[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Notices]
[Pages 25399-25400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10897]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64369; File No. SR-FINRA-2011-021]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change Relating to Extension of Implementation Date for
Expansion of the Order Audit Trail System to All NMS Stocks
April 29, 2011.
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 26, 2011, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to establish October 3, 2011, as the
implementation date of the amendments to FINRA Rules 7410 and 7470 that
the Commission approved on November 12, 2010.\4\
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\4\ See Securities Exchange Act Rel. No. 63311 (November 12,
2010), 75 FR 70757 (November 18, 2010) (SR-FINRA-2010-044).
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The text of the proposed rule change is available on FINRA's Web
site at http://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 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 is filing the proposed rule change to establish October 3,
2011, as the implementation date for the amendments to the OATS rules
expanding the OATS recording and reporting requirements to all NMS
stocks.
On November 12, 2010, the SEC approved SR-FINRA-2010-044, which
amended FINRA Rules 7410 and 7470 to expand the OATS recording and
reporting requirements to include all NMS stocks.\5\ On January 11,
2011, FINRA published Regulatory Notice 11-03 announcing that the
Commission approved the amendments and that FINRA was publishing a new
version of the OATS Reporting Technical Specifications. Pursuant to the
SEC's approval of SR-FINRA-2010-044 and
[[Page 25400]]
the timing set forth in Regulatory Notice 11-03, the amendments to the
OATS Rules are currently scheduled to begin to be phased in on July 11,
2011, six months after the publication of Regulatory Notice 11-03 and
the revised OATS Reporting Technical Specifications.
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\5\ See Securities Exchange Act Rel. No. 63311 (November 12,
2010), 75 FR 70757 (November 18, 2010) (SR-FINRA-2010-044).
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Since the publication of the Notice and the OATS Reporting
Technical Specifications, many firms and industry groups have requested
that the implementation date for the new recording and reporting
requirements be delayed to allow firms sufficient time to make
necessary systems updates and changes. In addition, firms have noted
that the time needed to make the necessary changes was increased
because firms are also changing and updating their systems to comply
with the SEC's new rule on risk management controls for broker-dealers
with market access, Rule 15c3-5 under the Act,\6\ which has a
compliance date of July 14, 2011.\7\ As a result of these discussions,
FINRA is seeking to delay the implementation of the new OATS recording
and reporting requirements for NMS stocks until October 3, 2011, to
give firms sufficient time to make necessary changes to their systems
to enable them to comply with the expanded OATS recording and reporting
requirements. Consequently, FINRA will begin to phase-in the new
recording and reporting requirements beginning on October 3, 2011.
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\6\ 17 CFR 240.15c3-5.
\7\ See Securities Exchange Act Release No. 63241 (November 3,
2010), 75 FR 69792 (November 15, 2010).
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FINRA has filed the proposed rule change for immediate
effectiveness.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\8\ 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 extending the implementation date
of the extension of the OATS Rules to all NMS stocks will ensure that
firms have sufficient time to make the necessary changes to their
systems to be able to comply with the new OATS recording and reporting
requirements when they become effective.
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\8\ 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.
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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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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.
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-2011-021 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-2011-021. 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 such 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 publicly
available. All submissions should refer to File Number SR-FINRA-2011-
021 and should be submitted on or before May 25, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10897 Filed 5-3-11; 8:45 am]
BILLING CODE 8011-01-P