[Federal Register: October 12, 2007 (Volume 72, Number 197)]
[Notices]
[Page 58136-58137]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12oc07-105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56615; File No. SR-FINRA-2007-014]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Limit the Use of FINRA's Name and Any Other
Name Owned by FINRA and To Require Members and Persons Associated With
a Member that Refer to their FINRA Membership on a Web site to Provide
a Hyperlink to http://www.finra.org
October 4, 2007.
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 September 17, 2007, 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'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared substantially by FINRA.
FINRA filed the proposal under section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective
upon filing with 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).
\4\ 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 amend NASD Interpretative Material 2210-4
(``IM-2210-4'') to limit the use of FINRA's name and any other
corporate name owned by FINRA and to require members and persons
associated with a member that refer to their FINRA Membership on a Web
site to provide a hyperlink to http://www.finra.org The text of the proposed rule change is available at http://www.finra.org., the
principal offices of FINRA, and 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
On November 9, 2006, the SEC approved an amendment to IM-2210-4
establishing a requirement for member firms and persons associated with
a member that refer to their membership in NASD on a Web site to
hyperlink to NASD's home page, http://www.nasd.com (``the hyperlink
requirement'').\5\ On January 8, 2007, NASD published Notice to Members
07-02, which announced the Commission's approval of the hyperlink
requirement and established July 7, 2007, as its implementation
date.\6\ Following SEC approval of the hyperlink requirement, NASD and
NYSE Group, Inc (``NYSE'') announced a plan to consolidate their member
regulation operations into a combined organization, the sole U.S.
private-sector provider of member firm regulation for securities firms
that do business with the public. To reflect this consolidation, NASD
changed its corporate name and internet domain and delayed the
implementation of the hyperlink requirement until its new corporate
name and internet domain could be established.\7\ NASD has changed its
name to FINRA and changed its internet domain from http://www.nasd.com to http://www.finra.org. FINRA is now submitting the instant proposed
rule change to amend IM-2210-4 to reflect the new corporate identity.
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\5\ See Securities Exchange Act Release No. 54740 (November 9,
2006), 71 FR 67184 (November 20, 2006) (SR-NASD-2006-073).
\6\ See NASD Notice to Members 07-02 (January 2007).
\7\ FINRA previously announced that it would file a separate
rule change to amend IM-2210-4 to reflect its new corporate name.
See Securities Exchange Act Release No. 56124 (July 24, 2007), 72 FR
42165 (August 1, 2007) (SR-NASD-2007-042) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change to Delay the
Implementation of NASD Interpretative Material 2210-4, which
Requires Certain Member Firms to Provide a Hyperlink to http//
http://www.nasd.com).
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First, the proposed rule change amends the heading of IM-2210-4 to
refer to FINRA instead of NASD. Second, the reference to the NASD By-
Laws has been updated to refer to the FINRA By-Laws, which were adopted
on July 30, 2007.\8\
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\8\ Specifically, Article XV, Section 2, now states: ``No member
shall use the name of the Corporation except to the extent that may
be permitted by the Rules of the Corporation.'' The name of the
Corporation is Financial Industry Regulatory Authority, Inc. See
Securities Exchange Act Release No. 56146 (July 26, 2007), 72 FR
42190 (August 1, 2007) (SR-NASD-2007-053) (Notice of Filing and
Order Granting Accelerated Approval of Proposed Rule Change Relating
to the Restated Certificate of Incorporation of National Association
of Securities Dealers, Inc.).
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Third, paragraph (1) includes a reference to FINRA or any other
corporate name or facility owned by FINRA. By including ``any other
corporate name or facility owned by FINRA,'' IM-2210-4 will still
retain limitations on the use of NASD's name to avoid any potential
confusion or misuse of its legacy name, which is still widely accepted
by investors. In addition, IM-2210-4 will encompass names or facilities
of FINRA, including TRACE and ADF. Consequently, under the proposed
rule change, members could neither state nor imply in any
communications with the public that FINRA, or any other corporate name
or facility owned by FINRA, endorses, indemnifies, or guarantees the
member's business practices, selling methods, the class or type of
securities offered, or any specific security.
Finally, in paragraph (3), FINRA replaces the references to
``NASD'' and the NASD Web site, ``http://www.nasd.com,'' with ``FINRA,'' and
``http://www.finra.org'' to reflect the new corporate identity. This amendment
would require members, or persons associated with a member, that refer
to their FINRA membership on a Web site to provide a hyperlink to
http://www.finra.org.\9\
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\9\ See Footnote 7.
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FINRA will announce the implementation date of the proposed rule
change in a Regulatory Notice to be published no later than 60 days
following Commission notice of the filing of the rule change in the
Federal Register for immediate effectiveness. The implementation date
will be 30 days after the date of the filing.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of section 15A(b)(6) of the Act,\10\ which requires, among
other things, that
[[Page 58137]]
FINRA's 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 is
amending IM-2210-4 to reflect its new corporate identity and to ensure
that its rule regarding the use of its corporate name is current and
accurate.
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\10\ 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 impose
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
The proposed rule change has become effective pursuant to section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder,\12\
because the foregoing proposed rule 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 if consistent with the protection of investors
and the public interest.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of such 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.\13\
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\13\ 15 U.S.C. 78s(b)(3)(C).
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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 rule-comments@sec.gov. Please include
File Number SR-FINRA-2007-014 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2007-014. 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 inspection
and copying 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 offices 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-2007-014 and should be
submitted on or before November 2, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E7-20118 Filed 10-11-07; 8:45 am]
BILLING CODE 8011-01-P