Notice2024-21623
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Form U4 and FINRA Rule 3110.19(d) (Obligation To Provide List of RSLs to FINRA) for New RSL Question
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
September 23, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 184 (Monday, September 23, 2024)</title>
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[Federal Register Volume 89, Number 184 (Monday, September 23, 2024)]
[Notices]
[Pages 77567-77572]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-21623]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101052; File No. SR-FINRA-2024-015]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change to Amend Form U4 and FINRA Rule 3110.19(d)
(Obligation To Provide List of RSLs to FINRA) for New RSL Question
September 17, 2024.
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 13, 2024, 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 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 (1) amend Section 1 (General Information) of
the Uniform Application for Securities Industry Registration or
Transfer (``Form U4'') to add a new question eliciting information to
identify locations as residential supervisory locations (``RSLs''); (2)
amend FINRA Rule 3110.19(d) (Obligation to Provide List of RSLs to
FINRA) to remove the reference to a list of RSLs and the quarterly
timeframe for member firms to provide the list to FINRA and replace it
with the requirement that member firms provide current information
identifying all locations designated as RSLs in the frequency, manner
and format as FINRA may prescribe; and (3) make conforming changes to
Section 6 (Registration Requests with Affiliated Firms) of the Form U4
and amend the Form U4 Instructions to account for the new question
soliciting RSL information (``RSL Question'').
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
Proposed Amendment to Section 1 (General Information) of Form U4 To Add
a New RSL Question
Effective June 1, 2024, FINRA Rule 3110.19 permits a member firm to
designate a private residence at which an associated person engages in
specified supervisory activities, subject to certain safeguards and
limitations, as an RSL, a non-registered location.\4\
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\4\ See Securities Exchange Act Release No. 98980 (November 17,
2023), 88 FR 82447 (November 24, 2023) (Notice of Filing of
Amendment No. 2 and Order Granting Accelerated Approval of File No.
SR-FINRA-2023-006); see also Regulatory Notice 24-02 (January 2024).
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Currently, Rule 3110.19(d) requires a member firm that elects to
designate any of its offices or locations as an RSL to provide FINRA
with a current list of those offices or locations by the 15th day of
the month following each calendar quarter in the manner and format
(e.g., through an electronic process or such other process) as FINRA
may prescribe.\5\ As part of FINRA's
[[Page 77568]]
proposal to adopt Rule 3110.19, FINRA committed to exploring ways for
member firms to provide information identifying their RSLs to FINRA and
other securities regulators in an efficient and timely manner,
including by identifying RSLs to the Central Registration Depository
(``CRD[supreg]'') using FINRA Gateway \6\ as a possible option.\7\ In
general, commenters to the proposal suggested that FINRA consider
leveraging the CRD system to identify and track RSLs,\8\ and FINRA
received similar suggestions from engagement with members of its
advisory committees and other interested parties. Noted benefits of
this approach included an increase in the timeliness and accuracy of
the RSL information and enhanced efficiency of providing the
information to FINRA in an automated fashion rather than manually
created lists of RSLs.
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\5\ See supra note 4.
\6\ FINRA Gateway is an electronic compliance portal designed to
streamline the compliance and reporting experience for member firms
and provide consolidated access to, among other things, uniform
registration forms, which includes Form U4 (``FINRA Gateway''). See
<a href="https://www.finra.org/filing-reporting/finra-gateway">https://www.finra.org/filing-reporting/finra-gateway</a>. Member firms
use FINRA Gateway or other platforms to file both initial and
amendments to Form U4 in the CRD system, the central licensing and
registration system used by the U.S. securities industry and its
regulators. In general, the CRD system includes information reported
on the uniform registration forms that member firms and regulatory
authorities complete and maintain as part of the securities industry
registration and licensing process. FINRA, state, and other
regulatory authorities use the information in the CRD system in
connection with their licensing and regulatory activities.
\7\ See Letter from Kosha Dalal, Vice President and Associate
General Counsel, FINRA, to Vanessa Countryman, Secretary, SEC, dated
September 14, 2023, <a href="https://www.finra.org/sites/default/files/2023-09/FINRA-2023-006-Response-to-Comments-09-14-2023.pdf">https://www.finra.org/sites/default/files/2023-09/FINRA-2023-006-Response-to-Comments-09-14-2023.pdf</a>.
\8\ See, e.g., Letter from David T. Bellaire, Executive Vice
President & General Counsel, Financial Services Institute, to
Secretary, SEC, dated April 27, 2023, <a href="https://www.sec.gov/comments/sr-finra-2023-006/srfinra2023006-20165189-334506.pdf">https://www.sec.gov/comments/sr-finra-2023-006/srfinra2023006-20165189-334506.pdf</a>; Letter from
Andrew Hartnett, NASAA President and Deputy Commissioner, Iowa
Insurance Division, to Sherry R. Haywood, Assistant Secretary, SEC,
dated April 27, 2023, <a href="https://www.sec.gov/comments/sr-finra-2023-006/srfinra2023006-20165163-334468.pdf">https://www.sec.gov/comments/sr-finra-2023-006/srfinra2023006-20165163-334468.pdf</a>.
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Following a thorough review of the various options for member firms
to identify their RSLs to FINRA, and in consideration of the comment
letters submitted to the SEC in connection with the proposal to adopt
Rule 3110.19 and other feedback FINRA has received, FINRA has
determined that amending Form U4 to add the proposed new RSL Question
would be the most appropriate manner for member firms to indicate a
non-registered location that is identified on Form U4 a private
residence is an RSL by responding ``Yes'' or ``No.'' Therefore, FINRA
is prescribing that member firms must comply with Rule 3110.19(d), as
proposed to be amended, by submitting such information to FINRA via the
proposed RSL Question on Form U4.
As noted, the CRD system includes information reported on the
uniform registration forms that member firms and regulatory authorities
complete and maintain as part of the securities industry registration
and licensing process.\9\ Member firms use Form U4 to register
associated persons with FINRA, other self-regulatory organizations
(``SROs''), and jurisdictions as appropriate.\10\ The Form U4 elicits
registration information, which consists of, among other things,
administrative, employment, criminal, regulatory, customer complaint,
and financial information about associated persons.\11\ The
administrative information elicited on Form U4 includes work and
residential location information about a member firm's associated
persons, including the offices and locations (registered and
unregistered) to which those persons are assigned.\12\
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\9\ See supra note 6.
\10\ See Form U4, Sections 4 (SRO Registrations) and 5
(Jurisdiction Registrations) for available registrations.
\11\ See Form U4.
\12\ See Form U4, Sections 1 (General Information), 6
(Registration Requests with Affiliated Firms), and 11 (Residential
History).
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FINRA believes that the most efficient, timely, and useful means
for member firms to provide information identifying RSLs to FINRA is
through the Form U4. Because member firms currently provide work and
residential information about their associated persons through the Form
U4 and keep such information up-to-date on an ongoing basis, FINRA
believes that the proposed RSL Question on Form U4 would leverage
existing processes to access and update Form U4 information to the CRD
system and provide member firms with a uniform way to submit
information to identify their RSLs in a manner with which they are
familiar. FINRA believes that prescribing the Form U4 as the method of
providing information identifying RSLs to FINRA would also allow member
firms using FINRA's API Platform to respond to the proposed RSL
Question for multiple locations simultaneously through an efficient
machine-to-machine upload process.\13\ In addition, the RSL information
would be readily accessible to securities regulators because it would
be available in the CRD system, which FINRA, state, and other
regulatory authorities use in connection with their licensing and
regulatory activities.\14\
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\13\ FINRA's API Platform is an application programming
interface that allows subscribers to make automated data transfers
with FINRA.
\14\ The reporting of RSL designations to the CRD system through
the Form U4 would allow FINRA and other securities regulators to
easily use the information for regulatory purposes. RSL data would
be fully integrated into the existing customizable reporting
capability available to securities regulators and would allow, for
example, a state securities regulator to generate reports of the
designated RSLs in its state by various criteria such as city or zip
code. The creation of such custom reports would not be possible if,
for example, member firms provided RSL information to FINRA in a
Portable Document Format (``PDF'') document.
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For these reasons, FINRA is proposing to amend Section 1 (General
Information) of the Form U4 to add a RSL Question that, when a member
firm has indicated that an associated person's office of employment
address is a non-registered location that is identified on Form U4 as a
private residence, would ask, ``Is this Office of Employment address an
RSL?'' and prompt the member firm to answer either ``Yes'' or ``No.''
The proposed RSL Question would also state that if ``Yes'' is selected
to the RSL Question, the member firm confirms that the location is
designated as an RSL as defined in FINRA Rule 3110.\15\ While FINRA
acknowledges that the RSL reporting process would result in a slight
extension of the previously announced October 15, 2024 initial RSL
reporting deadline, FINRA believes the later reporting start date would
ultimately result in a more timely and efficient process going forward
that would yield many benefits that promote investor protection and are
in the public interest. As noted above, FINRA believes that by changing
the RSL reporting mechanism to the Form U4 rather than a quarterly
list, the proposed rule change would: (1) leverage existing reporting
processes to increase the timeliness and accuracy of RSL information;
(2) enhance the efficiency of providing RSL information to FINRA in an
automated fashion; and (3) make the RSL information more readily
accessible to securities regulators.
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\15\ Complete and accurate reporting on Form U4 is the joint
responsibility of the member firm and the associated person. By
identifying a location or office as an RSL on Form U4, however, the
member firm is confirming the location or office is an RSL as
defined in Rule 3110. As such, the member firm is confirming that
the requirements set forth in Rule 3110.19 have been met for
designation of the RSL (e.g., the firm has conducted a risk
assessment prior to designating the office or location as an RSL as
set forth in Rule 3110.19(e)).
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Proposed Amendment to Rule 3110.19(d)
Currently, Rule 3110.19(d) provides that a member firm that elects
to designate any of its offices or locations as an RSL is required to
provide FINRA
[[Page 77569]]
with a list of the RSLs by the 15th day of the month following each
calendar quarter in the manner and format (e.g., through an electronic
process or such other process) as FINRA may prescribe. However, the
FINRA By-Laws impose a 30-day timeframe upon firms to keep Form U4
current at all times, and because the proposed RSL Question would be
part of the Form U4, the 30-day updating requirement makes unnecessary
the quarterly timeframe for firms to provide FINRA a list of RSLs as
currently required under Rule 3110.19(d). As such, FINRA is proposing
to make a conforming change to Rule 3110.19(d) to replace the
requirement for member firms to provide to FINRA a quarterly list of
RSLs in the manner and format prescribed by FINRA with the requirement
for member firms to provide to FINRA current information identifying
their RSLs in the frequency, manner and format prescribed.\16\
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\16\ FINRA is also proposing to amend the header to paragraph
(d) to read as ``Obligation to Provide Information Identifying RSLs
to FINRA.''
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Under the proposed rule change, the requirement for member firms to
provide a list of RSLs to FINRA would no longer be necessary since they
would be reporting information identifying their RSLs via Form U4 and
such information would be available to FINRA in the CRD system. Because
FINRA and other securities regulators have access to the information in
the CRD system in connection with their licensing and regulatory
activities, they would be able to view the most current information
about a member firm's RSLs at any time. Accordingly, this proposed
amendment to remove the quarterly RSL list requirement is appropriate
to align with the proposed amendment to Form U4 to include the RSL
Question.
Also, in light of the proposed amendment to Form U4 to include the
RSL Question, the quarterly timeframe currently provided in Rule
3110.19(d) does not align with the timing requirements for Form U4
amendments. Therefore, the proposed rule change would conform the
timeframe pursuant to which member firms would be required to provide
to FINRA information identifying their RSLs by removing the reference
to the quarterly basis currently set forth in Rule 3110.19(d). Under
the FINRA By-Laws, member firms and associated persons have a
continuing obligation to ensure that a Form U4 is timely updated when
an event or proceeding occurs that renders a prior response on the form
inaccurate or incomplete; specifically, not later than 30 days after
learning of the facts and circumstances giving rise to the change.\17\
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\17\ See FINRA By-Laws, Article V, Section 2(c).
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While FINRA acknowledges that the RSL reporting process would
result in a slight extension of the previously announced October 15,
2024 initial RSL reporting deadline to December 26, 2024, FINRA
believes that, under most circumstances, the reporting of RSL
designations via the Form U4 would provide FINRA and other securities
regulators this information on a more timely basis than the quarterly
cadence currently set forth under Rule 3110.19(d) and would make the
information more readily accessible to FINRA and other securities
regulators.\18\ In this regard, the locations or offices that member
firms have designated as RSLs would be reported to FINRA on a rolling
basis, consistent with the requirements to keep information current on
the Form U4, rather than only four times per year. As a result, FINRA
and other securities regulators may receive more current information
going forward for use in connection with their licensing and regulatory
activities than they would have received if the RSL information was
first provided through a quarterly RSL list on October 15, 2024, as
previously announced in Regulatory Notice 24-02. FINRA believes that,
on balance, the slight extension in the deadline for initial RSL
reporting would be offset by the benefits from the efficiencies and
timeliness resulting from the use of the ongoing reporting processes
associated with Form U4 reporting.\19\
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\18\ See supra note 14.
\19\ FINRA also notes that during the transition period between
the effective date of the proposed rule change and the November 26,
2024 implementation date, member firms may begin responding to the
RSL Question on Form U4 on a voluntary basis.
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Other Proposed Conforming Amendments
FINRA is proposing to add the same RSL Question in Section 1
(General Information) to Section 6 (Registration Requests with
Affiliated Firms) of Form U4. Section 6 (Registration Requests with
Affiliated Firms) of the Form U4 is similar to Section 1 (General
Information) and is used by a member firm to request registration for
an associated person with an affiliate of the member firm. As in
Section 1 (General Information), the RSL Question in Section 6
(Registration Requests with Affiliated Firms) would also prompt the
member firm, when it has indicated that an associated person's office
of employment address is a non-registered location that is identified
on Form U4 as a private residence, to answer either ``Yes'' or ``No,''
and state that if ``Yes'' is selected, the member firm confirms that
the location is designated as an RSL as defined in FINRA Rule 3110.
FINRA also is proposing to amend the Form U4 Instructions to
account for the new RSL Question. The proposed conforming update to the
instructions would provide: ``If the Office of Employment address is a
non-registered location and designated as a private residence, enter
`yes' or `no' to indicate whether the Office of Employment address is a
residential supervisory location as defined in FINRA Rule 3110. (Note:
this question can be answered only if the Private Residence Check Box
has been checked.) If `yes' is selected, the firm confirms that this
location is designated as an RSL as defined in FINRA Rule 3110.''
Implementation Procedures
The implementation date of the proposed rule change will be
November 26, 2024. An implementation date that is 30 days prior to the
date by which member firms must provide FINRA information identifying
their RSLs under amended Rule 3110.19(d) would also align with the
requirements of the FINRA By-Laws for member firms and registered
persons to keep information disclosed on registration forms current at
all times and that amendments to such forms must be filed with FINRA
and other applicable regulators not later than 30 days after learning
of the facts and circumstances giving rise to the change.\20\
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\20\ See supra note 17.
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FINRA is proposing to prescribe, for member firms that have
indicated on Form U4 that an associated person's office of employment
address is a non-registered location that is a private residence, the
following procedures for responding to the proposed RSL Question. The
proposed RSL Question would prompt member firms to answer the question
as either ``Yes'' or ``No'' within the timeframes set forth in the
following chart:
[[Page 77570]]
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Date member firm determines whether non- Date member firm response to
registered private residence location the RSL question on form U4 as
is or is not an RSL * ``Yes'' or ``No'' is due
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From June 1, 2024 (effective date of Required by December 26, 2024
Rule 3110.19) through November 25, **.
2024.
On or After November 26, 2024.......... Required within 30 days of RSL
designation in accordance with
FINRA By-Laws.
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* The member firm must first have indicated on the associated person's
Form U4 that the Office of Employment address is a non-registered
location and a private residence by checking the ``Private Residence
Check Box.'' See Form U4 Instructions, Section 1 (General Information)
(directing a filer to ``Check this [Private Residence Check Box] if
the Office of Employment address is a private residence.'').
** Prior to the implementation date,\21\ member firms may begin
responding to the RSL Question on Form U4 on a voluntary basis from
the date the RSL Question becomes available on Form U4 (``transition
period'').\22\
As of the November 26, 2024 implementation date, for any
associated person's office of employment address that is a non-
registered location and has been identified as a private residence
through the ``Private Residence Checkbox'' on Form U4, member firms
would have until December 26, 2024 to amend Form U4 to respond ``Yes''
or ``No'' to the RSL Question (if they have not already done so during
the transition period) to identify whether such private residence
location has or has not been designated by the member firm as an RSL on
or after the June 1, 2024 effective date of Rule 3110.19.\23\ Also, as
of the November 26, 2024 implementation date, member firms filing a
Form U4 to report, for the first time, that an associated person's
office of employment address that is a non-registered location and has
been identified as a private residence through the ``Private Residence
Checkbox'' on Form U4 would have until December 26, 2024 to respond to
the RSL Question to indicate whether that location has or has not been
designated by the member firm as an RSL on or after the June 1, 2024
effective date of Rule 3110.19.\24\
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\21\ FINRA expects to deploy the RSL Question on Form U4 on or
before September 30, 2024. FINRA will announce when the RSL Question
has been deployed on Form U4.
\22\ While member firms may respond to the RSL Question on a
voluntary basis during the transition period, the RSL Question
information that is voluntarily reported on Form U4 must nonetheless
be accurate, as is the case with any other information provided
through Form U4.
\23\ Prior to the November 26, 2024 implementation date, FINRA
is proposing to permit member firms to transition into their RSL
reporting requirement. During this transition period, member firms
may voluntarily begin responding to the proposed RSL Question on
Form U4. FINRA believes this transition period for compliance is
appropriate given the potentially significant number of private
residence locations that member firms may need to review to
determine whether or not to identify them on Form U4 as RSLs and
report this information to FINRA by December 26, 2024. While member
firms may respond to the RSL Question on a voluntary basis during
the transition period, the RSL Question information that is
voluntarily reported on the Form U4 must nonetheless be accurate, as
is the case with any other information provided through Form U4. See
Form U4, Section 15 (Signatures).
\24\ For example, if an associated person begins working from
their home on November 1, 2024 and their firm files an amended Form
U4 on November 30, 2024 to report the associated person's new office
of employment address is a non-registered location that is a private
residence, the firm would have until December 26, 2024 to respond
``Yes'' or ``No'' to the RSL Question to indicate whether the firm
has or has not designated that private residence location as an RSL.
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On and after the November 26, 2024 implementation date, member
firms must keep the response to the RSL Question current at all times
by supplementary amendments to the initial (or original) Form U4 and
such amendments must be filed with FINRA no later than 30 days after a
member firm designates or no longer designates a private residence
location as an RSL.\25\
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\25\ See supra note 17.
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FINRA has filed the proposed rule change for immediate
effectiveness. The implementation date for the proposed rule change
will be November 26, 2024.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\26\ 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 would
provide the most efficient, timely, and useful manner for member firms
to provide their RSL information to FINRA. In this regard, the proposed
RSL Question would allow member firms to leverage existing processes to
access and update Form U4 information to the CRD system using FINRA
Gateway and, for machine-to-machine uploads, FINRA's API Platform,
without the need to develop or implement a new method for providing the
RSL information. In addition, member firms would, in most
circumstances, provide more current information to FINRA about their
RSL designations because they would be required to amend the Form U4 to
report any changes to their RSL designations no later than 30 days
after the change. Specifically, member firms would be required to
update their RSL information on an ongoing basis rather than only four
times per year. Furthermore, by member firms reporting their RSL
designations to FINRA through the Form U4, FINRA and other securities
regulators would be able to readily access this information and easily
use it for regulatory purposes.
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\26\ 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. As discussed above, a member
firm that elects to designate any of its offices or locations as an RSL
is required to provide information identifying such offices to FINRA.
FINRA believes that doing so through an RSL Question on the Form U4
within the implementation timeframes described in this filing would
provide the most efficient, timely, and useful manner for member firms
to do so.
The proposed rule change would amend the Form U4 to add a new RSL
Question to facilitate the reporting of offices or locations designated
by member firms as RSLs to FINRA. The proposed new RSL Question would
require member firms to indicate whether a non-registered location that
is identified on Form U4 as a private residence is an RSL by responding
``Yes'' or ``No.'' As described above, this proposed rule change would
require member firms to amend such forms for all their associated
persons whose office of employment address is a non-registered location
that is identified on Form U4 as a private residence within the
implementation timeframe described in this proposed rule change, which
may place an administrative and operational burden on member firms.
FINRA notes that amendments to Form U4 are relatively frequent over the
course of a year, so member firms may be able to comply with this
requirement going forward when they update the Form U4 for other
reasons, subject to the
[[Page 77571]]
requirement in the FINRA By-Laws to ensure that a Form U4 is timely
updated not later than 30 days after learning of the facts and
circumstances giving rise to the change.\27\ In addition, FINRA
believes the transition period would help mitigate potential
administrative and operational burdens on member firms as it would
provide more time and flexibility to member firms in responding to the
proposed new RSL Question. Longer term, following the initial December
26, 2024 deadline, FINRA believes that the time it would take a member
firm to respond to the proposed new RSL Question for the subset of
associated persons whose office of employment address is identified on
Form U4 as a non-registered location that is a private residence would
be minimal.
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\27\ For example, in 2023, member firms filed Form U4 amendments
for almost 480,000 registered individuals, which is approximately
75% of the individuals who were registered as of December 31, 2023.
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Moreover, FINRA believes the administrative and operational burdens
on member firms and associated persons as a result of the proposed rule
change would be mitigated because member firms and associated persons
already must use Form U4 for associated persons to become registered
with appropriate SROs, and both member firms and applicants for
membership file initial, transfer and amended Forms U4 for their
associated persons electronically to the CRD system using the FINRA
Gateway or FINRA's API Platform (for machine-to-machine uploads of Form
U4 filings). The CRD system includes reporting and record keeping
capabilities that are familiar to member firms, and it may expedite the
submission and timely maintenance of accurate information regarding a
member firm's RSLs and the storage of historic Form U4 filings.
Further, FINRA, the SEC and other securities regulators have ready
access to Form U4 filings submitted to the CRD system using FINRA
Gateway or FINRA's API Platform.
FINRA considered alternative methods to collect RSL information
from member firms, including a custom electronic information request or
submission of simple lists of locations through the FINRA Gateway.
Either option would be costlier for member firms because they would
need to develop an infrastructure to create, maintain and report such
information, as well as to ensure the accuracy of the information. In
addition, because the RSL information would not be submitted through
Form U4, such information would not be easily aggregated, analyzed, or
made readily available to securities regulators.
FINRA also considered staggered due dates for responses to the RSL
Question on Form U4, whereby member firms would be required to provide
a ``Yes'' response to the RSL Question to indicate all of the non-
registered locations that are identified on Form U4 as private
residences that the member firm designated as RSLs by a specified date,
after which member firms would be required to provide a ``No'' response
to the RSL Question for those non-registered locations that are
identified on Form U4 as private residences that the member firm did
not designate as RSLs. However, such staggered responses are
unnecessary because the announced October 15, 2024 initial deadline for
the first quarterly list has been replaced with the December 26, 2024
deadline and, as noted above, FINRA believes that the length of the
transition period sufficiently mitigates the potential administrative
and operational burdens on member firms by leveraging current
operational processes already used by member firms. In addition, FINRA
believes that a single implementation date is simpler and less likely
to lead to confusion regarding the deadlines for compliance by member
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 Act \28\ and Rule 19b-
4(f)(6) thereunder.\29\
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\28\ 15 U.S.C. 78s(b)(3)(A).
\29\ 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. 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 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#4e3c3b222b632d2123232b203a3d0e3d2b2d60292138"><span class="__cf_email__" data-cfemail="7f0d0a131a521c1012121a110b0c3f0c1a1c51181009">[email protected]</span></a>. Please include
File Number SR-FINRA-2024-015 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-2024-015. 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 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of FINRA. Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection. All submissions should
refer to File Number SR-FINRA-2024-015 and should be submitted on or
before October 15, 2024.
[[Page 77572]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\30\
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\30\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-21623 Filed 9-20-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on September 23, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.