[Federal Register Volume 76, Number 42 (Thursday, March 3, 2011)]
[Notices]
[Pages 11829-11830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4720]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63960; File No. SR-FINRA-2011-008]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Require
Public Disclosure of Any Access or Post-Transaction Fees for Executions
Against a Public Quotation in an OTC Equity Security
February 24, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on February 18, 2011, the 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. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to require members to disclose on the member's
Web site fees imposed against its published quotation in any OTC Equity
Security consistent with FINRA Rule 6450 (Restrictions on Access Fees).
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.
[[Page 11830]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
On June 22, 2010, the SEC approved, among other rules, new FINRA
Rule 6450 (Restrictions on Access Fees).\3\ Rule 6450 provides that a
firm may not impose, nor permit to be imposed, non-subscriber access or
post-transaction fees against its published quotation in any OTC Equity
Security that exceed or accumulate to more than:
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 62359, 75 FR 37488
(June 29, 2010) (Order Approving File No. SR-FINRA-2009-054).
---------------------------------------------------------------------------
$0.003 per share, if the published quotation is priced
equal to or greater than $1.00; or
The lesser of (a) 0.3% of the published quotation price on
a per share basis or (b) 30% of the minimum pricing increment under
Rule 6434 relevant to the display of the quotation on a per share basis
if the published quotation is less than $1.00.
FINRA is filing the proposed rule change to add Supplementary
Material .01 (the ``disclosure rule'') to provide that a member must
disclose on its Web site, in a clear and conspicuous manner, fees (and
changes to fees) imposed against its published quotations as provided
for in Rule 6450 at least three (3) business days in advance.\4\ Where
a member makes multiple fee schedules available, the applicability of
each schedule must be clear (e.g., volume discount tiers and rates).
Members must maintain and preserve records of the fee schedules
required to be made available pursuant to this disclosure rule for the
period of time and accessibility specified in SEA Rule 17a-4(b) under
the Exchange Act.
---------------------------------------------------------------------------
\4\ For purposes of the first three business days of the
disclosure rule's operation, members would be in compliance with the
advance notice requirement if they have posted the fees prior to 9
a.m. on the trading day upon which they impose the fee.
---------------------------------------------------------------------------
FINRA has requested that the Commission approve the proposed rule
change on an accelerated basis, so that it may become effective as soon
as possible. The effective date of the proposed rule change will be two
weeks after Commission approval.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Exchange Act,\5\ 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 the proposed rule change will
provide transparency to members as to the level of non-subscriber
access or post-transaction fees imposed against published quotations in
OTC Equity Securities.
---------------------------------------------------------------------------
\5\ 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 Exchange 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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-FINRA-2011-008 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-2011-008. 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 available
publicly. All submissions should refer to File Number SR-FINRA-2011-008
and should be submitted on or before March 24, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4720 Filed 3-2-11; 8:45 am]
BILLING CODE 8011-01-P