[Federal Register Volume 76, Number 120 (Wednesday, June 22, 2011)]
[Notices]
[Pages 36586-36596]
[FR Doc No: 2011-15450]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64687; File No. SR-FINRA-2011-013]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Amendment No. 1 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 1, Establishing a Registration Category, Qualification
Examination and Continuing Education Requirements for Certain
Operations Personnel, and Adopt FINRA Rule 1250 (Continuing Education
Requirements) in the Consolidated FINRA Rulebook

 June 16, 2011.

I. Introduction

    On March 4, 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 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt FINRA Rule 1230(b)(6) to establish a
registration category and qualification examination requirement for
certain operations personnel. The proposed rule change also would adopt
continuing education requirements for such operations personnel and
adopt NASD Rule 1120 (Continuing Education Requirements) as FINRA Rule
1250 (Continuing Education Requirements) in the consolidated FINRA
rulebook with minor changes. The proposed rule change was published for
comment in the Federal Register on March 18, 2011.\3\ The Commission
received seventeen comment letters on the proposed rule change.\4\ On
June 15, 2011, the Commission received from FINRA a Response to
Comments and Partial Amendment No. 1 to the proposed rule change.\5\
The Commission is publishing this notice and order to solicit comment
on Amendment No. 1 and to approve the proposed rule change, as modified
by Amendment No. 1, 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. 64080 (March 14,
2011), 76 FR 15012 (March 18, 2011) (``Notice'').
    \4\ See comment letters submitted by Corey N. Callaway, CEO,
Callaway Financial Services, Inc., dated March 22, 2011
(``Callaway''); Jeffrey B. Williams, Vice President & Chief
Compliance Officer, Northwestern Mutual Investment Services, LLC,
dated March 25, 2011 (``NMIS''); Z. Jane Riley, Chief Compliance
Officer, The Leaders Group, Inc./TLG Advisors, Inc., dated April 6,
2011 (``TLG''); Matthew J. Gavaghan, Associate General Counsel,
Janney Montgomery Scott LLC, dated April 8, 2011 (``JMS''); Pam
Lewis Marlborough, Associate General Counsel, TIAA-CREF Individual &
Institutional Services, LLC, dated April 8, 2011 (``T-C Services--
1''); James Livingston, President/Chief Executive Officer, National
Planning Holdings, Inc., dated April 8, 2011 (``NPH''); D. Grant
Vingoe, Partner, Arnold & Porter LLP, dated April 8, 2011 (``A&P'');
David T. Bellaire, General Counsel and Director of Government
Affairs, Financial Services Institute, dated April 8, 2011
(``FSI''); Joan Hinchman, Executive Director, CEO and President,
National Society of Compliance Professionals Inc., dated April 8,
2011 (``NSCP''); Ronald C. Long, Director of Regulatory Affairs,
Wells Fargo Advisors, LLC, dated April 8, 2011 (``WFA''); Bari
Havlik, SVP and Chief Compliance Officer, Charles Schwab & Co.,
Inc., dated April 8, 2011 (``Schwab''); Sutherland Asbill & Brennan
LLP, on behalf of the Committee of Annuity Insurers, dated April 8,
2011 (``Sutherland''); Jesse D. Hill, Director of Regulatory
Relations, Edward Jones, dated April 8, 2011 (``Edward Jones'');
James T. McHale, Managing Director and Associate General Counsel,
SIFMA, dated April 29, 2011 (``SIFMA''); David S. Massey, President,
North American Securities Administrators Association, dated May 2,
2011 (``NASAA''); John W. Curtis, Managing Director, General
Counsel--Global Compliance, Goldman, Sachs & Co., dated May 3, 2011
(``Goldman''); and Pam Lewis Marlborough, Associate General Counsel,
TIAA-CREF Individual & Institutional Services, LLC, dated May 4,
2011 (``T-C Services--2'').
    \5\ See letter from Erika A. Lazar, FINRA, to Elizabeth Murphy,
Secretary, SEC, dated June 15, 2011 (``Response Letter''). The text
of the proposed rule Amendment No. 1 and FINRA's Response Letter are
available on FINRA's Web site at http:[sol][sol]www.finra.org, at
the principal office of FINRA, on the Commission's Web site at
http:[sol][sol]www.sec.gov, and at the Commission's Public Reference
Room.
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II. Description of Proposed Rule Change and Summary of Comments

    As described in Exchange Act Release No. 64080,\6\ FINRA is
proposing to adopt FINRA Rule 1230(b)(6) to establish a registration
category and qualification examination requirement for certain
operations personnel. The proposed rule change also would adopt
continuing education requirements for such operations personnel and
adopt NASD Rule 1120 (Continuing Education Requirements) as FINRA Rule
1250 (Continuing Education Requirements) in the consolidated FINRA
rulebook with minor changes. All of the commenters opposed the rule in
whole or in part.
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    \6\ See note 3 supra.
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    FINRA's responses to comments and explanation of the changes to the
proposed rule change made by Amendment No. 1 are described below.

A. Covered Persons

    Proposed FINRA Rule 1230(b)(6)(A) sets forth three categories of
persons that would be subject to the proposed registration,
qualification and continuing education requirements for an Operations
Professional.\7\ These categories are:
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    \7\ See Notice, note 3 supra.
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    (1) Senior management with responsibility over the covered
functions;\8\
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    \8\ Covered functions are discussed further in Part B below.
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    (2) Supervisors, managers or other persons responsible for
approving or authorizing work, including work of other persons, in
direct furtherance of the covered functions; and
    (3) Persons with the authority or discretion materially to commit a
member's capital in direct furtherance of the covered functions or to
commit a member to any material contract or agreement (written or oral)
in direct furtherance of the covered functions.
    One commenter supports limiting the scope of covered persons to
supervisory personnel.\9\ Three commenters are concerned about the
impact of the proposed rule change on arrangements between members and
third-party service providers, and request that FINRA limit the
proposal to ``associated persons'' of a member.\10\ One such commenter
requests an analysis of FINRA rules, the Securities Exchange Act of
1934 (``Exchange Act'') and SEC rules to allay concerns of unexpected
or unintended applications, interpretations and consequences with
respect to sweeping employees of third-party service providers into the
categories of associated and registered persons.\11\
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    \9\ TLG.
    \10\ NSCP, Schwab and SIFMA.
    \11\ Schwab.
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    Another commenter states that limiting the proposal to associated
persons would assist members in interpreting the proposed rule and
resolve complicated jurisdictional and practical issues, since
requiring firms to license employees of third-parties raises many
complex issues including contract negotiations with vendors determining
which member firm should sponsor the registrations of a vendor's
employees and which firm should ``supervise'' such employees when a
single vendor serves multiple members.\12\ Additionally, the commenter
suggests changing the title of proposed Rule 1230(b)(6)(A) from
``Requirement'' to ``Covered Persons'' and limiting this provision to
the following: ``[e]ach of the following associated persons of a
member, charged with responsibility for overseeing and protecting the
functional and control integrity of the covered functions in paragraph
(b)(6)(B) of this Rule, shall be required to register as an Operations
Professional.'' \13\ The commenter notes that this language, in part,
mirrors descriptive language used

by FINRA in the Notice. The commenter believes that the proposed rule
change significantly expands FINRA's regulation of outsourced
activities and requests that such authority be addressed as part of
FINRA's outsourcing proposal.\14\ Another commenter requests that FINRA
limit covered persons to employees of a member, given that the current
proposal would result in a great deal of subjectivity by members to
identify covered persons, and in light of a member's supervisory
obligations for outsourced functions under current FINRA guidance.\15\
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    \12\ SIFMA.
    \13\ SIFMA.
    \14\ SIFMA. See also Regulatory Notice 11-14 (Third-Party
Service Providers).
    \15\ NSCP.
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    FINRA responded that, as stated in the Notice, it believes that any
person who meets the definition of a covered person in proposed Rule
1230(b)(6)(A) and engages in one or more of the covered functions in
proposed Rule 1230(b)(6)(B) on behalf of a member must register as an
Operations Professional, regardless of whether such person works
internally at a member, an affiliate or third-party service provider
because they are performing regulated broker-dealer functions on behalf
of a member.\16\ FINRA believes that covered persons interact in areas
of a member that have a meaningful connection to client funds, accounts
and transactions and are involved in significant decisions that can
raise compliance issues for a firm.\17\ Also, FINRA states that, as
noted in the Notice, the proposed rule change does not alter the
definition of an associated person; rather, it imposes registration,
qualification examination and continuing education requirements on
persons who meet the depth of personnel criteria and engage in one or
more of the covered functions on behalf of a member.\18\
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    \16\ Response Letter.
    \17\ Id.
    \18\ Id.
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    In its Response Letter, FINRA stated that the alternative rule text
suggested by the commenter above \19\ would not change the application
of the proposed rule because, by virtue of their activities on behalf
of the member, the covered persons have been and continue to be
associated persons of such member.\20\ FINRA stated that Associated
person status is not determined at the discretion of a member firm
based on the location from which particular personnel are performing
functions on behalf of the firm; associated person status attaches to
persons who are involved in the securities and investment banking
business of a member firm and the covered functions in the proposed
rule represent a part of that business of a member firm.\21\ Moreover,
FINRA notes that the scope of covered persons and covered functions set
forth in proposed Rule 1230(b) is not exhaustive in terms of who may be
considered an associated person of the member based on the nature of
the operations activities being conducted on behalf of a member.\22\
Rather, FINRA has made a determination that the persons subject to the
proposed rule change are engaged in members' operations activities of
such significance to require registration, qualification examination
and continuing education requirements.\23\ FINRA, however, notes that
it is proposing to amend the title of paragraph (b)(6)(A) to proposed
Rule 1230 to ``Covered Persons'' from ``Requirement'' to better reflect
the content of the paragraph.\24\
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    \19\ See supra note 13 and accompanying text.
    \20\ Response Letter.
    \21\ Id.
    \22\ Id.
    \23\ Id.
    \24\ Id.
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    Two commenters note the prevalence of shared resources models, in
which shared services are provided to different legal entities within a
large financial company, and the challenges raised by the proposed rule
for firms in determining whether certain individuals previously not
identified as associated persons would now be subject to the rules
applicable to associated and registered persons.\25\ One commenter
requests clarification that only the Operations Professional and not
his or her supervisors or subordinates would be considered associated
persons of the member.\26\ The commenter also suggests that FINRA's
jurisdiction should not extend to any of the affiliated entities that
may employ an Operations Professional.\27\
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    \25\ NPH and Sutherland.
    \26\ Sutherland.
    \27\ Sutherland.
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    FINRA responds that members are free to use shared services models
because associated person status does not turn on employment.\28\ FINRA
notes that the proposed rule does not define associated persons;
rather, it defines which associated persons involved in the operation
of a member's investment banking and securities business must register
as an Operations Professional.\29\ FINRA says that firms must view each
person's responsibilities in connection with the covered functions
independently to determine who must register.\30\
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    \28\ Response Letter.
    \29\ Id.
    \30\ Id.
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    One commenter believes the proposed rule change is unfairly
burdensome on small firms, since it will make it impossible to obtain
and retain employees, in particular the potential registration of
independent Information Technology (``IT'') personnel and other
similarly outsourced functions.\31\ Another commenter states that
rather than requiring individuals at both the introducing broker-dealer
and clearing firm to register and test under the proposed rule, FINRA
should amend FINRA Rule 4311 (Carrying Agreements) to require that
parties to a clearing agreement specifically designate the party
responsible for any shared functions in the clearing agreement to
reduce the economic and resource burden of requiring all individuals
who meet the criteria of a covered function to register under the
proposal.\32\
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    \31\ Callaway.
    \32\ FSI. The SEC recently approved new FINRA Rule 4311. See
Exchange Act Release No. 63999 (Mar. 1, 2011), 76 FR 12380 (Mar. 7,
2011). The rule becomes effective on August 1, 2011. See Regulatory
Notice 11-26.
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    As further discussed in the Notice, FINRA does not believe that
small firms would be overly burdened by the proposed rule change.\33\
FINRA anticipates that many persons who would be subject to the new
Operations Professional registration category would qualify for the
proposed exception from the qualification examination based on existing
registrations, and FINRA would not assess a separate registration fee
for persons relying on the proposed exception to register as Operations
Professionals.\34\ FINRA says, moreover, that the impact of the
proposed rule change is expected to be minimal as the majority of the
covered functions are typically performed by a carrying and clearing
firm pursuant to a clearing arrangement.\35\ In such cases, it may be
possible for a small firm to rely on limited persons, perhaps the
Financial and Operations Principal, to liaise with the carrying and
clearing firm regarding those covered functions. FINRA stated that, as
further discussed in the Notice, a covered person would not be
considered an associated person of both the introducing and clearing
firms based solely on functions performed pursuant to a carrying
agreement approved under FINRA Rule 4311 (Carrying Agreements).\36\
FINRA indicated that it would not expect dual registration as an
Operations Professional in such cases.\37\

In addition, as further discussed in Section F below, the proposed rule
change provides a 120-day grace period for non-Day-One Professionals
associated with a non-clearing firm to pass a qualification
examination.\38\
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    \33\ Response Letter.
    \34\ Id.
    \35\ Id.
    \36\ Id.
    \37\ Id.
    \38\ Id.
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    One commenter believes that the depth of personnel and covered
functions are so loosely worded as to potentially capture activities
performed in a number of areas of a member firm, including, but not
limited to, Operations, Finance, Treasury, Information Technology
(``IT''), Information Security (``IS''), Marketing and Sales.\39\ FINRA
agrees with the commenter that covered persons may be designated in
multiple areas of a member (or outside the member) depending on the
business structure of the firm.\40\ FINRA stated that the proposed rule
change is function-based and, therefore, not conditioned upon an
individual's relationship to a particular department within a firm.\41\
FINRA said that, in developing the proposed rule change and with the
input of industry representatives, they identified operations functions
that significantly impact a member's business and have the potential to
harm the member, a customer, the integrity of the marketplace or the
public.\42\
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    \39\ T-C Services--1.
    \40\ Response Letter.
    \41\ Id.
    \42\ Id.
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    Several commenters have concerns regarding the application of
proposed Rule 1230(b)(6)(A)(i) (``[s]enior management with
responsibility over the covered functions'') to senior management up
the chain of command. One commenter questions how far up the chain of
command this provision is intended to go (i.e., whether it is intended
to reach the CEO) and recommends limiting it to persons with ``direct''
or ``primary'' responsibility for the covered functions.\43\ The
commenter requests express guidance that a firm's Chief Information
Officer, Chief Technology Officer or other senior executives
responsible for a firm's overall IT function would not be required to
register if not directly or primarily responsible for a covered
function.\44\ Another commenter suggests the proposed rule be limited
to ``senior management directly responsible for supervising or
overseeing the covered functions to ensure integrity and compliance
with the Federal securities laws and regulations and FINRA rules.''
\45\ The commenter notes that a firm's Chief Technology Officer and
other technology or information security executives may be deemed
senior management responsible for a covered function, even though their
roles are supportive in nature, and other executives who hold other
licenses would also be required to register (i.e., Marketing and Sales
executives who design customer confirms or assist in customer data
collection at account opening).\46\ The commenter posits that if these
executives are required to register, individuals down the chain of
command would also be subject to the proposal, which the commenter
finds unnecessary and redundant.\47\ The commenter also requests that
the SEC not approve the proposed rule change unless FINRA limits
covered persons to those individuals with ``significant
responsibilities or substantial decision-making authority regarding
operational issues.'' \48\
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    \43\ SIFMA.
    \44\ SIFMA.
    \45\ T-C Services--1.
    \46\ T-C Services--1.
    \47\ T-C Services--1.
    \48\ T-C Services--2 (referencing remarks made by Richard
Ketchum, Chairman and CEO of FINRA).
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    To clarify proposed Rule 1230(b)(6)(A)(i), FINRA is amending the
proposed rule change to provide that the first category of covered
persons would include senior management with direct responsibility over
the covered functions.\49\ FINRA states that it believes this proposed
change will better enable members to identify who must register as an
Operations Professional so that senior management with an indirect
relationship to the covered functions are not subject to the proposed
registration, qualification examination and continuing education
requirements; however, members must ensure senior management that sign
off on the covered functions and who are responsible for ensuring the
covered functions are executed in compliance with the Federal
securities laws and regulations and FINRA rules are properly
registered.\50\ FINRA states that the proposal's aim is not to require
registration for personnel with an indirect connection to the covered
functions.\51\
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    \49\ Response Letter.
    \50\ Id.
    \51\ See also proposed FINRA Rule 1230.06 (Scope of Operations
Professional Requirement) (excluding from registration those persons
whose activities are limited to performing a function ancillary to a
covered function, or whose function is to serve a role that can be
viewed as supportive of or advisory to the performance of a covered
function).
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    One commenter suggests that proposed Rule 1230(b)(6)(A)(ii)
(``[s]upervisors, managers or other persons responsible for approving
or authorizing work, including work of other persons, in direct
furtherance of the covered functions'') is too broad and may include
employees below the decision-making level and further suggests
replacing this provision with language in the Notice: ``[p]ersons who
are directly responsible for overseeing that tasks within the covered
functions are performed correctly in accordance with industry rules,
firm protocols, policies and procedures, and who are charged with
protecting the functional and control integrity of the covered
functions for a member.'' \52\ The commenter believes that this
language also would make proposed Rule 1230(b)(6)(A)(iii)
unnecessary.\53\
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    \52\ WFA.
    \53\ WFA.
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    To clarify proposed Rule 1230(b)(6)(A)(ii), FINRA is proposing to
amend the proposed rule to provide that the second category of covered
persons would include any person designated by senior management
specified in Rule 1230(b)(6)(A)(i) as a supervisor, manager or other
person responsible for approving or authorizing work, including work of
other persons, in direct furtherance of each of the covered functions,
as applicable, provided that there is sufficient designation of such
persons by senior management to address each of the applicable covered
functions.\54\ FINRA believes the change to proposed Rule
1230(b)(6)(A)(ii) helps to clarify that senior management of a firm may
designate the next tier of management or other persons responsible for
approving or authorizing work in direct furtherance of the covered
functions, in accordance with reasonable business practices.\55\ In
addition, FINRA stated that any person who qualifies as a covered
person is responsible for ensuring that the covered functions are
performed correctly in accordance with industry rules, firm protocols,
policies and procedures by virtue of their position.\56\ FINRA stated
that it believes this concept, as introduced by FINRA in the Notice to
elaborate generally on the role of covered persons, is implicit in each
of the three categories of covered persons in proposed Rule
1230(b)(6)(A)(i) through (iii).\57\
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    \54\ Response Letter.
    \55\ Id.
    \56\ Id.
    \57\ Id.
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    One commenter requests that proposed Rule 1230(b)(6)(A)(iii)
(``[p]ersons with the authority or discretion materially to commit a
member's capital in direct furtherance of the covered functions or to
commit a

member to any material contract or agreement (written or oral) in
direct furtherance of the covered functions'') be amended to state that
only written contracts are within its scope to avoid confusion arising
from interpreting when an oral contract may arise in the context of
back-office operations.\58\ FINRA stated that it does not intend to
amend the proposal as suggested by the commenter.\59\ FINRA said the
parenthetical language that makes express that both written and oral
contracts are included in the proposed rule derives from NYSE Rule
345.10 in the definition of a ``securities lending representative.''
\60\ FINRA stated that it believes that any contract or agreement,
written or oral, that materially commits a member in direct furtherance
of the covered functions (not just in the context of a securities
lending arrangement) is of a nature requiring the registration of the
person making such commitment on behalf of the member.\61\
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    \58\ SIFMA.
    \59\ Response Letter.
    \60\ Id.
    \61\ Id.
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    One commenter requests clarification regarding the statement in the
Notice which provides ``covered functions generally would not include a
person who engages in administrative responsibilities, such as an
initial drafter or code developer. A person who supervises or approves
such activities, however, generally would be required to register as an
Operations Professional.'' \62\ The commenter believes this statement
runs counter to the proposed supplementary material excluding ancillary
functions to a covered function since such supervisor or approver may
not have primary responsibility for a covered function.\63\ FINRA notes
that the proposed rule change does not require primary responsibility
for a covered function to trigger registration.\64\ FINRA stated that a
person who signs off on and/or supervises the activities or personnel
involved in writing code to implement firm systems and business
requirements is not performing a function that is ancillary to a
covered function because their responsibility has a direct nexus to the
execution of an activity covered by the proposed rule at a supervisory
level.\65\
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    \62\ T-C Services--1.
    \63\ T-C Services--1.
    \64\ Response Letter.
    \65\ Id.
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    One commenter requests FINRA acknowledge that firms tailor their
supervisory and supervisory control procedures to reflect their
business size and organizational structure, and that as a result, the
hierarchy of supervisors registered as Operations Professionals will
vary depending on a particular firm's system of supervision and the
particular covered function.\66\ Additionally, the commenter requests
FINRA acknowledge it is not a presumption that all ``managers'' with
direct reports engaged in covered functions be registered if the
responsibility for supervision of the activity, as contemplated by NASD
Rule 3010, resides at a higher level of the organization.\67\
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    \66\ SIFMA.
    \67\ SIFMA.
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    FINRA stated that it believes the comment regarding firm
supervisory and supervisory control procedures is outside the scope of
the proposed rule change.\68\ FINRA noted that the proposed rule does
not include a requirement regarding a firm's supervisory and
supervisory control procedures.\69\ FINRA stated that members are
responsible for ensuring that any person who meets the requirements to
register as an Operations Professional is appropriately registered,
regardless of the firm's particular supervisory and supervisory control
procedures.\70\ Additionally, FINRA stated that the proposed rule
change creates a function-based registration requirement, so members
must examine the activities of their operations personnel to determine
who would be required to register.\71\ FINRA said it will not make
categorical exclusions based on a person's title or department.\72\
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    \68\ Response Letter.
    \69\ Id.
    \70\ Id.
    \71\ Id.
    \72\ Id.
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B. Covered Functions

    FINRA's proposed rule would require a person to register as an
Operations Professional if the person is a ``covered person''
(discussed in Part A above) with responsibility for one or more of 16
``covered functions.'' Proposed Rule 1230(b)(6)(B) defines covered
functions as: (i) Client on-boarding (customer account data and
document maintenance); (ii) collection, maintenance, re-investment
(i.e., sweeps) and disbursement of funds; (iii) receipt and delivery of
securities and funds, account transfers; (iv) bank, custody, depository
and firm account management and reconciliation; (v) settlement, fail
control, buy ins, segregation, possession and control; (vi) trade
confirmation and account statements; (vii) margin; (viii) stock loan/
securities lending; (ix) prime brokerage (services to other broker-
dealers and financial institutions); (x) approval of pricing models
used for valuations; (xi) financial control, including general ledger
and treasury; (xii) contributing to the process of preparing and filing
financial regulatory reports; (xiii) defining and approving business
requirements for sales and trading systems and any other systems
related to the covered functions, and validation that these systems
meet such business requirements; (xiv) defining and approving business
security requirements and policies for information technology,
including, but not limited to, systems and data, in connection with the
covered functions; (xv) defining and approving information entitlement
policies in connection with the covered functions; and (xvi) posting
entries to a member's books and records in connection with the covered
functions to ensure integrity and compliance with the Federal
securities laws and regulations and FINRA rules.
    One commenter urges the SEC to direct FINRA to revise the proposed
rule to remove and/or clarify certain covered functions not necessary
to achieve the stated objectives of the rule.\73\ Another commenter
finds certain covered functions unclear and notes firms will incur
unnecessary costs by broadly interpreting the covered functions to
include activities not intended to be covered by the proposed rule.\74\
Another commenter believes the proposed rule change may cause confusion
with the use of the term ``operations'' since the proposed rule spans
many different areas of a firm's business and is not limited to
``trading and operations,'' which is a distinct area of a firm handling
clearing, daily disbursements and account activity.\75\ One commenter
requests clarification that the covered functions do not cover
``client-facing'' or ``front-office'' personnel who may have some
involvement in a covered function (e.g., with respect to ``client on-
boarding'' in proposed Rule 1230(b)(6)(B)(i), the activities of
unregistered employees who assist in gathering new account forms/
documentation and information from customers as part of clerical or
administrative duties).\76\ The commenter requests this clarification

with respect to the other covered functions as well.\77\
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    \73\ NSCP.
    \74\ TLG.
    \75\ NPH.
    \76\ SIFMA.
    \77\ SIFMA.
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    FINRA notes that the proposed rule change would affect personnel
who meet the depth of personnel in proposed Rule 1230(b)(6)(A) and are
engaged in one or more covered functions in proposed Rule
1230(b)(6)(B), and does not distinguish on the basis of whether such
persons are ``client-facing'' or ``front-office'' personnel.\78\ FINRA
notes, however, that an unregistered employee who gathers documentation
and information in a purely clerical or ministerial capacity likely
would not be required to register as an Operations Professional based
on the supplementary material in proposed Rule 1230.06.\79\
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    \78\ Response Letter.
    \79\ Id.
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    One commenter requests guidance regarding the term ``client on-
boarding'' in proposed Rule 1230(b)(6)(B)(i) because certain terms
commonplace in a general securities business broker-dealer practice are
not readily transferable to variable annuity sales, and firms should
not be faced with the risk of non-compliance due to unclear rule
text.\80\ The commenter suggests it may be helpful to link each covered
function to FINRA or SEC customer account and recordkeeping rules,
similar to the text in proposed Rule 1230(b)(6)(B)(xvi).\81\ FINRA
declines to amend the proposed rule change to link each of the covered
functions to relevant FINRA or SEC rules as it is the responsibility of
members to determine the regulatory requirements applicable to the
firms' operations based on their activities.\82\ FINRA notes that
client on-boarding would include, but is not limited to, account
management activities such as customer account initiation and
maintenance, related party account information and maintenance,
maintaining client terms and conditions and maintaining contact
information.\83\ FINRA reminded members to view the covered functions
in the context of the depth of personnel in proposed Rule
1230(b)(6)(A).\84\
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    \80\ Sutherland.
    \81\ Sutherland.
    \82\ Response Letter.
    \83\ Id.
    \84\ Id.
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    One commenter suggests the covered functions be revised to identify
specific functions, responsibilities or activities related to the
covered functions (e.g., the covered function ``[t]rade confirmation
and account statements'' (proposed Rule 1230(b)(6)(B)(vi)) fails to
provide guidance on what functions, responsibilities or activities
related to the compilation and/or production of account statements
would require registration).\85\ The commenter notes that many
brokerage accounts include cash management features (e.g., linked
accounts, online bill pay and payroll check deposit), which are
provided via agreements with other financial institutions, and
transactional information related to these cash management services is
included in the brokerage account statements. The commenter notes that
the proposed rule would appear to require the member to register not
only the associated persons of the member firm but also the
supervisors, managers and others employed by non-member financial
institutions.\86\ Additionally, the commenter points out that broker-
dealers use exchanges and third-party service providers for pricing and
valuations under proposed Rule 1230(b)(6)(B)(x) (``[a]pproval of
pricing models used for valuations'') and believes that the entire
management chain of command at the exchanges or third-party service
providers may be required to register as an Operations Professional
with the member.\87\
---------------------------------------------------------------------------

    \85\ Schwab.
    \86\ Schwab.
    \87\ Schwab.
---------------------------------------------------------------------------

    FINRA stated that it views covered persons engaging in one or more
of the covered functions on behalf of the member to be associated
persons of the member, irrespective of their employing entity, and the
proposed rule would require such persons to be registered with FINRA as
an Operations Professional.\88\ However, FINRA recognizes the
distinction between shared services models and arrangements in which
another financial institution provides distinct cash management
services in connection with a brokerage account.\89\ In the latter
situation, FINRA states that it would not view the financial
institution's employees to be associated persons of the member.\90\
Moreover, with respect to proposed Rule 1230(b)(6)(B)(x), FINRA
recognizes that certain data elements may be purchased by a member as
part of its execution of certain covered functions, and would not view
employees of such providers of data elements to be associated persons
of the member based solely on these activities; however, FINRA notes
that the proposed rule does not speak to the propriety of relying on
one or more data elements provided by third parties.\91\
---------------------------------------------------------------------------

    \88\ Response Letter.
    \89\ Id.
    \90\ Id.
    \91\ Response Letter.
---------------------------------------------------------------------------

    One commenter requests that FINRA delete the parenthetical language
in FINRA Rule 1230(b)(6)(B)(ix) (``[p]rime brokerage (services to other
broker-dealers and financial institutions)'') because the term ``prime
brokerage'' is well understood in the industry and the term ``financial
institutions'' creates ambiguity since it is not defined in the
proposed rule.\92\ The commenter also recommends modifying proposed
Rule 1230(b)(6)(B)(x) (``[a]pproval of pricing models used for
valuations'') to ``approval of pricing models used for the valuation of
customer holdings'' since, as proposed, it may sweep in firm risk
management or credit functions, which the commenter believes are
outside the intent of the proposed rule change.\93\ FINRA stated that
it does not intend to amend these provisions and notes that the
commenter did not provide details regarding the perceived ambiguity in
proposed Rule 1230(b)(6)(B)(ix).\94\ With respect to the commenter's
concerns with proposed Rule 1230(b)(6)(B)(x), FINRA does not intend to
regulate risk management practices of firms through the proposed
rule.\95\ FINRA stated that nothing in the proposed rule is meant to
reach the risk management function of modeling used by firms to
calculate capital, margin or liquidity requirements.\96\ However, FINRA
notes that this provision is not limited to valuations of customer
holdings and would include firm holdings of inventory positions.\97\
---------------------------------------------------------------------------

    \92\ SIFMA.
    \93\ SIFMA.
    \94\ Response Letter.
    \95\ Id.
    \96\ Id.
    \97\ Response Letter.
---------------------------------------------------------------------------

    Three commenters suggest FINRA refine proposed Rule
1230(b)(6)(B)(xii) (``[c]ontributing to the process of preparing and
filing financial regulatory reports'') because the phrase
``contributing to the process of'' is overly broad, interjects
unnecessary uncertainty as to who qualifies as a covered person and is
inconsistent with the depth of staff concept in subparagraph (A) of the
proposed rule.\98\ One commenter recommends refining this provision to
focus more on the development, creation and maintenance of financial
regulatory reports.\99\ Another commenter notes that as proposed the
function may capture numerous areas that merely provide a support
function, including IT, legal and compliance and any area of a

member firm that provides information included in the report.\100\
---------------------------------------------------------------------------

    \98\ SIFMA, T-C Services--1 and WFA.
    \99\ WFA.
    \100\ T-C Services--1.
---------------------------------------------------------------------------

    FINRA stated that it does not intend to amend proposed Rule
1230(b)(6)(B)(xii) because it believes this provision captures the
appropriate spectrum of personnel as proposed.\101\ FINRA also
reiterates that only persons who are both covered persons and conduct
activities or functions in one or more of the covered functions would
be subject to the new Operations Professional registration category,
and that proposed FINRA Rule 1230.06 specifically excludes persons
whose activities are limited to performing a function ancillary to a
covered function, or whose function is to serve a role that can be
viewed as supportive of or advisory to the performance of a covered
function (e.g., internal audit, legal or compliance personnel who
review but do not have primary responsibility for any covered
function), or who engages solely in clerical or ministerial activities
in a covered function.\102\
---------------------------------------------------------------------------

    \101\ Response Letter.
    \102\ Response Letter.
---------------------------------------------------------------------------

    One commenter urges FINRA to refine the scope and application of
proposed FINRA Rule 1230(b)(6)(B)(xiv) (``[d]efining and approving
business security requirements and policies for information technology,
including, but not limited to, systems and data, in connection with the
covered functions'') because it could sweep in virtually all
individuals who work in a firm's IT department.\103\ Another commenter
suggests the covered functions in proposed FINRA Rule
1230(b)(6)(B)(xiii), (xiv), and (xv) should specifically exclude
persons executing technical requirements defined and approved by
individuals who are supervised by one or more Operations Professionals
since, as currently drafted, the proposed rule could sweep in senior
management and other supervisors and managers in the IT and IS
departments that merely execute the instructions of an area
appropriately staffed by an Operations Professional chain of
command.\104\ One commenter notes that the covered functions in
proposed FINRA Rule 1230(b)(6)(B)(xiii) through (xv) are extraneous
because personnel in technology do not define and approve business
requirements or define and approve business security requirements
autonomously without oversight and approval from personnel in the
covered functions for which the systems are being designed, and any
technology personnel working directly in a covered function would be
subsumed by such covered function and do not require a separate
provision.\105\ The commenter believes that subparagraphs (xiii)
through (xv) are ambiguously worded and confusing, and suggests
consolidating the technology covered functions into one function as
follows: ``information technology (including information security)
supporting the other covered functions in paragraph (b)(6)(B) of this
Rule.'' \106\ The commenter suggests supplementary material to the
proposed rule to exclude junior technical experts leading a project
team from registration as an Operations Professional.\107\ The
commenter also requests a grace period for passing the examination for
technology managers who move into a position requiring registration
given that they move from area to area in a large firm and it may be
disruptive to firms.\108\
---------------------------------------------------------------------------

    \103\ FSI.
    \104\ T-C Services--1.
    \105\ Goldman.
    \106\ Goldman.
    \107\ Goldman.
    \108\ Goldman.
---------------------------------------------------------------------------

    Two commenters request clarification that the proposed rule applies
only to those who sign off on requirements and perform testing to
validate systems rather than those who build and implement the systems
because a broader application of the rule would create significant
challenges to the reallocation of technology resources as projects
emerge across firms and could lead to challenges in recruiting
technology professionals to work in the securities industry.\109\ One
commenter requests that FINRA clarify language in the rule filing that
may conflict with the proposed rule text in proposed Rule
1230(b)(6)(B)(xiii) because it creates ambiguity by suggesting that
supervisors of IT development teams that do not define, approve or
validate systems may have to register as an Operations Professional,
while the proposed rule does not require it.\110\
---------------------------------------------------------------------------

    \109\ Edward Jones and SIFMA.
    \110\ SIFMA. The Proposing Release noted that ``the covered
functions generally would not include a person who engages in
administrative responsibilities, such as an initial drafter or a
code developer'' but ``a person who supervises or approves such
activities generally would be required to register as an Operations
Professional.''
---------------------------------------------------------------------------

    FINRA stated that it does not intend to make the suggested changes
to proposed Rule 1230(b)(6)(B)(xiii) through (xv) as suggested by the
commenters because it believes these provisions are clear as
proposed.\111\ FINRA notes that comments asserting that a covered
function could sweep an entire IT department into the proposed
registration category for Operations Professionals fail to consider the
covered functions in the context of the depth of personnel set forth in
proposed Rule 1230(b)(6)(A).\112\ FINRA stated that it does not agree
that an entire IT or IS department is likely to meet such a threshold.
Member firms are responsible for determining the personnel in IT and IS
departments that are engaged in the covered functions at the depth of
personnel set forth in proposed Rule 1230(b)(6)(A).
---------------------------------------------------------------------------

    \111\ Response Letter.
    \112\ Id.
---------------------------------------------------------------------------

    One commenter requests that FINRA revise the language in proposed
Rule 1230(b)(6)(B)(xvi) (``[p]osting entries to a member's books and
records in connection with the covered functions to ensure integrity
and compliance with the Federal securities laws and regulations and
FINRA rules'') to distinguish that only those who define that process,
determine how the work is performed and approve the entries be required
to register under this provision, akin to the covered functions in
proposed Rule 1230(b)(6)(B)(xiii) and (xiv).\113\ One commenter
recommends deleting proposed Rule 1230(b)(6)(B)(xvi) as redundant
because part of the obligation of those performing the covered
functions in subparagraphs (i) through (xv) is to comply with the
regulatory requirements regarding books and records related to such
covered functions.\114\
---------------------------------------------------------------------------

    \113\ WFA.
    \114\ SIFMA.
---------------------------------------------------------------------------

    FINRA stated that it views the covered function relating to a
member's books and records in proposed Rule 1230(b)(6)(B)(xvi) as
clearly distinguishable from the IT functions in proposed Rule
1230(b)(6)(B)(xiii) and (xiv), so does not intend to amend the proposed
rule as recommended by the commenter.\115\ FINRA explains that it is
addressing covered persons who define and approve IT systems in one
context and covered persons responsible for the function of posting
entries to the member's books and records in the other.\116\
Additionally, FINRA states that it believes that the covered function
in proposed Rule 1230(b)(6)(B)(xvi) is necessary to make clear that
covered persons responsible for books and records posting activities in
connection with the covered functions are subject to the proposed
requirements.\117\
---------------------------------------------------------------------------

    \115\ Response Letter.
    \116\ Id.
    \117\ Id.

---------------------------------------------------------------------------

C. Extraterritorial Application of the Proposed Rule

    One commenter believes the proposed rule change imposes an
extraterritorial application of U.S. laws.\118\ The commenter suggests
that the proposed rule raises serious issues under the U.S. Supreme
Court's decision in Morrison v. National Australia Bank Ltd., 130 S.
Ct. 2869 (2010) and its holding, according to the commenter, that the
Exchange Act should be applied extraterritorially only when explicitly
authorized by statute. The commenter posits that there is no plain
wording in Exchange Act Section 15A(b)(6) allowing extraterritorial
application of the proposed rule change to Canada or elsewhere. The
commenter notes that Section 30(b) of the Exchange Act provides that
the Exchange Act does not apply ``to any person insofar as he transacts
a business in securities without the jurisdiction of the United
States,'' unless he does so in violation of regulations promulgated by
the SEC ``to prevent the evasion of [the Act].''
---------------------------------------------------------------------------

    \118\ A&P.
---------------------------------------------------------------------------

    In addition, the commenter believes the proposed rule conflicts
with Exchange Act Rule 15a-6, which, according to the commenter,
specifically declines to authorize extraterritorial reach by providing
exemptions to certain foreign broker-dealers. The commenter believes
the proposed rule change would effectively undermine key exemptions
provided by Rule 15a-6 that are extensively relied upon by the
international financial services community and could have implications
with respect to whether foreign locations are deemed branch offices of
a member. The commenter states that the proposed rule would require
registration of employees of foreign broker-dealers that are exempt
from registration as a U.S. broker-dealer under Rule 15a-6.\119\ The
commenter states ``Canadian employees performing covered functions
involving transactions in securities on a Canadian exchange for
registered U.S. broker-dealer affiliates would therefore be subject to
all FINRA rules, even though their own Canadian employers are exempt
from registration as broker-dealers in the U.S., in accordance with SEC
Rule 15a-6.'' The commenter notes that implicit in the Rule 15a-6
broker-to-broker exemption\120\ is the determination that the U.S.
broker-dealer will carefully select its foreign counterparts and
supervise their performance as it is the U.S. broker-dealer's
responsibility for execution, clearance and settlement to its U.S.
customers, even when transactions are executed abroad.
---------------------------------------------------------------------------

    \119\ A&P.
    \120\ The commenter represents firms operating under an
exemption in Exchange Act Rule 15a-6(a)(4)(i), 17 CFR 240.15a-
6(a)(4)(i), known as the broker-to-broker exemption, which provides
``[a] foreign broker or dealer shall be exempt from the registration
requirements of sections 15(a)(1) or 15B(a)(1) of the Act to the
extent that the foreign broker or dealer effects transactions in
securities with or for, or induces or attempts to induce the
purchase or sale of any security by a registered broker or dealer,
whether the registered broker or dealer is acting as principal for
its own account or as agent for others, or a bank acting pursuant to
an exception or exemption from the definition of broker or dealer in
sections 3(a)(4)(B), 3(a)(4)(E) or 3(a)(5)(C) of the Act.''
---------------------------------------------------------------------------

    The commenter also declares that the proposed rule change would
violate the obligations of the U.S. under the North American Free Trade
Agreement (``NAFTA'') because it would assert extraterritorial reach
over cross-border financial activities that were allowed by the SEC at
the time the U.S. became a party to NAFTA, and which have since been
permitted by the SEC without registration of foreign personnel.\121\
The commenter notes that because FINRA's rulemaking power derives from
the SEC, its authority can extend no further than that of the SEC.
Additionally, the commenter states that FINRA has issued examination
deficiencies as if the proposed rule has already been approved and
urges the SEC to disapprove the proposed rule change and to take
immediate action to cease what it believes is FINRA's de facto
enforcement of the proposed requirements. Lastly, the commenter notes
that FINRA has failed to consider reasonable alternatives such as
evaluating the adequacy of the Canadian regulatory scheme to achieve
the regulatory objectives of the proposal and encourages regulatory
cooperation in lieu of imposing potentially duplicative
requirements.\122\
---------------------------------------------------------------------------

    \121\ The commenter asserts that Article 1404(1) of NAFTA
prohibits the U.S. from adopting any measure restricting any type of
cross-border trade in financial services by cross-border financial
services providers of another Party that the Party permits on the
date of entry into force of NAFTA, except as provided in Section B
of the Party's Schedule to Annex VII. Under Section B, the U.S.
reserves the right to adopt any measure relating to cross-border
trade in securities services that derogates from Article 1404(1).
    \122\ A&P.
---------------------------------------------------------------------------

    The commenter's concerns stem from clearing arrangements between a
U.S. registered broker-dealer and Canadian firms operating under an
exemption from broker-dealer registration in Exchange Act Rule 15a-
6(a)(4)(i), in which the Canadian firms clear securities transactions
in foreign securities for U.S. institutional investors. FINRA stated
that it believes that the commenter's statements with respect to the
proposed rule change make certain assumptions that are not requirements
imposed by the proposal.\123\ FINRA stated that the proposed rule
change does not aim to expand the jurisdiction of FINRA, diverge from
Federal law, rules or regulations, U.S. Supreme Court precedent or
violate the obligations of the U.S. under NAFTA.\124\ FINRA notes that
it is a membership organization with jurisdiction over FINRA members
and their associated persons by virtue of its By-Laws and membership
agreements.\125\ FINRA stated that, without opining on the
extraterritorial application of U.S. securities laws, it questions the
relevance of the Morrison decision, which addressed the
extraterritorial application of Section 10(b) of the Exchange Act and
Exchange Act Rule 10b-5, and the obligations of the U.S. under NAFTA,
to the proposed rule change.\126\ FINRA stated that the proposed rule
change addresses the obligations of members under FINRA rules with
respect to the registration and qualification of certain associated
persons who are engaged in, responsible for or supervising certain
member operations functions.\127\ As noted above, FINRA stated that its
jurisdiction reaches associated persons of members and their
activities, regardless of their employing entity.\128\ The Commission
agrees with FINRA that the proposed rule does not expand FINRA's
jurisdiction. Furthermore, FINRA stated that it is not within its
purview to interpret the Federal securities laws or SEC rules.\129\
---------------------------------------------------------------------------

    \123\ Response Letter.
    \124\ Id.
    \125\ Id.
    \126\ Id.
    \127\ Id.
    \128\ Id.
    \129\ Id.
---------------------------------------------------------------------------

    Additionally, FINRA disagrees with the commenter's assessment of an
implied application of a proposed FINRA rule.\130\ As stated by the
commenter,\131\ and without independent verification or comment, FINRA
noted that the examination findings cited by the commenter relate to
the firm's outsourcing arrangements and compliance with Exchange Act
Rule 15c3-3(k)(2)(i), and the comment is outside the scope of the
proposed rule change.\132\
---------------------------------------------------------------------------

    \130\ Id.
    \131\ A&P, at note 1.
    \132\ Response Letter.
---------------------------------------------------------------------------

D. Examination Requirement

    One commenter states that an examination requirement provides no
benefit to investors and FINRA is the

true winner as it collects fees for testing, continuing education and
other potential items it will generate.\133\ Another commenter asserts
that a qualification examination is unnecessary to meet the objectives
of the proposal and recommends using firm written supervisory
procedures and Firm Element training.\134\ Two commenters state FINRA
should carefully evaluate the objectives and consequences of a one-
size-fits-all examination requirement on potential test takers and
recommend internal firm element training to deliver the proposed
product, market and operations knowledge portion of the required
examination content.\135\ One commenter supports the original intent of
the examination requirement, which was to establish a ``spot-the-red-
flags'' examination that would train test takers to identify and
escalate potential control problems, and believes that the scope should
not be expanded to cover the details of different products, operations
processes and rules and regulations given the breadth of the covered
functions.\136\ Further, the commenter notes that a high failure rate
will cause operational disruption at firms.\137\ One commenter notes
that the examination will be overbroad and extremely challenging for
many test takers, especially IT personnel who serve across the covered
functions who may have particular difficulty given their minimal
background or experience in industry issues.\138\
---------------------------------------------------------------------------

    \133\ Callaway.
    \134\ FSI.
    \135\ NSCP and TLG.
    \136\ SIFMA.
    \137\ SIFMA.
    \138\ NSCP.
---------------------------------------------------------------------------

    FINRA stated that it believes that the proposed qualification
examination requirement for Operations Professionals is appropriate as
proposed and does not agree that the objectives of the proposal can be
attained without a testing requirement for unregistered personnel.\139\
As FINRA noted in the Notice, it believes there is value in an
examination that tests for general securities knowledge about the
securities industry and that ongoing continuing education will
supplement this knowledge for Operations Professionals.\140\ FINRA
stated that the draft content outline for the proposed Operations
Professional examination was developed by FINRA staff in conjunction
with industry subject matter expert volunteers.\141\ FINRA stated that
its staff conducted several focus panels in mid-2010 with operations
professionals working in one or more of the covered functions and from
a wide range of FINRA member firms.\142\ FINRA said that it then
convened an Operations Professional exam committee consisting of more
than 40 operations professionals; such persons represent a broad range
of FINRA members, including size, geographical location and business
model.\143\ FINRA stated that both FINRA staff and committee members
placed an emphasis on creating a content outline and questions that are
appropriate across all the covered functions and test the appropriate
level of knowledge for a person who meets the depth of personnel as an
Operations Professional.\144\
---------------------------------------------------------------------------

    \139\ Response Letter.
    \140\ FINRA notes that NASD Rule 1070 (Qualification
Examinations and Waiver of Requirements), as well as other
applicable provisions regarding registration and qualification set
forth in FINRA's rulebook, such as NASD Rule 1031(c) regarding
requirements for examination on lapse of registration, would apply
to the Operations Professional qualification examination and
registration category.
    \141\ Response Letter.
    \142\ Id.
    \143\ Id.
    \144\ Id.
---------------------------------------------------------------------------

E. Exception to Qualification Examination Requirement

    FINRA noted that the proposed rule change would include an
exception to the Operations Professional qualification examination
requirement for persons who currently hold certain registrations (each
an ``eligible registration'') or have held one during the two years
immediately prior to registering as an Operations Professional.\145\
FINRA stated that the proposed exception also would apply to persons
who do not hold an eligible registration, but prefer an alternative to
taking the Operations Professional examination.\146\ FINRA said such
persons would be permitted to register in an eligible registration
category (subject to passing the corresponding qualification
examination or obtaining a waiver) and use such registration to qualify
for Operations Professional registration.\147\
---------------------------------------------------------------------------

    \145\ Id.
    \146\ Id.
    \147\ Response Letter.
---------------------------------------------------------------------------

    One commenter questions the value of an additional registration
category with such a broad exception since the majority of individuals
that would be subject to the proposed rule change would be eligible for
the proposed exception.\148\ To provide a clearer indication that the
proposed rule change is necessary, the commenter recommends FINRA
engage in an industry-wide survey to determine how many individuals
would not qualify for the exception.\149\ Two commenters assert that
the proposed exception is overly broad and will undermine the
regulatory purpose of the proposal.\150\ One such commenter believes
content overlap of the eligible registration qualification examinations
with the proposed Operations Professional examination is not sufficient
justification to accept one examination in lieu of another and finds it
inappropriate to grant a waiver to an individual who has passed certain
examinations that are limited in nature (e.g., Series 6).\151\
---------------------------------------------------------------------------

    \148\ NPH.
    \149\ NPH.
    \150\ NASAA and NPH.
    \151\ NASAA.
---------------------------------------------------------------------------

    One commenter recommends exempting persons who qualify for the
proposed exception from the requirement to separately register as an
Operations Professional (noting that costs to make internal system
changes to track and monitor dual registrations may be significant),
since FINRA's stated goal is to ensure that covered persons are
registered with FINRA and trained on industry practices.\152\ Another
commenter suggests FINRA specifically exempt supervisory personnel who
hold the most senior supervisory qualifications (i.e., Series 24 and
Series 27) from the requirement to register as an Operations
Professional based on the same policy reasoning for exempting certain
licensed individuals from the examination requirement.\153\ Another
commenter recommends FINRA include as an eligible registration the UK
FSA-approved Securities & Investment Level 3 Investment Operations
Certificate (IOC) and the Investment Administration Qualification
(IAQ), both widely recognized within the financial services industry in
the UK.\154\
---------------------------------------------------------------------------

    \152\ NMIS.
    \153\ Goldman.
    \154\ SIFMA.
---------------------------------------------------------------------------

    Given the significant functions performed by Operations
Professionals, FINRA stated that it believes a separate registration
category for such personnel is an appropriate measure to enhance the
operational integrity of members.\155\ FINRA stated that, as noted in
the Notice, a primary purpose of the proposed qualification examination
is to assess a covered person's basic understanding of the securities
industry and the requirement to take a registration examination serves
to alert such person of the role he or she plays

in this highly regulated environment.\156\ Thus, FINRA believes the
eligible registrations (and corresponding examinations) serve as a
valid proxy for the Operations Professional examination
requirement.\157\ In addition, FINRA is proposing to add language to
proposed Rule 1230(b)(6)(D) to provide that FINRA staff may accept as
an alternative to the Operations Professional qualification examination
requirement any domestic or foreign qualification if it determines that
acceptance of such alternative qualification is consistent with the
purposes of the rule, the protection of investors, and the public
interest.\158\
---------------------------------------------------------------------------

    \155\ Response Letter.
    \156\ Id.
    \157\ Id.
    \158\ Id.
---------------------------------------------------------------------------

    FINRA stated that the proposed exception applies to the Operations
Professional examination requirement only and not Firm Element
training.\159\ FINRA noted that individuals who avail themselves of the
proposed exception to the Operations Professional examination
requirement with an eligible registration would be subject to the
Regulatory Element program appropriate for such other registration
category; however, Operations Professionals would be subject to Firm
Element training based on their activities at the firm, which would
include the activities in the covered functions that mandate their
registration as an Operations Professional.\160\
---------------------------------------------------------------------------

    \159\ Id.
    \160\ Id.
---------------------------------------------------------------------------

F. Implementation Period and Grace Period for Non-Clearing Firms

    FINRA stated that in Regulatory Notice 10-25, it proposed a six- to
nine-month transition period for the proposed rule change.\161\ In the
Notice, FINRA proposed to a 60-day identification period beginning on
the effective date of the proposed rule change during which persons
required to register as an Operations Professional as of the effective
date of the proposed rule change (``Day-One Professionals'') must
request registration as an Operations Professional via Form U4 in CRD.
Day-One Professionals who are identified during the 60-day period and
must pass the Operations Professional examination (or an eligible
qualification examination) to qualify would be granted 12 months
beginning on the effective date of the proposed rule change to pass
such qualifying examination, during which time such persons may
function as an Operations Professional. The 12-month transition period
to pass a qualification examination would only apply to Day-One
Professionals so any person who is not subject to the registration
requirements for Operations Professionals as of the effective date of
the proposed rule change (``non-Day-One Professionals'') would be
required to register as an Operations Professional and, if applicable,
pass the Operations Professional qualification examination (or an
eligible qualification examination), prior to engaging in any
activities that would require such registration. However, any non-Day-
One Professional associated with a non-clearing member who must pass
the Operations Professional qualification examination (or an eligible
qualification examination) to obtain registration would be granted a
grace period of 120 days beginning on the date such person requests
Operations Professional registration to pass such qualifying
examination, during which time such person may function as an
Operations Professional.
---------------------------------------------------------------------------

    \161\ Id.
---------------------------------------------------------------------------

    One commenter believes the proposed implementation period would
place an undue burden on the industry and may cause serious disruptions
as firms reallocate employee time and resources away from other
critical areas.\162\ The commenter suggests a three-month
identification period followed by a 12-month period for such employees
to pass a qualification examination, since the potential burdens and
risks of the proposed timeframe far outweigh the minor benefit of the
rule being fully effective a few months earlier.\163\ Another commenter
recommends non-Day-One Professionals, regardless of when they become
subject to the proposed registration requirements, be eligible for the
12-month transition period to pass a qualifying examination.\164\
---------------------------------------------------------------------------

    \162\ SIFMA.
    \163\ SIFMA.
    \164\ NSCP.
---------------------------------------------------------------------------

    FINRA stated that it does not intend to further extend the proposed
implementation period as it believes that the proposed implementation
period provides adequate time for members to comply with the proposed
rule change.\165\ FINRA noted that Regulatory Notice 10-25 was
published for comment in May 2010, and that the proposed rule change
was filed in March 2011.\166\ FINRA stated that members have been aware
of the proposed rule change for over a year.\167\ FINRA stated that it
will announce an effective date for the proposed rule change in a
Regulatory Notice following Commission approval and firms will have 60
days following the effective date of the rule change to identify Day-
One Professionals, in addition to the 12-month transition period for
those Day-One Professionals who must pass a qualification
examination.\168\
---------------------------------------------------------------------------

    \165\ Response Letter.
    \166\ Id.
    \167\ Id.
    \168\ Id.
---------------------------------------------------------------------------

    One commenter suggests FINRA provide firms with the ability to
upload a ``batch'' file of Form U4 registration requests to the CRD
system at the conclusion of the initial identification period for Day-
One Professionals, since the requirement to maintain dual registrations
for such individuals will be administratively complex.\169\ FINRA
believes that the current Web-based Electronic File Transfer
functionality (Web EFT) will enable subscribers to efficiently batch
file uploads to Web CRD following approval of the proposed rule change
by the Commission.\170\
---------------------------------------------------------------------------

    \169\ SIFMA.
    \170\ Response Letter.
---------------------------------------------------------------------------

    Numerous commenters suggest extending the 120-day grace period for
non-Day-One Professionals associated with a non-clearing member to
persons associated with a clearing member firm because similar
disruptions to firm operations and client services also may occur at
clearing members.\171\ Certain commenters believe that if an extension
is granted, such individuals should report to a registered Operations
Professional or another registered person during the 120-day grace
period.\172\ One commenter maintains that limiting the 120-day grace
period to non-clearing members will force clearing firms to place
potentially inexperienced or unqualified employees in a supervisory
role simply because they are Operations Professionals, and notes that
FINRA should not expect that clearing firms have additional supervisory
staff on standby for each department responsible for a covered
function.\173\ Another commenter notes that without the grace period, a
clearing firm may not be able to hire and train new staff on a timely
basis or quickly replace staff in the event of a sudden departure,
which may disrupt the member's operations and present a significant
business continuity risk.\174\ The commenter further asserts that the
risk involved in extending the grace period to clearing firms is low
given that there will be multiple registered persons in the covered
areas, members have

incentive to hire or promote persons qualified to fill vacancies that
would require registration, newly hired or promoted persons will be
supervised by a registered person and such persons will not be directly
interacting with clients.\175\
---------------------------------------------------------------------------

    \171\ Edward Jones, JMS, NSCP, Schwab, SIFMA and WFA.
    \172\ Edward Jones, SIFMA and WFA.
    \173\ JMS.
    \174\ SIFMA.
    \175\ SIFMA.
---------------------------------------------------------------------------

    Based on the comments, FINRA is proposing to extend the 120-day
grace period to pass a qualification examination to non-Day-One
Professionals associated with a clearing member firm, since clearing
firms may experience similar resource challenges in finding qualified
new hires and transitioning staff into roles in the covered functions
that would require Operations Professional registration.\176\
---------------------------------------------------------------------------

    \176\ Response Letter.
---------------------------------------------------------------------------

G. Coordinate Proposed Rule Change With Other FINRA Rule Proposals

    Two commenters recommend FINRA coordinate the proposed rule change
with other FINRA rule proposals. One commenter requests parallel
implementation of the proposed rule change and the proposed
registration rules for a coherent, non-duplicative, understandable
framework for registration (including the issuance by FINRA of an
integrated, comprehensive Notice addressing the comments received on
both proposals) since ad hoc implementation of the new registration
categories would cause significant burdens to members.\177\ Another
commenter requests FINRA extend the action date for the proposed rule
change so it coincides with the expiration of the comment period for
Regulatory Notice 11-14 (Third-Party Service Providers) to allow
members to consider these closely related proposals concurrently.\178\
---------------------------------------------------------------------------

    \177\ Sutherland. See Regulatory Notice 09-70.
    \178\ JMS.
---------------------------------------------------------------------------

    FINRA stated that, while it appreciates the commenters' concerns
regarding coordination of related rule changes, it believes that the
proposed rule change requiring registration of Operations Professionals
can proceed now without overly burdening or confusing members.\179\
FINRA believes registration and education requirements for the
specified operations personnel are needed to help ensure that investor
protection mechanisms are in place for all areas of a member's business
that could harm the member, a customer, the integrity of the
marketplace or the public.\180\ FINRA believes that such enhancements
should not be unnecessarily postponed, and that it can work with
members in implementing future proposed registration rules and
requirements relating to third-party service providers separate and
apart from the proposed rule change addressing Operations Professional
registration.\181\
---------------------------------------------------------------------------

    \179\ Response Letter.
    \180\ Id.
    \181\ Id.
---------------------------------------------------------------------------

H. Rulemaking Process

    In the Notice, FINRA stated that additional guidance may be needed
following the adoption of the proposed rule change and that it would
address interpretive questions as needed, similar to its approach to
other regulatory initiatives with wide-ranging and novel impacts.\182\
One commenter believes that a delay in providing guidance will create
confusion and inconsistencies in compliance with the proposed rule, an
increased burden on firms in their efforts to comply and hinder FINRA
in meeting the objectives of the proposal by failing to provide a clear
framework for the proposed requirements.\183\ The commenter requests
FINRA provide more information regarding industry consultations that
took place during the rulemaking process, as the commenter is concerned
that a lack of transparency in the rulemaking process will lead to the
disenfranchisement of certain segments of the industry.\184\
---------------------------------------------------------------------------

    \182\ Response Letter.
    \183\ Sutherland.
    \184\ Sutherland.
---------------------------------------------------------------------------

    FINRA believes that it has provided ongoing guidance with respect
to the proposed rule change.\185\ FINRA stated that it cannot address
every specific interpretive issue that may arise in the rulemaking
process but has attempted to provide guidance where necessary to assist
members in understanding the proposed rule change.\186\ FINRA stated
that, as with most significant rule proposals, FINRA engaged the
industry in crafting the proposed rule change.\187\ FINRA said it
consulted with industry groups, its advisory committees and panels with
representatives from a cross-section of member firms that provided
critical input into the depth of personnel for covered persons, the
functions for inclusion in the covered functions in the proposed rule
and the content of the proposed Operations Professional qualification
examination.\188\
---------------------------------------------------------------------------

    \185\ Response Letter.
    \186\ Id.
    \187\ Id.
    \188\ Response Letter.
---------------------------------------------------------------------------

I. Costs

    One commenter suggests giving the industry flexible and less
burdensome alternatives to a new costly registration requirement so
they do not have to increase the costs of doing business, stating that
FINRA does not justify why registration is the sole effective and cost-
efficient means of accomplishing the objectives of the proposal.\189\
FINRA believes the proposed rule change is necessary to help ensure
that investor protection mechanisms of the highest level possible are
in place in all areas of a member's business that could harm the
member, a customer, the integrity of the marketplace or the
public.\190\ FINRA believes that the proposed registration,
qualification examination and continuing education requirements for
Operations Professionals will best achieve this result.\191\
---------------------------------------------------------------------------

    \189\ WFA.
    \190\ Response Letter.
    \191\ Id.
---------------------------------------------------------------------------

III. Commission's Findings

    After careful review of the proposed rule change, the comment
letters and the FINRA Response Letter, the Commission finds that the
proposed rule change, as modified by Amendment No. 1, is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities association.\192\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 15A(b)(6) of the Act,\193\ which requires,
among other things, that FINRA rules 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.
---------------------------------------------------------------------------

    \192\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
    \193\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    Although FINRA's registration regime historically has focused on
``front office'' personnel who have contact with customers or are
otherwise directly involved in effecting securities transactions,
persons who perform ``back office'' functions, such as recordkeeping,
trade confirmation, transaction settlement, internal auditing, and
securities lending operations \194\ are also important to a FINRA
member's ability to comply with its responsibilities under the Federal
securities laws and regulations, and the rules of FINRA. Given the
growing complexity of the industry, and the

importance of the services provided by the back-office personnel, the
Commission believes that FINRA's proposal to license and register
Operations Professionals and to require members to provide Operations
Professionals with continuing education, as amended by Amendment No. 1,
will help to address regulatory gaps in this area.
---------------------------------------------------------------------------

    \194\ We note that Section 984 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act, Public Law 111-203, 124 Stat.
1376 (2010), addresses securities lending by, among other things,
giving the Commission express authority to regulate persons that
``effect, accept, or facilitate a transaction involving the loan or
borrowing of securities.''
---------------------------------------------------------------------------

    The Commission believes that FINRA carefully considered all the
comments on the proposal and has responded appropriately. FINRA's
Amendment No 1 changes the proposed rule change in response to certain
requests by commenters to clarify the categories of covered persons,
accept certain alternative qualification examinations in lieu of the
Operations Professional examination, and to extend the 120-day grace
period for registration of non-Day-One Professionals to those who will
be associated with a clearing member. FINRA has suitably explained its
reasons for declining to amend the proposed rule in response to the
remainder of the comments it received.

IV. Accelerated Approval

    The Commission finds good cause, pursuant to Section 19(b)(2) of
the Exchange Act,\195\ for approving the proposed rule change, as
modified by Amendment No. 1 thereto, prior to the 30th day after
publication of notice of the filing of Amendment No. 1 in the Federal
Register. The proposed rule change was informed by FINRA's
consideration of, and the incorporation of many suggestions made in,
extensive comments on FINRA's proposal to require the registration of
Operations Professionals, and Amendment No. 1's modifications to the
proposed rule change add clarity to the proposed rule and provide
additional guidance to members and their associated persons.
---------------------------------------------------------------------------

    \195\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    Accordingly, the Commission finds that good cause exists to approve
the proposal, as modified by Amendment No. 1, on an accelerated basis.

V. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1, 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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-FINRA-2011-013 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-2011-013. This
file number should be included on the subject line if e-mail 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-2011-013
and should be submitted on or before July 13, 2011.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\196\ that the proposed rule change (SR-FINRA-2011-013), as
modified by Amendment No. 1, be, and hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

    \196\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\197\
---------------------------------------------------------------------------

    \197\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-15450 Filed 6-21-11; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 79, Number 200 (Thursday, October 16, 2014)]
[Notices]
[Pages 62133-62134]
[FR Doc No: 2014-24611]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Notice of Commission or Commission Staff Attendance at MISO
Meetings

    The Federal Energy Regulatory Commission hereby gives notice that
members of the Commission and Commission staff may attend the following
MISO-related meetings:

 Advisory Committee (10:00 a.m.-1:00 p.m., Local Time)
    [cir] October 22
    [cir] November 19
    [cir] December 10
 Board of Directors Audit & Finance Committee
    [cir] October 22 (3:30 p.m.-5:00 p.m.)
    [cir] November 19 (10:30 a.m.-12:30 a.m.)
 Board of Directors (8:30 a.m.-10:00 a.m., Local Time)
    [cir] October 23
    [cir] December 11
 Board of Directors Markets Committee (8:00 a.m.-10:00 a.m.,
Local Time)
    [cir] October 22
    [cir] November 19
    [cir] December 10
 Board of Directors System Planning Committee
    [cir] October 15 (11:00 a.m.-12:30 p.m.)
    [cir] November 19 (2:00 p.m.-4:00 p.m.)
    [cir] December 10 (3:30-5:30 p.m.)
 MISO Informational Forum (3:00 p.m.-5:00 p.m., Local Time)
    [cir] October 21
    [cir] November 18
    [cir] December 16
 MISO Market Subcommittee (9:00 a.m.-4:00 p.m., Local Time)
    [cir] October 28
    [cir] December 2
 MISO Supply Adequacy Working Group (9:00 a.m.-5:00 p.m., Local
Time)
    [cir] October 30
    [cir] December 4
 MISO Regional Expansion Criteria and Benefits Task Force (9:00
a.m.-5:00 p.m., Local Time)
    [cir] October 16
    [cir] November 13
    [cir] December 18

 MISO Planning Advisory Committee (9:00 a.m.-5:00 p.m., Local
Time)
    [cir] October 15
    [cir] November 12
    [cir] December 17
 Organization of MISO States Annual Meeting (9:00 a.m.-2:30
p.m., Local Time)
    [cir] October 21

    All of the meetings above will be held at: MISO Headquarters, 701
City Center Drive, 720 City Center Drive, and Carmel, IN 46032.
    Further information may be found at www.misoenergy.org.
    The above-referenced meetings are open to the public.
    The discussions at each of the meetings described above may address
matters at issue in the following proceedings:

Docket No. EL14-21, Southwest Power Pool, Inc. v. Midcontinent
Independent System Operator, Inc.
Docket No. ER14-1174, Southwest Power Pool, Inc.
Docket No. ER14-2850, Southwest Power Pool, Inc.
Docket No. EL11-34, Midwest Independent Transmission System Operator,
Inc. v. Southwest Power Pool, Inc.
Docket Nos. ER04-691, EL04-104 and ER04-106, et al., Midwest
Independent Transmission System Operator, Inc., et al.
Order No. 890, Preventing Undue Discrimination and Preference in
Transmission Service
Docket Nos. ER06-18, et al., Midwest Independent Transmission System
Operator, Inc.
Docket No. ER09-1431, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER10-1791, Midwest Independent Transmission System Operator,
Inc. and the Midwest ISO Transmission Owners
Docket No. ER10-2283, Midwest Independent Transmission System Operator,
Inc.
Docket No. RM10-23 and Order No. 1000, Transmission Planning and Cost
Allocation by Transmission Owning and Operating Public Utilities
Docket No. ER11-2275, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER11-3279, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER11-4081, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-678, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-2302, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-2706, Midwest Independent Transmission System Operator,
Inc.
Docket No. EL13-13, ITC Midwest, LLC
Docket No. ER13-187, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER13-186, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER13-101, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER13-89, MidAmerican Energy Company
Docket No. ER12-1266, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-1265, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-1564, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-1194, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-971, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER08-925, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-309, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-480, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER12-2682, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER13-984, Midcontinent Independent System Operator, Inc.

Docket No. ER13-1923, Midcontinent Independent System Operator, Inc.
Docket No. ER13-1695, Midcontinent Independent System Operator, Inc.
Docket No. ER13-1924, Midcontinent Independent System Operator, Inc.
Docket No. ER13-1943, Midcontinent Independent System Operator, Inc.
Docket No. ER13-1944, Midcontinent Independent System Operator, Inc.
Docket No. ER13-1945, Midcontinent Independent System Operator, Inc.
Docket No. ER13-692, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2156, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2375, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2376, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2379, Midcontinent Independent System Operator, Inc.
Docket No. ER14-862, Midcontinent Independent System Operator, Inc.
Docket No. ER14-859, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2233, Midcontinent Independent System Operator, Inc.
Docket No. ER14-836, Midcontinent Independent System Operator, Inc.
Docket No. ER14-801, Midcontinent Independent System Operator, Inc.
Docket No. ER14-790, Midcontinent Independent System Operator, Inc.
Docket No. ER14-503, Midcontinent Independent System Operator, Inc.
Docket No. ER14-721, Midcontinent Independent System Operator, Inc.
Docket No. ER14-706, Midcontinent Independent System Operator, Inc.
Docket No. ER14-684, Midcontinent Independent System Operator, Inc.
Docket No. ER14-705, Midcontinent Independent System Operator, Inc.
Docket No. ER14-698, Midcontinent Independent System Operator, Inc.
Docket No. ER14-689, Midcontinent Independent System Operator, Inc.
Docket No. ER14-684, Midcontinent Independent System Operator, Inc.
Docket No. ER14-681, Midcontinent Independent System Operator, Inc.
Docket No. ER14-659, Midcontinent Independent System Operator, Inc.
Docket No. ER14-649, Midcontinent Independent System Operator, Inc.
Docket No. ER14-421, Midcontinent Independent System Operator, Inc.
Docket No. ER14-422, Midcontinent Independent System Operator, Inc.
Docket No. ER14-624, Midcontinent Independent System Operator, Inc.
Docket No. ER14-256, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2124, Midcontinent Independent System Operator, Inc.
Docket No. ER14-102, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2295, Midcontinent Independent System Operator, Inc.
Docket No. ER14-603, Midcontinent Independent System Operator, Inc.
Docket No. ER14-114, Midcontinent Independent System Operator, Inc.
Docket No. ER14-115, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2378, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2337, Midcontinent Independent System Operator, Inc.
Docket No. ER14-542, Midcontinent Independent System Operator, Inc.
Docket No. ER14-170, Midcontinent Independent System Operator, Inc.
Docket No. ER14-516, Midcontinent Independent System Operator, Inc.
Docket No. ER14-206, Midcontinent Independent System Operator, Inc.
Docket No. ER14-202, Midcontinent Independent System Operator, Inc.
Docket No. ER14-83, Midcontinent Independent System Operator, Inc.
Docket No. ER14-960, Midcontinent Independent System Operator, Inc.
Docket No. ER14-698, Midcontinent Independent System Operator, Inc.
Docket No. EL13-88, Northern Indiana Public Service Corp. v
Midcontinent Independent System Operator, Inc., et al.
Docket No. EL14-12, ABATE et al. v Midcontinent Independent System
Operator, Inc., et al.
Docket No. AD12-16, Capacity Deliverability across the MISO/PJM Seam
Docket No. AD14-3, Coordination of Energy and Capacity across the MISO/
PJM Seam
Docket No. ER13-1938, Midcontinent Independent System Operator, Inc.
Docket No. ER14-990, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2468, Midcontinent Independent System Operator, Inc.
Docket No. ER13-2124, Midcontinent Independent System Operator, Inc.
Docket No. ER11-2059, Midwest Independent Transmission System Operator,
Inc.
Docket No. ER14-2154, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2156, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2368, Midcontinent Independent System Operator, Inc.
Docket No. ER14-1713, Midcontinent Independent System Operator, Inc.
Docket No. ER14-1736, Midcontinent Independent System Operator, Inc.
Docket No. ER14-1725, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2445, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2562, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2566, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2599, Midcontinent Independent System Operator, Inc.
Docket No. ER14-1243, Midcontinent Independent System Operator, Inc.
Docket No. ER14-2747, Midcontinent Independent System Operator, Inc.
    For more information, contact Patrick Clarey, Office of Energy
Markets Regulation, Federal Energy Regulatory Commission at (317) 249-
5937 or<EMAIL_ADDRESS>or Christopher Miller, Office of
Energy Markets Regulation, Federal Energy Regulatory Commission at
(317) 249-5936 or<EMAIL_ADDRESS>
    Dated: October 9, 2014.
 Kimberly D. Bose,
 Secretary.
[FR Doc. 2014-24611 Filed 10-15-14; 8:45 am]
BILLING CODE 6717-01-P