Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Compliance Date for SR-FINRA-2019-014, 20013-20014 [2020-07436]

Download as PDF Federal Register / Vol. 85, No. 69 / Thursday, April 9, 2020 / Notices and for those series of Index Fund Shares that publish their Portfolio Holdings on a daily basis.9 The Exchange’s proposal is narrowly tailored to series of exchange-traded funds (‘‘ETFs’’) with daily portfolio holdings disclosure. The Commission believes that the transparency that comes from daily portfolio holdings disclosure should provide market participants with sufficient information to facilitate the intraday valuation of the shares of a series of Managed Fund Shares or Index Fund Shares without the additional requirement to disseminate an IIV.10 Accordingly, the Commission believes that the proposed rule change, as modified by Amendment No. 1, is designed to, among other things, remove impediments to and perfects the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act 11 and the rules and regulations thereunder applicable to a national securities exchange. IV. Conclusion khammond on DSKJM1Z7X2PROD with NOTICES It is therefore ordered, pursuant to Section 19(b)(2) of the Act,12 that the proposed rule change (SR–CboeBZX– 2020–007), as modified by Amendment No. 1, be, and it hereby is, approved. Disclosed Portfolio is not made available to all market participants at the same time). 9 Under BZX’s Index Fund Shares listing rule, only certain series of Index Fund Shares are required to disclose their portfolio holdings daily. See BZX Rule 14.11(c)(1)(B)(iv). 10 The Commission notes that last year it adopted Rule 6c–11 under the Investment Company Act of 1940 (‘‘1940 Act’’) to permit ETFs that satisfy certain conditions to operate without obtaining an exemptive order from the Commission under the 1940 Act. See Investment Company Act Release No. 33646 (September 25, 2019), 84 FR 57162, 57180 (October 24, 2019) (‘‘Adopting Release’’). See also 17 CFR 270.6c–11. Rule 6c–11 does not require ETFs to disseminate an IIV as a condition for reliance on the rule. In the Adopting Release, the Commission stated that dissemination of an IIV ‘‘is not necessary to support the arbitrage mechanism for ETFs that provide daily portfolio holdings disclosure.’’ See Adopting Release at 57179–80. Instead, the daily portfolio holdings disclosure required by the rule ‘‘will provide market participants with the relevant data to input into their internal algorithms and thus allow them to determine if arbitrage opportunities exist.’’ See id. 11 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78s(b)(2). 13 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:28 Apr 08, 2020 Jkt 250001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–07446 Filed 4–8–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88556; File No. SR–FINRA– 2020–010] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Compliance Date for SR–FINRA–2019– 014 April 3, 2020. 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 April 1, 2020, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to provide members with additional time to comply with the amendments adopted by SR–FINRA–2019–014 related to transactions in U.S. Treasury Securities executed to hedge certain primary market transactions. The text of the proposed rule change is available on FINRA’s website at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 20013 the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On June 21, 2019, the SEC approved SR–FINRA–2019–014, which amended FINRA Rule 6730 (Transaction Reporting) to: (a) provide members until the close of TRACE System Hours on the next business day (i.e., until 6:29:59 p.m. ET on T+1) to report transactions in U.S. Treasury Securities 4 executed to hedge a P1 5 transaction, and (b) require members to append a new trade modifier when reporting TRACE transactions in U.S. Treasury Securities that are executed to hedge a P1 transaction.6 On September 19, 2019, FINRA published Regulatory Notice 19– 30 announcing SEC approval of the proposed rule change and establishing an effective date of June 1, 2020.7 In light of significant impacts that the spread of coronavirus disease (COVID– 19) may have on member firms, FINRA is extending the effective date of the amendments adopted by SR–FINRA– 2019–014 related to U.S. Treasury 4 Rule 6710(p) defines a ‘‘U.S. Treasury Security’’ as ‘‘a security, other than a savings bond, issued by the U.S. Department of the Treasury to fund the operations of the federal government or to retire such outstanding securities.’’ The term ‘‘U.S. Treasury Security’’ also includes separate principal and interest components of a U.S. Treasury Security that has been separated pursuant to the Separate Trading of Registered Interest and Principal of Securities (‘‘STRIPS’’) program operated by the U.S. Department of Treasury. 5 ‘‘List or Fixed Offering Price Transactions’’ and ‘‘Takedown Transactions,’’ which are identified with the ‘‘P1’’ modifier, generally are primary market sale transactions on the first day of trading of a security: (i) By a sole underwriter, syndicate manager, syndicate member or selling group member at the published or stated list or fixed offering price (or, for Takedown Transactions, at a discount from the published or stated list or fixed offering price) or (ii) in the case of primary market sale transactions effected pursuant to Securities Act Rule 144A, by an initial purchaser, syndicate manager, syndicate member or selling group member at the published or stated fixed offering price (or, for Takedown Transactions, at a discount from the published or stated fixed offering price). See Rule 6710(q) and (r). 6 See Securities Exchange Act Release No. 86178 (June 21, 2019), 84 FR 30783 (June 27, 2019) (Order Approving File No. SR–FINRA–2019–014). 7 See Regulatory Notice 19–30 (SEC Approves Amendments Relating to Transactions in U.S. Treasury Securities Executed to Hedge a Primary Market Transaction) (September 19, 2019). E:\FR\FM\09APN1.SGM 09APN1 20014 Federal Register / Vol. 85, No. 69 / Thursday, April 9, 2020 / Notices Security hedge transactions to allow members additional time to prepare for implementation of the new requirements. FINRA believes that, given the need for members to reallocate resources in response to COVID–19, members would benefit from additional time to, among other things, implement and test technology changes, update policies and procedures, and perform staff training related to implementation of the U.S. Treasury Security hedge amendments. FINRA notes that the implementation delay will not impact transparency because transactions in U.S. Treasury Securities currently are not disseminated. FINRA has filed the proposed rule change for immediate effectiveness. The new operative date of the amendments adopted by SR–FINRA–2019–014 will be August 3, 2020. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,8 which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest and Section 15A(b)(9) of the Act,9 which requires that FINRA rules not impose any burden on competition that is not necessary or appropriate. FINRA believes that providing members with additional time to comply with the changes adopted by SR–FINRA–2019–014 will ease compliance burdens for members as they reallocate resources in response to COVID–19. FINRA notes that the implementation delay will not impact transparency because transactions in U.S. Treasury Securities currently are not disseminated. khammond on DSKJM1Z7X2PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition 9 15 U.S.C. 78o–3(b)(6). U.S.C. 78o–3(b)(9). VerDate Sep<11>2014 16:28 Apr 08, 2020 Jkt 250001 Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6)(iii) thereunder.11 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) of the Act 12 to determine whether the proposed rule change 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 FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change would provide all affected members additional time to prepare for the implementation of the new U.S. Treasury Security hedging requirements, which should ease members’ implementation burdens given the need to reallocate resources in response to COVID–19. 8 15 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others • 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– FINRA–2020–010 on the subject line. 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission has waived the pre-filing requirement. 12 15 U.S.C. 78s(b)(2)(B). 11 17 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 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–FINRA–2020–010. 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 such filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FINRA– 2020–010 and should be submitted on or before April 30, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–07436 Filed 4–8–20; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #16412 and #16413; OREGON Disaster Number OR–00100] Presidential Declaration of a Major Disaster for the State of Oregon U.S. Small Business Administration. ACTION: Notice. AGENCY: 13 17 E:\FR\FM\09APN1.SGM CFR 200.30–3(a)(12). 09APN1

Agencies

[Federal Register Volume 85, Number 69 (Thursday, April 9, 2020)]
[Notices]
[Pages 20013-20014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07436]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88556; File No. SR-FINRA-2020-010]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Extend the Compliance Date for SR-FINRA-2019-
014

April 3, 2020.
    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 April 1, 2020, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which 
renders the proposal effective upon receipt of this filing by the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change
    FINRA is proposing to provide members with additional time to 
comply with the amendments adopted by SR-FINRA-2019-014 related to 
transactions in U.S. Treasury Securities executed to hedge certain 
primary market transactions.
    The text of the proposed rule change is available on FINRA's 
website at https://www.finra.org, at the principal office of FINRA and 
at the Commission's Public Reference Room.

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

    In its filing with the Commission, FINRA included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. FINRA has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    On June 21, 2019, the SEC approved SR-FINRA-2019-014, which amended 
FINRA Rule 6730 (Transaction Reporting) to: (a) provide members until 
the close of TRACE System Hours on the next business day (i.e., until 
6:29:59 p.m. ET on T+1) to report transactions in U.S. Treasury 
Securities \4\ executed to hedge a P1 \5\ transaction, and (b) require 
members to append a new trade modifier when reporting TRACE 
transactions in U.S. Treasury Securities that are executed to hedge a 
P1 transaction.\6\ On September 19, 2019, FINRA published Regulatory 
Notice 19-30 announcing SEC approval of the proposed rule change and 
establishing an effective date of June 1, 2020.\7\
---------------------------------------------------------------------------

    \4\ Rule 6710(p) defines a ``U.S. Treasury Security'' as ``a 
security, other than a savings bond, issued by the U.S. Department 
of the Treasury to fund the operations of the federal government or 
to retire such outstanding securities.'' The term ``U.S. Treasury 
Security'' also includes separate principal and interest components 
of a U.S. Treasury Security that has been separated pursuant to the 
Separate Trading of Registered Interest and Principal of Securities 
(``STRIPS'') program operated by the U.S. Department of Treasury.
    \5\ ``List or Fixed Offering Price Transactions'' and ``Takedown 
Transactions,'' which are identified with the ``P1'' modifier, 
generally are primary market sale transactions on the first day of 
trading of a security: (i) By a sole underwriter, syndicate manager, 
syndicate member or selling group member at the published or stated 
list or fixed offering price (or, for Takedown Transactions, at a 
discount from the published or stated list or fixed offering price) 
or (ii) in the case of primary market sale transactions effected 
pursuant to Securities Act Rule 144A, by an initial purchaser, 
syndicate manager, syndicate member or selling group member at the 
published or stated fixed offering price (or, for Takedown 
Transactions, at a discount from the published or stated fixed 
offering price). See Rule 6710(q) and (r).
    \6\ See Securities Exchange Act Release No. 86178 (June 21, 
2019), 84 FR 30783 (June 27, 2019) (Order Approving File No. SR-
FINRA-2019-014).
    \7\ See Regulatory Notice 19-30 (SEC Approves Amendments 
Relating to Transactions in U.S. Treasury Securities Executed to 
Hedge a Primary Market Transaction) (September 19, 2019).
---------------------------------------------------------------------------

    In light of significant impacts that the spread of coronavirus 
disease (COVID-19) may have on member firms, FINRA is extending the 
effective date of the amendments adopted by SR-FINRA-2019-014 related 
to U.S. Treasury

[[Page 20014]]

Security hedge transactions to allow members additional time to prepare 
for implementation of the new requirements. FINRA believes that, given 
the need for members to reallocate resources in response to COVID-19, 
members would benefit from additional time to, among other things, 
implement and test technology changes, update policies and procedures, 
and perform staff training related to implementation of the U.S. 
Treasury Security hedge amendments. FINRA notes that the implementation 
delay will not impact transparency because transactions in U.S. 
Treasury Securities currently are not disseminated.
    FINRA has filed the proposed rule change for immediate 
effectiveness. The new operative date of the amendments adopted by SR-
FINRA-2019-014 will be August 3, 2020.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\8\ which requires, among 
other things, that FINRA rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest and Section 15A(b)(9) of the Act,\9\ which requires 
that FINRA rules not impose any burden on competition that is not 
necessary or appropriate.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78o-3(b)(6).
    \9\ 15 U.S.C. 78o-3(b)(9).
---------------------------------------------------------------------------

    FINRA believes that providing members with additional time to 
comply with the changes adopted by SR-FINRA-2019-014 will ease 
compliance burdens for members as they reallocate resources in response 
to COVID-19. FINRA notes that the implementation delay will not impact 
transparency because transactions in U.S. Treasury Securities currently 
are not disseminated.

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

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change would 
provide all affected members additional time to prepare for the 
implementation of the new U.S. Treasury Security hedging requirements, 
which should ease members' implementation burdens given the need to 
reallocate resources in response to COVID-19.

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

    Written comments were neither solicited nor received.

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

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days after the date of the filing, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6)(iii) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Commission has waived the pre-filing requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) of the Act \12\ to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-FINRA-2020-010 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-FINRA-2020-010. 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 such filing also will be available for inspection 
and copying at the principal office of FINRA. All comments received 
will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-FINRA-2020-010 and should be submitted 
on or before April 30, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-07436 Filed 4-8-20; 8:45 am]
 BILLING CODE 8011-01-P
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