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Notice2026-22452

Self-Regulatory Organizations: Long-Term Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend LTSE Rule 3.291

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Published
November 4, 2026

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 91 Issue 212 (Wednesday, November 4, 2026)</title>
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[Federal Register Volume 91, Number 212 (Wednesday, November 4, 2026)]
[Notices]
[Pages 69593-69596]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22452]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106779; File No. SR-LTSE-2026-25]


Self-Regulatory Organizations: Long-Term Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend LTSE Rule 3.291

October 30, 2026.
    Pursuant to the provisions of Section 19(b)(1) under the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on October 20, 2026, Long-Term Stock Exchange, 
Inc. (``LTSE'' or the ``Exchange'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II and III below, which Items have been prepared 
by the self-regulatory organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing with the Commission a proposed rule change 
to amend LTSE Rule 3.291, Influencing or Rewarding Employees of Others; 
Gratuities, to conform to the rules of the Financial Industry 
Regulatory Authority, Inc. (``FINRA'') for purposes of an agreement 
between the Exchange and FINRA pursuant to Rule 17d-2 under the Act.\3\
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    \3\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available at the Exchange's 
website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a> and at the principal 
office of the Exchange.

II. Self-Regulatory Organization's Statement on the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange 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. The self-regulatory organization 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
    The Exchange proposes to amend LTSE Rule 3.291, Influencing or 
Rewarding Employees of Others; Gratuities, to conform the rule so that 
it is substantially similar to FINRA Rule 3220. The Exchange notes that 
this filing is based on a proposal recently submitted by FINRA, and 
approved by the Commission, to amend FINRA Rule 3220 (Influencing or 
Rewarding Employees of Others).\4\
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    \4\ See Securities Exchange Act Release No. 104830 (February 12, 
2026), 91 FR 7570 (February 18, 2026) (Order Approving File No. SR-
FINRA-2025-003) (``FINRA Approval Order'').
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    Pursuant to Rule 17d-2 under the Act,\5\ the Exchange and FINRA 
entered into an agreement to allocate regulatory responsibility for 
common rules (the ``17d-2 Agreement''). The 17d-2 Agreement covers 
common members of the Exchange and FINRA and allocates to FINRA 
regulatory responsibility, with respect to common members, for the 
following: (i) examination of common members of the Exchange and FINRA 
for compliance with certain federal securities laws, rules and 
regulations and rules of the Exchange that the Exchange has certified 
as identical or substantially similar to FINRA rules; (ii) 
investigation of common members of the Exchange and FINRA for 
violations of certain federal securities laws, rules or regulations, or 
Exchange rules that the Exchange has certified as identical or 
substantially similar to a FINRA rule; and (iii) enforcement of 
compliance by common members with certain federal securities laws, 
rules and regulations, and the rules of the Exchange that the Exchange 
has certified as identical or substantially similar to FINRA rules.\6\
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    \5\ 17 CFR 240.17d-2.
    \6\ See Securities and Exchange Release No. 86587 (August 7, 
2019), 84 FR 39883 (August 12, 2019) (approving File No. 4-747).
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    The 17d-2 Agreement included a certification by the Exchange that 
states that the requirements contained in certain Exchange rules are 
identical to, or substantially similar to, certain FINRA rules that 
have been identified as comparable. To conform to comparable FINRA 
rules for purposes of the 17d-2 Agreement, the Exchange proposes 
conforming the text of LTSE Rule 3.291 so that it is substantially 
similar to FINRA Rule 3220.
    Currently, LTSE Rule 3.291 is excluded from the 17d-2 Agreement 
because it is not identical, or substantially similar, to FINRA Rule

[[Page 69594]]

3220. Current LTSE Rule 3.291 prohibits a Member or person associated 
with a Member from directly or indirectly, giving or permitting to be 
given anything of value, including gratuities, in excess of one hundred 
dollars per individual per year to any person, principal, proprietor, 
employee, agent or representative of another person where such payment 
or gratuity is in relation to the business of the employer of the 
recipient of the payment or gratuity. FINRA Rule 3220 currently 
prohibits gifts in excess of $300.00, where the gift or gratuity is in 
relation to the business of the employer of the recipient. Unlike FINRA 
Rule 3220, current LTSE Rule 3.291 does not include provisions 
covering: supervision and record keeping requirements; an exclusion for 
payments made pursuant to bona fide, written employment contracts; 
gifts incidental to business entertainment; valuation of gifts; 
aggregation of gifts; personal gifts; bereavement gifts; de minimis 
gifts and promotional or commemorative items; donations due to 
federally declared major disasters; or gifts to a Member's associated 
persons or individual retail customers. LTSE Rule 3.291 was, therefore, 
excluded from the 17d-2 Agreement because it was not identical or 
substantially similar to FINRA Rule 3220. To harmonize its rules with 
FINRA, the Exchange proposes to conform the rule text of LTSE Rule 
3.291 to text that is substantially similar to FINRA Rule 3220 so that 
it may be incorporated into the 17d-2 Agreement in its entirety.
    The Exchange believes that these changes will help to avoid 
confusion among Members of the Exchange that are also members of FINRA 
by harmonizing LTSE Rule 3.291 with FINRA Rule 3220. The proposed 
changes to LTSE Rule 3.291 are designed to enable the Exchange to 
incorporate LTSE Rule 3.291 into the 17d-2 Agreement, further reducing 
duplicative regulation of Members that are also members of FINRA. For 
the avoidance of doubt, LTSE Rule 3.291 would equally apply to 
Exchange-only Members as the Exchange believes it appropriately 
protects against improprieties, such as conflicts of interest, that 
might arise when a Member or person associated with a Member gives 
items of value to an employee of another person, such as an 
institutional customer, vendor or counterparty with the hope of 
strengthening the relationship with the customer.
    First, the Exchange proposes to amend LTSE Rule 3.291(a) to 
increase the gift limit from $100 to $300 per individual per year. 
FINRA stated that the current gift limit of $100 has been in place 
since 1992.\7\ FINRA increased the gift limit from $100 to $300 to 
account for past inflation since 1992 and to account for expected 
future inflation for approximately ten years, thereby reducing the 
frequency of future upward adjustments to account for inflation.\8\ 
Consistent with FINRA's determination, the Exchange believes that a 
$300 gift limit would continue to permit the exchange of business 
courtesies while helping to guard against excessiveness, and reasonably 
reflects changes to purchasing power due to inflation since the gift 
limit was last raised in 1992 as well as approximately ten years of 
expected future inflation.
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    \7\ See supra note 4.
    \8\ See id.
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    Second, the Exchange proposes to add a new paragraph (d) to LTSE 
Rule 3.291 that would authorize FINRA staff to conditionally or 
unconditionally grant an exemption from any provision of LTSE Rule 
3.291 for good cause shown, provided that such exemption is consistent 
with the purpose of the Rule, the protection of investors, and the 
public interest. Specifically, the Exchange proposes that pursuant to 
LTSE Rule Series 9.600 (Procedures for Exemptions), FINRA staff, for 
good cause shown after taking into consideration all relevant factors, 
may conditionally or unconditionally grant an exemption from any 
provision of this Rule to the extent that such exemption is consistent 
with the purpose of the Rule, the protection of investors, and the 
public interest. This proposed provision mirrors the exemptive relief 
authority added by FINRA in new Rule 3220(d).\9\ Given the scope of 
LTSE Rule 3.291, which applies to gifts given to a wide range of 
recipients where the payment is in relation to the business of the 
employer of the recipient, and given the diversity of Member sizes, 
structures, businesses, and distribution models, the Exchange believes 
it would be useful and appropriate to have the ability to provide 
relief from a particular provision of the Rule under specific factual 
circumstances.
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    \9\ See id.
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    Third, FINRA Rule 3220 incorporated published guidance interpreting 
FINRA Rule 3220, including NASD Notice to Members 06-69,\10\ FINRA's 
Frequently Asked Questions on Gifts, Business Entertainment, and Non-
Cash Compensation,\11\ as well as an interpretive letter regarding 
bereavement gifts (the ``Aly Letter'').\12\ To maintain substantive 
alignment with FINRA Rule 3220, the Exchange proposes to adopt 
corresponding Supplementary Material .01 through .09 to LTSE Rule 
3.291. Each proposed Supplementary Material section is described below.
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    \10\ NASD Notice to Members 06-69 (Dec. 2006) (``NTM 06-69'').
    \11\ Gifts/Business Entertainment/Non-Cash Compensation FAQs, 
<a href="https://www.finra.org/rules-guidance/key-topics/gifts-gratuities-and-non-cash-compensation/faqs">https://www.finra.org/rules-guidance/key-topics/gifts-gratuities-and-non-cash-compensation/faqs</a> (``FAQs'').
    \12\ Letter from Gary L. Goldsholle, Vice President & Associate 
General Counsel, FINRA, to Amal Aly, Managing Director & Associate 
General Counsel, SIFMA, dated December 17, 2007 (``Aly Letter'').
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    Proposed Supplementary Material .01 (Gifts Incidental to Business 
Entertainment) would state that a gift given during the course of a 
business entertainment event is subject to LTSE Rule 3.291 unless it is 
consistent with the requirements of proposed Supplementary Material .04 
(Personal Gifts) or .06 (De Minimis Gifts and Promotional or 
Commemorative Items) which is substantially similar to FINRA Rule 3220 
Supplementary Material .04 and .06. For the purpose of the $300 limit, 
the cost of the business entertainment event itself would not be 
included in the value of the gift.
    Proposed Supplementary Material .02 (Valuation of Gifts) would 
require Members to value gifts (other than tickets for sporting or 
other events) at cost, exclusive of tax and delivery charges, and would 
require Members to value tickets for sporting or other events at the 
higher of cost or face value. If gifts are given to multiple 
recipients, Members must record the names of each recipient and 
calculate and record the value of the gift on a pro rata, per-recipient 
basis, for purposes of ensuring compliance with the $300 limit in LTSE 
Rule 3.291(a). FINRA Rule 3220 at Supplementary Material .02 requires 
Members to value gifts (other than tickets for sporting or other 
events) at cost rather than at the higher of cost or market value 
reduces complexity and subjectivity because market value can be 
difficult and burdensome to determine, while distinguishing tickets for 
sporting or other events accounts for the fact that such tickets are 
commonly purchased on secondary markets at costs that differ from face 
value.
    Proposed Supplementary Material .03 (Aggregation of Gifts) would 
require Members to aggregate all gifts given by the Member and each 
associated person of the Member to a particular recipient over the 
course of the year for purposes of ensuring compliance with the $300 
limit in LTSE Rule 3.291(a), and would require each Member to state in 
its procedures whether it is aggregating all gifts given by the Member 
and its

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associated persons on a calendar year, fiscal year, or on a rolling 
basis beginning with the first gift to any particular recipient. The 
aggregation requirement would not apply to personal gifts under 
proposed Supplementary Material .04 or to gifts of de minimis value or 
promotional or commemorative items under proposed Supplementary 
Material .06 as they are already not subject to the gift limit. This 
proposed provision which is substantially similar to FINRA Rule 3220.03 
would help ensure that persons who give multiple gifts in a year to the 
same recipient do not circumvent the gift limit.
    Proposed Supplementary Material .04 (Personal Gifts) would state 
that gifts that are given for infrequent life events (e.g., a wedding 
gift or a congratulatory gift for the birth of a child) are not subject 
to the restrictions in LTSE Rule 3.291(a) or the recordkeeping 
requirements in LTSE Rule 3.291(c), provided the gifts are customary 
and reasonable, personal in nature, and not in relation to the business 
of the employer of the recipient. In determining whether a gift is 
``personal in nature and not in relation to the business of the 
employer of the recipient,'' Members should consider a number of 
factors, including the nature of any pre-existing personal or family 
relationship between the person giving the gift and the recipient and 
whether the associated person paid for the gift. When the Member bears 
the cost of the gift, either directly or by reimbursing an associated 
person, the Exchange will presume that such gift is not personal in 
nature and instead is in relation to the business of the employer of 
the recipient. This provision is substantially similar to FINRA Rule 
3220 at Supplementary Material .04.
    Consistent with FINRA Rule 3220 at Supplementary Material .05 
(Bereavement Gifts), LTSE Rule 3.291 at proposed Supplementary .05 
separates bereavement gifts from personal gifts. Proposed Supplementary 
Material .05 would state that bereavement gifts that are customary and 
reasonable are not considered to be in relation to the business of the 
employer of the recipient and, therefore, are not subject to the 
restrictions in LTSE Rule 3.291(a) or the recordkeeping requirements in 
LTSE Rule 3.291(c). This provision is substantially similar to FINRA 
Rule 3220 at Supplementary Material .05.
    Proposed Supplementary Material .06 (De Minimis Gifts and 
Promotional or Commemorative Items), at paragraph (a), would state that 
gifts of a de minimis value (e.g., pens, notepads, or modest desk 
ornaments) or promotional items of nominal value that display the 
Member's logo (e.g., umbrellas, tote bags, or shirts) are not subject 
to the restrictions in LTSE Rule 3.291(a) or the recordkeeping 
requirements in LTSE Rule 3.291(c), provided that the value of the gift 
or promotional item is substantially below the $300 limit. Proposed 
Supplementary Material .06(b) would state that customary and reasonable 
solely decorative items commemorating a business transaction are not 
subject to the restrictions in LTSE Rule 3.291 or the recordkeeping 
requirements in LTSE Rule 3.291. These provisions are substantially 
similar to FINRA Rule 3220 at Supplementary Material .06.
    Proposed Supplementary Material .07 (Donations Due to Federally 
Declared Major Disasters) would state that donations by a Member or an 
associated person to any person, principal, proprietor, employee, agent 
or representative of another person to provide assistance to the 
individual for losses sustained in a natural event that the President 
has declared to be a major disaster, such as a wildfire, hurricane, 
tornado, earthquake, or flood, are not considered ``in relation to the 
business of the employer of the recipient'' for purposes of LTSE Rule 
3.291(a) and are not subject to the restrictions in LTSE Rule 3.291(a) 
or the recordkeeping requirements of LTSE Rule 3.291(c). This provision 
is substantially similar to FINRA Rule 3220 at Supplementary Material 
.07 which recognizes that the nature of such disasters is unpredictable 
and catastrophic.
    Proposed Supplementary Material .08 (Supervision and Recordkeeping) 
would state that the Exchange's supervision rules at LTSE Rule 5.110 
require a Member to have a supervisory system reasonably designed to 
achieve compliance with LTSE Rule 3.291.\13\ To meet these standards, 
Members would be required to have systems and procedures reasonably 
designed to ensure that payments and gratuities in relation to the 
business of the employer of the recipient given by the Member and its 
associated persons to employees of another person are (a) reported to 
the Member; (b) reviewed for compliance with LTSE Rule 3.291; and (c) 
maintained in the Member's records. Such procedures must be reasonably 
designed to ensure that an associated person who is giving a payment or 
gratuity is not responsible for determining whether such payment or 
gratuity is in relation to the business of the recipient's employer. 
Members are not required to maintain records of gifts that are 
consistent with the requirements of proposed Supplementary Material .04 
through .07. Requiring a person other than the associated person giving 
the gift to assess the nature of the gift is intended to encourage 
objectivity in making such determinations and is substantially similar 
to FINRA Rule 3220 at Supplementary Material .08.
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    \13\ The Exchange's supervision requirements for Members are set 
forth in LTSE Rule 5.110 (Supervision). To the extent applicable, 
Members would look to the applicable supervision rules of the 
Exchange to establish and maintain a supervisory system reasonably 
designed to achieve compliance with LTSE Rule 3.291.
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    Proposed Supplementary Material .09 (Gifts to a Member's Associated 
Persons or Individual Retail Customers) would state that LTSE Rule 
3.291 does not apply to gifts from a Member to its own associated 
persons, or to gifts from a Member or an associated person to 
individual retail customers. The Exchange believes that proposed 
Supplementary Material .09 would clarify, and improve awareness and 
understanding of, the scope of LTSE Rule 3.291 and is substantially 
similar to FINRA Rule 3220 at Supplementary Material .09.
    The Exchange believes the proposed rule change would promote 
efficiency without reducing protection for investors and the public 
interest. The proposed changes to LTSE Rule 3.291 to conform to the 
rules of FINRA improve transparency, awareness, and understanding of 
the rule's requirements. The Exchange believes these proposed changes 
would also help facilitate compliance with LTSE Rule 3.291 and would 
provide regulatory certainty to Members. Because the Exchange proposes 
to make conforming amendments that are substantially similar to FINRA's 
amendments to FINRA Rule 3220, Members that are also FINRA members 
would continue to be subject to a substantially similar rule when 
conducting business on the Exchange. In addition, Members that are not 
FINRA members would continue to be subject to LTSE Rule 3.291 to the 
extent that such Members conduct business with the public.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\14\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\15\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in

[[Page 69596]]

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.
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    \14\ 15 U.S.C. 78f.
    \15\ 15 U.S.C. 78f(b)(5).
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    As noted above, the proposed rule change conforms LTSE Rule 3.291 
to FINRA Rule 3220 so that it is substantially similar to FINRA's rule, 
thereby promoting uniform standards across the securities industry. The 
Exchange also notes the changes proposed herein align LTSE Rule 3.291 
with a recent filing submitted by FINRA and approved by the 
Commission.\16\ The Exchange believes further that these changes will 
help to reduce and avoid potential confusion among Members of the 
Exchange that are also members of FINRA by harmonizing LTSE Rule 3.291 
with FINRA Rule 3220. The proposed rule change is designed to enable 
the Exchange to incorporate LTSE Rule 3.291 into the 17d-2 Agreement, 
further reducing duplicative regulation of Members that are also 
members of FINRA. For the avoidance of doubt, LTSE Rule 3.291 would 
equally apply to Exchange-only Members as the Exchange believes it 
appropriately protects against improprieties that might arise when 
substantial gifts or monetary payments are given to certain persons.
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    \16\ See supra note 4.
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    The Exchange believes the proposed rule change would promote 
efficiency without reducing protection for investors and the public 
interest. The proposed changes to LTSE Rule 3.291 to conform to the 
rules of FINRA improve transparency, awareness, and understanding of 
the Rule's requirements. The Exchange believes these proposed changes 
would also help facilitate compliance with LTSE Rule 3.291.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not designed to address any competitive issues but rather to provide 
greater harmonization among Exchange and FINRA rules of similar 
purpose, resulting in less burdensome and more efficient regulatory 
compliance for common members and facilitating FINRA's performance of 
its regulatory functions under the 17d-2 Agreement. As such, the 
Exchange does not believe that the proposed rule change will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change is effective upon filing pursuant to 
Section 19(b)(3) of the Exchange Act \17\ and paragraph (f)(6) of Rule 
19b-4 thereunder,\18\ in that the proposed rule change does not 
significantly affect the protection of investors or the public 
interest; does not impose any significant burden on competition; and 
does not become operative for 30 days after filing or such shorter time 
as the Commission may designate.
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    \17\ 15 U.S.C. 78s(b)(3).
    \18\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further 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#1664637a733b75797b7b737862655665737538717960"><span class="__cf_email__" data-cfemail="e290978e87cf818d8f8f878c9691a2918781cc858d94">[email&#160;protected]</span></a>. Please include 
file number SR-LTSE-2026-25 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-LTSE-2026-25. 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 filing will be available for inspection and copying at 
the principal office of LTSE and on its internet website at <a href="https://longtermstockexchange.com/">https://longtermstockexchange.com/</a>. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-LTSE-2026-25 and should be submitted on or before November 25, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22452 Filed 11-3-26; 8:45 am]
BILLING CODE 8011-01-P


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