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FINRA Manual
Corporate Organization Notices
2007
07-65 FINRA Amends NYSE Rule 409(f) (Statements of Accounts to Customers) to Eliminate the Requirement to Include the Name of the Securities Market on which a Transaction is Effected; Effective Date: January 1, 2008
07-64 SEC approves amendments to NASD Rule 3010(g)(1) to Exempt Locations that Solely Conduct Final Approval of Research Reports; Effective Date: December 19, 2007
07-63 FINRA Adopts Rule Amendments Relating to Reporting of Odd-Lot Transactions; Effective Date: March 3, 2008
07-62 Revisions to the Series 23, 24, 42, 55, 62, 72 and 82 Examination Programs; Implementation Date: February 12, 2008
07-61 SEC Approves Exemption from TRACE Reporting Requirements for Certain "Derivative-Related Transactions"; Effective Date: December 13, 2007
07-60 FINRA Announces Relief Relating to Customer and PAIB Reserve Formula Computations and Required Deposits around the December 2007 Month-End Holidays
07-58 FINRA Solicits Comments on Proposed Guidance Regarding International Prime Brokerage Practices; Comment Period Expired: January 10, 2008
07-57 SEC Approves a Proposed Rule Change Relating to Representation of Parties in Arbitration and Mediation; Effective Date: December 24, 2007
07-56 Securities Industry/Regulatory Council on Continuing Education Issues Firm Element Advisory Update
07-55 FINRA Reminds Member Firms of Their Obligations Regarding Background Investigations of Prospective Personnel
07-53 SEC Approves New NASD Rule 2821 Governing Deferred Variable Annuity Transactions; Effective Date: May 5, 2008
07-52 Approves FINRA Membership Waive-In Process for Certain NYSE Member Organizations; Effective Date: October 12, 2007
07-51 Amendments to NASD IM-9216 to include certain NYSE Rules under the Minor Rule Violation Plan Effective Date: September 24, 2007
07-50 SEC Approves Amendments to NASD Rule 11870 and NYSE Rule 412 to Conform with NSCC's ACATS Transfer Cycle Time Frames; Effective Date: October 22, 2007
07-48 Broker-Dealer, Investment Adviser Firm, Agent and Investment Adviser Representative, and Branch Renewals for 2008; Payment Deadline: December 10, 2007
07-47 Amendments to NASD IM-2210-4: Web Site References to FINRA Membership and Limitations on the Use of FINRA's Name and Other Corporate Names Owned by FINRA; Effective Date: November 17, 2007
07-46 FINRA Requests Comment on Proposed Amendments to OTC Trade Reporting Requirements for Equity Securities; Comment Period Expires November 12, 2007
07-45 Amendments to NASD Rule 3210 to Conform with Amendments to the SEC's Regulation SHO Delivery Requirements; Effective Date: October 15, 2007
07-44 SEC Approves New Interpretive Material That Authorizes FINRA to Establish a Temporary Program to Allow Firms to Voluntarily Remit Accumulated Funds; Reminder Concerning Proper Disclosure of the Section 3 Fee; Effective Date: December 11, 2007 Sunset Date: June 11, 2008
07-43 FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers
07-42 SEC Approves NASD Rule 1160 Regarding Firm Contact Information; Effective Date: December 31, 2007
07-41 Member Firms are Reminded to Register with FINRA Associated Persons Who Also are Registered with Another SRO in a FINRA-Recognized Registration Category
07-40 SEC Approves Exception to Three Quote Rule and Related Recordkeeping Requirements for Certain Foreign Securities; Effective Date: September 28, 2007
07-39 SEC Approves Amendments Regarding OATS Routing Method Code for Intermarket Sweep Orders Effective Date: February 4, 2008
07-38 FINRA Extends Implementation of Rule Amendments Relating to Non-Tape (Or Clearing-Only) Reports for Previously Executed Trades Revised Effective Date: November 5, 2007
07-36 FINRA Clarifies Guidance Relating to SEC Regulation S-P under Notice to Members 07-06 (Special Considerations When Supervising Recommendations of Newly Associated Registered Representatives to Replace Mutual Funds and Variable Products)
07-35 Extension of Temporary Relief from NYSE Rule 409(f) (Statements of Accounts to Customers) to January 1, 2008
07-34 SEC Approves Amendments Relating to the Issuer-Directed Provisions of Rule 2790; Effective Date: September 5, 2007
07-33 FINRA Adopts Rule Amendments Relating to Non-Tape (or Clearing-Only) Reports for Previously Executed Trades; (Including Step-outs, Reversals and Riskless Principal Transactions) Effective Date: September 4, 2007
07-32 NASD Amends Rule 3013 and Interpretive Material 3013 to Permit Members to Designate Co-Chief Executive Officers and Multiple Chief Compliance Officers; Compliance Date: July 16, 2007
07-31 NASD Rule Changes to Conform with Amendments to SEC Rule 10a-1 and Regulation SHO; Compliance Date: July 6, 2007
07-30 NASD and NYSE Request Comment on Proposed Joint Guidance Regarding the Review and Supervision of Electronic Communications; Comment Period Expires July 13, 2007
07-29 SEC Approves Rule 2342 Setting Forth Requirements for Providing SIPC Information to Customers; Effective Date: November 6, 2007
07-28 SEC Approves Additional Mark-Up Policy for Transactions in Debt Securities, Except Municipal Securities; Effective Date: July 5, 2007
07-27 NASD Requests Comment on Proposed Rule 2721 to Regulate Member Private Securities Offerings; Comment Period Expires July 20, 2007
07-26 Securities Industry/Regulatory Council on Continuing Education Issues Firm Element Advisory Update
07-25 NASD Provides Guidance Concerning Trade Reporting Obligations for Transactions in Foreign Securities and American Depositary Receipts
07-24 New Requirement for the Reporting of Consolidated Short Interest Positions to the Intermarket Surveillance Group (ISG); Effective September 2007
07-21 Reporting of Transactions in TRACE-Eligible Securities With Execution Dates More Than T+365 Days Before Date of Report; TRACE System Enhancement Effective on June 4, 2007
07-20 NASD Amends Rules 1012 and 1013 to Require Applicants for Membership to Submit Applications Using Online Form NMA; Implementation Date: May 7, 2007; Compliance Date: May 31, 2007
07-19 SEC Approves Amendments to Expand IM-2110-2 to Include OTC Equity Securities; Effective Date: July 26, 2007
07-18 SEC Approves Amendments to TRACE Reporting Exempting Trades in TRACE-Eligible Securities Conducted on a Facility of, and Reported to, the New York Stock Exchange; Effective Date: January 9, 2007
07-17 NASD and NYSE Joint Release Regarding Special Measures against Specified Banks Pursuant to Section 311 of the USA PATRIOT Act
07-15 SEC Approves Amendments to TRACE Rules to Reflect the Availability of TRACE "Snapshot" Data for a Reduced Monthly Fee; Effective Date: May 1, 2007
07-14 Portfolio Margin Risk Disclosure Statement and Written Acknowledgement to be Furnished to Customers Using a Portfolio Margin Account
07-13 SEC Approves Amendments to NASD Code of Arbitration Procedure Concerning Subpoenas and Payment of Arbitrators; Effective Date: April 2, 2007
07-12 NASD Requests Comment on Proposed Amendments to Rules 3010(g) and 2711 in Connection with the Rule Harmonization Project with the NYSE; Comment Period Expires April 9, 2007
07-11 Amendment to Margin Rules to Establish a Portfolio Margin Pilot Program; Effective Date: April 2, 2007
07-10 SEC Approves Changes to NASD Interpretive Material 8310-2 Regarding the Release of Information through NASD BrokerCheck; Effective Date: March 19, 2007
07-09 SEC Approves Amendments to NASD Rules to Modify and Expand NASD's Authority to Initiate Trading and Quotation Halts in Over-the-Counter (OTC) Equity Securities; Effective Date: March 16, 2007
07-07 SEC Approves Revision of Customer and Industry Portions of NASD Code of Arbitration Procedure; Effective Date: April 16, 2007
07-06 Special Considerations When Supervising Recommendations of Newly Associated Registered Representatives to Replace Mutual Funds and Variable Products
07-05 Amendments to the Fees for Filing Offering Documents by Well-Known Seasoned Issuers Pursuant to the Corporate Financing Rule; Effective Date: February 26, 2007
07-03 NASD Announces SEC Approval of Amendments to Rule 2860 and Issues Guidance Concerning Large Options Position Reports and Aggregation of Certain Positions; Effective Date of Amendments February 12, 2007
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07-64 SEC approves amendments to NASD Rule 3010(g)(1) to Exempt Locations that Solely Conduct Final Approval of Research Reports; Effective Date: December 19, 2007
Office of Supervisory Jurisdiction Definition
| Regulatory Notice | |
Notice Type |
Referenced Rules & Notices NTM 07-12 NASD Rule 3010 NYSE Information Memo 05-74 NYSE Information Memo 06-13 |
| Suggested Routing Corporation Finance Legal Registration Senior Management Branch Office |
Key Topic(s) Office of Supervisory Jurisdiction Research Reports Supervision Uniform Branch Office Definition |
Executive Summary
Effective December 19, 2007, locations that solely conduct final approval of research reports are exempt from the definition of Office of Supervisory Jurisdiction.1 NASD Rule 3010(g)(1), as amended, is set forth in Attachment A.
Questions concerning this Notice should be directed to Rachael Grad, Counsel, Office of General Counsel, at (202) 728-8290.
Background & Discussion
The SEC has approved an amendment to NASD Rule 3010(g)(1) to exempt from the definition of Office of Supervisory Jurisdiction (OSJ) those locations that solely conduct final approval of research reports.2 The amendment allows FINRA to classify such locations consistently under both NASD and the incorporated NYSE rules.
In July 2006, amendments to the branch office definition under NASD Rule 3010(g)(2) went into effect (Uniform Branch Office Definition).3 The Uniform Branch Office Definition was developed by FINRA (then NASD), the NYSE and the North American Securities Administrators Association (NASAA) to establish a broad national standard. In conjunction with the new Uniform Branch Office Definition, a new Form BR was introduced to provide a more efficient, standardized method for member firms to register branch office locations.
While FINRA and the NYSE sought to adopt consistent interpretations of the new Uniform Branch Office Definition, they classified differently locations where final approval by a principal of research reports occurs. Under NASD rules, final review of advertising or sales literature (which includes research reports) makes a location an OSJ, and therefore a branch office. The NYSE rules, however, do not include an OSJ definition, and NYSE stated in Information Memos 05-74 and 06-13 that it deems a location where a member firm stations a Series 16 qualified supervisory analyst solely to review research reports as a "non-sales" location, which is an express exclusion from the Uniform Branch Office Definition.4 Because of the definition of OSJ set forth in NASD Rule 3010(g)(1), FINRA could not classify such locations as "non-sales" locations under NASD rules, unless the review of the research reports conducted from such locations constituted something less than final approval.5
The SEC recently approved the amendment to NASD Rule 3010(g)(2) to exclude locations that solely conduct final approval of research reports from the definition of OSJ. As a result of this amendment, FINRA is of the view that a location where a member firm conducts final approval of research reports may be considered a "non-sales" location for purposes of NASD Rule 3010(g)(2), the Uniform Branch Office Definition, provided no other activities at such location would require branch office registration.
1 See Securities Exchange Act Release No. 56585 (October 1, 2007) 72 FR 57081 (October 5, 2007) (Notice of Filing of Proposed Rule Change Relating to Amending the Definition of Office of Supervisory Jurisdiction in NASD Rule 3010(g)(1) to Exempt Locations that Solely Conduct Final Approval of Research Reports; SR-FINRA-2007-008).
2 NASD Rule 3010(g)(1) defines the term OSJ to mean any office of a member at which any one or more of the following functions take place: (a) order execution and/or market making; (b) structuring of public offerings or private placements; (c) maintaining custody of customers' funds and/or securities; (d) final acceptance (approval) of new accounts on behalf of the member; (e) review and endorsement of customer orders, pursuant to NASD Rule 3010(d); (f) final approval of advertising or sales literature for use by persons associated with the member, pursuant to NASD Rule 2210(b)(1); or (g) responsibility for supervising the activities of persons associated with the member at one or more other branch offices of the member.
3 See Securities Exchange Act Release No. 52403 (September 9, 2005); 70 FR 54782 (September 16, 2005) (Order Granting Approval of Proposed Rule Change Relating to Proposed Uniform Branch Office Definition; SR-NASD-2003-104).
4 See NYSE Information Memo 05-74 (October 6, 2005) (Branch Office Definition) ("An example of a non-sales location would be where a member or member organization stations a Series 16 qualified supervisory analyst in an office of a foreign affiliate, solely to review research reports") and NYSE Information Memo 06-13 (March 22, 2006) (Joint Interpretive Guidance from NYSE and NASD Relating to the Uniform Branch Office Definition, Question and Answer #5).
5 Compare NYSE Information Memo 06-13 (March 22, 2006) (Joint Interpretive Guidance from NYSE and NASD Relating to the Uniform Branch Office Definition, Question and Answer #5) with NASD Notice to Members 06-12 (March 2006) (Uniform Branch Office Definition, Question and Answer #5).
Attachment A
New language is underlined.
3010 Supervision
