
[Federal Register Volume 77, Number 31 (Wednesday, February 15, 2012)]
[Notices]
[Pages 8938-8942]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3471]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66364; File No. SR-FINRA-2011-064]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of Amendment No. 2 and Order Granting 
Accelerated Approval of a Proposed Rule Change, as Modified by 
Amendment No. 2, Adopting FINRA Rule 4524 (Supplemental FOCUS 
Information) and Proposed Supplementary Schedule to the Statement of 
Income (Loss) Page of FOCUS Reports

February 9, 2012.

I. Introduction

    On November 1, 2011, the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Exchange Act'') \1\ and Rule 19b-4 
thereunder,\2\ proposed FINRA Rule 4524 (Supplemental FOCUS 
Information) to require each member, as FINRA shall designate, to file 
such additional financial or operational schedules or reports as FINRA 
may deem necessary as a supplement to the FOCUS report. The proposed 
rule change was published for comment in the Federal Register on 
November 14, 2011.\3\ The Commission received five comments on the 
proposed rule change.\4\ FINRA filed Amendment No. 1 on February 8, 
2012, which was subsequently withdrawn.\5\ FINRA filed Amendment No. 2 
to the proposed rule change on February 8, 2012.\6\ The Commission is 
publishing this notice and order to solicit comments on Amendment No. 2 
and to approve the proposed rule change, as modified by Amendment No. 
2, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 65700 (November 7, 
2011), 76 FR 70523 (November 14, 2011).
    \4\ See Letter from Pat Nelson, dated November 30, 2011 
(``Nelson''); George Hessler, Stock USA Execution Services, Inc., to 
Marcia Asquith, Secretary, FINRA, dated November 25, 2011 (``Stock 
USA''); Holly H. Smith and Susan S. Krawczyk, Sutherland Asbill & 
Brennan LLP, for the Committee of Annuity Insurers, to Elizabeth M. 
Murphy, Secretary, SEC, dated December 5, 2011 (``CAI''); Howard 
Spindel and Cassondra E. Joseph, Integrated Management Solutions USA 
LLC, dated December 5, 2011 (``IMS letter''); Nancy Brda to 
Elizabeth M. Murphy, Newedge USA, LLC, dated December 5, 2011 
(``Newedge'') (Available at http://www.sec.gov/comments/sr-finra-2011-064/finra2011064.shtml).
    \5\ Amendment No. 1, dated February 8, 2012, was withdrawn on 
February 8, 2012.
    \6\ See Amendment No. 2 dated February 8, 2012 (``Amendment No. 
2''). The text of Amendment No. 2 is available on FINRA's Web site 
at http:www.finra.org, at the principal office of FINRA, and on the 
Commission's Web site, http://www.sec.gov/rules/sro.shtml.
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II. Description of Proposed Rule Change

    Pursuant to Exchange Act Rule 17a-5, FINRA members are required to 
file with FINRA reports concerning their financial and operational 
status using SEC Form X-17A-5, Financial and Operational Combined 
Uniform Single (FOCUS) Report.\7\ FINRA is proposing to adopt FINRA 
Rule 4524, which provides that as a supplement to filing FOCUS reports 
pursuant to Exchange Act Rule 17a-5 and FINRA Rule 2010, each member, 
as FINRA shall designate, shall file such additional financial or 
operational schedules or reports as FINRA may deem necessary or 
appropriate for the protection of investors or in the public interest. 
FINRA Rule 4524 also provides that FINRA will specify the content of 
such additional schedules or reports, their format, and the timing and 
the frequency of such supplemental filings in a Regulatory Notice (or 
similar communication) issued pursuant to the Rule. Finally, FINRA Rule 
4524 provides that FINRA will file with the Commission pursuant to 
Exchange Act Section 19(b) the content of any such Regulatory Notice 
(or similar communication) issued pursuant to the Rule.
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    \7\ 17 CFR 240.17a-5.
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    Pursuant to proposed FINRA Rule 4524, FINRA is proposing a 
Supplemental Statement of Income (``SSOI'') to magnify the data from 
the Statement of Income (Loss) page of the FOCUS Reports. The proposed 
SSOI is intended to capture more granular detail of a firm's revenue 
and expense information. The lack of more specific revenue and expense 
categories for certain business activities on the Statement of Income 
(Loss) page of the FOCUS Reports has led many firms to report much of 
their revenue and expenses as ``other'' (miscellaneous), a very general 
categorization that provides FINRA limited visibility into revenue and 
expense trends. The proposed SSOI is divided into sections containing 
line items that seek additional detail to permit FINRA to better 
understand revenue sources and expense composition on an ongoing basis. 
This additional detail would allow FINRA to better assess risk at a 
firm, and as a result, better allocate examination resources. As 
modified by Amendment No. 2, each member would be required

[[Page 8939]]

to file with FINRA the proposed SSOI within 20 business days of the end 
of each calendar quarter.
    The proposed SSOI contains a de minimis exception for providing 
details of revenue and expenses for certain designated sections. If a 
member's total dollar amount for a designated section is $5,000 or less 
for the reporting period, the member would only be required to enter 
the total dollar amount to complete the section. As modified by 
Amendment No. 2, the reporting threshold has been amended to include as 
a component to the de minimis exception for certain designated sections 
a percentage of gross revenue threshold. Additionally, not every line 
item would apply to every member, especially those with limited product 
offerings, thus limiting the burden of completing the form.
    The proposed SSOI includes a new Operational Page that would 
collect additional information from certain members with respect to 
participation in unregistered offerings during the reporting period. 
Members whose revenue from unregistered offerings exceeds 10% of total 
revenue for the reporting period would be required to complete the 
Operational Page by providing specific information about each 
unregistered offering. FINRA believes that such information would 
provide it with greater transparency and a stronger understanding 
regarding the types of unregistered offerings that generate significant 
revenue for members.
    FINRA will announce the implementation dates of the proposed SSOI 
in a Regulatory Notice to be published no later than 60 days following 
Commission approval of the proposed rule change. The implementation 
date of the proposed schedule will be no sooner than 180 days, and no 
later than 365 days, following Commission approval of the proposed rule 
change.

III. Summary of Comment Letters

    The proposed rule change was published for comment in the Federal 
Register on November 14, 2011, and the comment period closed on 
December 5, 2011. The Commission received five comment letters in 
response to the proposed rule change.\8\ On February 8, 2012, FINRA 
responded to the comments and filed Amendment No. 2 to the proposed 
rule change.\9\
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    \8\ See supra note 4.
    \9\ See supra note 5. On December 21, 2011, FINRA extended the 
time period for Commission action until February 10, 2012. See 
http://www.finra.org/web/groups/industry/@ip/@reg/@rulfil/documents/rulefilings/p125317.pdf.
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A. Reporting Threshold

    Several commenters expressed concerns that the reporting threshold 
was too low and should be raised.\10\ One commenter suggested moving to 
a range that would allow a large firm with significant revenues to have 
a de minimis exception in the range of $250,000-$500,000.\11\ Two 
commenters thought the $5,000 threshold was too low and suggested a 
reporting threshold of $10,000 or of 5% or 10% of gross revenue (i.e., 
firms would not be required to report any information on product lines 
that represented less than 5% or 10% of their gross revenue).\12\ One 
commenter suggested a de minimis exception for items less than 
$25,000.\13\ This commenter also expressed concerns that the proposal 
was anti-small business, because it required the same level of detail 
for every broker-dealer.\14\
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    \10\ CAI; Newedge; IMS; Stock USA.
    \11\ CAI.
    \12\ Newedge; IMS.
    \13\ Stock USA.
    \14\ Id.
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    In its response to comments, FINRA stated that Amendment No. 2 
amends the SSOI and the instructions to include as a component of the 
de minimis exception for certain designated sections a percentage of 
the gross revenue threshold.\15\ FINRA explained that if the aggregate 
amount for the designated section is less than the greater of $5,000 or 
5% of the firm's total revenue or total expense, as applicable, for a 
reporting period, the member would only be required to enter the 
aggregate amount to complete the section. FINRA also stated that it 
added a de minimis exception for the revenue from sale of insurance 
based products section on the SSOI. Finally, FINRA stated that it had 
clarified language on the SSOI and the instructions regarding the 
reporting thresholds for other expenses and other revenue.
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    \15\ See Letter from Matthew E. Vitek, Counsel, FINRA, to 
Elizabeth M. Murphy, Secretary, Commission dated February 8, 2012 
(``Response to Comments'').
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B. Filing Time Frame

    One commenter suggested that firms needed additional time to file 
the SSOI.\16\ Since the FOCUS filings are due on the 17th business day 
of the month, the commenter suggested an additional 3-5 days to submit 
the Supplemental Filing after the FOCUS report would be helpful.\17\ In 
its Response to Comments FINRA stated that it recognizes that the new 
report will involve an additional amount of work for members and 
believes that it is reasonable to give members an additional three 
business days to file the SSOI. FINRA, therefore, amended its proposal 
to require the SSOI to be filed within 20 business days after the end 
of the calendar quarter.\18\
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    \16\ Newedge.
    \17\ Id.
    \18\ Response to Comments.
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C. Instructions and Definitions

    One commenter believes that FINRA should provide more precise 
definitions for certain product lines on the SSOI, in order to avoid 
duplicative or inconsistent reporting.\19\ This commenter also stated 
that FINRA should define more precisely the product lines listed on the 
SSOI.\20\ Another commenter believes that the instructions could be 
construed as misleading, because of the choices available for a firm to 
use ``firm selected methodology'' (i.e., firm discretion).\21\
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    \19\ Newedge.
    \20\ Id.
    \21\ IMS.
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    In its Response to Comments, FINRA stated that for certain revenue 
items, where specific and/or detailed instructions are not provided on 
the SSOI, FINRA expects firms to report the revenue in accordance with 
the definition and/or methodology used for preparing the FOCUS report. 
FINRA further stated that it believed the instructions to the SSOI 
contained sufficient clarity for certain definitions, such as 
``commodities,'' ``corporate debt,'' ``US Government and Agency 
Securities,'' and ``asset backed securities;'' however, FINRA clarified 
the instructions with respect to the term ``foreign exchange.'' FINRA 
also added instructions regarding non-securities insurance based 
products. Finally, FINRA stated that the term ``derivatives other than 
listed or unlisted options'' does not appear in the proposed SSOI.\22\
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    \22\ Response to Comments.
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D. Small Firm Concerns

    One commenter believes that FINRA should make available a less 
detailed SSOI to small broker-dealers.\23\ Another commenter was 
concerned that the new categories of product lines will be difficult to 
complete and that firms may make mistakes when completing the report, 
leading to fines levied for late or incorrect submissions.\24\
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    \23\ IMS.
    \24\ Stock USA.
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    In its Response to Comments, FINRA stated that it believed the 
information being required in the SSOI is important to identify 
regulatory risks and trends, irrespective of firm size. FINRA also 
explained that many of the line items will not apply to smaller firms 
with limited product offerings. Further,

[[Page 8940]]

FINRA reiterated that it was modifying the SSOI to broaden the de 
minimis exception, making the form much less complicated and time 
consuming for smaller firms, and that the form should not require 
sophisticated systems to generate the information.\25\
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    \25\ Response to Comments.
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E. Reporting Exemption

    One commenter believes that firms that ``do not engage in risky 
business lines, and who provide financial information that is already 
transparent'' should be exempted from completing the SSOI.\26\ As an 
example, the commenter suggested that mutual fund wholesalers and 
variable annuity principal underwriters and wholesalers that are 
limited purpose broker-dealers are categories of firms that should be 
exempted.\27\ One commenter also discussed the role the supplemental 
filing would play with respect to a broker-dealer's annual audit.\28\
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    \26\ CAI.
    \27\ Id.
    \28\ Id.
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    In its Response to Comments, FINRA stated that it does not agree 
that firms such as variable annuity principal underwriters and 
wholesalers should be exempt. FINRA believes the required information 
is important to identify revenue sources, enable FINRA to segment 
firms, and identify regulatory risk and trends without regard to the 
business model of the member or whether a particular business segment 
or product line has raised recent regulatory concerns.\29\ FINRA also 
noted that revenue streams of variable annuity principal underwriters 
and wholesalers are not transparent from the FOCUS report as it 
currently exists.\30\ Finally, FINRA noted that many of the line items 
will not apply to firms with limited product offerings, such as mutual 
fund wholesalers and variable annuity principal underwriters and 
wholesalers.\31\
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    \29\ Response to Comments.
    \30\ Id.
    \31\ Id.
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F. Exemption From Operational Page Reporting

    One commenter, CAI, suggested that there was an inconsistency 
between the proposed Operational Page and FINRA offering rules, 
specifically FINRA Rule 5110.\32\ CAI notes that FINRA Rule 5110 
exempts ten types of offerings from the rule, including offerings of 
open and closed-end investment companies, offerings of variable 
annuities, and offerings of modified guaranteed annuity contracts and 
modified guaranteed life insurance policies.\33\ CAI suggested that 
there is an inconsistency between the proposed Operational Page and 
certain FINRA offering rules, stating, ``that offerings that are 
exempted from FINRA offering rules should not be subject to the 
Operational Page.'' \34\
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    \32\ CAI.
    \33\ Id.
    \34\ Id.
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    In response to these concerns, FINRA explained its view that the 
commenter did not recognize the different purposes the Operational Page 
serves from FINRA Rule 5110. The Operational Page of the SSOI is 
intended to provide FINRA with greater transparency as to the source of 
the revenues associated with unregistered offerings when such revenues 
are a material percentage of a firm's overall revenues. FINRA Rule 5110 
regulates the underwriting terms and arrangements of most public 
offerings of securities sold through FINRA members. While not subject 
to FINRA Rule 5110, information about the exempted offerings identified 
by this commenter would provide FINRA with a better understanding 
regarding the types of unregistered offerings that generate significant 
revenue for members. In this regard, FINRA notes that it has found 
significant problems in several recent examinations and investigations, 
including fraud and sales practice abuses in Regulation D 
offerings.\35\ FINRA further noted that the SSOI would not be a report 
that is required to be audited under Exchange Act Rule 17a-5.
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    \35\ Response to Comments (citing FINRA Regulatory Notice 10-22 
(April 2010) in regard to Regulation D offerings and FINRA press 
release regarding sanction of eight firms and ten individuals for 
selling interests in troubled private placements).
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G. Reporting Issues

    One commenter stated that FINRA should give more consideration to 
member practices and procedures with respect to their books and 
records.\36\ This commenter stated that firms organize ``revenue data 
based on internal definitions of business lines and to comply with 
generally accepted accounting principles (``GAAP''). These internal 
categories allocate income based on how member firms view the nature 
and scope of their business lines.'' \37\ The commenter believes, 
therefore, that FINRA's proposed schedule, which requires reporting by 
product lines, contradicts GAAP rules and procedures. The commenter 
also believes that, ``FINRA is artificially forcing firms to 
differentiate income generated by investments from that of trading by 
requiring that revenue be reported by how the income might be taxed.'' 
\38\ Further, this commenter noted that FINRA's stated purpose of 
obtaining more granular information is not achieved, because the 
proposal allows for a dozen separate categories for trading income data 
but only one line for capital gains or losses related to longer-term 
investments.\39\
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    \36\ IMS.
    \37\ Id.
    \38\ Id.
    \39\ Id.
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    In its Response to Comments, FINRA disagreed that the proposal is 
at odds with member practices. FINRA stated that the SSOI is similar to 
the FOCUS Report in that it requires members to break-out revenues 
based on product line and distinguishes between trading and investment 
gains. FINRA also stated that requesting information to be reported by 
product line is not inconsistent with GAAP. Further, the instructions 
to the SSOI require that all revenue and expense items must be reported 
in accordance with GAAP. With respect to breaking out trading revenue 
data compared to investment capital gains or losses, FINRA believes 
that more granular detail for trading revenue is warranted because the 
regulatory risks associated with trading activities differ from the 
regulatory risks associated with longer-term investment activities.

H. Alternatives

    Two commenters suggested alternatives to the SSOI. One commenter 
asked if FINRA had researched and considered other alternatives to 
obtain the same information on the SSOI in another manner.\40\ Another 
commenter suggested that FINRA establish a joint task force to consider 
producing a revised FOCUS report.\41\
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    \40\ Nelson.
    \41\ IMS.
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    In response to these objections to the SSOI, FINRA reiterated its 
previous statement that it considered various alternatives and believes 
that the SSOI is the most effective and timely way to obtain the 
additional detail of revenues earned or expenses incurred by product or 
more specific categories. Further, FINRA notes that it consulted with 
its advisory committees in connection with the development of the 
proposed SSOI.

I. Future Reports or Schedules

    Several commenters expressed concerns about the implementation of 
future FINRA reports or schedules.\42\ These commenters thought that

[[Page 8941]]

publication via a Regulatory Notice was insufficient and suggested that 
any future schedules or reports be done through the more typical self-
regulatory organization (``SRO'') proposed rule change process.\43\ In 
its Response to Comments FINRA stated that it has modified the proposed 
rule change to clarify that all future reports or schedules will be 
filed with the Commission pursuant to Exchange Act Section 19(b).\44\ 
Thus, commenters will be assured of having an opportunity to comment on 
any request for such additional substantive information made pursuant 
to the proposed rule, which must be approved by the Commission before 
it can become effective.
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    \42\ CAI; Nelson; Stock USA.
    \43\ Stock USA; Nelson; CAI.
    \44\ Response to Comments.
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J. Implementation Date

    One commenter suggested an alternative compliance effective date of 
no sooner than 365 days following the Commission's approval of the 
proposed rule change because members not already collecting this 
information will require much more time than larger firms to implement 
the operational and system changes the SSOI necessitates.\45\ The 
commenter noted that many of its members are ``mid-sized firms that 
will not have the granular, detailed financial information required by 
the SSOI at their fingertips.'' \46\
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    \45\ CAI.
    \46\ Id.
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    In its Response to Comments, FINRA stated that it disagrees with 
the commenter and believes that the proposed implementation date, which 
would be no sooner than 180 days and no later than 365 days following 
SEC approval, strikes the proper balance of ensuring FINRA receives 
timely information while giving members sufficient time to file the 
first proposed SSOI.

K. SRO Rulemaking

    Several commenters were concerned that FINRA did not conduct a 
cost-benefit analysis in its rule proposal. Specifically, one commenter 
stated that FINRA should conduct a more rigorous and detailed cost-
benefit analysis that the industry can use to consider alternatives to 
the rule proposal.\47\ Other commenters were concerned about the 
overall lack of a detailed cost-benefit analysis by both the Commission 
and FINRA.\48\ Stock USA believes that a better justification is 
needed, to show ``how the proposed rule will be used to enhance its 
meeting of both the economic and protective provisions of Section 
15A(b)(6) of the Exchange Act.'' \49\
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    \47\ Id.
    \48\ Newedge; Nelson.
    \49\ Stock USA.
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    In its Response to Comments, FINRA noted that it believed it had 
complied with its rulemaking obligations under the Exchange Act, by 
submitting a ``concise general statement of the basis and purpose'' of 
its proposed rule. FINRA believes its proposed rule will ``further 
strengthen FINRA's ability to protect investors through a more informed 
understanding of the drivers of members' business that can be used for 
more targeted examinations and to understand trends in those drivers 
that may portend greater risk to the firm and the protection of 
customer assets.'' \50\ FINRA also noted that the burden arising from 
completing the SSOI is outweighed by FINRA's enhanced ability to 
protect investors by having a more detailed understanding of members' 
sources of revenue and expense drivers.\51\
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    \50\ Response to Comments.
    \51\ Id.
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L. Comment Period

    One commenter noted that the twenty-one day comment period did not 
allow firms sufficient time to properly estimate the costs associated 
with the operational and systems changes needed to complete the 
SSOI.\52\ In its Response to Comments, FINRA noted that the length of a 
comment period is determined by the SEC and therefore outside the scope 
of its response.\53\
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    \52\ CAI.
    \53\ Response to Comments.
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M. FINRA's Authority

    One commenter questioned FINRA's authority to adopt a supplement to 
the FOCUS report and stated that no one has addressed the role such a 
supplement would play with respect to a broker-dealer's annual 
audits.\54\ In response, FINRA stated that as a general matter the 
proposed rule is consistent with Section 15A(b)(6) of the Exchange Act 
and is ``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.'' \55\ 
FINRA further stated that with respect to the role the SSOI would play 
with respect to a broker-dealer's annual audits, the SSOI is not one of 
the reports required to be audited under Exchange Act Rule 17a-5 and 
that FINRA does not expect or require the SSOI to be audited unless the 
auditor believes there is a concern for such review.\56\
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    \54\ CAI.
    \55\ Response to Comments.
    \56\ Id.
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IV. Commission's Findings

    The Commission has carefully considered the proposed rule change, 
the comments received, Amendment No. 2, and FINRA's Response to 
Comments. The Commission finds that the proposed rule change is 
consistent with the requirements of the Exchange Act, and the rules and 
regulations thereunder that are applicable to a national securities 
association.\57\ In particular, the Commission finds that the proposal 
is consistent with Section 15A(b)(6) of the Act,\58\ which requires, 
among other things, that the rules of a national securities association 
be designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general, protect investors and the public 
interest.
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    \57\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \58\ 15 U.S.C. 78o-3(b)(6).
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    Proposed FINRA Rule 4524 and the SSOI will provide FINRA with the 
ability to obtain more specific information about the finances of a 
member broker-dealer. The Commission believes that the proposed rule 
change works in conjunction with the existing Commission broker-dealer 
financial responsibility rules and will further FINRA's ability to 
oversee its members by, among other things, increasing the transparency 
of the various revenue streams and sources of income of broker-dealers. 
For example, FINRA noted in its Response to Comments that FINRA has 
found significant problems in several recent examinations and 
investigations, including fraud and sales practice abuses in Regulation 
D offerings.\59\ The Commission believes the proposed rule change will 
give FINRA greater ability to examine the revenues of its members and 
therefore improve its ability to, among other things, uncover 
fraudulent and abusive practices that undermine public confidence in 
the securities markets and thus impede efficiency and capital 
formation.
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    \59\ See Response to Comments.
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    With respect to commenter concerns that the proposed rule change 
would give FINRA the ability to circumvent filing proposed rule changes 
with the Commission and thus avoid the notice and comment process 
attendant thereto,

[[Page 8942]]

FINRA has clarified the proposed rule change in Amendment No. 2 to make 
clear that any such new reports or schedules will be filed with the 
Commission pursuant to Exchange Act Section 19(b).\60\ Accordingly, the 
proposed rule change is clear that interested parties will have 
opportunity to have notice of, and comment upon, future schedules or 
reports issued by FINRA under FINRA Rule 4524.
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    \60\ The Commission notes that such reports or schedules, or 
changes to any existing reports or schedules, fall within the 
definition of ``rules of an association'' under Exchange Act Section 
3(a)(27), subject to the self-regulatory organization rulemaking 
provisions set forth in Exchange Act Section 19(b) and Rule 19b-4 
thereunder.
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    The Commission believes that FINRA carefully considered all 
comments on the proposal and has responded appropriately. FINRA's 
Amendment No. 2 changed the proposed rule change in response to 
commenter concerns to provide broker-dealers with additional time to 
file the SSOI and to include an additional component to the de minimis 
exception based on a percentage of gross revenue threshold. FINRA has 
suitably explained its reasons for declining to amend Rule 4524 and the 
SSOI in response to the remainder of comments it received.

V. Accelerated Approval

    The Commission finds goods cause, pursuant to Section 19(b)(2) of 
the Act \61\ for approving the proposed rule change, as modified by 
Amendment No. 2 thereto, prior to the 30th day after publication of 
Amendment No. 2 in the Federal Register. The changes proposed in 
Amendment No. 2 respond to specific concerns raised by the commenters 
and do not raise regulatory concerns.
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    \61\ 15 U.S.C. 78s(b)(2).
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    Accordingly, the Commission finds that good cause exists to approve 
the proposal, as modified by Amendment No. 2, on an accelerated basis.

VI. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether Amendment No. 2 
to 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 email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2011-064 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-2011-064. 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 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-2011-064 and should be submitted on or before March 7, 2012.

VII. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\62\ that the proposed rule change (SR-FINRA-2011-064), as modified 
by Amendment No. 2, be, and hereby is, approved on an accelerated 
basis.
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    \62\ 15 U.S.C. 78(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\63\
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    \63\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3471 Filed 2-14-12; 8:45 am]
BILLING CODE 8011-01-P


