Rule 2450 should be repealed in
light of the explicit provisions in Regulation T requiring the deposit
of sufficient funds within the specified payment period. FINRA also
stated that the hypothecation prohibition in NASD Rule 2450 should be
repealed because it would no longer be relevant as it is predicated on
a partial or installment payment under the rule. In addition, FINRA
noted that, since the adoption of NASD IM-2830-2, the laws governing
broker-dealers have changed, and today virtually all broker-dealers
doing business with the public are FINRA members. FINRA also noted that
NASD IM-2830-2 largely duplicates the requirement in Section 22(d) of
the Investment Company Act to sell mutual fund shares to investors at
the current public offering price. As a
[[Page 8769]]
result, FINRA stated that NASD IM-2830-2 no longer serves any useful
purpose, and proposed not to incorporate its content into the
consolidated FINRA rulebook. Furthermore, FINRA proposed to repeal
Incorporated NYSE Rule 413, which requires members to adopt such
uniform forms as the NYSE may prescribe to facilitate the orderly flow
of transactions within the financial community. FINRA stated that its
By-Laws contain several provisions by which FINRA may prescribe
processes for members' activities, including the use of uniform forms.
Thus, FINRA stated that Incorporated NYSE Rule 413 is duplicative of
these provisions and should be repealed. In approving this proposed
rule change, the Commission notes that FINRA members and their
associated persons are required to comply with all applicable Federal
securities laws and that FINRA, as a self-regulatory organization, has
the obligation to have the capacity to enforce compliance by its
members and their associated persons with the Act and the rules and
regulations thereunder.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the proposed rule change (SR-FINRA-2009-093) be, and it
hereby is, approved.
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\6\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-3779 Filed 2-24-10; 8:45 am]
BILLING CODE 8011-01-P