Notice2021-21113
Program for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2; Notice of Filing and Order Approving and Declaring Effective an Amended Plan for the Allocation of Regulatory Responsibilities Among the Financial Industry Regulatory Authority, Inc., The Nasdaq Stock Market LLC, and Nasdaq BX, Inc.
Primary source
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Published
September 29, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 186 (Wednesday, September 29, 2021)</title>
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[Federal Register Volume 86, Number 186 (Wednesday, September 29, 2021)]
[Notices]
[Pages 53996-54003]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-21113]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93114; File No. 4-575]
Program for Allocation of Regulatory Responsibilities Pursuant to
Rule 17d-2; Notice of Filing and Order Approving and Declaring
Effective an Amended Plan for the Allocation of Regulatory
Responsibilities Among the Financial Industry Regulatory Authority,
Inc., The Nasdaq Stock Market LLC, and Nasdaq BX, Inc.
September 23, 2021.
Notice is hereby given that the Securities and Exchange Commission
(``Commission'') has issued an Order, pursuant to Section 17(d) of the
Securities Exchange Act of 1934 (``Act''),\1\ approving and declaring
effective an amendment to the plan for allocating regulatory
responsibility (``Plan'') filed on September 2, 2021, pursuant to Rule
17d-2 of the Act,\2\ by the Financial Industry Regulatory Authority,
Inc. (``FINRA''), The Nasdaq Stock Market LLC (``Nasdaq''), and Nasdaq
BX, Inc. (``BX'') (collectively, ``Participating Organizations'' or
``parties''). This agreement amends and restates the agreement entered
into between FINRA and BX on December 5, 2008, entitled ``Agreement
between Financial Industry Regulatory Authority, Inc. and Boston Stock
Exchange, Incorporated pursuant to Rule 17d-2 under the Securities
Exchange Act of 1934,'' and any subsequent amendments thereafter, and
the agreement entered into between FINRA and Nasdaq approved by the
Commission on July 12, 2006, entitled ``Agreement between the National
Association of Securities Dealers, Inc. and The Nasdaq Stock Market LLC
Pursuant to Section 17(d) and Rule 17d-2,'' and any subsequent
amendments thereafter.
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\1\ 15 U.S.C. 78q(d).
\2\ 17 CFR 240.17d-2.
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I. Introduction
Section 19(g)(1) of the Act,\3\ among other things, requires every
self-regulatory organization (``SRO'') registered as either a national
securities exchange or national securities association to examine for,
and enforce compliance by, its members and persons associated with its
members with the Act, the rules and regulations thereunder, and the
SRO's own rules, unless the SRO is relieved of this responsibility
pursuant to Section 17(d) \4\ or Section 19(g)(2) \5\ of the Act.
Without this relief, the statutory obligation of each individual SRO
could result in a pattern of multiple examinations of broker-dealers
that maintain memberships in more than one SRO (``common members'').
Such regulatory duplication would add unnecessary expenses for common
members and their SROs.
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\3\ 15 U.S.C. 78s(g)(1).
\4\ 15 U.S.C. 78q(d).
\5\ 15 U.S.C. 78s(g)(2).
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Section 17(d)(1) of the Act \6\ was intended, in part, to eliminate
unnecessary multiple examinations and regulatory duplication.\7\ With
respect to a common member, Section 17(d)(1) authorizes the Commission,
by rule or order, to relieve an SRO of the responsibility to receive
regulatory reports, to examine for and enforce compliance with
applicable statutes, rules, and regulations, or to perform other
specified regulatory functions.
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\6\ 15 U.S.C. 78q(d)(1).
\7\ See Securities Act Amendments of 1975, Report of the Senate
Committee on Banking, Housing, and Urban Affairs to Accompany S.
249, S. Rep. No. 94-75, 94th Cong., 1st Session 32 (1975).
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To implement Section 17(d)(1), the Commission adopted two rules:
Rule 17d-1 and Rule 17d-2 under the Act.\8\ Rule 17d-1 authorizes the
Commission to name a single SRO as the designated examining authority
(``DEA'') to examine common members for compliance with the financial
responsibility requirements imposed by the Act, or by Commission or SRO
rules.\9\ When an SRO has been named as a common member's DEA, all
other SROs to which the common member belongs are relieved of the
responsibility to examine the firm for compliance with the applicable
financial responsibility rules. On its face, Rule 17d-1 deals only with
an SRO's obligations to enforce member compliance with financial
responsibility requirements. Rule 17d-1 does not relieve an SRO from
its obligation to examine a common member for compliance with its own
rules and provisions of the federal securities laws governing matters
other than financial responsibility, including sales practices and
trading activities and practices.
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\8\ 17 CFR 240.17d-1 and 17 CFR 240.17d-2, respectively.
\9\ See Securities Exchange Act Release No. 12352 (April 20,
1976), 41 FR 18808 (May 7, 1976).
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To address regulatory duplication in these and other areas, the
Commission adopted Rule 17d-2 under the Act.\10\ Rule 17d-2 permits
SROs to propose joint plans for the allocation of regulatory
responsibilities with respect
[[Page 53997]]
to their common members. Under paragraph (c) of Rule 17d-2, the
Commission may declare such a plan effective if, after providing for
appropriate notice and opportunity for comment, it determines that the
plan is necessary or appropriate in the public interest and for the
protection of investors, to foster cooperation and coordination among
the SROs, to remove impediments to, and foster the development of, a
national market system and a national clearance and settlement system,
and is in conformity with the factors set forth in Section 17(d) of the
Act. Commission approval of a plan filed pursuant to Rule 17d-2
relieves an SRO of those regulatory responsibilities allocated by the
plan to another SRO.
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\10\ See Securities Exchange Act Release No. 12935 (October 28,
1976), 41 FR 49091 (November 8, 1976).
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II. The Plan
On January 8, 2009, the Commission declared effective the Plan
entered into between FINRA and the Boston Stock Exchange, Incorporated
(n/k/a Nasdaq BX, Inc. (``BX'')) for allocating regulatory
responsibility pursuant to Rule 17d-2.\11\ The Plan is intended to
reduce regulatory duplication for firms that are common members of
FINRA and BX by allocating regulatory responsibility with respect to
certain applicable laws, rules, and regulations that are common among
them. Included in the Plan is an exhibit that lists every BX rule for
which FINRA bears responsibility under the Plan for overseeing and
enforcing with respect to BX members that are also members of FINRA and
the associated persons therewith (``Certification'').
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\11\ See Securities Exchange Act Release No. 59218 (January 8,
2009), 74 FR 2143 (January 14, 2009).
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III. Proposed Amendment to the Plan
On September 2, 2021, the parties submitted a proposed amendment to
the Plan (``Amended Plan''). The primary purpose of the Amended Plan is
to allocate surveillance, investigation, and enforcement
responsibilities for Rule 14e-4 under the Act, to reflect the name
change of Boston Stock Exchange, Incorporated to Nasdaq BX, Inc., and
to add Nasdaq as a Participant to the Plan.\12\ The text of the
proposed Amended Plan, which replaces and supersedes the current Plan
in its entirety, is as follows:
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\12\ The Amended Plan replaces and supersedes the agreement
between FINRA and Nasdaq. See Securities Exchange Act Release No.
54136 (July 12, 2006), 71 FR 40759 (July 18, 2006).
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* * * * *
Agreement [Between] Among Financial Industry Regulatory Authority,
Inc., The NASDAQ Stock Market LLC and [Boston Stock Exchange,
Incorporated] NASDAQ BX, Inc. Pursuant to Rule 17d-2 Under the
Securities Exchange Act of 1934
This Agreement, by and [between]among the Financial Industry
Regulatory Authority, Inc. (``FINRA''), The Nasdaq Stock Market LLC
(``Nasdaq'') and [Boston Stock Exchange, Incorporated]Nasdaq BX,
Inc. (``BX''), is made this [5th] 30th day of [December]August,
[2008]2021 (the ``Agreement''), pursuant to Section 17(d) of the
Securities Exchange Act of 1934 (the ``Exchange Act'') and Rule 17d-
2 thereunder, which permits agreements between self-regulatory
organizations to allocate regulatory responsibility to eliminate
regulatory duplication. FINRA, Nasdaq and BX may be referred to
individually as a ``party'' and together as the ``parties.''
This Agreement amends and restates the agreement entered into
between FINRA and BX on December 5, 2008, entitled ``Agreement
between Financial Industry Regulatory Authority, Inc. and Boston
Stock Exchange, Incorporated pursuant to Rule 17d-2 under the
Securities Exchange Act of 1934,'' and any subsequent amendments
thereafter and the agreement entered into between FINRA and Nasdaq
approved by the SEC on July 12, 2006, entitled ``Agreement between
the National Association of Securities Dealers, Inc. and The Nasdaq
Stock Market LLC Pursuant to Section 17(d) and Rule 17d-2,'' and any
subsequent amendments thereafter.
Whereas, FINRA, Nasdaq and BX desire to reduce duplication in
the examination, of their [Dual]Common Members (as defined herein)
and in the filing and processing of certain registration and
membership records; and
Whereas, FINRA, Nasdaq and BX desire to execute an agreement
covering such subjects pursuant to the provisions of Rule 17d-2
under the Exchange Act and to file such agreement with the U.S.
Securities and Exchange Commission (the ``SEC'' or ``Commission'')
for its approval.
Now, therefore, in consideration of the mutual covenants
contained hereinafter, FINRA, Nasdaq and BX hereby agree as follows:
Definitions. Unless otherwise defined in this Agreement or the
context otherwise requires, the terms used in this Agreement shall
have the same meaning as they have under the Exchange Act and the
rules and regulations thereunder. As used in this Agreement, the
following terms shall have the following meanings:
(a) ``Nasdaq Rules'', ``BX Rules'' or ``FINRA Rules'' shall
mean: (i) The rules of Nasdaq, (ii) the rules of BX, or (iii) the
rules of FINRA, respectively, as the rules of an exchange or
association are defined in Exchange Act Section 3(a)(27).
(b) ``Common Rules'' shall mean Nasdaq Rules and BX Rules that
are substantially similar to the applicable FINRA Rules and certain
provisions of the Exchange Act and SEC rules set forth on Exhibit 1
in that examination for compliance with such provisions and rules
would not require FINRA to develop one or more new examination
standards, modules, procedures, or criteria in order to analyze the
application of the provision or rule, or a [Dual]Common Member's
activity, conduct, or output in relation to such provision or rule;
provided, however, Common Rules shall not include the application of
the SEC, Nasdaq, BX or FINRA rules as they pertain to violations of
insider trading activities, which is covered by a separate 17d-2
Agreement by and among [the American Stock Exchange, LLC, BATS
Exchange, Inc., Boston Stock Exchange, Inc., CBOE Stock Exchange,
LLC, Chicago Stock Exchange, Inc., Financial Industry Regulatory
Authority, Inc., International Securities Exchange, LLC, The NASDAQ
Stock Market LLC, National Stock Exchange, Inc., New York Stock
Exchange, LLC, NYSE Arca Inc., NYSE Regulation, Inc., and
Philadelphia Stock Exchange, Inc.] Cboe BZX Exchange, Inc., Cboe BYX
Exchange, Inc., Chicago Stock Exchange, Inc., Cboe EDGA Exchange,
Inc., Cboe EDGX Exchange, Inc., Financial Industry Regulatory
Authority, Inc., MEMX, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq
PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York
Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., Investors
Exchange LLC and Long-Term Stock Exchange, Inc. approved by the
Commission on [October 17, 2008]September 23, 2020. Common Rules
shall not include any provisions regarding: (i) Notice, reporting or
any other filings made directly to or from Nasdaq or BX; (ii)
incorporation by reference of other Nasdaq or BX Rules that are not
Common Rules; (iii) exercise of discretion in a manner that differs
from FINRA's exercise of discretion including, but not limited to
exercise of exemptive authority by Nasdaq or BX; (iv) prior written
approval of Nasdaq or BX; and (v) payment of fees or fines to Nasdaq
or BX.
(c) ``[Dual]Common Members'' shall mean those members of FINRA
and a member of at least one of Nasdaq or BX [members that are also
members of FINRA] and the associated persons therewith.
(d) ``Effective Date'' shall have the meaning set forth in
paragraph [14]13.
(e) ``Enforcement Responsibilities'' shall mean the conduct of
appropriate proceedings, in accordance with FINRA's Code of
Procedure (the [NASD] Rule 9000 Series) and other applicable FINRA
procedural rules, to determine whether violations of Common Rules
have occurred, and if such violations are deemed to have occurred,
the imposition of appropriate sanctions as specified under FINRA's
Code of Procedure and sanctions guidelines.
(f) ``Regulatory Responsibilities'' shall mean the examination
responsibilities and Enforcement Responsibilities relating to
compliance by the [Dual]Common Members with the Common Rules and the
provisions of the Exchange Act and the rules and regulations
thereunder, and other applicable laws, rules and regulations, each
as set forth on Exhibit 1 attached hereto. The term ``Regulatory
Responsibilities'' shall also include the surveillance,
investigation and Enforcement Responsibilities relating to
compliance by Common Members with Rule 14e-4 of the Securities
Exchange Act (``Rule
[[Page 53998]]
14e-4''), with a focus on the standardized call option provision of
Rule 14e-4(a)(1)(ii)(D).
2. Regulatory [and Enforcement] Responsibilities. FINRA shall
assume Regulatory Responsibilities [and Enforcement
Responsibilities] for [Dual]Common Members. Attached as Exhibit 1 to
this Agreement and made part hereof, Nasdaq and BX furnished FINRA
with a current list of Common Rules and certified to FINRA that such
rules that are Nasdaq Rules and BX Rules are substantially similar
to the corresponding FINRA Rules (the ``Certification''). FINRA
hereby agrees that the rules listed in the Certification are Common
Rules as defined in this Agreement. Each year following the
Effective Date of this Agreement, or more frequently if required by
changes in either the rules of Nasdaq, BX or FINRA, Nasdaq and BX
shall submit an updated list of Common Rules to FINRA for review
which shall add Nasdaq Rules and BX Rules not included in the
current list of Common Rules that qualify as Common Rules as defined
in this Agreement; delete Nasdaq Rules and BX Rules included in the
current list of Common Rules that no longer qualify as Common Rules
as defined in this Agreement; and confirm that the remaining rules
on the current list of Common Rules continue to be Nasdaq Rules and
BX Rules that qualify as Common Rules as defined in this Agreement.
Within 30 days of receipt of such updated list, FINRA shall confirm
in writing whether the rules listed in any updated list are Common
Rules as defined in this Agreement. Notwithstanding anything herein
to the contrary, it is explicitly understood that the term
``Regulatory Responsibilities'' does not include, and Nasdaq and BX
shall retain full responsibility for (unless otherwise addressed by
separate agreement or rule) (collectively, the ``Retained
Responsibilities'') the following:
(a) [S]surveillance, examination, investigation and enforcement
with respect to trading activities or practices involving Nasdaq's
or BX's own marketplaces;
(b) registration pursuant to [its]Nasdaq's or BX's applicable
rules of associated persons (i.e., registration rules that are not
Common Rules);
(c) discharge of [its]Nasdaq's or BX's duties and obligations as
a Designated Examining Authority pursuant to Rule 17d-1 under the
Exchange Act; and
(d) any Nasdaq Rules and BX Rules that are not Common Rules.
[3.] Dual Members. Prior to the Effective Date, BX shall furnish
FINRA with a current list of Common Members, which shall be updated
no less frequently than once each quarter.]
[4.]3. No Charge. There shall be no charge to Nasdaq and BX by
FINRA for performing the Regulatory Responsibilities [and
Enforcement Responsibilities] under this Agreement except as
hereinafter provided]. FINRA shall provide Nasdaq and BX with ninety
(90) days advance written notice in the event FINRA decides to
impose any charges to Nasdaq and BX for performing the Regulatory
Responsibilities under this Agreement. If FINRA determines to impose
a charge, Nasdaq and BX shall have the right at the time of the
imposition of such charge to terminate this Agreement; provided,
however, that FINRA's Regulatory Responsibilities under this
Agreement shall continue until the Commission approves the
termination of this Agreement.
[5.]4. Reassignment of Regulatory Responsibilities.
Notwithstanding any provision hereof, this Agreement shall be
subject to any statute, or any rule or order of the Commission
reassigning Regulatory Responsibilities between self-regulatory
organizations. To the extent such action is inconsistent with this
Agreement, such action shall supersede the provisions hereof to the
extent necessary for them to be properly effectuated and the
provisions hereof in that respect shall be null and void.
[6.]5. Notification of Violations. In the event that FINRA
becomes aware of apparent violations of any Nasdaq Rules or BX
Rules, which are not listed as Common Rules, discovered pursuant to
the performance of the Regulatory Responsibilities assumed
hereunder, FINRA shall notify Nasdaq and BX of those apparent
violations for such response as Nasdaq and BX deems appropriate. In
the event that Nasdaq or BX becomes aware of apparent violations of
any Common Rules, discovered pursuant to the performance of the
Retained Responsibilities, Nasdaq and BX shall notify FINRA of those
apparent violations and such matters shall be handled by FINRA as
provided in this Agreement. Each party agrees to make available
promptly all files, records and witnesses necessary to assist the
other in its investigation or proceedings. Apparent violations of
Common Rules, FINRA Rules, federal securities laws, and rules and
regulations thereunder, shall be processed by, and enforcement
proceedings in respect thereto shall be conducted by FINRA as
provided hereinbefore; provided, however, that in the event a
[Dual]Common Member is the subject of an investigation relating to a
transaction on Nasdaq or BX, Nasdaq and BX, at each party's [may in
its] discretion assume concurrent jurisdiction and responsibility.
[7.]6. Continued Assistance.
(a) FINRA shall make available to Nasdaq and BX all information
obtained by FINRA in the performance by it of the Regulatory
Responsibilities hereunder with respect to the [Dual]Common Members
subject to this Agreement. In particular, and not in limitation of
the foregoing, FINRA shall furnish Nasdaq and BX any information it
obtains about [Dual]Common Members which reflects adversely on their
financial condition. Nasdaq and BX shall make available to FINRA any
information coming to [its]their attention that reflects adversely
on the financial condition of [Dual]Common Members or indicates
possible violations of applicable laws, rules or regulations by such
firms.
(b) The parties agree that documents or information shared shall
be held in confidence, and used only for the purposes of carrying
out their respective regulatory obligations. Neither party shall
assert regulatory or other privileges as against the other with
respect to documents or information that is required to be shared
pursuant to this Agreement.
(c) The sharing of documents or information between the parties
pursuant to this Agreement shall not be deemed a waiver as against
third parties of regulatory or other privileges relating to the
discovery of documents or information.
[8.]7. [Dual]Common Member Applications.
(a) [Dual]Common Members subject to this Agreement shall be
required to submit, and FINRA shall be responsible for processing
and acting upon all applications submitted on behalf of allied
persons, partners, officers, registered personnel and any other
person required to be approved by the rules of [both]Nasdaq, BX and
FINRA or associated with [Dual]Common Members thereof. Upon request,
FINRA shall advise Nasdaq and BX of any changes of allied members,
partners, officers, registered personnel and other persons required
to be approved by the rules of [both]Nasdaq, BX and FINRA.
(b) [Dual]Common Members shall be required to send to FINRA all
letters, termination notices or other material respecting the
individuals listed in paragraph [8]7(a).
(c) When as a result of processing such submissions FINRA
becomes aware of a statutory disqualification as defined in the
Exchange Act with respect to a [Dual]Common Member, FINRA shall
determine pursuant to Sections 15A(g) and/or Section 6(c) of the
Exchange Act the acceptability or continued applicability of the
person to whom such disqualification applies and keep Nasdaq and BX
advised of its actions in this regard for such subsequent
proceedings as Nasdaq and BX may initiate.
(d) Notwithstanding the foregoing, FINRA shall not review the
membership application, reports, filings, fingerprint cards,
notices, or other writings filed to determine if such documentation
submitted by a broker or dealer, or a person associated therewith or
other persons required to register or qualify by examination meets
the Nasdaq or BX requirements for general membership or for
specified categories of membership or participation in Nasdaq or BX,
such as Equities Market Maker, Equities ECN, Order Entry Firm, or
any similar type of Nasdaq or BX membership or participation that is
created after this Agreement is executed. FINRA shall not review
applications or other documentation filed to request a change in the
rights or status described in this paragraph [8]7(d), including
termination or limitation on activities, of a member or a
participant of Nasdaq or BX, or a person associated with, or
requesting association with, a member or participant of Nasdaq or
BX.
[9.]8. Branch Office Information. FINRA shall also be
responsible for processing and, if required, acting upon all
requests for the opening, address changes, and terminations of
branch offices by [Dual]Common Members and any other applications
required of [Dual]Common Members with respect to the Common Rules as
they may be amended from time to time. Upon request, FINRA shall
advise Nasdaq and BX of the opening, address change and termination
of branch
[[Page 53999]]
and main offices of [Dual]Common Members and the names of such
branch office managers.
[10.]9. Customer Complaints. Nasdaq and BX shall forward to
FINRA copies of all customer complaints involving [Dual]Common
Members received by Nasdaq and BX relating to FINRA's Regulatory
Responsibilities under this Agreement. It shall be FINRA's
responsibility to review and take appropriate action in respect to
such complaints.
[11.]10. Advertising. FINRA shall assume responsibility to
review the advertising of [Dual]Common Members subject to the
Agreement, provided that such material is filed with FINRA in
accordance with FINRA's filing procedures and is accompanied with
any applicable filing fees set forth in FINRA Rules.
[12.]11. No Restrictions on Regulatory Action. Nothing contained
in this Agreement shall restrict or in any way encumber the right of
either party to conduct its own independent or concurrent
investigation, examination or enforcement proceeding of or against
[Dual]Common Members, as either party, in its sole discretion, shall
deem appropriate or necessary.
[13.]12. Termination. This Agreement may be terminated by
Nasdaq, BX or FINRA at any time upon the approval of the Commission
after one (1) year's written notice to the other party, except as
provided in paragraph [4]3.
[14.]13. Effective Date. This Agreement shall be effective upon
approval of the Commission.
[15.]14. Arbitration. In the event of a dispute between the
parties as to the operation of this Agreement, Nasdaq, BX and FINRA
hereby agree that any such dispute shall be settled by arbitration
in Washington, DC in accordance with the rules of the American
Arbitration Association then in effect, or such other procedures as
the parties may mutually agree upon. Judgment on the award rendered
by the arbitrator(s) may be entered in any court having
jurisdiction. Each party acknowledges that the timely and complete
performance of its obligations pursuant to this Agreement is
critical to the business and operations of the other party. In the
event of a dispute between the parties, the parties shall continue
to perform their respective obligations under this Agreement in good
faith during the resolution of such dispute unless and until this
Agreement is terminated in accordance with its provisions. Nothing
in this Section [15]14 shall interfere with a party's right to
terminate this Agreement as set forth herein.
[16. Notification of Members. BX and FINRA shall notify Dual
Members of this Agreement after the Effective Date by means of a
uniform joint notice.]
[17.]15. Amendment. This Agreement may be amended in writing
duly approved by each party. All such amendments must be filed with
and approved by the Commission before they become effective.
[18.]16. Limitation of Liability. [Neither FINRA nor BX]None of
the parties nor any of their respective directors, governors,
officers or employees shall be liable to [the]any other party to
this Agreement for any liability, loss or damage resulting from or
claimed to have resulted from any delays, inaccuracies, errors or
omissions with respect to the provision of Regulatory
Responsibilities as provided hereby or for the failure to provide
any such responsibility, except with respect to such liability, loss
or damages as shall have been suffered by any party [one or the
other of FINRA or BX] and caused by the willful misconduct of [the
other]another party or their respective directors, governors,
officers or employees. No warranties, express or implied, are made
by [FINRA or BX]any party hereto with respect to any of the
responsibilities to be performed by [each of] them hereunder.
[19.]17. Relief from Responsibility. Pursuant to Sections
17(d)(1)(A) and 19(g) of the Exchange Act and Rule 17d-2 thereunder,
FINRA, Nasdaq and BX join in requesting the Commission, upon its
approval of this Agreement or any part thereof, to relieve Nasdaq
and BX of any and all responsibilities with respect to matters
allocated to FINRA pursuant to this Agreement; provided, however,
that this Agreement shall not be effective until the Effective Date.
[20.]18. Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
[21.]19. Separate Agreement. This Agreement is wholly separate
from (1) the multiparty Agreement made pursuant to Rule 170d-2 of
the Exchange Act among NYSE American LLC, Cboe BZX Exchange, Inc.,
the Cboe EDGX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe Exchange,
Inc., Nasdaq ISE, LLC, Financial Industry Regulatory Authority,
Inc., NYSE Arca, Inc., The Nasdaq Stock Market LLC, BOX Exchange
LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Miami International
Securities Exchange, LLC, Nasdaq GEMX, LLC, Nasdaq MRX, LLC, MIAX
PEARL, LLC, and MIAX Emerald, LLC approved by the Commission on
February 12, 2019 involving the allocation of regulatory
responsibilities with respect to common members for compliance with
common rules relating to the conduct by broker-dealers of accounts
for listed options, index warrants, currency index warrants and
currency warrants or (2) the multiparty Agreement made pursuant to
Rule 17d-2 of the Exchange Act among NYSE American LLC, Cboe BZX
Exchange, Inc., the Cboe EDGX Exchange, Inc., Cboe C2 Exchange,
Inc., Cboe Exchange, Inc., Nasdaq ISE, LLC, Financial Industry
Regulatory Authority, Inc., NYSE Arca, Inc., The Nasdaq Stock Market
LLC, BOX Exchange LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Miami
International Securities Exchange, LLC, Nasdaq GEMX, LLC, Nasdaq
MRX, LLC, MIAX PEARL, LLC, and MIAX Emerald, LLC approved by the
Commission on February 11, 2019 involving options-related market
surveillance matters and such agreements as may be amended from time
to time.
[22.]20. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and
such counterparts together shall constitute one and the same
instrument.
Exhibit 1
[Valid beginning December 15, 2008]
NOTE: The entire existing table of rules should be deleted and
replaced with the table below and for the remainder of the exhibit
new text is underlined and deleted text is in brackets.
NASDAQ AND BX RULES CERTIFICATION FOR 17d-2 AGREEMENT WITH FINRA
The Nasdaq Stock Market LLC (``Nasdaq'') and [Boston Stock
Exchange, Incorporated]Nasdaq BX, Inc. (``BX'') hereby certify[ies]
that the requirements contained in the Nasdaq and BX rules listed
below are identical to, or substantially similar to, the [NASD and]
FINRA rules noted below:
#Common Rules shall not include provisions regarding (i) notice,
reporting or any other filings made directly to or from Nasdaq or
BX, (ii) incorporation by reference to other Nasdaq or BX Rules that
are not Common Rules, (iii) exercise of discretion in a manner that
differs from FINRA's exercise of discretion, including but not
limited to exercise of exemptive authority, by Nasdaq or BX, (iv)
prior written approval of Nasdaq or BX, and (v) payment of fees or
fines to Nasdaq or BX.
------------------------------------------------------------------------
BX Rule Nasdaq Rule FINRA Rule
------------------------------------------------------------------------
General 2, Section 15. General 2, Section 4370. Business
Business Continuity Plans. 15. Business Continuity Plans.
Continuity Plans.
General 2, Section 10. General 2, Section 4517. Member Filing
Executive Representative. 10. Executive and Contact
Representative. Information
Requirements.
General 3, Rule 1002(b) General 3, Rule FINRA Bylaws Article
Qualifications of Exchange 1002(b) III, Sec. 1.
Members and Associated Qualifications of
Persons; Registration of Exchange Members
Branch Offices and and Associated
Designation of Office of Persons;
Supervisory Jurisdiction. Registration of
Branch Offices and
Designation of
Office of
Supervisory
Jurisdiction.
[[Page 54000]]
General 3, Rule 1002(d). General 3, Rule 3110(a)(3)
Registration of Branch 1002(d). Supervision and SM
Offices and Designation of Registration of .01 and .02
Office of Supervisory Branch Offices and Supervision* and
Jurisdiction. Designation of FINRA By-Laws
Office of Article IV, Sec. 8.
Supervisory
Jurisdiction.
General 3, 1012(c)(1). Duty General 3, Rule 1122. Filing of
to Ensure the Accuracy, 1012(c)(1). Duty to Misleading
Completeness, and Current Ensure the Information as to
Nature of Membership Accuracy, Membership or
Information Filed with the Completeness, and Registration; FINRA
Exchange. Current Nature of Bylaws Article IV,
Membership sec. 1(c) of the By-
Information Filed Laws.
with the Exchange.
General 4, Section 1, 1210. General 4, Section 1210. Registration
Registration Requirements. 1, 1210. Requirements.
Registration
Requirements.
General 4, Section 1, 1220. General 4, Section 1220. Registration
Registration Categories1. 1, 1220. Categories.
Registration
Categories1.
General 4, Section 1, General 4, Section 1220.06. Eliminated
1220.06. Eliminated 1, 1220.06. Registration
Registration Categories\1\. Eliminated Categories.
Registration
Categories\2\.
------------------------------------------------------------------------
\1\ FINRA shall only have Regulatory Responsibilities regarding BX
General 4, Section 1220 to the extent that BX recognizes the same
categories of limited principal and representative registration as the
BX Rule, by incorporating Nasdaq General 4, Section 1220, does not
recognize registration related to investment banking, research,
government securities, investment company and variable contracts
products, direct participation programs, private securities offerings,
and operations professional.
\2\ FINRA shall only have Regulatory Responsibilities regarding Nasdaq
General 4, Section 1220 to the extent that Nasdaq recognizes the same
categories of limited principal and representative registration as
Nasdaq General 4, Section 1220 does not recognize registration related
to investment banking, research, government securities, investment
company and variable contracts products, direct participation
programs, private securities offerings, and operations professional.
------------------------------------------------------------------------
------------------------------------------------------------------------
General 4, Section 1, Rule General 4, Section 1230. Associated
1230(1)-(2)(D) Associated 1, Rule 1230(1)- Persons Exempt from
Persons Exempt from (2)(D) Associated Registration.
Registration. Persons Exempt from
Registration.
General 4, Section 1, 1240. General 4, Section 1240. Continuing
Continuing Education 1, 1240. Continuing Education
Requirements. Education Requirements.
Requirements.
General 4, Section 1, 1250. General 4, Section 1010. Electronic
Electronic Filing 1, 1250. Electronic Filing Requirements
Requirements for Uniform Filing Requirements for Uniform Forms
Forms. for Uniform Forms. and FINRA Bylaws
Article V, Section
2.
Equity 5, Section 1. Equity 5, Section 1. 7410. Definitions.
Definitions. Definitions.
Equity 5, Section 2. Equity 5, Section 2. 7420. Applicability.
Applicability. Applicability.
Equity 5, Section 3. Equity 5, Section 3. 7430.
Synchronization of Member Synchronization of Synchronization of
Business Clocks. Member Business Member Business
Clocks. Clocks.
Equity 5, Section 4. Equity 5, Section 4. 7440. Recording of
Recording of Order Recording of Order Order Information.
Information. Information.
Equity 5, Section 5. Order Equity 5, Section 5. 7450. Order Data
Data Transmission Order Data Transmission
Requirements. Transmission Requirements.
Requirements.
Equity 5, Section 6. Equity 5, Section 6. 7460. Violation of
Violation of Order Audit Violation of Order Order Audit Trail
Trail System Rules. Audit Trail System System Rules.
Rules.
General 9, Section 1(a). General 9, Section 2010. Standards of
Standards of Commercial 1(a). Standards of Commercial Honor
Honor and Principles of Commercial Honor and Principles of
Trade. and Principles of Trade.*
Trade.
General 9, Section 1(b). General 9, Section 5320. Prohibition
Trading Ahead of Customer 1(b). Prohibition Against Trading
Orders. Against Trading Ahead of Customer
Ahead of Customer Orders.
Orders.
General 9, Section 1(c). General 9, Section 5270. Front Running
Front Running Policy. 1(c). Front Running of Block
Policy. Transactions.
General 9, Section 1(d). General 9, Section 5280. Trading Ahead
Trading Ahead of Research 1(d). Trading Ahead of Research
Reports. of Research Reports. Reports.
General 9, Section 1(e). General 9, Section 5240. Anti-
Anti-Intimidation/ 1(e). Anti- Intimidation/
Coordination. Intimidation/ Coordination.
Coordination.
General 9, Section 1(f). General 9, Section 2232. Customer
Confirmation of Callable 1(f). Confirmation Confirmations.
Common Stock. of Callable Common
Stock.
General 9, Section 1(g). General 9, Section 2140. Interfering
Interfering With the 1(h). Interfering With the Transfer
Transfer of Customer With the Transfer of Customer
Accounts in the Context of of Customer Accounts in the
Employment Disputes. Accounts in the Context of
Context of Employment
Employment Disputes. Disputes.
General 9, Section 1(i). Use General 9, Section 2020. Use of
of Manipulative, Deceptive 1(g). Use of Manipulative,
or Other Fraudulent Devices. Manipulative, Deceptive or Other
Deceptive or Other Fraudulent
Fraudulent Devices. Devices.*
General 9, Section 2. General 9, Section 2150. Improper Use
Customers' Securities or 2. Customers' of Customers'
Funds. Securities or Funds. Securities or
Funds; Prohibition
Against Guarantees
and Sharing in
Accounts.
General 9, Section 3. General 9, Section 2210. Communications
Communications with the 3. Communications with the Public.
Public. with the Public.
General 9, Section 5. General 9, Section 3230. Telemarketing.
Telemarketing. 5. Telemarketing.
General 9, Section 6. General 9, Section 2251. Processing and
Forwarding of Proxy and 6. Forwarding of Forwarding of Proxy
Other Issuer-Related Proxy and Other and Other Issuer-
Materials. Issuer-Related Related Materials.
Materials.
General 9, Section 7(a). General 9, Section 2261. Disclosure of
Disclosure of Financial 7(a). Disclosure of Financial
Condition. Financial Condition. Condition.
General 9, Section 7(b). General 9, Section 2262. Disclosure of
Disclosure of Control 7(b). Disclosure of Control
Relationship with Issuer. Control Relationship with
Relationship with Issuer.
Issuer.
General 9, Section 7(c). General 9, Section 2269. Disclosure of
Disclosure of Participation 7(c). Disclosure of Participation or
or Interest in Primary or Participation or Interest in Primary
Secondary Distribution. Interest in Primary or Secondary
or Secondary Distribution.
Distribution.
General 9, Section 10 General 9, Section 2111. Suitability.
Recommendations to 10 Recommendations
Customers (Suitability). to Customers
(Suitability).
[[Page 54001]]
General 9, Section 11. Best General 9, Section 5310. Best Execution
Execution and 11. Best Execution and
Interpositioning. and Interpositioning.
Interpositioning.
General 9, Section 12. General 9, Section 2231. Customer
Customer Account Statements. 12. Customer Account Statements.
Account Statements.
General 9, Section 13. General 9, Section 2264. Margin
Margin Disclosure Statement. 13. Margin Disclosure
Disclosure Statement.
Statement.
General 9, Section 14. General 9, Section 2130. Approval
Approval Procedures for Day- 14. Approval Procedures for Day-
Trading Accounts. Procedures for Day- Trading Accounts
Trading Accounts. and Rule 2270 Day-
Trading Risk
Disclosure
Statement.
General 9, Section 15. General 9, Section 3240. Borrowing From
Borrowing From or Lending 15. Borrowing From or Lending to
to Customers. or Lending to Customers.
Customers.
General 9, Section 16. General 9, Section 2122. Charges for
Charges for Services 16. Charges for Services Performed.
Performed. Services Performed.
General 9, Section 18. General 9, Section 5250. Payments for
Payments for Market Making. 18. Payments for Market Making.
Market Making.
General 9, Section 19. General 9, Section 3260. Discretionary
Discretionary Accounts. 19. Discretionary Accounts.
Accounts.
General 9, Section 20. General 9, Section 3110. Supervision.
Supervision. 20. Supervision.
General 9, Section 21(a). General 9, Section 3120. Supervisory
Supervisory Control System, 21(a). Supervisory Control System.
Annual Certification of Control System,
Compliance and Supervisory Annual
Processes. Certification of
Compliance and
Supervisory
Processes.
General 9, Section 21(c). General 9, Section 3130. Annual
Supervisory Control System, 21(c). Supervisory Certification of
Annual Certification of Control System, Compliance and
Compliance and Supervisory Annual Supervisory
Processes. Certification of Processes.
Compliance and
Supervisory
Processes.
General 9, Section 23. General 9, Section 3270. Outside
Outside Business Activities 23. Outside Business Activities
of an Associated Person. Business Activities of an Associated
of an Associated Person.
Person.
General 9, Section 24. General 9, Section 3280. Private
Private Securities 24. Private Securities
Transactions of an Securities Transactions of an
Associated Person. Transactions of an Associated Person.
Associated Person.
General 9, Section 25. General 9, Section 3210. Accounts at
Transactions for or by 25. Transactions Other Broker-
Associated Persons. for or by Dealers and
Associated Persons. Financial
Institutions.
General 9, Section 26. General 9, Section 3220. Influencing or
Influencing or Rewarding 26. Influencing or Rewarding Employees
Employees of Others. Rewarding Employees of Others.
of Others.
General 9, Section 27. General 9, Section 4530. Reporting
Reporting Requirements. 27. Reporting Requirements.
Requirements.
General 9, Section 28. General 9, Section 2263. Arbitration
Disclosure to Associated 28. Disclosure to Disclosure to
Persons When Signing Form U- Associated Persons Associated Persons
4. When Signing Form U- When Signing or
4. Acknowledging Form
U-4.
General 9, Section 30. Books General 9, Section 4511. General
and Records, Section 43. 30. Books and Requirements.
General Requirements. Records, Section
43. General
Requirements.
General 9, Section 31. Use General 9, Section 2060. Use of
of Information Obtained in 31. Use of Information
Fiduciary Capacity. Information Obtained in
Obtained in Fiduciary Capacity.
Fiduciary Capacity.
General 9, Section 37. Anti- General 9, Section 3310. Anti-Money
Money Laundering Compliance 37. Anti-Money Laundering
Program. Laundering Compliance Program.
Compliance Program.
General 9, Section 39. General 9, Section 4360. Fidelity
Fidelity Bonds. 39. Fidelity Bonds. Bonds.
General 9, Section 30. Books General 9, Section 4513. Records of
and Records, (d) Record of 44. Records of Written Customer
Written Complaints; (e) Written Customer Complaints.
``Complaint'' Defined. Complaints.
General 9, Section 30. Books General 9, Section 4512. Customer
and Records, (b) Customer 45. Customer Account
Account Information. Account Information. Information.
General 9, Section 30. Books General 9, Section 4514. Authorization
and Records, (g) Negotiable 46. Authorization Records for
Instruments Drawn From A Records for Negotiable
Customer's Account. Negotiable Instruments Drawn
Instruments Drawn From a Customer's
From a Customer's Account.
Account.
General 9, Section 30. Books General 9, Section 4515. Approval and
and Records, (j) Changes in 47. Approval and Documentation of
Account Name or Designation. Documentation of Changes in Account
Changes in Account Name or
Name or Designation. Designation.
General 9, Section 49. General 9, Section 5230. Payments
Payments Involving 49. Payments Involving
Publications that Influence Involving Publications that
the Market Price of a Publications that Influence the
Security. Influence the Market Price of a
Market Price of a Security.
Security.
General 9, Section 50. General 9, Section 1021. Foreign
Foreign Members. 50. Foreign Members.
Members.
General 9, Section 51. General 9, Section 2241. Research
Research Analysts. 51. Research Analysts and
Analyst. Research Reports.
General 9, Section 71. General 9, Section 4570. Custodian of
Custodian of Books and 71. Custodian of Books and Record,
Records. Books and Records. (a) Designation of
Custodian.
Equity 9, Section 1 Equity 9, Section 1. 5330. Adjustment of
Adjustment of Open Orders. Adjustment of Open Orders.
Orders.
Equity 9, Section 3. Equity 9, Section 3. 5210. Publication of
Publication of Transactions Publication of Transactions and
and Quotations. Transactions and Quotations.
Quotations.
Equity 9, Section 10. Prompt Equity 9, Section 11860(a)(4)(A).
Receipt and Delivery of 10. Prompt Receipt Purchases.
Securities. and Delivery of
Securities.
Equity 10, Section 1. Direct Equity 10, Section 2310. Direct
Participation Programs. 1. Direct Participation
Participation Programs.
Programs.
Equity 10, Section 2. Equity 10, Section 2341. Investment
Investment Company 2. Investment Company Securities.
Securities. Company Securities.
2841. General............... Equity 10, Section 2351(a). General
3(a). General. Provisions
Applicable to
Trading in Index
Warrants, Currency
Index Warrants and
Currency Warrants.
[[Page 54002]]
Equity 10, Section 4 Equity 10, Section 4 2357. Position and
Position Limits; 5 Exercise Position Limits; 5 Exercise Limits;
Limits; and 7 Liquidation Exercise Limits; Liquidations.
of Index Warrant Positions. and 7 Liquidation
of Index Warrant
Positions.
------------------------------------------------------------------------
The following provisions are covered by the Agreement between
the Parties:
<bullet> SEC '34 Act Section 28(e) Effect on Existing Law
<bullet> SEC '34 Act Rule 10b-10 Confirmation of Transactions
<bullet> SEC '34 Act Rule 203 of Regulation SHO Borrowing and
Delivery Requirements
<bullet> SEC '34 Act Rule 606 of Regulation NMS Disclosure of Order
Routing Information
<bullet> SEC '34 Act Rule 607 of Regulation NMS Customer Account
Statements
<bullet> SEA Rule 14e-4--Prohibited Transactions in Connection with
Partial Tender Offers-
[caret] FINRA shall perform surveillance, investigation, and
Enforcement Responsibilities for SEA Rule 14e-4(a)(1)(ii)(D).
* FINRA shall not have any Regulatory Responsibilities for these
rules as they pertain to violations of insider trading activities,
which is covered by a separate 17d-2 Agreement by and among [the
American Stock Exchange, LLC, BATS Exchange, Inc. Boston Stock
Exchange, Inc., CBOE Stock Exchange, LLC, Chicago Stock Exchange,
Inc., Financial Industry Regulatory Authority, Inc., International
Securities Exchange, LLC, The NASDAQ Stock Market LLC, National
Stock Exchange, Inc., New York Stock Exchange, LLC, NYSE Arca Inc.,
NYSE Regulation, Inc., and Philadelphia Stock Exchange, Inc.] Cboe
BZX Exchange, Inc., Cboe BYX Exchange, Inc., Chicago Stock Exchange,
Inc., Cboe EDGA Exchange Inc., Cboe EDGX Exchange Inc., Financial
Industry Regulatory Authority, Inc., MEMX, LLC, MIAX PEARL, LLC,
Nasdaq BX, Inc., Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, NYSE
National, Inc., New York Stock Exchange, LLC, NYSE American LLC,
NYSE Arca Inc., and Investors' Exchange LLC and the Long-Term Stock
Exchange, Inc. as approved by the SEC on [October 17, 2008]September
23, 2020.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#8cfef9e0e9a1efe3e1e1e9e2f8ffccffe9efa2ebe3fa"><span class="__cf_email__" data-cfemail="7705021b125a14181a1a121903043704121459101801">[email protected]</span></a>. Please include
File Number 4-575 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number 4-575. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method. The Commission will post all comments on the
Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed plan that are filed with the
Commission, and all written communications relating to the proposed
plan between the Commission and any person, other than those that may
be withheld from the public in accordance with the provisions of 5
U.S.C. 552, will be available for website viewing and printing in the
Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the plan also will be available for inspection and
copying at the principal offices of FINRA, BX, and Nasdaq. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number 4-575 and should be submitted on or before
October 20, 2021.
V. Discussion
The Commission finds that the proposed Amended Plan is consistent
with the factors set forth in Section 17(d) of the Act \13\ and Rule
17d-2(c) thereunder \14\ in that the proposed Amended Plan is necessary
or appropriate in the public interest and for the protection of
investors, fosters cooperation and coordination among SROs, and removes
impediments to and fosters the development of the national market
system. In particular, the Commission believes that the proposed
Amended Plan should reduce unnecessary regulatory duplication by
allocating to FINRA certain examination and enforcement
responsibilities for Common Members that would otherwise be performed
by FINRA, BX, and Nasdaq. Accordingly, the proposed Amended Plan
promotes efficiency by reducing costs to Common Members. Furthermore,
because BX, Nasdaq and FINRA will coordinate their regulatory functions
in accordance with the Amended Plan, the Amended Plan should promote
investor protection.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78q(d).
\14\ 17 CFR 240.17d-2(c).
---------------------------------------------------------------------------
The Commission notes that, under the Amended Plan, BX, Nasdaq and
FINRA have allocated regulatory responsibility for those BX and Nasdaq
rules, set forth in the Certification, that are substantially similar
to the applicable FINRA rules in that examination for compliance with
such provisions and rules would not require FINRA to develop one or
more new examination standards, modules, procedures, or criteria in
order to analyze the application of the rule, or a Common Member's
activity, conduct, or output in relation to such rule. In addition,
under the Amended Plan, FINRA would assume regulatory responsibility
for certain provisions of the federal securities laws and the rules and
regulations thereunder that are set forth in the Certification. The
Common Rules covered by the Amended Plan are specifically listed in the
Certification, as may be amended by the Parties from time to time.
According to the Amended Plan, BX and Nasdaq will each review the
Certification at least annually, or more frequently if required by
changes in either the rules of BX, Nasdaq, or FINRA, and, if necessary,
submit to FINRA an updated list of Common Rules to add BX or Nasdaq
rules not included on the then-current list of Common Rules that are
substantially similar to FINRA rules; delete BX or Nasdaq rules
included in the then-current list of Common Rules that no longer
qualify as common rules; and confirm that the remaining rules on the
list of Common Rules continue to be BX or Nasdaq rules that qualify as
common rules.\15\ FINRA will then confirm in writing whether the rules
listed in any updated list are Common Rules as defined in the Amended
Plan. The Commission believes that these provisions are designed to
provide for continuing communication between the Parties to ensure the
continued accuracy of the scope of the proposed allocation of
regulatory responsibility.
---------------------------------------------------------------------------
\15\ See paragraph 2 of the Amended Plan.
---------------------------------------------------------------------------
The Commission is hereby declaring effective an Amended Plan that,
among other things, allocates regulatory responsibility to FINRA for
the oversight and enforcement of all BX and Nasdaq rules that are
substantially
[[Page 54003]]
similar to the rules of FINRA for Common Members of BX and FINRA, and
Nasdaq and FINRA. Therefore, modifications to the Certification need
not be filed with the Commission as an amendment to the Amended Plan,
provided that the Parties are only adding to, deleting from, or
confirming changes to BX or Nasdaq rules in the Certification in
conformance with the definition of Common Rules provided in the Amended
Plan. However, should the Parties decide to add a BX and Nasdaq rule to
the Certification that is not substantially similar to a FINRA rule;
delete a BX and Nasdaq rule from the Certification that is
substantially similar to a FINRA rule; or leave on the Certification a
BX and Nasdaq rule that is no longer substantially similar to a FINRA
rule, then such a change would constitute an amendment to the Amended
Plan, which must be filed with the Commission pursuant to Rule 17d-2
under the Act.\16\
---------------------------------------------------------------------------
\16\ The addition to or deletion from the Certification of any
federal securities laws, rules, and regulations for which FINRA
would bear responsibility under the Amended Plan for examining, and
enforcing compliance by, Common Members, also would constitute an
amendment to the Amended Plan.
---------------------------------------------------------------------------
Under paragraph (c) of Rule 17d-2, the Commission may, after
appropriate notice and comment, declare a plan, or any part of a plan,
effective. In this instance, the Commission believes that appropriate
notice and comment can take place after the proposed amendment is
effective. The primary purpose of the Amended Plan is to allocate
surveillance, investigation, and enforcement responsibilities for Rule
14e-4 under the Act, to reflect the name change of Boston Stock
Exchange, Incorporated to Nasdaq BX, Inc., and to add Nasdaq as a
Participant to the Plan. The Commission notes that the prior version of
this plan immediately prior to this proposed amendment was published
for comment and the Commission did not receive any comments
thereon.\17\ Furthermore, the Commission does not believe that the
amendment to the plan raises any new regulatory issues that the
Commission has not previously considered.
---------------------------------------------------------------------------
\17\ See supra note 11 (citing to Securities Exchange Act
Release No. 59218).
---------------------------------------------------------------------------
VI. Conclusion
This order gives effect to the Amended Plan filed with the
Commission in File No. 4-575. The Parties shall notify all members
affected by the Amended Plan of their rights and obligations under the
Amended Plan.
It is therefore ordered, pursuant to Section 17(d) of the Act, that
the Amended Plan in File No. 4-575, between the FINRA, BX, and Nasdaq,
filed pursuant to Rule 17d-2 under the Act, hereby is approved and
declared effective.
It is further ordered that BX and Nasdaq are relieved of those
responsibilities allocated to FINRA under the Amended Plan in File No.
4-575.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(34).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-21113 Filed 9-28-21; 8:45 am]
BILLING CODE 8011-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.