Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Align Existing Investigatory and Disciplinary Processes and Related Rules With the Investigatory and Disciplinary Processes and Related Rules of Nasdaq PHLX LLC, 51015-51020 [2018-21900]
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Federal Register / Vol. 83, No. 196 / Wednesday, October 10, 2018 / Notices
19(b)(3)(A) of the Act 78 and Rule 19b–
4(f)(6) thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days from the
date of filing. However, Rule 19b–
4(f)(6)(iii) 79 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative on
October 1, 2018 to coincide with the
effective date of FINRA’s proposed rule
change on which the proposal is
based.80 The waiver of the operative
delay would make the Exchange’s
qualification requirements consistent
with those of FINRA, as of October 1,
2018. Therefore, the Commission
believes that the waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest and hereby waives the 30-day
operative delay and designates the
proposal operative on October 1, 2018.81
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.
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
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BX–2018–047 on the subject line.
All submissions should refer to File
Number SR–BX–2018–047. 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for 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 the Exchange. 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 SR–BX–2018–047 and should
be submitted on or before October 31,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.82
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–21904 Filed 10–9–18; 8:45 am]
BILLING CODE 8011–01–P
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
79 17
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84355; File No. SR–
NASDAQ–2018–066]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Align
Existing Investigatory and Disciplinary
Processes and Related Rules With the
Investigatory and Disciplinary
Processes and Related Rules of
Nasdaq PHLX LLC
October 3, 2018.
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
September 24, 2018, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
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 the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to align its
existing investigatory and disciplinary
processes and related rules with the
investigatory and disciplinary processes
and related rules of Nasdaq PHLX LLC
(‘‘Phlx’’) [sic]
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaq.cchwallstreet.com, at the
principal office of the Exchange, 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, 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
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
78 15
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
80 See supra note 7. As discussed above, the
Exchange has stated that the new registration
requirements for developers of algorithmic trading
strategies would become operative on April 1, 2019.
81 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
51015
1 15
82 17
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CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 83, No. 196 / Wednesday, October 10, 2018 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to amend certain of
its rules to align its existing
investigatory and disciplinary processes
and related rules with the investigatory
and disciplinary processes and related
rules of Phlx. Nasdaq notes that Phlx
amended its rules recently to adopt an
investigatory and disciplinary process
identical in all material respects to the
investigatory and disciplinary processes
of Nasdaq BX, Inc. (‘‘BX’’) and Nasdaq.3
The amendment also vested the Phlx
Regulation Department with the same
authority proposed herein. The
Exchange therefore proposes the below
changes to the 8000 and 9000 Series of
the Nasdaq Rules in order to conform its
rules to those of Phlx 8000 and 9000
Series rules in all respects.4
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Definition of Nasdaq Regulation
The Exchange proposes to revise the
definition of Nasdaq Current Rule
9120(w) (‘‘Nasdaq Regulation’’) to
expressly include the Exchange’s
Enforcement Department. The
Exchange’s Enforcement Department is
specifically charged with pursuing
disciplinary action against members,
persons associated with a member, and
persons subject to the Exchange’s
jurisdiction, in addition to FINRA’s
Department of Enforcement.
Similarly, the Exchange proposes to
add references to the ‘‘Nasdaq
3 See Securities Exchange Act Release No. 82143
(November 22, 2017), 82 FR 56672 (November 29,
2017) (Notice of Filing and Immediate Effectiveness
of Proposed Rule Change To Adopt Investigatory
and Disciplinary Processes Substantially Similar to
Nasdaq BX, Inc. and The Nasdaq Stock Market LLC
for Phlx, which, among other things, similarly
enabled Phlx to retain discretion to perform these
functions).
4 The Exchange notes that the Financial Industry
Regulatory Authority (‘‘FINRA’’) amended its rules
recently to reflect an internal reorganization of
FINRA’s Enforcement Operations. See Securities
Exchange Act Release No. 83781 (August 6, 2018),
83 FR 39802 (August 10, 2018). In July 2017, FINRA
announced its plan to consolidate its existing
enforcement functions into a unified Department of
Enforcement. FINRA’s recent rule change makes
technical and other non-substantive changes to
FINRA Rules 9000 Series Code of Procedure (the
‘‘Code’’) to reflect the single Department of
Enforcement. The rule change removed references
to the Market Regulation department, its head and
employees from the Code where those references
reflect the previously separate Market Regulation
enforcement function. In light of FINRA’s
reorganization, the Exchange is likewise removing
references to the Market Regulation department, its
head and employees from the Code, and re-lettering
the remainder of those sections where such relettering is necessary (i.e. Rule 9120). Phlx will also
submit a similar rule filing to remove those
references in due course.
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Regulation Department’’ in Nasdaq
Current Rule 9120(aa) (definition of the
term ‘‘Party’’). The Exchange also
proposes to add a definition for the term
‘‘Party’’ as used in the Nasdaq Rule 9400
series,5 and to add references to
‘‘FINRA’’ in Nasdaq Current Rule
9120(aa)(3) to clarify that FINRA falls
under the definition of ‘‘Party’’ as used
in the Rule 9550 series. In addition, the
Exchange is adding references to the
Nasdaq Regulation Department
throughout the Nasdaq Rule 8000 and
9000 series.6 These amendments will
conform the text of Nasdaq 8000 and
9000 rules with those of Phlx.7
Role of FINRA
The Exchange proposes to add rule
text to certain rules to clarify that
FINRA may act on behalf of the
Exchange. Today, FINRA is empowered
to act on behalf of the Exchange.8 The
revisions to these rules will therefore
clarify FINRA’s authority as it currently
exists today.9
Jurisdiction
The Exchange proposes to replace the
current rule text related to jurisdiction
of Nasdaq to initiate disciplinary actions
with text substantially similar to the
Phlx’s jurisdiction rule text. Nasdaq
5 The Exchange notes that, like Phlx, it is likewise
including the Department of Enforcement as a
potential party to a matter under the Rule 9400
Series. The Exchange believes that including this
department in Rule 9400 Series is appropriate
because it may be involved in the initiation of such
a matter for Nasdaq currently. The Exchange is also
adding FINRA to other parts of Rule 9400 where it
is appropriate to show that FINRA may be the entity
that initiated an action under the rule.
6 See Nasdaq Current Rules 8001, 8210, 8211, IM–
8310–3, 9001, 9120, 9131, 9133, 9143, 9146, 9211,
9212, 9213, 9215, 9216, 9251, 9252, 9253, 9264,
9269, 9270, 9311, 9400, 9522, 9523, 9524, 9552,
9553, 9554, 9555, 9556, 9557, 9558, 9559, 9610,
9630, 9810, 9820, 9830, and 9840.
7 The Exchange is also amending Current Nasdaq
Rule 9120(aa)(2), to align that rule text with
FINRA’s recent rule change. The term ‘‘Party’’ when
used in the Rule 9520 Series, now means FINRA’s
Department of Enforcement, rather than Member
Regulation. See Securities Exchange Act Release
No. 83781 (August 6, 2018), 83 FR 39802 (August
10, 2018).
8 See Nasdaq Current Rule 8001 (‘‘Nasdaq and
FINRA are parties to the Regulatory Contract
pursuant to which FINRA has agreed to perform
certain functions described in these rules on behalf
of Nasdaq. Nasdaq rules that refer to Nasdaq
Regulation, Nasdaq Regulation staff, Nasdaq staff,
and Nasdaq departments should be understood as
also referring to FINRA staff and FINRA
departments acting on behalf of Nasdaq pursuant to
the Regulatory Contract.’’).
9 See Nasdaq Current Rules 9400, 9522, 9552,
9553, 9554, 9555, 9556, 9557, and 9558. The
Exchange notes that FINRA currently performs the
functions described in these rules. The proposed
changes further clarify that in the rule text.
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Current Rules 1012(h) 10 and 1031(f) 11
permit a disciplinary action to be
brought within two years after the
effective date of resignation,
cancellation, or revocation of a member
or associated person. The current
Nasdaq provisions are more limited
than Phlx’s jurisdictional language. Phlx
Rule 9110(d) does not contain a time
limit on when a matter may be brought
against a member or associated person
following its termination or
deregistration, so long as the Exchange
serves written notice within one year of
receipt by the Exchange of notice of
such termination or deregistration that
the Exchange is making inquiry into a
matter or matters which occurred prior
to the termination of such person’s
status as a member or associated
person.12 The substantive amendment
10 A resigned Nasdaq member or a Nasdaq
member that has had its membership canceled or
revoked shall continue to be subject to the filing of
a complaint under the Nasdaq Rules based upon
conduct that commenced prior to the effective date
of the Nasdaq member’s resignation from Nasdaq or
the cancellation or revocation of its membership.
Any such complaint, however, shall be filed within
two years after the effective date of resignation,
cancellation, or revocation.
11 A person whose association with a Nasdaq
member has been terminated and who is no longer
associated with any member of Nasdaq or a person
whose registration has been revoked or canceled
shall continue to be subject to the filing of a
complaint under Nasdaq Rules based upon conduct
which commenced prior to the termination,
revocation, or cancellation or upon such person’s
failure, while subject to Nasdaq’s jurisdiction as
provided herein, to provide information requested
by Nasdaq pursuant to the Nasdaq Rules, but any
such complaint shall be filed within: (A) Two years
after the effective date of termination of registration
pursuant to subsection (c); provided, however, that
any amendment to a notice of termination filed
pursuant to paragraph (c)(2) that is filed within two
years of the original notice that discloses that such
person may have engaged in conduct actionable
under any applicable statute, rule, or regulation
shall operate to recommence the running of the
two-year period under this subsection; (B) two years
after the effective date of revocation or cancellation
of registration pursuant to the Nasdaq Rules; or (C)
in the case of an unregistered person, within two
years after the date upon which such person ceased
to be associated with the Nasdaq member.
A person whose association with a member has
been terminated and is no longer associated with
any Nasdaq member shall continue to be subject to
a proceeding to suspend, consistent with Article IX,
Section 2 of the Nasdaq By-Laws, his or her ability
to associate with a member based on such person’s
failure to comply with an arbitration award or a
written and executed settlement agreement
obtained in connection with an arbitration or
mediation submitted for disposition pursuant to
Nasdaq Rules, provided that such proceeding is
instituted within two years after the date of entry
of such award or settlement.
12 Any member or any partner, officer, director or
person employed by or associated with any member
(the Respondent) who is alleged to have violated or
aided and abetted a violation of the Securities
Exchange Act of 1934 (Exchange Act), the rules and
regulations thereunder, the By-Laws and Rules of
the Exchange or any interpretation thereof, and the
Rules, Regulations, resolutions and stated policies
of the Board of Directors or any Committee of the
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Federal Register / Vol. 83, No. 196 / Wednesday, October 10, 2018 / Notices
with respect to jurisdiction is with the
timeframe for bringing a disciplinary
action against a member or associated
person. The proposed rule expands the
timeframe.
The amendment to expand
jurisdiction will not apply retroactively
and any complaints not filed within the
existing two year time-period will be
time-barred. The new jurisdiction rule
will only apply to members or
associated persons who terminate with
the Exchange on or after October 15,
2018.
The Exchange also proposes to
eliminate the rule text contained within
Nasdaq Current Rules 1012(h) and
1031(f) and reserve those sections.
amozie on DSK3GDR082PROD with NOTICES1
Interested Staff Definition
The definition of Interested Staff is
being conformed to Phlx’s definition
and includes references to Exchange
and FINRA employees as those terms
are proposed to be defined.13 The
proposed Nasdaq definition better
defines who falls within the category of
Interested Staff without substantively
Exchange, shall be subject to the disciplinary
jurisdiction of the Exchange, and after notice and
opportunity for a hearing may be appropriately
disciplined by expulsion, suspension, fine, censure,
limitation or termination as to activities, functions,
operations, or association with a member
organization, or any other fitting sanction in
accordance with the provisions of these
disciplinary Rules.
An individual member, or a partner, officer,
director or person employed by or associated with
a member may be charged with any violation within
the disciplinary jurisdiction of the Exchange
committed by employees under his supervision or
by the member with which he is associated, as
though such violations were his own. A member
may be charged with any violation within the
disciplinary jurisdiction of the Exchange committed
by its officers, directors, or employees or by a
member or other person who is associated with
such member, as though such violation were its
own.
Any member, or any partner, officer, director, or
person employed by or associated with a member
organization, and any member organization shall
continue to be subject to the disciplinary
jurisdiction of the Exchange following the
termination of such person’s permit or the
termination of the employment by or the
association with a member organization of such
member or partner, officer, director or person, or
following the deregistration of a member
organization from the Exchange; provided, that the
Exchange serves written notice to such former
member, partner, officer, director, employee,
associated person or member organization within
one year of receipt by the Exchange of notice of
such termination or deregistration that the
Exchange is making inquiry into a matter or matters
which occurred prior to the termination of such
person’s status as a member, or as a partner, officer,
director or person employed by or associated with
a member organization, or prior to the
deregistration of such member organization.
13 As noted in n.5 above, the Exchange is,
however, omitting references to FINRA’s
Department of Market Regulation in light of
FINRA’s recent rule filing that similarly omitted
references to its Department of Market Regulation.
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amending the definition. At this time,
Nasdaq’s proposal mirrors the Phlx
definition, except insofar as Nasdaq’s
proposal omits references to FINRA’s
Department of Market Regulation for the
reasons set forth in footnote 5 above.14
The Exchange also notes that it is
removing the words ‘‘a district director
or’’ from Nasdaq Current Rules
9120(t)(1)(D), 9120(t)(2)(D), and
9120(t)(3)(D) because there is no such
position at the Exchange. The use of
those words in the current definition
refers to the individual to whom a
FINRA employee may report. Those
words are therefore being preserved as
they relate to FINRA in Proposed New
Rules 9120(r)(1)(H), 9120(r)(2)(E),
9120(r)(3)(E), and 9210(r)(4)(F).
Special Panelist
The Exchange is removing the
definition of Special Panelist and relettering the remainder of the Section.
Phlx and BX do not use or otherwise
define a Special Panelist. Nasdaq
Current Rule 9120(u) defines a Special
Panelist.15 The Exchange notes that
related rules, Nasdaq Current Rules
9212(a)(2)(B) and 9231(b)(2), are not
mandatory today and permit, but do not
require, a Chief Hearing Officer to
utilize a Special Panelist. Nasdaq has
automated its system throughout the
years so that most disciplinary actions
today involve issues which pertain to
quotations of securities, execution of
transactions, reporting of transactions
and trading practices, including rules,
for example, that prohibit manipulation
and insider trading, among other Rules
as described in Nasdaq Current Rules
9120(u)(1)–(4). Further, FINRA has
14 The Exchange notes that it is adopting a more
comprehensive definition of ‘‘Interested Staff’’
under Nasdaq Current Rule 9120(t) to align it with
the definition used by Phlx. Specifically, the
Exchange is adopting new text that accounts for the
role of the Nasdaq Regulation Department,
including the involvement of employees thereof.
Thus, the proposed new definition will include all
individuals that should be considered as
‘‘Interested Staff’’ for purposes of the Nasdaq Rule
9000 Series.
15 ‘‘The term ‘‘Special Panelist’’ means an
individual approved by the Nasdaq Board of
Directors at least annually who may be selected by
the Chief Hearing Officer to serve on a Hearing
Panel pursuant to Rules 9212, 9221, 9231, and
9232. A Special Panelist may be drawn from
FINRA’s Market Regulation Committee, or any other
source the Nasdaq Board of Directors deems
appropriate given the responsibilities of Special
Panelists. Special Panelists may participate in
disciplinary proceedings in which issues arise
regarding: (1) The quotations of securities; (2) the
execution of transactions; (3) the reporting of
transactions; and (4) trading practices, including
rules prohibiting manipulation and insider trading,
and those Rules designated as Trading Rules (Rule
3300 Series), The Nasdaq Stock Market Rules (Rule
4000 Series), and Other Systems and Programs
Rules (Rule 6000 Series).’’ See Nasdaq Current Rule
9120(u).
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51017
skilled panelists who, like the Special
Panelists, are trained to handle matters
involving the subject matters described
in the Special Panelist definition. The
Exchange believes that the notion of a
Special Panelist is not necessary
because today FINRA panelists are
equipped to handle matters related to
the subject matter of Nasdaq Current
Rules 9120(u)(1)–(4) with respect to any
type of hearing. The concept of a
Special Panelist is not extraordinary,
rather it is a presumed skill set for
today’s FINRA panelists. The Exchange
therefore proposes to remove all
references to the term ‘‘Special Panelist’’
from its rules because the reality of
current panelist selection and
disciplinary processes obviate the need
for this rule.16
Hearing Panelists
The Exchange is removing a category
of individuals that may serve on a
Hearing Panel and re-lettering the
remainder of the section.17 Phlx and BX
rules do not include that category of
individuals from among those whom the
Chief Hearing Officer may select as a
Panelist. The Exchange originally
proposed Current Rule 9231(b)(1)(D) as
a transitional rule when the Exchange
sought to become registered as a
national securities exchange. The Rule
allowed ‘‘persons who served on the
NASD National Adjudicatory Council,
or a disciplinary subcommittee thereof,
prior to the date that Nasdaq
commenced operating as a national
securities exchange to sit on Hearing
Panels.’’ 18 This enabled the Exchange to
pull from a larger pool of candidates.
The Exchange has now been a national
securities exchange for nearly 12 years,
and believes that there is a sufficient
pool of panelists from which the Chief
Hearing Officer may now pull. This is
evidenced by the Hearing Panels both
Phlx and BX are able to assemble. Given
the passage of time, the need for Nasdaq
Current Rule 9231(b)(1)(D) no longer
exists.
The Exchange is also clarifying
Current Rule 9231(b)(1)(E) (Proposed
New Rule 9231(b)(1)(D)) to more clearly
state who may serve on a Hearing Panel.
16 See Nasdaq Current Rules 9120(u),
9212(a)(2)(B), 9221(a)(3), 9231(b)(2), 9231(c)(2), and
9232(a)–(c).
17 Specifically, the Exchange is removing Nasdaq
Current Rule 9231(b)(1)(D) (‘‘served on the FINRA
National Adjudicatory Council or on a disciplinary
subcommittee of the FINRA National Adjudicatory
Council prior to the date that Nasdaq commenced
operating as a national securities exchange; or’’).
18 See Securities Exchange Act Release No. 34–
53128 (January 13, 2006), 71 FR 3550 (January 23,
2006) (File No. 10–131) (Order granting application
of NASDAQ Stock Market LLC for registration as a
national securities exchange).
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Federal Register / Vol. 83, No. 196 / Wednesday, October 10, 2018 / Notices
Currently, BX and Phlx Rules
9231(b)(1)(D) indicate that the Chief
Hearing Office may select as a Panelist
a person who ‘‘is a FINRA Panelist
approved by the Nasdaq Board at least
annually, including a person who
previously served on the Market
Regulation Committee 19 not earlier than
four years before the date the complaint
was served upon the Respondent who
was the first served Respondent in the
disciplinary proceeding for which the
Hearing Panel or the Extended Hearing
Panel is being appointed, or from other
sources the Board deems appropriate
given the responsibilities of Panelists.’’
The Exchange is adding the same text
after ‘‘is a FINRA Panelist approved by
the Nasdaq Board at least annually’’ in
Proposed New Rule 9231(b)(1)(D) to
make it clear that a person who served
on the Market Regulation Committee is
among those permitted to serve as a
Panelist, provided that person meets the
requirements of the rule.
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Other Non-Substantive and Technical
Amendments
The Exchange proposes to add a
sentence within Nasdaq Current Rule
9270(e)(2), similar to Phlx, to add more
specificity to this rule and make clear
that the Office of Disciplinary Affairs
may accept an offer of settlement and
order of acceptance or refer them to the
Exchange Review Council. The
Exchange notes that today the Office of
Disciplinary Affairs may accept an offer
of settlement and order of acceptance or
refer them to the Exchange Review
Council, so this language is intended to
clarify current practice under the rule.
The Exchange also proposes to make
certain technical amendments
throughout these rules to: (i) Add
‘‘FINRA’’ before ‘‘Regulatory
Contract’’; 20 (ii) amend ‘‘NASD’’ to the
updated name ‘‘FINRA’’; 21 (iii) replace
‘‘Association’’ with ‘‘FINRA’’; 22 (iv)
update certain incorrect cross-references
to both FINRA and Nasdaq rule
citations 23; (v) add, remove, or modify
rule text or punctuation in certain rules
19 The Exchange notes that while FINRA recently
‘‘consolidate[d] its existingenforcement [sic]
functions into a unified Department of
Enforcement’’, see Securities Exchange Act Release
No. 83781 (August 6, 2018), 83 FR 39802 (August
10, 2018), it did not eliminate the Market
Regulation Committee. See, e.g., FINRA Code of
Procedure Rule 9120(u).
20 See Nasdaq Current Rules 8001, 9001, 9120(f),
and Proposed New Rules 9120(g), and 9120(u) and
(v).
21 See Nasdaq Current Rule 8110.
22 See Nasdaq Current Rules 8210(a)(1),
9558(a)(2), and 9610(a).
23 See Nasdaq Current Rules 9231(c), 9268(e)(2),
9269(d)(2), 9270(e), 9270(e)(2), 9270(f)(2), 9311(a),
9312(a)(3), 9331(a)(2), 9351(a), 9524(a)(1),
9524(b)(3), and 9559 (q)(1).
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to conform the rule text of Nasdaq to
Phlx ;24 (vi) include the phrase ‘‘or
person’’ in various places throughout
the rule to make it clear that inclusion
of the person associated with a member
is applicable ;25 (vii) relocate and/or
renumber certain rules for ease of
reference given other amendments
described herein ;26 and (vii) correct a
typographical error.27
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,28 in general, and furthers the
objectives of Section 6(b)(5) of the Act,29
in particular, in that it is designed to
promote just and equitable principles of
trade, 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. In
addition, the Exchange believes that the
proposed rule changes further the
objectives of Section 6(b)(7) of the Act,30
in particular, in that these changes
provide for fair procedures for the
disciplining of members and persons
associated with members, the denial of
membership to any person seeking
membership therein, the barring of any
person from becoming associated with a
member thereof, and the prohibition or
limitation by the Exchange of any
person with respect to access to services
offered by the Exchange or a member
thereof.
In addition, the Exchange believes
that the proposed rule changes are
consistent with Section 6(b)(6) of the
Act,31 which requires the rules of an
exchange provide that its members be
appropriately disciplined for violations
of the Act as well as the rules and
regulations thereunder, or the rules of
the Exchange, by expulsion, suspension,
limitation of activities, functions, and
operations, fine, censure, being
suspended or barred from being
associated with a member, or any other
fitting sanction.
The Exchange believes that the
proposed changes are consistent with
these requirements because the changes
24 See Nasdaq Current Rules IM–8310–3,
9211(a)(1)–(2), 9221(a)(1), 9231(b)(1), 9270(e)(2),
9270(f)(3), 9559(e), 9559(h)(2), and 9630(b).
25 See Nasdaq Current Rules 9552(b), 9553(b),
9554(b), 9555(b).
26 See Proposed New Rule 9212(a)(2), which
relocates language from Current Rule 9212(a)(2)(A);
and Proposed New Rule 9231(c), which relocates
language from Current Rule 9231(c)(1).
27 See Nasdaq Current Rules 9215(f) and
9523(a)(4).
28 15 U.S.C. 78f(b).
29 15 U.S.C. 78f(b)(5).
30 15 U.S.C. 78f(b)(7).
31 15 U.S.C. 78f(b)(6).
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further harmonize Nasdaq’s
investigative and adjudicatory processes
with similar processes used by Phlx.
The new processes are well-established
as fair and designed to protect investors
and the public interest. Because the
Exchange is conforming the Nasdaq rule
text to the Phlx rule text to eliminate
any differences (except for those noted
herein), the Exchange believes that the
proposed changes should facilitate
prompt, appropriate, and effective
discipline of members and their
associated persons consistent with the
Act. The Exchange believes that adding
references to the Nasdaq Regulation
Department within the 8000 and 9000
Nasdaq Series rules as described in this
proposal clarifies the involvement that
Nasdaq Regulation plays in the
investigation and enforcement of
Nasdaq’s disciplinary rules. In addition,
the Exchange believes that adding
references to FINRA within the 8000
and 9000 Nasdaq Series rules as
described in this proposal brings greater
transparency to its rules and clarifies
the process as it exists today. Today,
FINRA is empowered to act on behalf of
the Exchange.32
The Exchange believes that
harmonizing the rule text of the
investigative and adjudicatory processes
with those of Phlx will reduce the
burden on members and their associated
persons as they only will need to be
familiar with a single rule set going
forward. Because the substance of the
rules would remain unchanged, the
Exchange believes that the proposed
change would continue to provide fair
procedures for the suspending and
disciplining of members and associated
persons, the denial of membership to
any person seeking membership therein,
the barring of any person from becoming
associated with a member thereof, and
the prohibition or limitation by the
Exchange of any person with respect to
access to services offered by the
Exchange or a member thereof.
The Exchange’s proposal to replace
the current rule text related to
jurisdiction of Nasdaq to initiate
disciplinary actions with text
substantially similar to the Phlx’s
jurisdiction rule text will permit the
Exchange to initiate a disciplinary
action beyond two years after the
effective date of the member’s or
associated person’s termination with the
Exchange. This provision would not
apply retroactively, but would permit
the Exchange to bring actions after the
effective date of termination, so long as
the Exchange serves written notice
within one year of receipt by the
32 See
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Exchange of notice of such termination
that the Exchange is making inquiry into
a matter or matters which occurred prior
to the termination of status as a member
or associated person. The Exchange
believes that this provision will provide
the Exchange with the same latitude as
Phlx to bring actions against its
members and associated persons for
violations of its rule. The Exchange
believes that it is consistent with the
Act to provide the Exchange with the
ability to initiate violations for members
and their associated persons for
violations which took place while these
members and associated persons were
members of the Exchange. The rule
change will better protect investors and
the public interest by allowing actions
to proceed that may otherwise have
been time barred under the old rule.
The Exchange’s proposal to amend
the definition of Interested Staff will
conform Nasdaq’s definition to Phlx’s
definition, except insofar as Nasdaq’s
proposal omits references to FINRA’s
Department of Market Regulation for the
reasons set forth in footnote 5 above.
The Exchange believes that it is
consistent with the Act because the
definition better defines who falls
within the category of Interested Staff
without substantively amending the
definition.
Removing the definition of Special
Panelist is consistent with the Act
because today Nasdaq Current Rules
9212(a)(2)(B) and 9231(b)(2) do not
require a Chief Hearing Officer to utilize
a Special Panelist. Further, FINRA has
skilled panelists who, like the Special
Panelists, are trained to handle matters
involving the subject matters described
in the Special Panelist definition, thus
the reality of the panel selection and
disciplinary processes today obviate the
need for this rule.
Removing from the pool of panelists
persons that served on the FINRA
National Adjudicatory Council or on a
disciplinary subcommittee of the FINRA
National Adjudicatory Council prior to
the date that Nasdaq commenced
operating as a national securities
exchange is consistent with the act
because there currently exists a
sufficient number of persons from
whom a Chief Hearing Officer may
select as a Panelist. This change, in
addition to adding clarifying text to
Current Rule 9231(b)(1)(E) (Proposed
New Rule 9231(b)(1)(D)) to more clearly
state who may serve on a Hearing Panel,
thereby aligning the text with the text of
the parallel BX and Phlx Rules, is also
consistent with the Act because it
creates a uniform pool from which
Panelists may be selected across the
Nasdaq, BX, and Phlx, thus removing
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21:20 Oct 09, 2018
Jkt 247001
confusion that may result from having
different pools of Panelists depending
on the exchange.
Finally, making technical
amendments in Nasdaq Current Rules
8001, 8110, 8210, IM–8310–3, 9001,
9120, 9211, 9212, 9221, 9231, 9268,
9269, 9270, 9311, 9312, 9331, 9351,
9524, 9552, 9553, 9554, 9555, 9556,
9558, 9559, 9610, and 9630 removes
impediments to and perfects the
mechanism of a free and open market by
removing confusion that may result
from having incorrect or incomplete
material in the Exchange’s rulebook.
The Exchange believes that its
proposal furthers the objectives of
Section 6(b)(7) of the Act,33 in that it is
designed to provide a fair procedure for
the disciplining of members and
persons associated with members, the
denial of membership to any person
seeking membership therein, the barring
of any person from becoming associated
with a member thereof, and the
prohibition or limitation by the
exchange of any person with respect to
access to services offered by the
exchange or a member thereof.
Specifically, the Exchange believes that
the proposed investigatory and
disciplinary process is consistent with
Section 6(b)(7) of the Act 34 because it is
based on the existing processes used by
Phlx.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change is intended to
more clearly align the text of Phlx’s and
the Exchange’s rules. Specifically and as
described in detail above, the Exchange
believes that this change will bring
efficiency and consistency to the
investigative and adjudicatory
processes, thereby reducing the burden
on members and their associated
persons who are also members of Phlx.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or 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
33 15
U.S.C. 78f(b)(7).
34 Id.
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Sfmt 4703
51019
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 35 and
subparagraph (f)(6) of Rule 19b–4
thereunder.36
A proposed rule change filed under
Rule 19b–4(f)(6)37 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),38 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so the Exchange may
immediately amend its disciplinary
rules to conform to Phlx’s disciplinary
process. The Exchange states that the
proposed amendment to expand its
current jurisdiction will not apply
retroactively and any complaints not
filed within the existing two-year time
period will be time-barred. The
Exchange further states that its new
jurisdiction rule will only apply to
applicable members or associated
persons who terminate their
membership or association on October
15, 2018 or thereafter. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest as it will allow Nasdaq to
conform its disciplinary rules to those of
Phlx. In addition, the proposal does not
present any novel issues. Therefore, the
Commission hereby waives the
operative delay and designates the
proposal as operative upon filing.39
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
35 15
U.S.C. 78s(b)(3)(A)(iii).
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 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. The Exchange has satisfied this
requirement.
37 17 CFR 240.19b–4(f)(6).
38 17 CFR 240.19b–4(f)(6)(iii).
39 For purposes only of waving the 30-day
operative delay, the Commission has considered the
purposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
36 17
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Federal Register / Vol. 83, No. 196 / Wednesday, October 10, 2018 / Notices
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:
amozie on DSK3GDR082PROD with NOTICES1
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2018–066 on the subject line.
Paper Comments
• 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–NASDAQ–2018–066. 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 (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. 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 SR–
NASDAQ–2018–066 and should be
submitted on or before October 31,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.40
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–21900 Filed 10–9–18; 8:45 am]
CFR 200.30–3(a)(12).
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21:20 Oct 09, 2018
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84349; File No. SR–NYSE–
2018–42]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
7.14, Clearance and Settlement
October 3, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on
September 20, 2018, New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘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 selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7.14, Clearance and Settlement, to
remove language that is inconsistent
with the Exchange’s Price List. The
proposed rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, 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, the
self-regulatory organization 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 those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
40 17
of the most significant parts of such
statements.
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1. Purpose
The Exchange proposes to amend
Rule 7.14, Clearance and Settlement, to
remove language that was inadvertently
included when the rule was first
adopted and that is inconsistent with
the Exchange’s Price List. The Exchange
adopted Rule 7.14 as part of a proposed
rule change to adopt rules for trading
UTP securities on Pillar, the Exchange’s
new trading technology platform.4 Rule
7.14 was based on similar rules of its
affiliate, NYSE Arca, Inc. (‘‘NYSE
Arca’’) Rule 7.14–E and adopted by the
Exchange without any substantive
differences.5 Rule 7.14 applies only to
trading in UTP Securities. Paragraph (c)
of Rule 7.14 states that ‘‘[e]ach clearing
firm must be admitted to the Exchange
as a member organization by meeting
the qualification requirements set forth
in Rule 2.’’ Paragraph (c) of Rule 7.14
also includes language that exempts
clearing firms from paying the regular
member organization fee 6 where that
clearing firm became a member
organization for the sole purpose of
acting as a clearing firm on the
Exchange. This language was
inadvertently included when Rule 7.14
was adopted and is inconsistent with
the Exchange’s Price List, which does
not include language exempting clearing
only member organizations from the
fee’s application.7 The Exchange notes
that no such exemption exists in the
Exchange’s rule governing the trading of
NYSE-listed securities. Therefore, the
Exchange proposes to remove the
following phrase from the first sentence
of Exchange Rule 7.14(c): ‘‘provided,
however, if the clearing firm has become
a member organization for the sole
purpose of acting as a clearing firm on
the Exchange, such clearing firm need
4 See Securities Exchange Act Release Nos. 76803;
(December 30, 2015), 81 FR 536 (January 6, 2016)
(SR–NYSE–2015–67); and 81225 (July 27, 2017), 82
FR 36033 (August 2, 2017) (SR–NYSE–2017–35).
5 Id.
6 The ‘‘regular membership organization fee’’
referred to in Exchange Rule 7.14(c) is referred to
as a Trading Licenses fee in the Exchange’s Price
List.
7 In accordance with the Price list, the Exchange
charges all member organizations a Trading License
fee on an annual basis. All member organizations
with 10 or more trading licenses are charged a fee
or $50,000 for the first trading license held by the
member organization unless they qualify for a
reduced rate. See the Exchange’s Price List on pages
33–34 available at https://www.nyse.com/
publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf
(dated September 4, 2018).
E:\FR\FM\10OCN1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 196 (Wednesday, October 10, 2018)]
[Notices]
[Pages 51015-51020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21900]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84355; File No. SR-NASDAQ-2018-066]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Align Existing Investigatory and Disciplinary Processes and Related
Rules With the Investigatory and Disciplinary Processes and Related
Rules of Nasdaq PHLX LLC
October 3, 2018.
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 September 24, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') 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 the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to align its existing investigatory and
disciplinary processes and related rules with the investigatory and
disciplinary processes and related rules of Nasdaq PHLX LLC (``Phlx'')
[sic]
The text of the proposed rule change is available on the Exchange's
website at https://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, 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, 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 Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
[[Page 51016]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Nasdaq proposes to amend certain of its rules to align its existing
investigatory and disciplinary processes and related rules with the
investigatory and disciplinary processes and related rules of Phlx.
Nasdaq notes that Phlx amended its rules recently to adopt an
investigatory and disciplinary process identical in all material
respects to the investigatory and disciplinary processes of Nasdaq BX,
Inc. (``BX'') and Nasdaq.\3\ The amendment also vested the Phlx
Regulation Department with the same authority proposed herein. The
Exchange therefore proposes the below changes to the 8000 and 9000
Series of the Nasdaq Rules in order to conform its rules to those of
Phlx 8000 and 9000 Series rules in all respects.\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 82143 (November 22,
2017), 82 FR 56672 (November 29, 2017) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Adopt
Investigatory and Disciplinary Processes Substantially Similar to
Nasdaq BX, Inc. and The Nasdaq Stock Market LLC for Phlx, which,
among other things, similarly enabled Phlx to retain discretion to
perform these functions).
\4\ The Exchange notes that the Financial Industry Regulatory
Authority (``FINRA'') amended its rules recently to reflect an
internal reorganization of FINRA's Enforcement Operations. See
Securities Exchange Act Release No. 83781 (August 6, 2018), 83 FR
39802 (August 10, 2018). In July 2017, FINRA announced its plan to
consolidate its existing enforcement functions into a unified
Department of Enforcement. FINRA's recent rule change makes
technical and other non-substantive changes to FINRA Rules 9000
Series Code of Procedure (the ``Code'') to reflect the single
Department of Enforcement. The rule change removed references to the
Market Regulation department, its head and employees from the Code
where those references reflect the previously separate Market
Regulation enforcement function. In light of FINRA's reorganization,
the Exchange is likewise removing references to the Market
Regulation department, its head and employees from the Code, and re-
lettering the remainder of those sections where such re-lettering is
necessary (i.e. Rule 9120). Phlx will also submit a similar rule
filing to remove those references in due course.
---------------------------------------------------------------------------
Definition of Nasdaq Regulation
The Exchange proposes to revise the definition of Nasdaq Current
Rule 9120(w) (``Nasdaq Regulation'') to expressly include the
Exchange's Enforcement Department. The Exchange's Enforcement
Department is specifically charged with pursuing disciplinary action
against members, persons associated with a member, and persons subject
to the Exchange's jurisdiction, in addition to FINRA's Department of
Enforcement.
Similarly, the Exchange proposes to add references to the ``Nasdaq
Regulation Department'' in Nasdaq Current Rule 9120(aa) (definition of
the term ``Party''). The Exchange also proposes to add a definition for
the term ``Party'' as used in the Nasdaq Rule 9400 series,\5\ and to
add references to ``FINRA'' in Nasdaq Current Rule 9120(aa)(3) to
clarify that FINRA falls under the definition of ``Party'' as used in
the Rule 9550 series. In addition, the Exchange is adding references to
the Nasdaq Regulation Department throughout the Nasdaq Rule 8000 and
9000 series.\6\ These amendments will conform the text of Nasdaq 8000
and 9000 rules with those of Phlx.\7\
---------------------------------------------------------------------------
\5\ The Exchange notes that, like Phlx, it is likewise including
the Department of Enforcement as a potential party to a matter under
the Rule 9400 Series. The Exchange believes that including this
department in Rule 9400 Series is appropriate because it may be
involved in the initiation of such a matter for Nasdaq currently.
The Exchange is also adding FINRA to other parts of Rule 9400 where
it is appropriate to show that FINRA may be the entity that
initiated an action under the rule.
\6\ See Nasdaq Current Rules 8001, 8210, 8211, IM-8310-3, 9001,
9120, 9131, 9133, 9143, 9146, 9211, 9212, 9213, 9215, 9216, 9251,
9252, 9253, 9264, 9269, 9270, 9311, 9400, 9522, 9523, 9524, 9552,
9553, 9554, 9555, 9556, 9557, 9558, 9559, 9610, 9630, 9810, 9820,
9830, and 9840.
\7\ The Exchange is also amending Current Nasdaq Rule
9120(aa)(2), to align that rule text with FINRA's recent rule
change. The term ``Party'' when used in the Rule 9520 Series, now
means FINRA's Department of Enforcement, rather than Member
Regulation. See Securities Exchange Act Release No. 83781 (August 6,
2018), 83 FR 39802 (August 10, 2018).
---------------------------------------------------------------------------
Role of FINRA
The Exchange proposes to add rule text to certain rules to clarify
that FINRA may act on behalf of the Exchange. Today, FINRA is empowered
to act on behalf of the Exchange.\8\ The revisions to these rules will
therefore clarify FINRA's authority as it currently exists today.\9\
---------------------------------------------------------------------------
\8\ See Nasdaq Current Rule 8001 (``Nasdaq and FINRA are parties
to the Regulatory Contract pursuant to which FINRA has agreed to
perform certain functions described in these rules on behalf of
Nasdaq. Nasdaq rules that refer to Nasdaq Regulation, Nasdaq
Regulation staff, Nasdaq staff, and Nasdaq departments should be
understood as also referring to FINRA staff and FINRA departments
acting on behalf of Nasdaq pursuant to the Regulatory Contract.'').
\9\ See Nasdaq Current Rules 9400, 9522, 9552, 9553, 9554, 9555,
9556, 9557, and 9558. The Exchange notes that FINRA currently
performs the functions described in these rules. The proposed
changes further clarify that in the rule text.
---------------------------------------------------------------------------
Jurisdiction
The Exchange proposes to replace the current rule text related to
jurisdiction of Nasdaq to initiate disciplinary actions with text
substantially similar to the Phlx's jurisdiction rule text. Nasdaq
Current Rules 1012(h) \10\ and 1031(f) \11\ permit a disciplinary
action to be brought within two years after the effective date of
resignation, cancellation, or revocation of a member or associated
person. The current Nasdaq provisions are more limited than Phlx's
jurisdictional language. Phlx Rule 9110(d) does not contain a time
limit on when a matter may be brought against a member or associated
person following its termination or deregistration, so long as the
Exchange serves written notice within one year of receipt by the
Exchange of notice of such termination or deregistration that the
Exchange is making inquiry into a matter or matters which occurred
prior to the termination of such person's status as a member or
associated person.\12\ The substantive amendment
[[Page 51017]]
with respect to jurisdiction is with the timeframe for bringing a
disciplinary action against a member or associated person. The proposed
rule expands the timeframe.
---------------------------------------------------------------------------
\10\ A resigned Nasdaq member or a Nasdaq member that has had
its membership canceled or revoked shall continue to be subject to
the filing of a complaint under the Nasdaq Rules based upon conduct
that commenced prior to the effective date of the Nasdaq member's
resignation from Nasdaq or the cancellation or revocation of its
membership. Any such complaint, however, shall be filed within two
years after the effective date of resignation, cancellation, or
revocation.
\11\ A person whose association with a Nasdaq member has been
terminated and who is no longer associated with any member of Nasdaq
or a person whose registration has been revoked or canceled shall
continue to be subject to the filing of a complaint under Nasdaq
Rules based upon conduct which commenced prior to the termination,
revocation, or cancellation or upon such person's failure, while
subject to Nasdaq's jurisdiction as provided herein, to provide
information requested by Nasdaq pursuant to the Nasdaq Rules, but
any such complaint shall be filed within: (A) Two years after the
effective date of termination of registration pursuant to subsection
(c); provided, however, that any amendment to a notice of
termination filed pursuant to paragraph (c)(2) that is filed within
two years of the original notice that discloses that such person may
have engaged in conduct actionable under any applicable statute,
rule, or regulation shall operate to recommence the running of the
two-year period under this subsection; (B) two years after the
effective date of revocation or cancellation of registration
pursuant to the Nasdaq Rules; or (C) in the case of an unregistered
person, within two years after the date upon which such person
ceased to be associated with the Nasdaq member.
A person whose association with a member has been terminated and
is no longer associated with any Nasdaq member shall continue to be
subject to a proceeding to suspend, consistent with Article IX,
Section 2 of the Nasdaq By-Laws, his or her ability to associate
with a member based on such person's failure to comply with an
arbitration award or a written and executed settlement agreement
obtained in connection with an arbitration or mediation submitted
for disposition pursuant to Nasdaq Rules, provided that such
proceeding is instituted within two years after the date of entry of
such award or settlement.
\12\ Any member or any partner, officer, director or person
employed by or associated with any member (the Respondent) who is
alleged to have violated or aided and abetted a violation of the
Securities Exchange Act of 1934 (Exchange Act), the rules and
regulations thereunder, the By-Laws and Rules of the Exchange or any
interpretation thereof, and the Rules, Regulations, resolutions and
stated policies of the Board of Directors or any Committee of the
Exchange, shall be subject to the disciplinary jurisdiction of the
Exchange, and after notice and opportunity for a hearing may be
appropriately disciplined by expulsion, suspension, fine, censure,
limitation or termination as to activities, functions, operations,
or association with a member organization, or any other fitting
sanction in accordance with the provisions of these disciplinary
Rules.
An individual member, or a partner, officer, director or person
employed by or associated with a member may be charged with any
violation within the disciplinary jurisdiction of the Exchange
committed by employees under his supervision or by the member with
which he is associated, as though such violations were his own. A
member may be charged with any violation within the disciplinary
jurisdiction of the Exchange committed by its officers, directors,
or employees or by a member or other person who is associated with
such member, as though such violation were its own.
Any member, or any partner, officer, director, or person
employed by or associated with a member organization, and any member
organization shall continue to be subject to the disciplinary
jurisdiction of the Exchange following the termination of such
person's permit or the termination of the employment by or the
association with a member organization of such member or partner,
officer, director or person, or following the deregistration of a
member organization from the Exchange; provided, that the Exchange
serves written notice to such former member, partner, officer,
director, employee, associated person or member organization within
one year of receipt by the Exchange of notice of such termination or
deregistration that the Exchange is making inquiry into a matter or
matters which occurred prior to the termination of such person's
status as a member, or as a partner, officer, director or person
employed by or associated with a member organization, or prior to
the deregistration of such member organization.
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The amendment to expand jurisdiction will not apply retroactively
and any complaints not filed within the existing two year time-period
will be time-barred. The new jurisdiction rule will only apply to
members or associated persons who terminate with the Exchange on or
after October 15, 2018.
The Exchange also proposes to eliminate the rule text contained
within Nasdaq Current Rules 1012(h) and 1031(f) and reserve those
sections.
Interested Staff Definition
The definition of Interested Staff is being conformed to Phlx's
definition and includes references to Exchange and FINRA employees as
those terms are proposed to be defined.\13\ The proposed Nasdaq
definition better defines who falls within the category of Interested
Staff without substantively amending the definition. At this time,
Nasdaq's proposal mirrors the Phlx definition, except insofar as
Nasdaq's proposal omits references to FINRA's Department of Market
Regulation for the reasons set forth in footnote 5 above.\14\ The
Exchange also notes that it is removing the words ``a district director
or'' from Nasdaq Current Rules 9120(t)(1)(D), 9120(t)(2)(D), and
9120(t)(3)(D) because there is no such position at the Exchange. The
use of those words in the current definition refers to the individual
to whom a FINRA employee may report. Those words are therefore being
preserved as they relate to FINRA in Proposed New Rules 9120(r)(1)(H),
9120(r)(2)(E), 9120(r)(3)(E), and 9210(r)(4)(F).
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\13\ As noted in n.5 above, the Exchange is, however, omitting
references to FINRA's Department of Market Regulation in light of
FINRA's recent rule filing that similarly omitted references to its
Department of Market Regulation.
\14\ The Exchange notes that it is adopting a more comprehensive
definition of ``Interested Staff'' under Nasdaq Current Rule 9120(t)
to align it with the definition used by Phlx. Specifically, the
Exchange is adopting new text that accounts for the role of the
Nasdaq Regulation Department, including the involvement of employees
thereof. Thus, the proposed new definition will include all
individuals that should be considered as ``Interested Staff'' for
purposes of the Nasdaq Rule 9000 Series.
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Special Panelist
The Exchange is removing the definition of Special Panelist and re-
lettering the remainder of the Section. Phlx and BX do not use or
otherwise define a Special Panelist. Nasdaq Current Rule 9120(u)
defines a Special Panelist.\15\ The Exchange notes that related rules,
Nasdaq Current Rules 9212(a)(2)(B) and 9231(b)(2), are not mandatory
today and permit, but do not require, a Chief Hearing Officer to
utilize a Special Panelist. Nasdaq has automated its system throughout
the years so that most disciplinary actions today involve issues which
pertain to quotations of securities, execution of transactions,
reporting of transactions and trading practices, including rules, for
example, that prohibit manipulation and insider trading, among other
Rules as described in Nasdaq Current Rules 9120(u)(1)-(4). Further,
FINRA has skilled panelists who, like the Special Panelists, are
trained to handle matters involving the subject matters described in
the Special Panelist definition. The Exchange believes that the notion
of a Special Panelist is not necessary because today FINRA panelists
are equipped to handle matters related to the subject matter of Nasdaq
Current Rules 9120(u)(1)-(4) with respect to any type of hearing. The
concept of a Special Panelist is not extraordinary, rather it is a
presumed skill set for today's FINRA panelists. The Exchange therefore
proposes to remove all references to the term ``Special Panelist'' from
its rules because the reality of current panelist selection and
disciplinary processes obviate the need for this rule.\16\
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\15\ ``The term ``Special Panelist'' means an individual
approved by the Nasdaq Board of Directors at least annually who may
be selected by the Chief Hearing Officer to serve on a Hearing Panel
pursuant to Rules 9212, 9221, 9231, and 9232. A Special Panelist may
be drawn from FINRA's Market Regulation Committee, or any other
source the Nasdaq Board of Directors deems appropriate given the
responsibilities of Special Panelists. Special Panelists may
participate in disciplinary proceedings in which issues arise
regarding: (1) The quotations of securities; (2) the execution of
transactions; (3) the reporting of transactions; and (4) trading
practices, including rules prohibiting manipulation and insider
trading, and those Rules designated as Trading Rules (Rule 3300
Series), The Nasdaq Stock Market Rules (Rule 4000 Series), and Other
Systems and Programs Rules (Rule 6000 Series).'' See Nasdaq Current
Rule 9120(u).
\16\ See Nasdaq Current Rules 9120(u), 9212(a)(2)(B),
9221(a)(3), 9231(b)(2), 9231(c)(2), and 9232(a)-(c).
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Hearing Panelists
The Exchange is removing a category of individuals that may serve
on a Hearing Panel and re-lettering the remainder of the section.\17\
Phlx and BX rules do not include that category of individuals from
among those whom the Chief Hearing Officer may select as a Panelist.
The Exchange originally proposed Current Rule 9231(b)(1)(D) as a
transitional rule when the Exchange sought to become registered as a
national securities exchange. The Rule allowed ``persons who served on
the NASD National Adjudicatory Council, or a disciplinary subcommittee
thereof, prior to the date that Nasdaq commenced operating as a
national securities exchange to sit on Hearing Panels.'' \18\ This
enabled the Exchange to pull from a larger pool of candidates. The
Exchange has now been a national securities exchange for nearly 12
years, and believes that there is a sufficient pool of panelists from
which the Chief Hearing Officer may now pull. This is evidenced by the
Hearing Panels both Phlx and BX are able to assemble. Given the passage
of time, the need for Nasdaq Current Rule 9231(b)(1)(D) no longer
exists.
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\17\ Specifically, the Exchange is removing Nasdaq Current Rule
9231(b)(1)(D) (``served on the FINRA National Adjudicatory Council
or on a disciplinary subcommittee of the FINRA National Adjudicatory
Council prior to the date that Nasdaq commenced operating as a
national securities exchange; or'').
\18\ See Securities Exchange Act Release No. 34-53128 (January
13, 2006), 71 FR 3550 (January 23, 2006) (File No. 10-131) (Order
granting application of NASDAQ Stock Market LLC for registration as
a national securities exchange).
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The Exchange is also clarifying Current Rule 9231(b)(1)(E)
(Proposed New Rule 9231(b)(1)(D)) to more clearly state who may serve
on a Hearing Panel.
[[Page 51018]]
Currently, BX and Phlx Rules 9231(b)(1)(D) indicate that the Chief
Hearing Office may select as a Panelist a person who ``is a FINRA
Panelist approved by the Nasdaq Board at least annually, including a
person who previously served on the Market Regulation Committee \19\
not earlier than four years before the date the complaint was served
upon the Respondent who was the first served Respondent in the
disciplinary proceeding for which the Hearing Panel or the Extended
Hearing Panel is being appointed, or from other sources the Board deems
appropriate given the responsibilities of Panelists.'' The Exchange is
adding the same text after ``is a FINRA Panelist approved by the Nasdaq
Board at least annually'' in Proposed New Rule 9231(b)(1)(D) to make it
clear that a person who served on the Market Regulation Committee is
among those permitted to serve as a Panelist, provided that person
meets the requirements of the rule.
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\19\ The Exchange notes that while FINRA recently
``consolidate[d] its existingenforcement [sic] functions into a
unified Department of Enforcement'', see Securities Exchange Act
Release No. 83781 (August 6, 2018), 83 FR 39802 (August 10, 2018),
it did not eliminate the Market Regulation Committee. See, e.g.,
FINRA Code of Procedure Rule 9120(u).
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Other Non-Substantive and Technical Amendments
The Exchange proposes to add a sentence within Nasdaq Current Rule
9270(e)(2), similar to Phlx, to add more specificity to this rule and
make clear that the Office of Disciplinary Affairs may accept an offer
of settlement and order of acceptance or refer them to the Exchange
Review Council. The Exchange notes that today the Office of
Disciplinary Affairs may accept an offer of settlement and order of
acceptance or refer them to the Exchange Review Council, so this
language is intended to clarify current practice under the rule.
The Exchange also proposes to make certain technical amendments
throughout these rules to: (i) Add ``FINRA'' before ``Regulatory
Contract''; \20\ (ii) amend ``NASD'' to the updated name ``FINRA'';
\21\ (iii) replace ``Association'' with ``FINRA''; \22\ (iv) update
certain incorrect cross-references to both FINRA and Nasdaq rule
citations \23\; (v) add, remove, or modify rule text or punctuation in
certain rules to conform the rule text of Nasdaq to Phlx ;\24\ (vi)
include the phrase ``or person'' in various places throughout the rule
to make it clear that inclusion of the person associated with a member
is applicable ;\25\ (vii) relocate and/or renumber certain rules for
ease of reference given other amendments described herein ;\26\ and
(vii) correct a typographical error.\27\
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\20\ See Nasdaq Current Rules 8001, 9001, 9120(f), and Proposed
New Rules 9120(g), and 9120(u) and (v).
\21\ See Nasdaq Current Rule 8110.
\22\ See Nasdaq Current Rules 8210(a)(1), 9558(a)(2), and
9610(a).
\23\ See Nasdaq Current Rules 9231(c), 9268(e)(2), 9269(d)(2),
9270(e), 9270(e)(2), 9270(f)(2), 9311(a), 9312(a)(3), 9331(a)(2),
9351(a), 9524(a)(1), 9524(b)(3), and 9559 (q)(1).
\24\ See Nasdaq Current Rules IM-8310-3, 9211(a)(1)-(2),
9221(a)(1), 9231(b)(1), 9270(e)(2), 9270(f)(3), 9559(e), 9559(h)(2),
and 9630(b).
\25\ See Nasdaq Current Rules 9552(b), 9553(b), 9554(b),
9555(b).
\26\ See Proposed New Rule 9212(a)(2), which relocates language
from Current Rule 9212(a)(2)(A); and Proposed New Rule 9231(c),
which relocates language from Current Rule 9231(c)(1).
\27\ See Nasdaq Current Rules 9215(f) and 9523(a)(4).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\28\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\29\ in particular, in that it is designed to
promote just and equitable principles of trade, 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. In addition, the Exchange believes that the proposed rule
changes further the objectives of Section 6(b)(7) of the Act,\30\ in
particular, in that these changes provide for fair procedures for the
disciplining of members and persons associated with members, the denial
of membership to any person seeking membership therein, the barring of
any person from becoming associated with a member thereof, and the
prohibition or limitation by the Exchange of any person with respect to
access to services offered by the Exchange or a member thereof.
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\28\ 15 U.S.C. 78f(b).
\29\ 15 U.S.C. 78f(b)(5).
\30\ 15 U.S.C. 78f(b)(7).
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In addition, the Exchange believes that the proposed rule changes
are consistent with Section 6(b)(6) of the Act,\31\ which requires the
rules of an exchange provide that its members be appropriately
disciplined for violations of the Act as well as the rules and
regulations thereunder, or the rules of the Exchange, by expulsion,
suspension, limitation of activities, functions, and operations, fine,
censure, being suspended or barred from being associated with a member,
or any other fitting sanction.
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\31\ 15 U.S.C. 78f(b)(6).
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The Exchange believes that the proposed changes are consistent with
these requirements because the changes further harmonize Nasdaq's
investigative and adjudicatory processes with similar processes used by
Phlx. The new processes are well-established as fair and designed to
protect investors and the public interest. Because the Exchange is
conforming the Nasdaq rule text to the Phlx rule text to eliminate any
differences (except for those noted herein), the Exchange believes that
the proposed changes should facilitate prompt, appropriate, and
effective discipline of members and their associated persons consistent
with the Act. The Exchange believes that adding references to the
Nasdaq Regulation Department within the 8000 and 9000 Nasdaq Series
rules as described in this proposal clarifies the involvement that
Nasdaq Regulation plays in the investigation and enforcement of
Nasdaq's disciplinary rules. In addition, the Exchange believes that
adding references to FINRA within the 8000 and 9000 Nasdaq Series rules
as described in this proposal brings greater transparency to its rules
and clarifies the process as it exists today. Today, FINRA is empowered
to act on behalf of the Exchange.\32\
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\32\ See Nasdaq Current Rule 8001.
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The Exchange believes that harmonizing the rule text of the
investigative and adjudicatory processes with those of Phlx will reduce
the burden on members and their associated persons as they only will
need to be familiar with a single rule set going forward. Because the
substance of the rules would remain unchanged, the Exchange believes
that the proposed change would continue to provide fair procedures for
the suspending and disciplining of members and associated persons, the
denial of membership to any person seeking membership therein, the
barring of any person from becoming associated with a member thereof,
and the prohibition or limitation by the Exchange of any person with
respect to access to services offered by the Exchange or a member
thereof.
The Exchange's proposal to replace the current rule text related to
jurisdiction of Nasdaq to initiate disciplinary actions with text
substantially similar to the Phlx's jurisdiction rule text will permit
the Exchange to initiate a disciplinary action beyond two years after
the effective date of the member's or associated person's termination
with the Exchange. This provision would not apply retroactively, but
would permit the Exchange to bring actions after the effective date of
termination, so long as the Exchange serves written notice within one
year of receipt by the
[[Page 51019]]
Exchange of notice of such termination that the Exchange is making
inquiry into a matter or matters which occurred prior to the
termination of status as a member or associated person. The Exchange
believes that this provision will provide the Exchange with the same
latitude as Phlx to bring actions against its members and associated
persons for violations of its rule. The Exchange believes that it is
consistent with the Act to provide the Exchange with the ability to
initiate violations for members and their associated persons for
violations which took place while these members and associated persons
were members of the Exchange. The rule change will better protect
investors and the public interest by allowing actions to proceed that
may otherwise have been time barred under the old rule.
The Exchange's proposal to amend the definition of Interested Staff
will conform Nasdaq's definition to Phlx's definition, except insofar
as Nasdaq's proposal omits references to FINRA's Department of Market
Regulation for the reasons set forth in footnote 5 above. The Exchange
believes that it is consistent with the Act because the definition
better defines who falls within the category of Interested Staff
without substantively amending the definition.
Removing the definition of Special Panelist is consistent with the
Act because today Nasdaq Current Rules 9212(a)(2)(B) and 9231(b)(2) do
not require a Chief Hearing Officer to utilize a Special Panelist.
Further, FINRA has skilled panelists who, like the Special Panelists,
are trained to handle matters involving the subject matters described
in the Special Panelist definition, thus the reality of the panel
selection and disciplinary processes today obviate the need for this
rule.
Removing from the pool of panelists persons that served on the
FINRA National Adjudicatory Council or on a disciplinary subcommittee
of the FINRA National Adjudicatory Council prior to the date that
Nasdaq commenced operating as a national securities exchange is
consistent with the act because there currently exists a sufficient
number of persons from whom a Chief Hearing Officer may select as a
Panelist. This change, in addition to adding clarifying text to Current
Rule 9231(b)(1)(E) (Proposed New Rule 9231(b)(1)(D)) to more clearly
state who may serve on a Hearing Panel, thereby aligning the text with
the text of the parallel BX and Phlx Rules, is also consistent with the
Act because it creates a uniform pool from which Panelists may be
selected across the Nasdaq, BX, and Phlx, thus removing confusion that
may result from having different pools of Panelists depending on the
exchange.
Finally, making technical amendments in Nasdaq Current Rules 8001,
8110, 8210, IM-8310-3, 9001, 9120, 9211, 9212, 9221, 9231, 9268, 9269,
9270, 9311, 9312, 9331, 9351, 9524, 9552, 9553, 9554, 9555, 9556, 9558,
9559, 9610, and 9630 removes impediments to and perfects the mechanism
of a free and open market by removing confusion that may result from
having incorrect or incomplete material in the Exchange's rulebook.
The Exchange believes that its proposal furthers the objectives of
Section 6(b)(7) of the Act,\33\ in that it is designed to provide a
fair procedure for the disciplining of members and persons associated
with members, the denial of membership to any person seeking membership
therein, the barring of any person from becoming associated with a
member thereof, and the prohibition or limitation by the exchange of
any person with respect to access to services offered by the exchange
or a member thereof. Specifically, the Exchange believes that the
proposed investigatory and disciplinary process is consistent with
Section 6(b)(7) of the Act \34\ because it is based on the existing
processes used by Phlx.
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\33\ 15 U.S.C. 78f(b)(7).
\34\ Id.
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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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposed rule change is
intended to more clearly align the text of Phlx's and the Exchange's
rules. Specifically and as described in detail above, the Exchange
believes that this change will bring efficiency and consistency to the
investigative and adjudicatory processes, thereby reducing the burden
on members and their associated persons who are also members of Phlx.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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 from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \35\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\36\
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\35\ 15 U.S.C. 78s(b)(3)(A)(iii).
\36\ 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 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.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6)\37\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\38\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so the Exchange may
immediately amend its disciplinary rules to conform to Phlx's
disciplinary process. The Exchange states that the proposed amendment
to expand its current jurisdiction will not apply retroactively and any
complaints not filed within the existing two-year time period will be
time-barred. The Exchange further states that its new jurisdiction rule
will only apply to applicable members or associated persons who
terminate their membership or association on October 15, 2018 or
thereafter. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest as it will allow Nasdaq to conform its disciplinary rules to
those of Phlx. In addition, the proposal does not present any novel
issues. Therefore, the Commission hereby waives the operative delay and
designates the proposal as operative upon filing.\39\
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\37\ 17 CFR 240.19b-4(f)(6).
\38\ 17 CFR 240.19b-4(f)(6)(iii).
\39\ For purposes only of waving the 30-day operative delay, the
Commission has considered the purposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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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
[[Page 51020]]
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
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2018-066 on the subject line.
Paper Comments
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-NASDAQ-2018-066. 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 (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for 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 a.m. and 3
p.m. Copies of the filing also will be available for inspection and
copying at the principal office of the Exchange. 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 SR-NASDAQ-2018-066 and should be submitted
on or before October 31, 2018.
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\40\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-21900 Filed 10-9-18; 8:45 am]
BILLING CODE 8011-01-P
