Notice2022-14398
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 6120 (Trading Halts) To Conform to Recent Amendments to the SIP Plans and To Make Technical and Clarifying Changes to the Rule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 7, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 87 Issue 129 (Thursday, July 7, 2022)</title>
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[Federal Register Volume 87, Number 129 (Thursday, July 7, 2022)]
[Notices]
[Pages 40571-40575]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-14398]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95191; File No. SR-FINRA-2022-016]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rule 6120 (Trading Halts) To
Conform to Recent Amendments to the SIP Plans and To Make Technical and
Clarifying Changes to the Rule
June 30, 2022.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 22, 2022, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to amend FINRA Rule 6120 (Trading Halts) to
conform to recent amendments to the NMS plans governing the collection,
consolidation and dissemination of quotation and transaction
information for NMS stocks and to make technical and clarifying changes
to the rule.\4\
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\4\ See CTA/CQ Approval Order and UTP Approval Order, infra note
10.
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The text of the proposed rule change is available on FINRA's
website at <a href="http://www.finra.org">http://www.finra.org</a>, at the principal office of FINRA and
at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Background
FINRA Rule 6120 provides FINRA with the authority to halt trading
otherwise than on an exchange in NMS stocks under the circumstances
specified in Rule 6120(a) and pursuant to the procedures set forth in
Rule 6120(b). Rule 6120(a)(1) provides that FINRA shall halt trading
otherwise than on an exchange in any NMS stock whenever any market that
has the authority to call a regulatory halt in the security imposes a
trading halt, or suspends a listing, to: (a) permit dissemination of
material news; (b) obtain information from the issuer relating to
material news; (c) obtain information relating to the issuer's ability
to meet listing qualification requirements; or (d) obtain any other
information that is necessary to protect investors and the public
interest.
In addition, Rule 6120(a)(2) provides that FINRA shall halt trading
otherwise than on an exchange in any NMS stock when extraordinary
market activity in the security is occurring, such as the execution of
a series of transactions for a significant dollar value at prices
substantially unrelated to the current market for the security, as
measured by the national best bid or offer. To halt trading under this
provision, FINRA must determine that such extraordinary market activity
is likely to have a material effect on the market for the security and
either (i) FINRA determines that such extraordinary market activity is
caused by the misuse or malfunction of an electronic quotation,
communication, reporting, or execution system operated by, or linked
to, FINRA, or (ii) after consultation with a national securities
exchange trading the security, FINRA determines that such extraordinary
market activity is caused by the misuse or malfunction of an electronic
quotation, communication, reporting, or execution system operated by,
or linked to, such other national securities exchange. Rule 6120(a)(3)
addresses FINRA's authority to close its quotation display and trade
reporting facilities for NMS stocks under specified circumstances.
Specifically, Rule 6120(a)(3) provides that FINRA shall close the
Alternative Display Facility (``ADF'') \5\ or any Trade Reporting
Facility (``TRF'') \6\ to quotation or trade reporting activity, as
applicable, whenever the ADF or TRF is unable to transmit real-time
trade reporting information to the applicable Securities Information
Processor (SIP'').\7\ If the ADF or any TRF closes pursuant to this
provision, members are not prohibited from trading through other
markets for which trading is not halted.\8\
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\5\ The ADF is a display-only facility operated by FINRA that
provides FINRA members with a mechanism to display quotations and
report over-the-counter (``OTC'') transactions in NMS stocks.
\6\ The TRFs provide FINRA members with a mechanism to report
OTC transactions in NMS stocks. There are currently three active
TRFs: (1) FINRA/Nasdaq TRF Carteret, (2) FINRA/Nasdaq TRF Chicago
and (3) FINRA/NYSE TRF. While each TRF is operated by an affiliate
of a registered national securities exchange, each TRF is a FINRA
facility and subject to FINRA's oversight.
\7\ Currently, there are two SIPs that are responsible for
collecting, consolidating and disseminating quotation and
transaction information in NMS stocks that is collected pursuant to
the following three NMS plans: (1) the Joint Self-Regulatory
Organization Plan Governing the Collection, Consolidation and
Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading
Privileges Basis (the ``UTP Plan''), (2) the Second Restatement of
the CTA Plan (the ``CTA Plan''), and (3) the Restated CQ Plan (the
``CQ Plan'' and, collectively with the UTP Plan and the CTA Plan,
the ``SIP Plans''). FINRA and the national securities exchanges are
participants of the SIP Plans (collectively, the ``Participants'').
\8\ Rule 6120(a) also requires members to promptly notify FINRA
whenever they have knowledge of any matter related to an NMS stock
or the issuer thereof that has not been adequately disclosed to the
public or where they have knowledge of a regulatory problem relating
to such security. FINRA is not proposing any changes to this
requirement.
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[[Page 40572]]
Rule 6120(b) sets forth the procedures for commencement and
termination of trading halts and closures declared under Rule 6120(a).
Rule 6120(b)(1) provides that the commencement of a trading halt or
closure, as applicable, will be effective simultaneously with
appropriate notice. Rule 6120(b)(2) provides that trading shall resume
upon appropriate notice that a trading halt or closure is no longer in
effect.
In February 2021, the Participants filed proposed amendments to the
provisions of the SIP Plans governing regulatory and operational halts
(the ``SIP Plan Amendments'').\9\ The Commission approved the SIP Plan
Amendments on May 28, 2021.\10\ Among other things, the SIP Plan
Amendments updated and clarified the process for Regulatory Halts under
the SIP Plans. Under the SIP Plan Amendments, the Primary Listing
Market may also declare a Regulatory Halt in any security for which it
is the Primary Listing Market,\11\ as provided for in the rules of the
Primary Listing Market, if it determines that there is a SIP
Outage,\12\ Material SIP Latency,\13\ Extraordinary Market
Activity,\14\ or in the event of national, regional, or localized
disruption that necessitates a Regulatory Halt to maintain a fair and
orderly market.\15\ The SIP Plan Amendments also clarified that the
start time of a Regulatory Halt is when the Primary Listing Market
declares the halt, regardless of whether an issue with communications
impacts the dissemination of the notice.\16\ For Regulatory Halts other
than SIP Halts, the Primary Listing Market will declare the resumption
of trading when it determines that trading may resume in a fair and
orderly manner and in accordance with its rules.\17\ Where such a
Regulatory Halt is initiated by another Participant that is a Primary
Listing Market, a Participant may resume trading after the Participant
receives notification from the Primary Listing Market that the
Regulatory Halt has been terminated.\18\ For SIP Halts, the Primary
Listing Market will terminate the halt with a notification that
specifies a SIP Halt Resume Time.\19\
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\9\ See Securities Exchange Act Release No. 91189 (February 23,
2021), 86 FR 12038 (March 1, 2021) (``CTA/CQ Amendments Release'');
Securities Exchange Act Release No. 91190 (February 23, 2021), 86 FR
12045 (March 1, 2021) (``UTP Amendments Release'').
\10\ See Securities Exchange Act Release No. 92070 (May 28,
2021), 86 FR 29849 (June 3, 2021) (``CTA/CQ Approval Order'');
Securities Exchange Act Release No. 92071 (May 28, 2021), 86 FR
29846 (June 3, 2021) (``UTP Approval Order'').
\11\ See, e.g., UTP Amendments Release, supra note 9, at 12046.
``Regulatory Halt'' is defined in the SIP Plan Amendments as ``a
halt declared by the Primary Listing Market in trading in one or
more securities on all Trading Centers for regulatory purposes,
including for the dissemination of material news, news pending,
suspensions, or where otherwise necessary to maintain a fair and
orderly market. A Regulatory Halt includes a trading pause triggered
by Limit Up Limit Down, a halt based on Extraordinary Market
Activity, a trading halt triggered by a Market-Wide Circuit Breaker,
and a SIP Halt.'' See id. at 12046 n.8. The ``Primary Listing
Market'' is defined as ``the national securities exchange on which
an Eligible Security is listed. If an Eligible Security is listed on
more than one national securities exchange, Primary Listing Market
means the exchange on which the security has been listed the
longest.'' See id. at 12046 n.9. All capitalized terms not otherwise
defined herein have the meaning given to them in the SIP Plans, as
amended by the SIP Plan Amendments.
\12\ ``SIP Outage'' is defined as ``a situation in which the
Processor has ceased, or anticipates being unable, to provide
updated and/or accurate quotation or last sale price information in
one or more securities for a material period that exceeds the time
thresholds for an orderly failover to backup facilities established
by mutual agreement among the Processor, the Primary Listing Market
for the affected securities, and the Operating Committee unless the
Primary Listing Market, in consultation with the Processor and the
Operating Committee, determines that resumption of accurate data is
expected in the near future.'' See, e.g., UTP Amendments Release,
supra note 9, at 12046 n.10.
\13\ ``Material SIP Latency'' is defined as ``a delay of
quotation or last sale price information in one or more securities
between the time data is received by the Processor and the time the
Processor disseminates the data over the high speed line or over the
`high speed line' under the CQ Plan, which delay the Primary Listing
Market determines, in consultation with, and in accordance with,
publicly disclosed guidelines established by the Operating
Committee, to be (a) material and (b) unlikely to be resolved in the
near future.'' See, e.g., UTP Amendments Release, supra note 9, at
12046 n.11. A ``SIP Halt'' includes any Regulatory Halt in one or
more securities that a Primary Listing Market declares in the event
of a SIP Outage or Material SIP Latency.
\14\ ``Extraordinary Market Activity'' is defined as ``a
disruption or malfunction of any electronic quotation,
communication, reporting, or execution system operated by, or linked
to, the Processor or a Trading Center or a member of such Trading
Center that has a severe and continuing negative impact, on a
market-wide basis, on quoting, order, or trading activity or on the
availability of market information necessary to maintain a fair and
orderly market. For purposes of this definition, a severe and
continuing negative impact on quoting, order, or trading activity
includes (i) a series of quotes, orders, or transactions at prices
substantially unrelated to the current market for the security or
securities; (ii) duplicative or erroneous quoting, order, trade
reporting, or other related message traffic between one or more
Trading Centers or their members; or (iii) the unavailability of
quoting, order, transaction information, or regulatory messages for
a sustained period.'' See, e.g., UTP Amendments Release, supra note
9, at 12046 n.12.
\15\ See, e.g., UTP Amendments Release, supra note 9, at 12046.
\16\ See, e.g., UTP Plan, Section X.D.1.
\17\ See, e.g., UTP Amendments Release, supra note 9, at 12046.
\18\ See, e.g., UTP Plan, Section X.E.2.
\19\ See, e.g., UTP Amendments Release, supra note 9, at 12046.
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FINRA is proposing to amend FINRA Rule 6120 to conform to the
updated Regulatory Halt provisions for NMS stocks as set forth in the
SIP Plan Amendments. Under the proposed rule change, Rule 6120 would be
amended as described below to incorporate the definitions, notice and
timing requirements for Regulatory Halts under the SIP Plan Amendments,
as well as to make related organizational, clarifying, and technical
changes.
Authority To Initiate Halts and Facility Closures
The purpose of Rule 6120(a)(1) is to provide authority for FINRA to
halt OTC trading in an NMS stock when a Primary Listing Market declares
a Regulatory Halt in that NMS stock, so that trading is halted both on
the equity exchanges and in the OTC market. FINRA is proposing
amendments to simplify the text of Rule 6120(a) to delete the list of
specific types of Regulatory Halts and instead provide FINRA with
authority to declare a halt in trading otherwise than on an exchange in
an NMS stock whenever a Primary Listing Market declares any type of
halt that meets the definition of a ``Regulatory Halt'' under the SIP
Plans.\20\ Thus, for example, instead of explicitly adding ``SIP Halt''
to Rule 6120(a)(1), FINRA is amending the rule to tie FINRA's authority
for declaring OTC halts in any NMS stock to the declaration of any
``Regulatory Halt,'' as that term is defined in the SIP Plans, by a
Primary Listing Market.\21\ FINRA believes that using the same terms
(and cross-referencing the definitions) used in the SIP Plan Amendments
would simplify and streamline the rule, as well as avoid any potential
confusion about differences between FINRA's authority under Rule
6120(a)(1) and Regulatory
[[Page 40573]]
Halts that are declared by a Primary Listing Market.\22\
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\20\ The proposed rule change would also update the citation in
Rule 6120(a)(1) for the definition of ``NMS stock'' under Regulation
NMS from Rule 600(b)(47) to Rule 600(b)(55) to reflect recent
reorganization of the defined terms in Rule 600 of Regulation NMS.
\21\ The proposed rule change would also add new paragraph (c)
to Rule 6120 providing that, for purposes of Rule 6120, the
following terms have the meanings set forth in the applicable SIP
Plan: ``Primary Listing Market,'' ``Processor,'' ``Regulatory
Halt,'' ``SIP Halt Resume Time,'' and ``Trading Center.''
\22\ The proposed updates should ensure that Rule 6120(a)(1)
remains consistent with the SIP Plans and avoid the need to update
the FINRA rule to account for any changes in the types of Regulatory
Halts covered under the SIP Plans.
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In addition, Rule 6120(a)(2) would be updated to align FINRA's
authority to declare an OTC trading halt in an NMS stock due to
``extraordinary market activity'' with the scope of that term as
provided for in the SIP Plan Amendments. As described above, Rule
6120(a)(2) provides that FINRA shall halt OTC trading in an NMS stock
when extraordinary market activity is occurring, FINRA determines that
such activity is likely to have a material effect on the market for the
security, and FINRA determines that the activity is caused by the
misuse or malfunction of a system operated by, or linked to, FINRA or a
national securities exchange. Under the proposed rule change, FINRA is
amending this provision to incorporate the elements of the definition
of Extraordinary Market Activity under the SIP Plan Amendments.\23\
Specifically, Rule 6120(a)(2)(A) would be revised to provide halt
authority where extraordinary market activity in a security is
occurring that has a severe and continuing negative impact, on a
market-wide basis, on quoting, order, or trading activity or on the
availability of market information necessary to maintain a fair and
orderly market. Consistent with the SIP Plan Amendments, Rule
6120(a)(2)(A) would further provide that, for purposes of FINRA Rule
6120(a)(2), a severe and continuing negative impact on quoting, order,
or trading activity includes (i) a series of quotes, orders, or
transactions at prices substantially unrelated to the current market
for the security or securities; (ii) duplicative or erroneous quoting,
order, trade reporting, or other related message traffic between one or
more Trading Centers or members; or (iii) the unavailability of
quoting, order, transaction information, or regulatory messages for a
sustained period. Rules 6120(a)(2)(C)(i) and (ii) (to be redesignated
as Rules 6120(a)(2)(B)(i) and (ii)) would also be adjusted in two ways
to further align FINRA's authority with the authority for a Primary
Listing Market to declare a Regulatory Halt in an NMS stock due to
Extraordinary Market Activity under the SIP Plan Amendments. First,
both provisions would be amended to refer to the ``disruption'' or
malfunction of an applicable system, rather than the ``misuse'' or
malfunction of such system. Second, Rule 6120(a)(2)(B)(i) would be
amended to refer to a system operated by, or linked to, a FINRA member
(in addition to a system operated by, or linked to, FINRA itself), and
Rule 6120(a)(2)(B)(ii) would be similarly amended to refer to a system
operated by, or linked to, a member of the exchange trading the
security with which FINRA has consulted (in addition to a system
operated by, or linked to, the exchange itself). FINRA believes that
these proposed conforming amendments would enhance consistency between
FINRA's authority to halt trading in the OTC market for NMS stocks due
to extraordinary market activity with the exchanges' authority to halt
trading due to extraordinary market activity, as set forth in the SIP
Plan Amendments.
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\23\ To reflect these changes and incorporate the new definition
of ``extraordinary market activity'' within paragraph (a)(2)(A),
paragraph (a)(2)(B) would be deleted and current paragraph (a)(2)(C)
would be redesignated as paragraph (a)(2)(B).
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FINRA is also proposing several clarifying changes to Rule
6120(a)(3), which provides FINRA with authority to close the ADF or a
TRF to quotation or trade reporting activity in certain
circumstances.\24\ Rule 6120(a)(3) would be amended in several
instances to refer to both quoting and trading, rather than just
trading, since, among other things, the ADF provides FINRA members with
a facility for the display of quotations.\25\ Finally, the proposed
rule change would add a clause to the first sentence of Rule 6120(a)(3)
to further clarify that in addition to circumstances where the ADF or a
TRF is unable to accept quotes or trade reports from participants or
transmit real-time quotation or trade reporting information to the
Processor,\26\ FINRA has the authority to close the relevant facility
in the event of other internal or external systems issues that cause a
severe and continuing negative impact on the functioning of the
facility. For example, a system linked to the ADF or a TRF may cause a
severe and continuing negative impact on the facility. This proposed
additional language would clarify that FINRA's authority to close the
ADF or a TRF extends to instances where a facility's ability to
properly function is impacted by a system linked to the facility (e.g.,
a member's execution or reporting system), as well as malfunctions or
disruptions originating within the facility itself.\27\
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\24\ As described above, Rule 6120(a) provides authority with
respect to both trading halts and facility closures. Therefore, as
an additional clarifying change, FINRA is also proposing to add a
reference to facility closures in the title of paragraph (a).
\25\ Specifically, clause (i) in the first sentence would be
amended to provide that FINRA may close a facility when it is unable
to ``accept quotes or trade reports from participants or transmit
real-time quotation or trade reporting information to the applicable
Processor'' and the last sentence would be revised to provide that
if a facility closes ``to quoting or trading . . . members would not
be prohibited from quoting or trading through other markets for
which quoting or trading is not halted.'' In addition, the rule
would be amended to clarify that FINRA shall, ``in its discretion,''
close the ADF or any TRF in such circumstances. This change is a
non-substantive clarification, as FINRA is already responsible for
determining whether circumstances exist that would merit closing the
ADF or a TRF.
\26\ The existing reference to the applicable ``Securities
Information Processor'' would be amended to refer to the
``Processor'' as defined in the SIP Plan Amendments. See supra note
21.
\27\ FINRA reminds members that firms must establish, maintain
and enforce written policies and procedures that include a pre-
determined response addressing OTC trading and reporting in the
event of a systems issue during the trading day that prevents the
firm from reporting OTC trades within the timeframe prescribed by
FINRA rules. A firm's procedures should address the firm's response
to a FINRA facility systems issue, as well as an issue with its own
or its vendor's systems. In the event of a widespread FINRA facility
systems issue, firms may only continue to directly execute OTC
trades in NMS stocks if they have connectivity and the ability to
report to another FINRA facility. See Trade Reporting Notice,
January 20, 2016 (OTC Equity Trading and Reporting in the Event of
Systems Issues (``Systems Issues Notice'')). The proposed rule
change would not affect these obligations.
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Commencement and Termination of Halts or Facility Closures
With respect to the process for initiating and terminating halts or
facility closures, the proposed rule change would amend Rule 6120(b) to
align FINRA's process related to Regulatory Halts declared under Rule
6120(a)(1) with the process specified in the SIP Plan Amendments.
Existing Rule 6120(b) would be reorganized to address Regulatory Halts
initiated under Rule 6120(a)(1) under paragraph (b)(1), and separately
address FINRA halts and facility closures initiated under Rules
6120(a)(2) or (3), respectively, under paragraph (b)(2).\28\ Consistent
with the SIP Plan Amendments, proposed Rule 6120(b)(1) would provide
that, in the case of a Regulatory Halt, the start time of the trading
halt shall be when the Primary Listing Market declares the Regulatory
Halt, regardless of whether an issue with communications impacts the
dissemination of the notice. Further, unless otherwise specified in
Rule 6121,\29\ trading following a Regulatory
[[Page 40574]]
Halt shall resume upon notice from the Primary Listing Market that the
Regulatory Halt has been terminated or at the SIP Halt Resume Time
specified in such notice, as applicable. These changes would conform
FINRA's language regarding the commencement and termination of
Regulatory Halts with the language specified in the SIP Plan
Amendments.\30\
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\28\ In connection with this reorganization, the title of Rule
6120(b) would be updated to include a reference to facility
closures, Rule 6120(b)(1) would be titled ``Regulatory Halts'' and
Rule 6120(b)(2) would be titled ``FINRA Halts and Closures.''
\29\ Rule 6121 (Trading Halts Due to Extraordinary Market
Activity) sets forth requirements specifically relating to the
resumption of trading following a trading pause pursuant to the
Regulation NMS Plan to Address Extraordinary Market Volatility (the
``Limit Up Limit Down'' Plan). Under the SIP Plan Amendments, a
Limit Up Limit Down trading pause is a type of Regulatory Halt.
\30\ See supra note 19 and accompanying text.
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Proposed Rule 6120(b)(2) would incorporate the existing
commencement and termination language under current Rules 6120(b)(1)
and (2), and specify that such provisions apply to trading halts and
facility closures initiated by FINRA under Rule 6120(a)(2) and
(a)(3).\31\ The proposed rule change would also make non-substantive,
clarifying edits to the language of Rule 6120(b)(2).\32\
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\31\ As noted above, firms must establish, maintain and enforce
written policies and procedures that include a pre-determined
response addressing OTC trading and reporting in the event that a
FINRA facility experiences a widespread systems issue during the
trading day. FINRA has provided guidance regarding how it will
announce when it believes that firms should invoke such procedures.
See Systems Issues Notice, supra note 27, at 2. The proposed rule
change would not affect such guidance.
\32\ Specifically, Rule 6120(b)(2) would be amended to provide
that ``the commencement of the trading halt or closure will be
effective simultaneously with appropriate notice from FINRA, and the
halt or closure will terminate upon appropriate notice from FINRA
that the trading halt or closure is no longer in effect,'' rather
than ``the commencement of the trading halt or closure will be
effective simultaneously with appropriate notice'' and ``[t]rading
shall resume upon appropriate notice that a trading halt or closure
is no longer in effect.''
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FINRA has filed the proposed rule change for immediate
effectiveness. The operative date of the proposed rule change will be
30 days from the date of filing.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\33\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest. FINRA believes that
conforming its trading halt authority under Rule 6120 with the updated
provisions of the SIP Plans will promote consistency between the
treatment of off-exchange and on-exchange trading in NMS stocks,
thereby enhancing coordination among FINRA and the national securities
exchanges. FINRA further believes that the other proposed technical,
clarifying, and organizational updates to Rule 6120 are in furtherance
of the objectives of the Act by clarifying the scope and operation of
the rule.
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\33\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. Further, the proposed rule
change is expected to have little impact on how FINRA executes trading
halts. Thus, FINRA does not expect the proposed rule change to impose
any additional costs on member firms or the investing public, or to
convey material benefits beyond providing additional clarity and
avoiding potential confusion about differences between FINRA's
authority under Rule 6120 and Regulatory Halts that are declared by a
Primary Listing Market.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \34\ and Rule 19b-
4(f)(6) thereunder.\35\
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\34\ 15 U.S.C. 78s(b)(3)(A).
\35\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
FINRA has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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#7200071e175f111d1f1f171c0601320117115c151d04"><span class="__cf_email__" data-cfemail="8efcfbe2eba3ede1e3e3ebe0fafdcefdebeda0e9e1f8">[email protected]</span></a>. Please include
File Number SR-FINRA-2022-016 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 SR-FINRA-2022-016. 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 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 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 filing also will be available for inspection
and copying at the principal office of FINRA. 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
[[Page 40575]]
information that you wish to make available publicly. All submissions
should refer to File Number SR-FINRA-2022-016 and should be submitted
on or before July 28, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
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\36\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2022-14398 Filed 7-6-22; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on July 7, 2022.
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.