
[Federal Register: January 14, 2010 (Volume 75, Number 9)]
[Notices]               
[Page 2179-2180]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14ja10-114]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61311; File No. SR-FINRA-2009-072]

 
Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Approving Proposed Rule Change To Amend the 
Deficient Claims Rules of the Codes of Arbitration Procedure for 
Customer and Industry Disputes

January 7, 2010.

I. Introduction

    On October 28, 2009, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc. 
(``NASD'')) filed with the Securities and Exchange Commission (the 
``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Rule 12307 of the Code of Arbitration for 
Customer Disputes (the ``Customer Code'') and Rule 13307 of the Code of 
Arbitration for Industry Disputes (the ``Industry Code'') 
(collectively, the ``Codes'') to clarify the date of filing of an 
arbitration claim once a deficiency is corrected. The proposed Rule 
change was published for comment in the Federal Register on December 2, 
2009.\3\ The Commission received two comment letters, both of which 
supported the proposed rule change.\4\ This order approves the proposed 
rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 74 FR 63167 (Dec. 2, 2009).
    \4\ See letters from William A. Jacobson, Esq., Associate 
Clinical Professor of Law, Director, Cornell Securities Law Clinic 
and Sang Joon Kim, student, dated December 9, 2009, and Scott R. 
Shewan, President, Public Investors Arbitration Bar Association, 
dated December 17, 2009.
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II. Description of the Proposal

    When parties initiate arbitration claims in FINRA's arbitration 
forum, they must file a signed and dated submission agreement, pay all 
required filing fees, and provide a statement of claim explaining the 
facts and outlining the remedies requested.\5\ If a party's claims do 
not comply with the Customer Code or Industry Code, as applicable, 
those claims are considered deficient.\6\ FINRA received inquiries from 
constituents on how the arbitration forum determines the date of filing 
of a claim that was deficient when filed, but is later corrected.
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    \5\ Rule 12302(a)(1) of the Customer Code and Rule 13302(a)(1) 
of the Industry Code.
    \6\ A claim may be deficient because, for example, the party 
failed to file a properly signed and dated submission agreement, 
failed to pay all required filing fees, or failed to file the 
correct number of copies of the submission agreement, statement of 
claim or other supporting documents.
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    To address these constituents' concerns, FINRA proposed to amend 
Rules 12307(b) of the Customer Code and 13307(b) of the Industry Code 
to clarify the date of filing of a deficient claim when the deficiency 
is corrected within 30 days from the time the party receives notice of 
the deficiency (the ``Deficiency Period''). As amended, these rules 
would provide that if the deficiency is corrected within the Deficiency 
Period, the claim will be considered filed on the date the initial 
statement of claim was filed.
    Two commenters addressed the proposed rule change and both urged 
the Commission to approve it.

III. Discussion and Commission Findings

    The Commission finds the proposed rule change to be consistent with 
the requirements of the Act and the rules and regulations thereunder 
applicable to a national securities association.\7\ In particular, the 
Commission finds that the proposed rule change is consistent with 
Section 15A(b)(6) of the Act in that it is designed, among other 
things, to promote just and equitable principles of trade and to 
protect investors and the public interest.
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    \7\ In approving the proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
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    The Commission believes it is important to provide persons using 
FINRA's arbitration forum clear guidance on how to determine the date 
of filing of a deficient claim. The proposed rule change should 
eliminate confusion, provide transparency concerning forum practice, 
and enhance the efficiency of case administration.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-FINRA-2009-072) be, and 
hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).


[[Page 2180]]


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-544 Filed 1-13-10; 8:45 am]
BILLING CODE 8011-01-P

