Notice2022-17429
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Make Technical and Other Non-Substantive Changes Within FINRA Rules
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 15, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 156 (Monday, August 15, 2022)</title>
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[Federal Register Volume 87, Number 156 (Monday, August 15, 2022)]
[Notices]
[Pages 50143-50144]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-17429]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95454; File No. SR-FINRA-2022-022]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Make Technical and Other Non-Substantive
Changes Within FINRA Rules
August 9, 2022.
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, 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,
II, and III 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 Exchange Act,\3\ 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\ 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 make technical and other non-substantive
changes within FINRA rules.
The text of the proposed rule change is available on FINRA's
website at <a href="http://www.finra.org">http://www.finra.org</a>, 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
On May 18, 2022, the SEC announced the immediate effectiveness of
amendments to the Code of Arbitration Procedure for Industry Disputes
(``Industry Code'') to permit persons with sexual assault claims and
sexual harassment claims to elect not to enforce predispute arbitration
agreements in cases that relate to those disputes.\4\ The rule change,
File No. SR-FINRA-2022-012, aligned FINRA rules with the Ending Forced
Arbitration of Sexual Assault and Sexual Harassment Act of 2021
(``Act'').\5\
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\4\ See Securities Exchange Act Release No. 94942 (May 18,
2022), 87 FR 31592 (May 24, 2022) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2022-012).
\5\ Ending Forced Arbitration of Sexual Assault and Sexual
Harassment Act of 2021, Public Law 117-90, 136 Stat. 26 (2022).
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In File No. SR-FINRA-2022-012, FINRA amended FINRA Rule 13201 to
provide, among other things, that sexual assault claims and sexual
harassment claims would be administered in the forum under FINRA Rule
13802.\6\ FINRA amended FINRA Rule 13802 to add the terms ``sexual
assault claim'' and ``sexual harassment claim'' to the title and
throughout the rule to clarify that it applies to these types of
claims. However, File No. SR-FINRA-2022-012 did not include these terms
in paragraph (d) of FINRA Rule 13802. The proposed rule change would
add references to ``sexual assault'' and ``sexual harassment'' to
conform paragraph (d) with the rest of the provisions in FINRA Rule
13802.\7\
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\6\ FINRA Rule 13802 sets forth requirements as to the number of
arbitrators on the panel, the composition of the panel, the filing
fee, the relief available, and the availability of attorneys' fees
for such claims.
\7\ The proposed rule change would apply to all members,
including members that are funding portals or have elected to be
treated as capital acquisition brokers (``CABs''), given that the
funding portal and CAB rule sets incorporate the impacted FINRA
rules by reference.
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In addition, the proposed rule change would make technical, non-
substantive changes to the Industry Code and the Code of Arbitration
Procedure for Customer Disputes (``Customer Code''). The proposed rule
change would update FINRA Rules 12100(aa) and 13100(x) by correcting a
typographical error in the name of the Commodities Future Trading
Commission, from ``Commodities'' to ``Commodity.'' The proposed rule
change also would update FINRA Rules 12301(b) and 13301(b) by deleting
a duplicate word, the second ``the'' in the first sentence of these
rules. In addition, the proposed rule change would update FINRA Rule
13303(b) to insert a phrase that was inadvertently omitted. Under FINRA
Rule 13303(b), when a third party is added to a claim, the respondent
must serve the party with the answer and all documents previously
served by any party or sent to the parties by the Director of FINRA
Dispute Resolution Services. The current rule inadvertently omits
``parties by the'' in the second sentence. Thus, the proposed rule
change would insert this phrase for clarity and consistency with other
FINRA rules.
Finally, FINRA would update the citation in FINRA Rule 5122(c)(12)
for the definition of ``commodity pool operator'' under the Commodity
Exchange Act from Section 1a(5) to Section 1a(11) to reflect the
reorganization of the defined terms in the Commodity Exchange Act.\8\
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\8\ 7 U.S.C. 1a.
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FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the SEC waive the requirement that
the proposed rule change not become operative for 30 days after the
date of the filing, so FINRA can implement the proposed rule change
immediately.
[[Page 50144]]
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Exchange Act,\9\ 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 the proposed rule change
will provide greater clarity to members and the public regarding FINRA
rules by conforming paragraph (d) of FINRA Rule 13802 with the rest of
the provisions in current FINRA Rule 13802 and by making technical
updates to FINRA Rule 5122 and provisions of the Industry and Customer
Codes.
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\9\ 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 Exchange Act. The proposed rule
change brings clarity and consistency to FINRA rules without adding any
burden on firms.
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 Exchange Act \10\ and
Rule 19b-4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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 Exchange Act. If the
Commission takes such action, the Commission shall institute
proceedings to determine whether the proposed rule should be approved
or 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 Exchange Act. Comments may be submitted
by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#95e7e0f9f0b8f6faf8f8f0fbe1e6d5e6f0f6bbf2fae3"><span class="__cf_email__" data-cfemail="c6b4b3aaa3eba5a9ababa3a8b2b586b5a3a5e8a1a9b0">[email protected]</span></a>. Please include
File Number SR-FINRA-2022-022 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2022-022. This
file number should be included on the subject line if email 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 website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 website 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. Persons submitting comments are cautioned that
we do not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly.
All submissions should refer to File Number SR-FINRA-2022-022 and
should be submitted on or before September 6, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17429 Filed 8-12-22; 8:45 am]
BILLING CODE 8011-01-P
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